WGZ

DG Hyp and Deutsche Hypo launched the only two benchmark covered bonds of the week, and though both deals were priced tightly, they attracted a lot of demand.

The European Investment Bank and the European Union kicked off April by printing impressive benchmark deals, yet despite this strong start to the quarter SSA bankers fear that a combination of the threat of a Brexit and the low yields on offer in the euro market will make conditions extremely challenging for issuers.

The Joint Laender reached its 50th deal two months after it was forced to postpone a planned transaction, printing a €1.5bn seven year benchmark that proceeded smoothly this time round.

The European Union proved that for the right issuers there is considerable demand at the 15 year point of the curve, with the Joint Länder planning a return to the market with a seven year benchmark for the first time since a mooted deal in February stalled.

Landesbank Hessen-Thüringen Girozentrale (Helaba) and WL Bank met contrasting outcomes for their euro denominated German Pfandbriefe issued this week.

The SSA market has seen a steady stream of activity across the euro and dollar markets this week. The European Stability Mechanism priced the week’s biggest deal on Tuesday, printing €4bn in 10 and 40 year tenors. Meanwhile African Development Bank led the charge in dollars, preparing to print a $1bn no-grow in its first benchmark deal of the year.

Austria has printed €5bn in a dual tranche issuance, pricing in 10 and 30 year tenors as the sovereign took advantage of a window of opportunity arising from a rally in global equities.

AIB Mortgage Bank attracted robust demand for its €1bn seven year covered bond issued on Thursday, and WL Bank also did well despite the difficult 10 year tenor and measly spread.

Covered bond issuers failed to take heed of poor market conditions and, just like lemmings, followed one another with poorly performing deals this week.