UK Sovereign

Ireland's return to bond auctions last month helped the sovereign reach nearly 60% of its funding target for the year. Across the Irish sea, the UK started its financial year with a £2.577bn auction - and a reduced funding target of £128.4bn.

The UK Debt Management Office slashed its Gilt sales target on Wednesday, when it introduced its funding plan for the 2014-2015 fiscal year — a move which should boost demand for UK government bond syndications.

A remarkable start to the year for the eurozone periphery is in clear view in this month's sovereign funding scorecard. Just two months into the year, Portugal has completed more than half of its target, while Ireland is not far behind. At the other end of the volume spectrum, Spain is making good headway in tackling its €133.3bn target with 26% completed, while Italy — which has yet to sell a syndication this year — is behind on 18%.

The SSA bond market could have a new issuer to look forward to after the UK government on Wednesday handed the devolved government in Scotland the power to issue its own bonds.

Demand for the UK Debt Management Office’s last syndication of the fiscal year on Wednesday broke records. A reopening of the 2068 index linked Gilt attracted the largest ever book for a UK linker syndication.

The rampant start to 2014 by peripheral eurozone sovereigns is clear to see in this week's funding scorecard, with the region's comeback kids Ireland and Portugal halfway and a quarter way through their funding programmes already. Spain has also made promising progress in its attempt to hit what is its largest ever funding target, with nearly a fifth of its total already in the bag. Italy will look to move into double figures from its 4% status in the coming weeks with a widely expected syndication.

The United Kingdom’s debut sukuk is unlikely to come before October, although the government plans to make an announcement on the deal before July, according to a source with knowledge of the situation. HSBC is frontrunner among banks to arrange the deal, added the source.

Efforts by the UK Treasury to shore up investor confidence in Gilts ahead of a referendum on Scottish independence could create more uncertainty in the long term, according to analysts.

The UK’s Debt Management Office is in discussions with the Turkish Treasury — and other countries — about the practicalities of launching a debut £200m sukuk.

The end of November finds almost every sovereign in the scorecard more than 90% funded for the year. Italy's cause was helped in no small part by a bumper €22.3bn domestic inflation linked bond at the start of the month. The UK - with a funding year running from April March - is also well on track with 70% of its programme completed.

UK Prime Minister David Cameron unveiled plans for a sovereign sukuk debut at the World Islamic Economic Forum on Tuesday. A deal could come as soon as next financial year.

The sovereign funding scorecard expands beyond Europe this month with the addition of Japan. The country has a whopping ¥156.8tr (€1.2tr) target this year but is well on track having raised ¥136.2tr so far.