KfW

A number of borrowers announced benchmark mandates in the dollar markets following Monday’s Labor Day holiday.

FMS Wertmanagement justified its decision to wait for a less congested new issue market on Tuesday when it priced an oversubscribed €2.5bn deal in an unusual maturity where such sizes are far from expected.

German wind-up agency, FMS Wertmanagement finally dipped a toe in the choppy waters of the euro market on Monday with a new benchmark mandate. But beyond this deal, the euro pipeline is bear for the week ahead.

German agency KfW printed on Tuesday the only the second SSA dollar global benchmark since July. The deal starved dollar market took the paper 2bp through initial price thoughts. But senior SSA bankers suspect the meagre returns to US Treasuries that the sector can offer investors may hinder forthcoming supply.

The European Financial Stability Facility sent out a request for proposals on Wednesday and could come with a deal as soon as next week. The bailout borrower will join several other names looking at printing in euros, but investors are cautious and borrowers could prove reluctant to test sentiment this week or next with a benchmark.

It has seemed crazy that so many issuers were prepared to sit the summer out given the benign market conditions in recent weeks.

A lack shortage of supply in secondary is driving investors into private placement markets. Washington supranationals raised funds through innovative methods this week, including Uridashi and private placements in unfamiliar currencies.

KfW sold a quartet of private placements in a range of currencies to a Swiss institutional investor on Monday. It followed up with a public Canadian deal on Tuesday.

KfW priced a five year NZ$100m ($81.26m) bond on Thursday. Although the tenor follows a trend of recent Kauri deals, the German agency opted for the less familiar Eurobond format.

Sensing an avalanche of pent-up demand that secondary markets could not satisfy, KfW waded into the Eurodollar market on Wednesday with a blowout seven year. The Eurodollar deal was heavily oversubscribed allowing the size to be increased from initial expectation and the reoffer spread to be tightened by 2bp from initial price thoughts.

Bank Nederlandse Gemeenten (BNG) tapped its 2.375% five year Canadian Eurobond on Tuesday. This marks the start of further loonie activity according to bankers.

Number one Kangaroo borrower KfW finally made an appearance in the Australian dollar market on Wednesday with a A$650m ($683.3m) August 2017 bond. The trade follows heavy Kangaroo supply from SSAs across the globe in the past month.