IFR 03.21.2020

Both groups recommended that the DMO

RETAINûmEXIBILITYûOVERûITSûMATURITYûSELECTIONû

though.

For the quarter’s three scheduled long-

DATEDûAUCTIONSûINVESTORSûANDû

market-makers agreed that the 1.25% 2041

ANDûûûWEREûTHEûBESTûCANDIDATESûFORû

reopenings.

Market players sought a new 10-year –

either in a 2030 maturity or 2031, which

some dealers put forward on the basis that it

would retain benchmark status for longer.

)NûCONTRASTûSOMEûINVESTORSûWANTEDûAû

FURTHERûTAPûOFûTHEûûûBEFOREûANYû

new line is issued.

-ARKET

MAKERSûANDûINVESTORSûALSOûPUSHEDû

FORûNEWû'ILTSûINûTHEûTWOûTOûTHREEûANDûlVE

YEARûBUCKETSû*ANUARYûûANDû*ANUARYûû

tenors were the most popular). Buyers

wanted the shorter-dated line built up

BEFOREûTHEûlVE

YEARSûLAUNCH

)NûTHEûINmATION

LINKEDûSECTORûSOMEû

market-makers called for a new issue in the

10-year area. Both groups saw the 2028 RPI-

linker as the best candidate for a reopening,

THOUGHûINVESTORSûARGUEDûMOREûGENERALLYûFORû

SHORTER

DATEDûINmATIONûDEBTûINûVIEWûOFûTHEû

CONSULTATIONûOVERûSHIFTINGûTHEûBENCHMARKû

from RPI to CPI.

Other potential new products highlighted

INûTHEû$-/SûPREVIOUSûMARKETûCONSULTATIONû

in January – Sonia FRNs and green bonds –

did not feature this time. The DMO attributed

THISûTOûINVESTORSûANDûMARKET

MAKERSûFOCUSINGû

on the core funding programme in the

current exceptional market conditions.

REMIT RAMPS UP

4HEûûREMITûTOTALSûaBNûOFû'ILTû

SALESû4HISûMARKSûAûSIGNIlCANTûINCREASEûFROMû

THEûaBNûTHEû$-/ûWASûTASKEDûWITHû

RAISINGûFORûûUPûFROMûANûINITIALû

aBN    ûREmECTINGûTHEû*OHNSONû

administration’s higher commitments for

infrastructure spending and other measures

TOûhLEVELûUPvûTHEû5+SûSTRONGûREGIONALû

disparities.

The higher remit seems likely to increase

FURTHERûNEXTûMONTHûGIVENûITûDOESûNOTû

INCLUDEûaBNûOFûCORONAVIRUSûFUNDINGû

announced in the recent budget (£7bn of

extra spending and a £5bn emergency

response fund).

Any increase will follow publication of

THEûOUTTURNûOFûTHEû

û#ENTRALû

'OVERNMENTû.ETû#ASHû2EQUIREMENTû

according to the DMO, which is

PROVISIONALLYûSCHEDULEDûFORû!PRILû

NON-CORE CURRENCIES

NEW ZEALAND LIFTS ISSUANCE TARGET

The NEW ZEALAND TREASURY has increased its

PROJECTEDûBONDûISSUANCEûFORûlSCALûYEARû

20 by NZ$3bn (US$1.81bn) as part of the

COUNTRYSûRESPONSEûTOûTHEû#OVID

ûOUTBREAK

The decision was made necessary by the

GOVERNMENTSû.:BNûlSCALûSTIMULUSû

package, equal to a hefty 4% of GDP, to increase

HEALTHûSERVICESûANDûSUPPORTûWAGESûINCOMESû

ANDûVULNERABLEûBUSINESSESûANDûINDUSTRIESû

These measures will enable New Zealand

TOûLIMITûITSûPREDICTEDûCORONAVIRUS

RELATEDû

economic contraction to 1% of GDP by Q1

ûVERSUSûûWITHOUTûTHEMûACCORDINGûTOû

Treasury department forecasts.

