the leads - BayernLB, Commerzbank, DekaBank,
HSBC and UniCredit - announced a
BENCHMARKûSIZEûWITHûGUIDANCEûOFûMID
SWAPSû
less 7bp area.
Book updates were not forthcoming and the
SIZEûWASûSETûATûõMûWITHûTHEûSPREADûUNCHANGEDû
from guidance, at mid-swaps less 7bp.
On a relative value basis, the trade may
have made sense. Certainly when looking at
THEû&EBRUARYûû"UNDû
ûMID
SWAPSûLESSû
50bp - but that Bund hit -0.219% last
-ONDAY ûAûRECORDûNEGATIVEûYIELDûFORûTHEû
TENORûATûTHEûTIMEûITûBECAMEûEVENûMOREû
negative as the week progressed).
Bankers said that yields and swaps have
moved lower so quickly that investors were
far from willing buyers of such paper,
particularly ahead of the ECB meeting last
Thursday.
They suggested this was not the best
backdrop to persuade investors to lock in
low yields and duration in an illiquid bond -
EVENûIFûRATEDû4RIPLEû!ûBYû&ITCHû!PARTûFROMû
the decent Bund spread, the deal had little
else going for it - neither new issue
concession nor absolute yield.
0RE
ANNOUNCEMENTûCOMPARABLESûOFFEREDû
up by the leads had various Laender bonds
quoted one to a couple of basis points
tighter than where the issuer landed.
The result was not that surprising to one
syndicate head, who said an analysis of SSA
DEALSûORDERûBOOKSûSINCEûMID
-AYûSHOWEDû
that, beyond a few large buyers, investor
interest is actually quite thin.
4HEûSQUEEZEûTHATûHASûALLOWEDûISSUERSûTOû
print heavily oversubscribed bonds with
negative or very limited new issue
concessions is easing.
Anyone who is not a forced buyer is
STEPPINGûBACK ûTHEûSYNDICATEûOFlCIALûSAID
STERLING
WORLD BANK’S ‘UNUSUAL MOVE’ ADDS
FIXED TO SONIA OFFER
WORLD BANK added a new point to its nascent
Sonia-linked curve but unexpectedly tacked
ONûAûlXED
RATEûNOTEûINûRESPONSEûTOûFEEDBACKû
from investors during execution.
“It is a very unusual move,” said a lead.
h)NVESTORûDEMANDûFORûlXEDûPAPERûCAMEû
through the marketing.”
The change, “on a whim”, according to a
banker away, may have capped demand for
THEûmOATER
7HILEûINTERESTûWASûOVERûaMûWHENûTHEû
new tranche was announced, combined
ORDERSûENDEDûATûONLYûaBN
PLUS ûWITHûTICKETSû
FORûTHEûlXEDûLEGûATûMOREûTHANûaMûSOMEû
ûMINUTESûAHEADûOFûBOOKSûCLOSING
“In the end, for the issuer the format
doesn’t really matter. I guess it is a good
thing that they can accommodate demand
for both. The problem is one cannibalises
the other,” said the banker away.
0RICINGûFORûTHEûaMû$ECEMBERûû
mOATERû
ûINûLINEûWITHû)04S ûATû3ONIAûPLUSûBPû- was fair, two leads said.
h)TûWASûINûLINEûWITHûTHEûISSUERSûlXEDû
CURVE ûWHICHûISûAROUNDûBP vûSAIDûTHEûlRSTû
lead.
7ORLDû"ANKûHASûISSUEDû3ONIA
LINKEDû
TRADESûTWICEûBEFOREû
ûAûaBNû/CTOBERûû
ATûBPûANDûAûaBNû-AYûûATûBP
4HEûaMûlXEDûTRANCHEûDUEû$ECEMBERû
ûPRICEDûINûLINEûWITHû)04SûATûBPûOVERû
THEûû3EPTEMBERûû'ILT
Citigroup, JP Morgan and NatWest Markets
were leads.
CORPORATES
US DOLLARS
TARIFFS, FED JOLT US CREDIT MARKETS
THROUGH VOLATILE WEEKThe investment-grade bond market went
on a roller-coaster ride fuelled by tariff-
inspired volatility at the start of last week,
but managed to glide towards the end of it
with more bonds sold and burgeoning
optimism.
