The Swedish borrower raised C$250m ($209m) of five year paper at 9bp over mid-swaps on Wednesday via HSBC, Scotiabank and TD Securities.
A banker on the deal said it had been prompted by a combination of recent improvements in the basis swap versus euros and increasing central bank appetite for Canadian dollars. “A number of central banks have diversified their reserves into the currency, which has brought the market back to life,” he said.
The vast majority of Kommuninvest’s deal went to central banks in Asia, the Americas and North America, he added, with a rump being taken by domestic bank treasuries to boost their liquidity coverage ratios.
SSA activity in Canadian dollars has been muted in recent years but stepped up in the second half of 2014, with Rentenbank, Asian Development Bank, BNG, KfW, Inter-American Development Bank and Export-Import Bank of Korea all issuing in the currency.
The banker added that further SSA deals were likely in the near future. “The basis swap is continuing to improve, particularly as Canadian banks issue in foreign markets and swap the proceeds back into their home currency, so we definitely expect to see more issuers looking at this market.”
For other SSA borrowers, however, Australian dollars retained their appeal this week, as Asian investors in particular continued to show strong demand for the sector. Six SSA borrowers accessed the Kangaroo market, raising a total of more than A$2bn ($1.6bn).
Rentenbank led the way on Tuesday, pricing a new A$650m January 2020 deal in line with guidance at 26bp over mid-swaps.
Asian central banks, bank treasuries and real money investors took most of the allocations, with a mixture of offshore and domestic Australian demand. HSBC, RBC Capital Markets and TD Securities were bookrunners.
Also on Tuesday, IADB and Province of Manitoba tapped outstanding Kangaroo deals.
IADB raised A$500m with a reopening of its February 2020 via Commonwealth Bank of Australia, Deutsche Bank and Nomura. The deal was priced at mid-swaps plus 21bp.
Asian investors took the majority of allocations but bankers also reported increasing participation from domestic Australian investors. “SSA Kangaroos are showing value versus Australian government and provincial paper,” said a banker on the deal.
Meanwhile, Manitoba tapped its March 2025 bond for A$150m, taking the outstanding on the line to A$250m.
HSBC, RBC Capital Markets and TD Securities priced the tap at 48bp over mid-swaps, with Japanese life insurers accounting for the majority of demand.
KfW also opted for a pair of Kangaroo re-openings this week, raising A$300m of February 2025 paper on Wednesday via Deutsche Bank and Nomura at mid-swaps plus 33bp. On the following day the German borrower tapped an April 2020 line for A$250m at 25bp over mid-swaps via Deutsche Bank, RBC Capital Markets and TD Securities.
Thursday also saw NWB Bank price a new A$150m July 2025 Kangaroo in line with guidance at 54bp over mid-swaps. HSBC, Nomura and TD Securities led the deal.
Completing the line-up was L-Bank, which took a A$150m tap of its 2018s via Deutsche Bank and RBC at 32bp over mid-swaps.
