German Sovereign
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A pair of public sector borrowers are lining up to sell dollar floating rate notes on Thursday, following a series of floating and fixed rate deals in the currency on Wednesday. -
Public sector borrowers are nipping in with short dated dollar deals before next week’s US Federal Reserve meeting with the central bank looking less likely to raise rates.
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The 10 year Bund yield hit a record intraday low on Tuesday, as a German region increased a deal size and a French agency lined up an unconventional eight year deal.
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A trio of issuers have lined up short end dollar deals for pricing on Wednesday. Some bankers said the focus on threes and fives was in response to poor US jobs data last week, although that view was not universal.
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German bund yields have dipped below the ECB’s main deposit rate of minus 0.4%, meaning that they are no longer eligible for purchase under the ECB’s asset purchase programme.
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KfW became the first supranational or agency to sell a euro-denominated five year benchmark with a negative yield on Tuesday.
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A pair of issuers reopened the 10 year part of the dollar curve for sovereigns, supranationals and agencies this week, but despite both trades gaining plaudits there is still scepticism over whether a $2bn-plus sized deal is possible.
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Rentenbank joined the rush for dollars on Wednesday as Inter-American Development Bank and British Columbia set pricing on deals announced the previous day.
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There was a steady stream of sterling deals in the supranational and agency market this week, amid confidence that volumes will keep up until the UK’s referendum on European Union membership is imminent.
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