Still, CPPIB - which lacks a government
guarantee but is supported by guaranteed
contributions and creditors’ seniority to
pensioners, as well as its US$400bn of assets
ûACHIEVEDûTHEûVERYûLIMITEDûTHREEûTOûlVE
YEARû
spread characteristic of EDC and other top
Triple As, the lead said.
Its September 2023 bond was trading at
around plus 14bp when the new issue was
ANNOUNCEDûh4HATûISûTHEûSAMEûmATNESSûOFû
curve that the top supranationals get - a very
modest premium.”ONTARIO TEACHERS TOO
There is one other Canadian public pension
fund mandate in the pipeline, though there
won’t necessarily be a deal.
ONTARIO TEACHERS’ FINANCE TRUST, fully
guaranteed by Ontario Teachers’ Pension
Plan Board, is meeting investors in Europe
via Barclays, BNP Paribas, Bank of America and
JP Morgan.
Leads emphasised, though, that the issuer
had not announced any deal in connection
with its roadshow.EUROS
VOLATILITY SEES SPAIN 30-YEAR SHED
ORDERSThe order book on the KINGDOM OF SPAIN‘s 30-
year shed some €12bn of demand from its
peak last Tuesday as opportunistic investors
dropped out when it was buffeted by
volatile markets, an outcome that
CONTRASTEDûWITHûTHEûMAJORITYûOFûSû
sovereign syndications.
Order books for public sector new issues,
in particular sovereign deals, have been
breaking all records since the start of year as
investors scramble to get their hands on
primary paper.
However, Spain’s €5bn deal last week
LOOKEDûLIKEûTHEûlRSTûCHINKûINûTHEûARMOURûOFû
the so-far bullet-proof market. While allAPPEAREDûWELLûATûTHEûlRSTûUPDATES ûWITHû
books passing €20bn and then €30bn, they
plummeted to €18bn including €2.35bn of
JLM interest.
“For me, this wasn’t a spread issue,” said a
lead. “There was a short period where Bunds
richened and equities moved and we lost
some opportunistic investors.”
From the 89bp area over mid-swaps
guidance where marketing started, the level
was set 3bp tighter at 86bp over.
Bankers away from the deal agreed that
the sharp movements in markets had
undermined interest in the new issue.
“I think the move in spread and that drop
in book says something about the market,”
said a banker away from the transaction.
“Ultimately, I think it is still a success, but
the market is more volatile and this really
demonstrates that.”
Despite the volatility, bankers defended
the decision for Spain to issue on Tuesday.
“There is a broad acceptance that core
rates will be lower for longer and that curves
WILLûREMAINûmAT vûSAIDûTHEûLEADûh#OMBINEDû
with the strong performance in the
secondary of their long end, all the
indicators were good for the new issue.”
!NDûWHILEûTHEûBOOKûDROPPEDûSIGNIlCANTLY û
landing pricing at 86bp made for a limited
new issue premium, according to bankers,
who placed fair value in the mid to low 80s.
The reception was in stark contrast to that
encountered by Italy’s €7bn 2.45%
September 2050 issued in January. That
TRADEûSAWûAûlNALûORDERûBOOKûOFûõBNûANDû
moved pricing to land at BTPs plus 6bp from
IPTs of the 9bp area.
Indeed, Spain’s last appearance in the
bond market was also met with a markedly
different reaction. In January, the sovereign
raised €10bn through a 0.5% April 2030 at
0.525% generating a record breaking €53bn-
plus book.
Spain last issued a syndicated 30-year
bond in February 2018, when it sold a €6bn
2.7% October 2048 on books exceeding€25.8bn. That note was bid at 0.987% on
Tuesday, having priced at 2.726%.
In January, the sovereign also announced
that it was committed to issuing green
bonds, hoping to tap into demand from
green bond funds and encourage similar
issuance from Spanish credits.
