KfW

There may have been the odd stinker of a deal this year but it is hard to fault SSA borrowers as a group. They went after the money this year with aggression, front-loading programmes and bringing some spectacular deals. Some market watchers were looking forward to the autumn issuance season being something of a repeat of the first three months of the year, but it does not look like that will happen. And that is a good thing.

Supranationals and agencies placed a flurry of Kangaroo deals this week, as the market showed no sign of calming after a busy month.

Finland has hired five banks to run a five year syndication, making it the first borrower to tackle a new euro benchmark in the belly of the curve since the summer break. KfW, meanwhile, priced an oversubscribed 10 year on Tuesday afternoon while Rentenbank got a short dated print away.

Ahead of an expected flood of issuance kicking off in the last week of August, here are the updated funding scores for selected European supranational and agency borrowers.

KfW is looking at opportunities at the long end of the euro curve for early September, in order to dodge potential uncertainty arising from the German federal elections and the next Federal Reserve Open Markets Committee meeting. The issuer is also mulling the possibility of a 10 year Kangaroo bond in order to take advantage of Japanese investors returning to the Australian market.

A bevy of issuers looked to print dollar floaters on Wednesday and Thursday, as Federal Reserve chairman Ben Bernanke’s congressional testimonies on both days made markets too risky for issuers to attempt a fixed rate benchmark. But as Bernanke’s dovish testimony appeared to mollify markets, the era of floaters could come to an end next week.

Province of Ontario and KfW brought heavily oversubscribed dollar benchmarks at the short end of the curve on Tuesday afternoon, proving that there is demand for issuers in dollars if they are willing to pay a concession.

Province of Ontario and KfW mandated banks for dollar benchmark on Monday afternoon. If the deals are met with a strong response, they could encourage other issuers to look to sell dollar issues next week.

Following an unexpectedly heavy week of issuance from European supranationals and agencies, here are the updated funding scores for selected borrowers in the category.

Export Development Canada (EDC) sold its first sterling bond of the year on Thursday, placing a three year note. The issuer was able to increase the deal beyond its minimum size even with a volatile sterling market on Thursday morning.

KfW placed its first Swedish krona deal in a year on Monday, as a handful of investors dipped into what dealers dubbed a “new normal” in pricing that has wiped 30bp-50bp from coupons.

KfW sold its second Canadian dollar deal of the year on Tuesday, a three year fixed rate note. The deal benefited from increased interest in Canadian dollars — largely in response to falling interest in Australian dollars along with a favourable perception of the country — but also suffered from investor reluctance to buy fixed rate paper.