NordLB

All eyes in the primary euro public sector bond market are fixed on the expected arrival of Germany's green Bund this week, but there were still some other deals announced on Tuesday. Greece is sticking to its plan for a syndicated bond issuance every quarter and Berlin hopes to match the success of its compatriot Land NRW in the 30 year part of the curve.

A former sovereign, supranational and agency bond trader at Commerzbank has joined NordLB after an almost two year hiatus from the capital markets.

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The State of North Rhine-Westphalia and Nederlandse Waterschapsbank rebooted the long of the euro SSA curve on Wednesday with well subscribed deals and minimal new issue premiums.

The State of North Rhine-Westphalia and Nederlandse Waterschapsbank will be the first two public sector borrowers to test investors’ appetite for euro deals in the long end of the curve following the summer break.

The State of Baden-Wuerttemberg only managed to sell around half of its €1bn 10 year bond to investors on Tuesday as it came flat or slightly through its curve alongside competing supply in the tenor.

ABN Amro has become the 18th bank to call an additional tier one (AT1) in 2020, as refinancing conditions continue to improve, despite the impact of the coronavirus pandemic.

A pair of German sub-sovereigns had the primary public sector bond market to themselves this week, with each taking €500m at tight levels to their secondary curves.

The State of Lower Saxony was the sole borrower active in the primary public sector bond market on Thursday as it raised €500m with a 10 year at a negative yield. The deal ended up comfortably subscribed in spite of a slow start to the book-build.

The State of Lower Saxony mandated banks on Wednesday to run a 10 year euro benchmark on Thursday, as German states remain the only action in the public sector primary market.

The European Commission’s proposed amendment to the Liquidity Coverage Ratio Delegated Act suggests covered bonds, such as those issued by NordLB Luxembourg and others, could be excluded, which could extinguish banks’ demand for them. However, it is likely that a solution referencing the covered bond directive will be found.

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