The Inter-American Development Bank (IADB) and Nederlands Waterschapsbank (NWB) both sold 10 year bonds on Thursday, ending a brief quiet spell in the maturity for Kangaroo debt.
Blow-out dollar deals by the European Investment Bank and Network Rail, which were priced on Wednesday afternoon, have demonstrated the rampant appetite for SSA paper. And now more issuers look set to take advantage of the conditions.
Both Spain and the European Financial Stability Facility could follow Portugal’s triumphant return to the capital markets with a 2024 bond on Tuesday with their own 10 year deals next week. Portugal, meanwhile, plans to build its capital markets presence this year with its first auctions of medium to long dated debt in two years.
Denmark is set to follow the success of its Nordic SSA peer, Kommuninvest on Tuesday with the second successful three year Reg S/144A dollar benchmark this week from the region.
The Finnish 10 year transaction, priced in yesterday’s buoyant and receptive market, had a spectacular book-build with over €9bn of orders from more than 120 accounts for a deal that was always capped at €4bn.
The Kingdom of Spain shrugged off fears of contagion from the fallout over a rescue package for Cyprus with a record breaking bill auction on Tuesday. But a tougher trial for the eurozone periphery comes on Thursday when the sovereign attempts to sell longer dated debt.
The Republic of Italy paid inflated yields on Tuesday at its first debt auction since being downgraded by Fitch Ratings last week, and could well have to cough up on Wednesday when it attempts to sell longer dated debt, said analysts.
The Republic of Italy passed the first test of its new political environment on Wednesday, placing its maximum target of €6.5bn at an auction that included the launch of a new 10 year line.
The Republic of Italy’s borrowing costs shot up at a bills auction on Tuesday as it became clear that Italy’s government elections would produce an inconclusive result, which caused peripheral government bond markets to spin wider. A bigger test of demand, however, will be on Wednesday when Italy will auction five and 10 year bonds.
Volatility reigned supreme on Monday as projections based on early voting results from the Republic of Italy’s general election played havoc with Italian bond yields.
Network Rail sold its first floating rate note in sterling on Monday — a £600m three year. The deal’s large size and tight pricing could encourage other borrowers eyeing sterling deals in the format.
Rentenbank priced its first new Kangaroo line of 2013 on Thursday — a 10 year deal. The healthy yield on offer sparked interest from offshore investors, and suggests that there is room for further issuance in Australian dollars at the far end of the curve.
The future looks set to be one of smaller but more frequent deals for supranational borrowers if Tuesday’s prints from the Inter-American and Asian Development Banks are anything to go by. Both borrowers opened books on new global format benchmarks in the morning with pricing expected later in the day. Meanwhile, Bank Nederlandse Gemeenten tested the notoriously tricky 10 year maturity following KfW’s success with a similar deal last week.
The Inter-American Development Bank (IADB) and the Asian Development Bank (ADB) are set to answer the burning question in the SSA dollar market on Tuesday as they attempt to find the price at which the apparently rampant appetite for SSA dollar paper extends to tightly priced supranational credits.
Several supranational borrowers are eyeing dollar issuance after a blockbuster start to the market this week, SSA Markets understands. Denmark’s KommuneKredit capped off a week of oversubscribed trades from Libor plus issuers when it sold its first ever five year.
The European Investment Bank (EIB) and Kommunalbanken (KBN) are expected this week to test investor appetite for dollar SSA paper for the first time in 2013. Bankers and issuers alike will watch the deals with interest to assess the balance between investors’ need for paper and willingness to endure eye-wateringly tight reoffer spreads.
Nordic municipal financing agencies are targeting sterling issuance in 2013, having held their first joint roadshow to meet the sterling investor base last week.
Mongolia made an explosive debut in the international bond market this week, raising $1.5bn from a deal that was the biggest Asian sovereign debut in more than a decade. But more eye-catching for bankers was the deal’s size relative to the country’s economy — it was equivalent to 15% of Mongolia’s projected GDP for this year, and was greater than its entire foreign exchange reserves.
FADE’s daring dive into the capital markets after more than a year’s absence has paid off handsomely. Lead managers Barclays, BBVA, Crédit Agricole and Santander received orders of well over €2.5bn, comfortably justifying a €1.75bn three year print and 10bp tightening from initial price guidance.
The Kingdom of Spain brushed off fears over its latest debt sale as it received bids of more than €2.5bn for paper maturing in April 2021 — beyond the reach of any secondary market assistance from the ECB — at auction on Thursday.