Austria

Austria mandated banks on Tuesday to lead its second century bond, in what will be a litmus test for investor appetite in the ultra-long end of the curve since the outbreak of the Covid-19 crisis.

Austria and Belgium could bring syndicated transactions as early as next week, according to SSA bankers, after both sovereigns recently announced bigger funding programmes in response to the coronavirus pandemic.

Green bonds made up the majority of the supply in the euro bank bond market on Thursday, with Hypo Noe and Santander capitalising on strong demand for the asset class.

Stephan Gimpel is leaving Citi to pursue an opportunity in fintech, after 14 years in the US bank’s debt capital markets business.

Raiffeisen Bank International launched a tier two bond in euros on Tuesday with investors still showing strong appetite for risk. But a smaller order book for the trade suggested that market conditions might be softening compared with recent trading sessions.

The Austrian treasury has shaken up its funding outlook for the year as a result of the Covid-19 pandemic. Its new planned issuance total is almost double the previous target.

Investors were "hugely receptive" to Hypo Noe’s seven year Pfandbrief issued on Tuesday, suggesting it is only a matter of time before another borrower tests demand further along the curve with a 10 year covered bond — which would be the first since early March, before the coronavirus pandemic disrupted markets. Reopening such long dated funding would provide a compelling alternative to using central bank liquidity.

An abundance of cheap central bank funding has negated the need to issue short dated covered bonds but access to competitive funding at the long end would provide a compelling reason for issuers to return to the primary market, said bankers on Monday. A seven year transaction mandated by Hypo Noe on Monday is likely to provide a test of investor appetite.

Issuance in the financial institutions bond market had a preferred senior flavour this week, with issuers finding this the most cost-effective funding compared with other asset classes. In addition, some of them can use it to fulfil regulatory requirements.

Nordea Bank and Erste Group Bank were marketing preferred senior bonds on Wednesday, finding demand in the seven year part of the curve following a flurry of five year deals earlier this week.

Austria made a rare trip to the dollar market last Thursday as it raised $600m via a reverse enquiry-led private placement, GlobalCapital understands.

Underwriting banks must subscribe to 30% of AMS's Sfr1.75bn (£1.81bn) rights issue after the spread of the Covid-19 coronavirus smashed the Austrian sensor maker's share price during the offer period. Equity capital market sources said they have never seen a market which is so bad for issuance.