German Sovereign

France impressed as it received a record €51bn order book and paid a small new issue premium with its first syndication since the outbreak of the Covid-19 pandemic. The sovereign was joined in the long end of the curve this week by two sub-sovereign borrowers as investor appetite for duration grows, with more supply expected to follow.

Germany would be wise to consider diversifying its colossal funding needs with a syndication in dollars — a currency in which it is no stranger and which has become more attractive for euro-based funders, according to a head of public sector debt capital markets at one of the sovereign’s primary dealerships.

France received its biggest ever order book as it came to the market for a 20 year syndication on Tuesday. SSA bankers say that investors are looking for duration after previously sticking to defensive maturities as the Covid-19 crisis eases.

Dollars was the favoured currency for public sector borrowers for the second week running this week, giving attractive funding conditions for euro borrowers amid strong investor demand, particularly in the 10 year part of the curve.

Belgium took advantage of more attractive funding conditions in dollars versus euros and strong demand at the 10 year point of the curve to sell its first dollar bond since 2017 on Tuesday. SSA supply in dollars will continue on Wednesday with the Asian Infrastructure Investment Bank and Nederlandse Waterschapsbank bringing socially responsible deals.

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Monday, May 18. The source for secondary trading levels is ICE Data Services.

Belgium is set to issue its first dollar bond since 2017 as euro funders continue to take advantage of the attractive funding conditions in the currency, with three other public sector borrowers also in the market for dollars.

This week's funding scorecard looks at the progress of Europe's supranationals and agencies in the middle of May.

Guarantor: Federal State of North Rhine‑Westphalia

Unédic and NRW.Bank are planning to issue their first ever social bonds. The proceeds of Unédic's bond will go towards providing support for the French state unemployment package.

The European Investment Bank inaugurated its sustainability awareness bond (SAB) framework in Australian dollars on Tuesday, while on Wednesday NRW.Bank printed the largest SSA Kangaroo so far this year.

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Monday, May 11. The source for secondary trading levels is ICE Data Services.