KfW

The European Investment Bank and KfW added to the glut of dollar benchmark supply on Tuesday with new benchmark trades.

Several borrowers are working on dollar deals for as early as next week, SSA Markets understands. Dollars is set to be the go-to currency for benchmark issues in coming weeks. Tight swap spreads are putting investors off across the board but the central bank bid will support dollar deals.

The World Bank and KfW capitalised on strong momentum in the Russian rouble Eurobond market to tap an existing line and print a new issue, respectively.

NRW.Bank priced a 10 year on Monday afternoon, offering investors a premium of just a few basis points over its curve. KfW is also thought to be looking at a euro benchmark, which could come as soon as Tuesday.

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.