KfW

The European Financial Stability Facility is set to enjoy enviable conditions when it comes to the euro market next week — during which the Greek sovereign could also make an appearance. Demand at the long end has been particularly strong due to a yield spike last week, which KfW and SCNF Réseau have since taken advantage of.

The private placement market is proving its worth at the long end in euros and with dollar floaters, helping issuers make the most of excellent conditions.

SNCF Réseau launched its first 30 year green bond on Tuesday, following the example set by European Investment Bank at the end of June. KfW was also out in euros with a long 15 year — and more borrowers might be tempted to bring euro deals at the long end, said bankers.

Respite from a two week old rout in eurozone government bond yields allowed two public sector borrowers on Monday to venture out with mandates for long dated euro deals. But analysts warned that the sovereign bond sell-off could have more room left to run.

Benchmarks from the Inter-American Development Bank, KfW and Spain have now been scored in GC BondMarker. While two of the deals met with a warm reception from voters, one deal was not so popular.

The euro market showed its strength for SSA borrowers this week, as Agence Française de Développement succeeded in bringing a deal after requesting a change in its banking licence and KfW kept up its record of raising €5bn with every euro benchmark this year despite a volatile backdrop.

Guarantor: Federal Republic of Germany

Euro conditions are excellent for public sector borrowers, with Spain pulling in a nearly €30bn book for an €8bn 10 year — which bankers away from the trade said indicated a high presence of quality investors — and KfW raising €5bn after picking a seven year deal over a shorter tenor. Another pair of issuers are now looking to take advantage.

The euro market for public sector borrowers looks set to kick back into action after a quiet last week, with a pair of big borrowers mandating for trades to come on Tuesday.

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

KfW is the solitary SSA issuer out in dollars so far this week, and it is sticking to the very short end with an 18 month deal, a week before a US Federal Open Market Committee meeting at which investors overwhelmingly believe it will raise its target rate.

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark as of Thursday's close. The source for secondary trading levels is Interactive Data.