Nordic Investment Bank NIB

Investors have begun to push back against ever tighter levels in the public sector dollar market, with a deeply sub-Libor trade this week failing to find full subscription. But there was not much concern ahead of next week’s Easter holidays, with some strong funding already raised in the first quarter and the new Federal Reserve chair’s first Federal Open Market Committee meeting passing this week without any great surprises.

The Nordic Investment Bank became the second borrower this week to access the two year part of the curve, taking advantage of a widening in swap spreads.

The Nordic Investment Bank has announced that it will become the second borrower of the week to access the two year dollar market. The first, Kommunalbanken, scooped up $1.25bn on Tuesday.

This week's scorecard reveals how far progressed supranationals are in their 2018 funding plans as we hit the middle of February.

Public sector borrowers this week set new landmarks in what has already been an exemplary year in dollars, as KfW sold the largest 10 year dollar benchmark in 2.5 years and the Nordic Investment Bank priced the tightest deal versus swaps of 2018 so far. SSA bankers are confident that conditions will hold at both ends of the curve — allowing the possibility of further long end supply and even lower short end spreads.

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Demand for SRI bonds and favourable basis swaps are boosting the Swedish krona market for SSAs, despite concerns late last year that the Swedish central bank’s tightening monetary policy and the krona’s appreciation against the dollar could stifle issuance. The European Investment Bank, Nordic Investment Bank and African Development Bank all came at the long end of the krona curve this week.

Public sector borrowers wrapped up a trio of short end dollar trades on Tuesday, with the tightest issuer able to grind in pricing to the lowest level from an SSA this year and the higher yielding names finding ample demand despite ending up at similar spreads. SSA bankers are confident that the strong conditions will also ring true at the long end for KfW, which has mandated for its first 10 year dollar benchmark in nearly three years.

Public sector borrowers are pouring into the three year part of the dollar curve after a series of issuers printed strong deals in the tenor last week.

Strong moves in the Mexican peso and the peso/dollar basis swap have ignited investor demand for bonds in the currency from SSA issuers that can offer a pick-up over govvies.

SSAs enjoyed a fine week in the sterling market, raising a total of nearly £2bn as bankers pointed to several factors that could be driving demand.

Nordic Investment Bank is looking to tap into what has been a bumper market for public sector sterling issuance in the early part of 2018, after hiring banks on Monday to run a December 2023 Reg S only benchmark.