Sterling

Issuer sees blowout demand for long dated sterling debt

◆ ‘A great, great trade,’ say rival bankers ◆ Investors ‘under-supplied’ in sterling

◆ BPM raises new euro debt with no NIP as investors pile in ◆ 'Periphery is the new core' thinking powers primary ◆ KBC debuts sterling tier two to feed bond-starved investors

Although investors want sterling risk, issuers are not queueing up to issue

◆ Nationwide to grow asset size by a quarter ◆ Affords to pay 38% premium thanks to top ranking CET1 ratio in Europe ◆ Strong rally of Virgin Money bonds suggest acquisition likely to proceed

Pent-up demand for first sterling covered deal in three months fuelled the tight outcome

◆ ‘Rare beast’ of a spread drives demand ◆ Deal increased as order book swelled ◆ Cross-currency basis has kept issuance at bay

£500m no-grow trade the first in sterling for three months

Sterling issuance has all but evaporated in recent weeks despite evidence of structural demand from UK investors. Even domestic issuers have snubbed the currency but suggest that some euro funders could be lured back

Bond was sized to ensure secondary performance, and it indeed it has performed

Trickier structure draws in crowd starved of deals

Smaller, weaker FIG issuers bathe in spotlight as anything and everything sells