UniCredit

KfW rebooted the short end of the euro public sector bond market on Tuesday with a well subscribed trade which offered a modest new issue premium. The deal shared the euro SSA market with the State of Baden-Württemberg’s debut green bond.

Banco de Sabadell was met with good demand for the first euro additional tier one benchmark of the year on Tuesday, as investors welcomed a rare opportunity to pick up subordinated bank debt in the primary market. Alpha Bank could add to the supply later this week after unveiling plans for a new tier two transaction.

Hamburg Commercial Bank (HCB) returned to the senior preferred market for the first time in 21 months this week, extending its maturity curve as it works on finishing a multi-year transformation plan following its privatisation.

HVB, the Germany subsidiary of UniCredit, attracted more demand for its €750m 10 year than any Pfandbrief of that size launched in over a decade.

Four public sector borrowers announced new deals in the primary market on Monday ahead of the European Union’s much anticipated second transaction from its Support to mitigate Unemployment Risks in an Emergency programme this year, which is expected to arrive later in the week.

UniCredit’s German subsidiary, HVB, is expected to open order books for a 10 year benchmark on Tuesday. With swap yields currently just positive, the deal has a slim chance of offering a positive return.

Subordinated bank bonds were under pressure on Thursday and Friday, as risky assets fell victim to the same volatility that has been plaguing rates markets for weeks.

Serbia and Croatia issued euro-denominated bonds this week. Market participants said the deals showed there was strong appetite for the right kind of sovereign credits.

NatWest expanded its environmental, social and governance (ESG) offering with its debut social housing bond this week, the first from a UK financial issuer, landing the €1bn deal well through fair value.

Rating: Baa2/BBB/A

Financial institutions have ramped up their sales of green debt at the start of 2021, as they look to take advantage of a quiet funding year by building out their environment, social and governance frameworks. This week, nearly all FIG euro issuance arrived in ESG formats.

Croatia was set to price a bond in euros on Thursday, following two other EM sovereign issuances in the currency this week.