Scotiabank

Rating: Aaa/AAA

A flattening and rising US Treasury yield curve may be sparking concerns of a slowdown for the US economy but it is having the opposite effect on the short end of the dollar market for public sector borrowers, writes Craig McGlashan.

Kommunalbanken priced a three year dollar benchmark flat to its secondary market curve on Wednesday, picking up $1bn at a punchy spread.

Kommunalbanken has circulated initial price thoughts of 5bp area over mid-swaps for a no-grow $1bn three year benchmark, a level that bankers away from the trade said was 'well priced'.

Fresh doubt has been cast on whether the record-breaking $100bn loan package for US chip maker Broadcom will come to fruition, after a US national security committee took the unusual step of issuing a public warning against the acquisition that the funds will finance.

The new issue US dollar bond market roared back to life as volatility dropped and corporates took advantage of favourable conditions with $17bn of supply coming from 19 borrowers.

Europe’s syndicated loans bankers say recent transactions highlight how cut-throat the market is for lenders, as the European Commission gets under way with a study on market practices.

Daimler led three corporate dollar issuers on Thursday as the market stabilised and high grade credits showed their resilience after a stop-start week.

US chip maker Broadcom has received commitments from 12 lenders for a staggering $100bn funding package to finance its acquisition of technology company Qualcomm.

Scotiabank looks set to enter the US private placement market, after it hired an experienced banker from National Australia Bank.

Leveraged loans have dominated leveraged buyout financing in recent months, but high yield bonds could be poised for a comeback, say European investors. Crown Holdings, the US can maker, added to early signs of optimism with its new €1.5bn cross-border bond offering this week, writes Victor Jimenez.

SSA bankers looking to get their Christmas shopping in early were in a state of shock on Tuesday, as the World Bank brought a dollar deal to follow the Province of New Brunswick’s return to the currency after a six year hiatus. But that could be it for 2017 as issuance is unlikely next week, which is bisected by a Federal Open Market Committee meeting.