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Sub-sovereigns

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State could fund 50% more next year and is ready to act early in January
SSA
◆ Longest euro benchmark from a Canadian province ◆ Investor demand for spread over European SSAs ◆ Building a curve and paying a premium
◆ German state's last benchmark this year ◆ Tightest Länder seven year in 2025 ◆ International demand dominates book
SSA
◆ Land NRW and British Columbia eye euros ◆ Rentenbank going for dollars ◆ Too soon to pre-fund?
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  • SSA
    Norway’s Kommunalbanken (KBN) sold a $1.25bn five year note on Wednesday, having started out with a $1bn no grow trade. The issuer faced overwhelming demand from investors and said the deal has re-priced its dollar curve. That spurred two more borrowers into mandating deals.
  • SSA
    Tight swap spreads ticked even tighter on Friday, a day after the Federal Reserve unveiled QE3. The swap will make it hard for sub-Libor issuers to offer an attractive spread over Treasuries.
  • SSA
    The European Central Bank (ECB) on Thursday announced plans to expand its list of eligible instruments for collateral. One effect of the expansion could be an increase in the number of investors that can buy non-euro denominated SSA paper.
  • SSA
    The Spanish regions of Valenica and Murcia have requested a bigger bailout from Spain’s central government than expected. Spain’s problems are only escalating as Moody’s is expected to downgrade the sovereign to junk status which could further push the country’s borrowing costs.
  • SSA
    Catalonia, the Spanish region worth 20% of the country’s economy, asked the central government on Tuesday for financial aid. A bail-out will strain Spain’s coffers further and is likely to deter more investors from wanting to buy its debt, bringing Spain closer to the prospect of an EU bail-out.
  • SSA
    The Province of Manitoba issued on Wednesday its third dollar global deal this year. Lead bankers are expecting to price through initial guidance later in the afternoon with the book well oversubscribed.