Rentenbank

Rentenbank was set to price on Tuesday afternoon what is likely to be its last dollar global before it receives an explicit government guarantee from Germany. The deal was a complete blow out and looks set to be priced on top of fellow German agency KfW’s secondary curve, according to the leads.

Rentenbank reopened the benchmark market for SSA borrowers on Monday with the first of a possible quartet of dollar trades that bankers expect to see in the near future.

German development banks are mulling dollar issues before the end of the year, SSA Markets understands. Rentenbank is likely to come with a trade this week or next, while NRW.Bank will consider a dollar benchmark before the end of the year if the euro/dollar basis is favourable enough.

Rentenbank priced its first new dollar deal in a year on Wednesday which attracted a large order book, tightened in secondary markets, and looks set to tighten even further once the German parliament approves the borrower's new explicit sovereign guarantee.

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

A queue of SSA issuers is forming to take advantage of an under supplied dollar market with a flood of supply in September, according to bankers. Although tight spreads and low yields will make conditions tough for the very best credits in shorter dates, duration and cheaper names should be able to take advantage of a hungry investor base.

Germany plans to give Rentenbank an explicit and direct guarantee, putting the issuer on a par with KfW. Renten’s secondary levels will tighten as a result, but it won’t threaten KfW’s status in capital markets, said market participants.

Rentenbank tapped an eight year Kangaroo bond on Friday, rounding off an already busy week for Aussie dollars. However, the deal failed to reach full subscription at the time of pricing.

FMS Wertmanagement, which bankers expect to see in benchmark format next week, left market participants bewildered when it priced a €500m new issue to capitalise on reverse enquiry for its name. Rentenbank also took advantage of reverse enquiry to tap 2019 debt.