The new deal was sold through Barclays,
BBVA, BNP Paribas, Credit Agricole, JP Morgan
and Santander.UNEDIC REVIVES PUBLIC SECTOR EUROSA heavily oversubscribed benchmark from
UNEDICûnûTHEûlRSTûFROMûTHEû&RENCHûAGENCYûINûAû
year – revived the stalled euro public sector
bond market last Thursday.
Lead managers Barclays, BNP Paribas,
Commerzbank, Credit Agricole and Societe
Generale drew orders in excess of €3.5bn for
the 10-year offering.
Investor support for the €1.25bn deal,
which leads tightened 2bp during
marketing to 14bp over the interpolated
OAT curve, contrasted with last Tuesday’s
more expensive benchmark in the same
maturity from the European Stability
Mechanism (ESM).
ESM was unable to tighten its €2bn no-grow
offering from initial indications of mid-swaps
less 8bp. Its order book reached €2.5bn.
In contrast, Unedic began marketing at
the equivalent of swaps plus 6.5bp, though
lNALûPRICINGûWASûTIGHTERûATûBPûOVER
“They are one of very few level one issuers
that price positive versus mid-swaps,” noted
a lead manager, who termed the deal “an
impressive trade in a challenging market, to
say the least”.
With more than three-quarters of
February’s new issues now trading wider than
their launch levels, Unedic attracting demand
of €3.5bn at a negative yield was “quite
special”, the lead said. It priced at –0.243%.
The lead attributed this to it being a rare
Republic of France-guaranteed borrower,
which issues in benchmark size.28 International Financing Review February 29 2020ALL US DOLLAR FIXED-RATE GLOBALS
BOOKRUNNERS: 1/1/2020 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)Excluding equity-related debt, ABS/MBS.
Source: Refinitiv SDC code: O51 Citigroup 26 10,502.68 10.5
2 JP Morgan 19 6,887.06 6.9
3 BofA 21 6,867.74 6.8
4 Barclays 13 6,368.81 6.3
5 TD Securities 12 6,278.76 6.3
6 Goldman Sachs 17 6,069.25 6.0
7 Morgan Stanley 11 4,827.93 4.8
8 RBC 11 4,267.09 4.3
9 Deutsche Bank 10 4,163.27 4.2
10 Wells Fargo 11 3,897.00 3.9
Total 58 100,318.37ALL SOVEREIGN BONDS IN EUROS
BOOKRUNNERS: 1/1/2020 TO DATE
Managing No of Total Share
bank or group issues €(m) (%)Excluding ABS/MBS.
Source: Refinitiv SDC code: N41 JP Morgan 13 9,484.52 11.9
2 BNP Paribas 11 7,448.74 9.3
3 Citigroup 9 6,838.46 8.6
4 SG 6 5,899.53 7.4
5 Goldman Sachs 8 5,306.30 6.6
6 HSBC 7 4,978.31 6.2
7 Credit Agricole 4 4,412.84 5.5
8 Barclays 7 3,677.29 4.6
9 Nomura 3 3,447.15 4.3
10 Santander 4 3,385.77 4.2
Total 27 79,852.58ALL INTERNATIONAL GREEN BONDS
BOOKRUNNERS: 1/1/2020 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)Excludes social bonds and mixed use of proceeds.
Source: Refinitiv SDC code: JG11 BNP Paribas 12 2,548.82 10.4
2 Credit Agricole 11 2,097.07 8.6
3 Barclays 10 2,087.01 8.5
4 Santander 9 1,816.89 7.4
5 SG 5 1,812.20 7.4
6 JP Morgan 8 1,419.41 5.8
7 HSBC 10 1,015.30 4.2
8 BofA 6 782.74 3.2
9 UniCredit 4 706.08 2.9
10 Morgan Stanley 4 697.73 2.9
Total 49 24,424.696 IFR Bonds 2322 p 25 - 43 .indd 28 28 / 02 / 2020 19 : 15 : 31