Asian Development Bank ADB

The Inter-American Development Bank has added slightly to its 2020 funding programme following the announcement of a substantial lending package in response to the Covid-19 crisis.

This week’s funding scorecard looks at the progress supranationals have made in their funding programmes during a first quarter wracked by volatility.

This week, it was the best of times, it was the worst of times – and despite volatility caused by the spread of the Covid-19, a trickle of MTN issuance has managed to slip through into the market.

The recent fall in the price of oil is having a knock-on effect on non-core currency issuance. While oil dependent markets could take a hit as their currencies weaken, some net importers could benefit from a stronger currency and safe haven flows.

A window for Kangaroo issuance opened this week, as a positive move in the Australian dollar/euro basis swap helped rouse a slumbering market that had not seen a deal for a fortnight. In spite of unstable conditions, SSAs entered the market on Monday and Tuesday, with a trio of regular borrowers tapping six lines for a combined A$575m ($364m).

MTN deal volumes year-to-date have slumped by nearly a third year on year, falling from $51.6bn in 2019 to $35bn this year. The fall has been particularly pronounced in core currency deals, with deals from other currencies forming a larger proportion of the market.

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Monday, February 3. The source for secondary trading levels is ICE Data Services.

Rating: Aaa/AAA/AAA

Two supranationals hopped into the Kangaroo market with environmental, social governance (ESG) bond taps this week, in a move that is becoming increasingly popular. With a local holiday this weekend marking the end of antipodean summer, bankers expect Australian dollar issuance to restart in the next few weeks.

The Asian Development Bank came in tight for a 10 year euro deal, pricing close to the level of World Bank's seven year sold earlier this month

Nederlandse Waterschapsbank and the State of Brandenburg took advantage of a lack of euro SSA supply this week to bring well subscribed deals on Tuesday. The Asian Development Bank will be looking to follow with a 10 year euro benchmark on Wednesday.

Demand for the Asian Development Bank's new five year Kauri print — the first SSA deal in the market since August — soared on Wednesday, leading to the deal being increased twice during pricing. With several frequent issuers also circling the market, bankers expect more to follow.