EIB

Concerns over the UK’s exit from the European Union, which have increased following Tuesday’s series of votes in parliament on the matter, will not affect demand for sterling SSA paper, according to bankers.

The European Investment Bank showed there was ample appetite for sterling SSA paper on Wednesday, despite Tuesday’s vote in the UK Parliament that left more uncertainty over the eventual outcome of Brexit.

The European Court of Auditors (ECA) issued on Tuesday a report criticising several core elements of the European Fund for Strategic Investment (EFSI) — the so-called Juncker investment plan.

This week's funding scorecard looks at the progress supranationals have made in their funding programmes.

The European Investment Bank, European Commission and EU member states are struggling to decide how to run InvestEU, a €47bn guarantee from the EU budget supposed to support €650bn in investment, as a successor to the Juncker plan. The Commission is seeking more direct control, while the European Bank for Reconstruction and Development is also after a bigger role.

A record start to the SSA sterling market came to a halt early this week, with borrowers avoiding prints as the UK Parliament delivered a historically large defeat to the government over its planned withdrawal agreement with the European Union. But once the big risk of the event was out the way, supply picked up — although with Brexit’s direction as uncertain as ever, further blocks to issuance are likely.

Rating: Aaa/AAA/AAA

High grade bond markets have made a flying start to the year, defying the expectations of a bear market in fixed income following the end of the European Central Bank’s asset purchase programme and tightening of monetary policy in the US. Instead of the expected cautious tone, investors have been fuelling record order books, big deals and strong performance in the secondary markets, write Burhan Khadbai and Nigel Owen.

Italy and the European Investment received combined orders of over €50bn in the euro public sector market on Tuesday before what could be an even more uncertain period in Europe, with the UK parliament set to vote on prime minister Theresa May’s Brexit withdrawal agreement later in the evening.

SNCF Réseau paid a significant new issue premium for its first benchmark green bond since 2017 on Monday. The European Investment Bank will issue its own 10 year euro bond on Tuesday, following trades in sterling and dollars earlier in the year.

Hopes of a thriving new market for securitizations by multilateral development banks hit a hole in the road in December, when the US Treasury said it disapproved of them and would seek to stop them.

Rating: Aaa/AAA/AAA