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Sub-sovereigns

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◆ Spread to Land Hessen key to pricing ◆ Leads thought long and hard on whether to tighten ◆ 1bp move the right amount as book grew
◆ Three German states brought a new Joint Länder bond ◆ No book update, KfW curve guides pricing ◆ Flemish Community prints new 15 year
Second digital project won’t be the issuer’s last, Länder peers may be ‘interested and willing’ to join in
SSA
◆ Half-year close keeps some issuers on sidelines ◆ Bankers expect big euro supply to come ◆ More concession on pricing could be required
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  • Région Wallonne is moving forward with plans to sell its first bonds in benchmark and sustainable format, with initial price thoughts announced on Wednesday for new seven and 15 year bonds.
  • SSA
    The European Central Bank has indicated that it is looking into how to mitigate the costs that years of negative interest rates have exacted on banks. That has led some in the market to bet that it will introduce tiered interest rates at some point. But analysts are not convinced that tiering deposit rates will help weak lenders — or make any difference at all. Mike Turner reports.
  • The Province of Ontario’s three year dollar benchmark this week sparked criticism from onlooking bankers after the spread was set a day before pricing. However, a head of SSA DCM at one of the leads replied that it was the “honourable” thing to do after the deal received more demand than expected.
  • KfW and SFIL printed $4.25bn of debt on Tuesday, with both deals looking as if they paid a few basis points over fair value. That marks a return to new issue premiums in the dollar market for sovereigns, supranationals and agencies.
  • The sovereigns, supranational and agency market poured into dollars on Monday with two issuers announcing price thoughts for deals and a third potentially due on screens after investor meetings.
  • Rating: Aa2/A+