IFR 03.21.2020

SSAR

US DOLLARS

SSA SHUTOUT EXTENDS TO CP

$ESPITEûINVESTORûAPPETITEûFORûSAFE

HAVENû

assets, public sector borrowers are

struggling to fund in short-term markets -

most acutely in US dollars.

This mirrors their experience in term debt,

where supply has collapsed in March after a

BOOMûACROSSûTHEûlRSTûTWOûMONTHSûOFûTHEûYEARû

“The short-term market is more or less

closed,” said the head of treasury at a European

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h3PREADSûAREûALLûOVERûTHEûPLACEûANDûNOûONEû

knows exactly where prices are or the

market condition. If I ask dealers, it is really

hard to get them to answer, and they don’t

KNOWûATûWHATûLEVELSûWEûCANûTRADEûORûEVENûIFû

we can do something.”

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greater liquidity. “It is normally faster and

MOREûEFFECTIVEûWITHûMOREûVOLUMEvûTHEû

treasury head said. “If I need US$500m

today, I can print.”

But it has not traded in the US for the past

MONTHû/Nû4UESDAYûTHEû53û&EDERALû2ESERVEû

acknowledged that the US$1.1trn USCP market

had been under considerable strain in recent

days as businesses and households face greater

UNCERTAINTYûINûLIGHTûOFûTHEûCORONAVIRUSûOUTBREAKû

The US central bank responded by

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Facility, which dates back to the 2008 global

lNANCIALûCRISISû)TûENABLESûTHEû&EDûTOûBUYûTOP

rated A1/P1 unsecured and asset-backed CP

directly from eligible issuers - including US

issuers with a foreign parent.

Still, problems in short-term debt are not

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leading SSA credits in ECP, was offering three-

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This translated to Libor plus 75bp, a notably

high spread for a top-rated name.

h4HATûGIVESûAûPICTUREûOFûTHEûMARKETû)TûISûSOû

stressed, it seems not to work so well,” said

the treasury head.

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LEVELûQUOTEDû

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SHORTENEDûEVENûFORûTOP

RATEDûPUBLICûSECTORû

credits.

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do short-term trades,” the treasury head

said.

But these range from one week to one

month in maturity.

Against this background, the CPFF is set to

BEGINûOPERATIONSûONû&RIDAYû%VENûIFûITSûRATEûOFû

three-month OIS plus 200bp (with a 10bp

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&EDSûINTERVENTIONûSHOULDûRESTOREûORDERûTOû

the market.

“It will be better for sure. It could take a

few days but it’s going to help a lot,” said the

treasury head.

BILLS LAND

SSAs’ US dollar CP struggle contrasts with

the success of eurozone treasury bill

auctions during the week. The European

3TABILITYû-ECHANISMûSAWûAûCOVERûRATIOûOFû

NEARLYûTWOûTIMESûFORûAûõBNûOFFERINGûOFû

six-month bills on Tuesday.

This followed France attracting more than

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SOVEREIGNûSOLDûõBNûOFû"4&SûINûTHREEûSIXû

nine and 12-month maturities.

Bankers also report the euro CP sector

functioning for SSAs.

“It is working quite well. There is a strong

mIGHT

TO

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!NOTHERûNOTEDûSIGNIlCANTûACTIVITYûFROMû

borrowers managing their liquidity and

swap collateral, though he also reported “a

lot of stress on short-term markets”.

International Financing Review March 21 2020 25

BONDS SSAR

EUROPEAN SOVEREIGN BOND AUCTION RESULTS WEEK ENDING MARCH 20 2020

Pricing date Issuer Size Coupon (%) Maturity Average Yield (%) Bid-to-cover

Mar 17 2020 UK £2bn 1.75 Jan 22 2049 1.029 2.12

Mar 18 2020 Germany €1.176bn 0.00 Aug 15 2050 0.01 1.15

Mar 19 2020 Spain €1.299bn 0.00 Apr 30 2023 0.024 2.55

Mar 19 2020 Spain €1.67bn 1.50 Apr 30 2027 0.473 1.93

Mar 19 2020 Spain €1.545bn 0.50 Apr 30 2030 0.661 2.21

Mar 19 2020 Spain €500m 2.35 Jul 30 2033 0.827 2.09

Mar 19 2020 France €3.161bn 0.00 Mar 25 2023 -0.43 1.66

Mar 19 2020 France €2.426bn 0.00 Mar 25 2025 -0.22 1.66

Mar 19 2020 France €1.857bn 2.75 Oct 25 2027 -0.05 1.28

Mar 19 2020 France (i) €220m 0.10 Mar 1 2028 -0.08 2.50

Mar 19 2020 France (€i) €339m 0.70 Jul 25 2030 -0.25 2.11

Mar 19 2020 UK £3.25bn 0.625 Jun 7 2025 0.64 1.97

Source: IFR

ALL INTERNATIONAL BONDS (ALL CURRENCIES)

BOOKRUNNERS: 1/1/2020 TO DATE

Managing No of Total Share

bank or group issues US$(m) (%)

Including Euro, foreign, global issues. Excluding equity-related debt,

US Global ABS/MBS.

Source: Refinitiv SDC code: J1

1 JP Morgan 307 82,038.84 8.3

2 Barclays 247 67,804.73 6.9

3 Citigroup 241 60,905.62 6.2

4 BofA Securities 215 52,874.92 5.4

5 Goldman Sachs 170 47,527.83 4.8

6 HSBC 214 46,311.45 4.7

7 Deutsche Bank 185 42,045.64 4.3

8 BNP Paribas 152 40,766.28 4.1

9 Morgan Stanley 124 39,556.32 4.0

10 Credit Agricole 140 34,328.95 3.5

Total 1,288 986,722.32

ALL BONDS IN EUROS

BOOKRUNNERS: 1/1/2020 TO DATE

Managing No of Total Share

bank or group issues €(m) (%)

Including Euro-preferreds. Excluding equity-related debt,

US Global ABS/MBS.

Source: Refinitiv SDC code: N1

1 JP Morgan 83 28,636.10 8.1

2 BNP Paribas 93 25,087.46 7.1

3 Barclays 94 23,709.72 6.7

4 Credit Agricole 76 22,666.87 6.4

5 HSBC 75 20,169.20 5.7

6 SG 58 19,034.64 5.4

7 Deutsche Bank 71 17,186.28 4.9

8 UniCredit 72 16,365.60 4.7

9 Citigroup 53 14,228.00 4.0

10 Goldman Sachs 43 13,899.46 4.0

Total 389 351,558.60

ALL 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: JG1

1 BNP Paribas 12 2,548.82 9.4

2 Credit Agricole 12 2,346.31 8.6

3 Barclays 11 2,336.25 8.6

4 SG 6 1,952.78 7.2

5 Santander 9 1,816.89 6.7

6 JP Morgan 10 1,569.85 5.8

7 HSBC 12 1,102.58 4.1

8 BofA Securities 8 1,094.26 4.0

9 ING 7 743.21 2.7

10 Danske Bank 7 733.62 2.7

Total 55 27,151.86

6 IFR Bonds 2325 p 23 - 45 .indd 25 20 / 03 / 2020 19 : 59 : 39