France

Deal arrangers expect bank bond supply will peter out after a flurry of deals this week. Issuers have been enjoying fantastic conditions, but most of them have finished their funding plans early so they can lay low throughout a much-feared fourth quarter. Tyler Davies and Bill Thornhill report.

Green, social and sustainable issuance has dominated the supranational and agency bond market for a whole month, consistently outpacing conventional supply. This week proved another extremely strong one for the asset class.

Rating: Aa2/AA

Crédit Agricole and Nykredit Realkredit were able to push aggressively on pricing in the additional tier one (AT1) market this week, as they took advantage of favourable supply and demand dynamics.

Unédic returned for another social benchmark on Thursday, adding to the slew of successful French agency SRI-themed paper.

Korian, the French nursing home operator, has launched a €400m rights issue to buy Inicea, a French operator of psychiatry clinics.

Another slew of socially responsible SSA deals hit screens on Wednesday, all achieving impressive size and healthy order books, showing the strength of the market in euros for the borrower class.

My Money’s Bank’s 10 year Obligations Foncières issued on Wednesday attracted strong demand, largely due to the spread on offer.

Société du Grand Paris plans to steam ahead with funding as it announced a doubling of its green EMTN programme and a substantial increase to its 2020 funding programme to help prefund the financing for the next three years of the Grand Paris Express project.

At around €300bn, France is the world’s second largest covered bond market. Yet, unless issuers consider pre-funding for bonds that fall due early next year, supply prospects for the remainder of this year are dim. This, along with stability in the French economy, property market and covered bond ratings, should stand the asset class in good stead.

Yorkshire Building Society (YBS) has mandated leads for the first euro covered bond from the UK since January, My Money Bank has also mandated and, after concluding a roadshow, Sumitomo Mitsui Trust Bank is due this week too. All three bonds will offer a temptingly high spread.

Green, social and sustainable issuance has dominated the supranational and agency bond market for a whole month, consistently outpacing conventional supply. That trend looks set to continue with three SRI deals already on screens.