53ûISSUERSûSOLDû53BNûTHROUGHû
Thursday, beating expectations for as little
as US$15bn.
That pessimism on volume came from
seeing that new issue concessions were
elevated to double digits and credit spreads
had retraced about half the gains from this
year’s rally.
4HEûPESSIMISMûSTARTEDûONû&RIDAYû-AYû û
WHENû53û0RESIDENTû$ONALDû4RUMPû
announced he wanted new tariffs on
IMPORTSûFROMû-EXICOû4HATûMOVEûADDEDûONEûmore strain to a market still coping with
proposed tariffs on Chinese imports and
grappling with the reality that a trade deal is
much farther away than hoped.
That tone carried into the primary market
early last week when a handful of issuers
tested the market, but many were forced to
offer double-digit concessions to attract
investors.
Issuance from DUKE ENERGY, HOME DEPOT and
SANTANDER HOLDINGSûALLûGAVEûUPûBP
BPûOFû
NEWûISSUEûCONCESSIONS ûACCORDINGûTOû)&2û
data.
h)TSûALLûABOUTûTRADE vûSAIDû$AVIDû+NUTSON û
Schroders’ head of credit research for the
Americas.
h3OMEûOFûITSûSELFûINmICTED ûBUTûITûDOESNTû
mean it is not meaningful, because it is
causing a tremendous amount of volatility,
not just in the credit markets but in
currencies and stock markets as well.”OPTIMISM ARISES
But the coaster jerked back in the other
DIRECTIONûWHENûTHEû&EDERALû2ESERVEûMADEûAû
string of statements signalling a willingness
to cut interest rates to stem any fallout from
Trump’s tariff policies.BONDS CORPORATESALL US DOLLAR FIXED-RATE GLOBALS
BOOKRUNNERS: 1/1/2019 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 Citigroup 103 31,314.35 9.9
2 JP Morgan 113 29,847.16 9.4
3 Barclays 84 26,847.02 8.5
4 Goldman Sachs 86 24,514.60 7.7
5 BAML 94 22,539.87 7.1
6 Morgan Stanley 58 16,892.34 5.3
7 Wells Fargo 78 14,628.60 4.6
8 RBC 52 14,087.77 4.4
9 Deutsche Bank 39 13,042.09 4.1
10 Mizuho 46 11,697.94 3.7
Total 217 316,985.64
Excluding equity-related debt, ABS/MBS.
Source: Refinitiv SDC code: O5ALL SOVEREIGN BONDS IN EUROS
BOOKRUNNERS: 1/1/2019 TO DATE
Managing No of Total Share
bank or group issues €(m) (%)
1 JP Morgan 14 12,041.49 12.4
2 BNP Paribas 13 9,597.22 9.9
3 HSBC 11 9,096.18 9.4
4 Citigroup 12 7,757.04 8.0
5 SG 11 7,537.17 7.8
6 Credit Agricole 8 6,857.49 7.1
7 Barclays 9 6,845.77 7.1
8 Goldman Sachs 10 5,618.71 5.8
9 Deutsche Bank 7 3,844.02 4.0
10 UniCredit 2 2,938.01 3.0
Total 30 96,897.74
Excluding ABS/MBS.
Source: Refinitiv SDC code: N4ALL INTERNATIONAL US$ BONDS
BOOKRUNNERS: 1/1/2019 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 JP Morgan 373 89,972.30 9.4
2 Citigroup 363 86,572.48 9.0
3 BAML 304 65,768.93 6.9
4 Barclays 249 61,253.85 6.4
5 Goldman Sachs 241 56,794.48 5.9
6 Morgan Stanley 212 47,464.59 5.0
7 HSBC 211 44,808.06 4.7
8 Credit Suisse 195 43,021.47 4.5
9 Deutsche Bank 196 41,438.88 4.3
10 Wells Fargo 172 33,867.84 3.5
Total 1,113 958,717.97
Including Euro, foreign and global issues. Excluding equity-related debt,
US Global ABS/MBS.
Source: Refinitiv SDC code: O1