Austrian Sovereign
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It was another sparkling week in dollars for public sector borrowers, with Asian Development Bank the pick of the bunch as it brought the tightest deal of the year so far versus Libor and US Treasuries. More supply is expected for next week, although some SSA bankers feel the market could do with a “breather”. -
Oesterreichische Kontrollbank’s decision to mix up this week’s dollar supply with a three year benchmark reaped rewards on Thursday, as it recorded one of its largest ever allocations to central banks and one of its tightest ever US Treasury spreads. But some SSA bankers believe the dollar market might need a “breather” after a rampant start to the year.
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The public sector dollar market on Wednesday showed that it had more than enough depth to cope with a pair of issuers bringing deals in the same maturity with just a basis point of difference in initial price thoughts, as both trades came in size and at tightened pricing. Another agency is set to dip into the demand on Thursday.
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A quartet of public sector borrowers brought small dollar deals this week that were fine but unspectacular, which SSA bankers said was down to a confluence of factors. There are hopes that with the market likely quiet next week for the US mid-term elections and Federal Open Market Committee meeting, conditions could return to their best for the albeit limited funding windows left in 2018.
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Public sector borrowers are taking different approaches to the MTN market as they look to see out the rest of the funding year.
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Österreichische Kontrollbank and Erste Abwicklungsanstalt priced well received dollar deals on Tuesday. The pipeline in the currency is building with Bank Nederlanse Gementeen and Swedish Export Credit Corporation having lined up three year trades.
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Österreichische Kontrollbank will complete its benchmark funding for the year with a no-grow $1bn five year. Meanwhile, Erste Abwicklungsanstalt has lined up its second dollar deal of the year in the three year part of the curve.
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Erste Group has arranged a Schuldschein via blockchain, through a platform it helped construct alongside Linux Foundation’s Hyperledger Fabric.
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Österreichische Kontrollbank could issue one more benchmark before the year end at the short end of the curve, according to a treasury official at the agency.
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Österreichische Kontrollbank mandated banks for a three year dollar benchmark global on Tuesday, with strong investor demand for the currency as a result of a lack of supply.
