Belgium

Belgium was able to print a large 20 year benchmark bond on Tuesday, pulling in a book of €27bn. But despite the size of the demand, investors were reluctant to follow the price more than 1bp from initial guidance.

Two public sector borrowers hit screens with new issues on Monday, with Belgium choosing a 20 year and Madrid opting for a 10 year sustainable bond.

A broad and diversified group of investors placed large orders for ING Belgium’s €1.25bn 10 year covered bond issued on Thursday, lapping up its positive reoffer yield and the convincing spread pick-up, as well as the rarity and strength of the name. The resounding response stood in contrast to two tightly priced negative yielding Pfandbriefe issued earlier this week.

ING Belgium has mandated lead managers for its first covered bond since September 2018 and its fifth since the programme’s inception in 2013. The prospective deal may just avoid being issued with a negative yield, but it’s a close call.

The European Commission wants to develop new non-financial reporting standards that will compel EU companies to publish more information about the risks they face from climate change and other sustainability issues.

Argenta Spaarbank returned to the euro market on Wednesday to seal a deal that it had pulled in last October. This time around the issuer was able to bring in the funding it wanted, even though the final spread only moved 5bp from initial price thoughts.

Investors did not want to miss out on the senior bond marketed by KBC Group on Tuesday, as the issuer seized on strong market conditions to extend its credit curve and launch a deal at what many saw as fair value.

Rating: Aa3/AA/AA-

Italy and Belgium were the latest eurozone sovereigns to build their largest ever order books for syndicated bonds on Wednesday, with the former coming close to breaking the record demand from a eurozone issuer set by Spain on Tuesday.

Spain and Cyprus attracted strong demand for their syndicated bonds on Tuesday, with the former receiving the largest ever order book for a public sector euro benchmark. Italy and Belgium will add to the eurozone sovereign supply on Wednesday after mandating leads for new 30 and 10 year trades, respectively.

Ageas sold a restricted tier one (RT1) bond this week in an effort to replace some of its grandfathered securities. The insurer secured tight pricing, bolstered by about €5bn of orders.

A flurry of new deals this week had issuers having to compete for investors’ attention. Bankers said that higher yielding deals were much easier to sell, with non-preferred senior bonds from Bankia and Lloyds Banking Group proving more popular than a tighter print from Belfius.