The new gross bond issuance target is

.:BNûWITHû.:BNûHAVINGûALREADYû

BEENûRAISEDûWHILEûFUTUREûlSCALûYEARûSUPPLYû

forecasts are also expected to be ratcheted

higher in the 2020 budget.

With maturities and buybacks of

NZ$5.4bn scheduled, net issuance is now

FORECASTûATû.:BNûINû

ûWHICHûWILLû

take the total outstanding New Zealand

GOVERNMENTûBONDSûUPûTOû.:BNû

4HEû4REASURYûSAIDûITûWILLûSETûREVISEDû

issuance plans for the June 2020 quarter

before the end of the current quarter and no

longer plans to begin a repurchase

programme of the May 15 2021 nominal

bond before June 30.

SOVEREIGN COMPARABLES

2EVISEDû1ûSUPPLYûPLANSûMAYûINCLUDEûAûNEWû

syndicated bond offering to help meet the

extra NZ$3bn of funding.

4HEûPREVIOUSûSYNDICATEDûISSUEûINû

September raised the maximum NZ$2bn the

Treasury was seeking by opening a 1.50%

May 15 2031 line.

.:'"SûENJOYûSOMEûSCARCITYûVALUEûTOûREmECTû

THEûCOUNTRYSûRELATIVELYûSMALLûGOVERNMENTû

debt, which has been around 20%–25% of

'$0ûFORûSEVERALûYEARSû

/FFSHOREûDEMANDûHASûSOFTENEDûHOWEVERû

after New Zealand lost its position as the

highest yielding market, in absolute terms,

AMONGû4RIPLEû!$OUBLEû!ûRATEDûSOVEREIGNS

Nowadays, the dominant and liquid US

Treasury market and the neighbouring

!USTRALIANûMARKETûOFFERûINVESTORSûMOREûBANGû

for their bucks.

.:'"û

YEARûYIELDSûWEREûQUOTEDûATûû

ONû7EDNESDAYûBPûANDûBPûLESSûTHANû

RESPECTIVEû4REASURYûANDû!#'"û

YEARûYIELDSû

of 1.03% and 1.18%.

.:'"SûSTILLûPROVIDEûDIVERSIlCATIONûBENElTSû

but liquidity can be a problem, especially as

New Zealand has not met the size

requirements of Citigroup’s nominal World

'OVERNMENTû"ONDû)NDEXûWHICHûMANYûGLOBALû

portfolio managers like to track.

4UESDAYSûAGGRESSIVEûlSCALûLOOSENINGû

came a day after an emergency 75bp cut in

THEû2ESERVEû"ANKûOFû.EWû:EALANDSûOFlCIALû

cash rate to 0.25%, alongside a pledge to

KEEPûITûATûTHATûLEVELûFORûATûLEASTûûMONTHS

SSA TRIO KEEP ON TAPPING

Three regular Triple A rated SSA issuers

HAVEûBEENûTAPPINGûTHEIRûSHORT

DATEDû

+ANGAROOûLINESûAGAINûMOSTûPROBABLYûDRIVENû

by demand from a single Asian central bank

in this segment, according to bankers away

from both deals.

ASIAN DEVELOPMENT BANK increased its 5.0%

-ARCHûûSûBYû!Mû53M ûONû-ARCHû

13, raising the outstanding size to A$1.2bn.

28 International Financing Review March 21 2020

ALL AGENCY BONDS IN EUROS

BOOKRUNNERS: 1/1/2020 TO DATE

Managing No of Total Share

bank or group issues €(m) (%)

Excluding equity-related debt. Including publicly owned institutions.

Source: Refinitiv SDC code: N6

1 Barclays 11 4,157.09 13.2

2 HSBC 11 3,955.19 12.6

3 JP Morgan 7 3,638.02 11.6

4 BofA Securities 5 2,956.79 9.4

5 Commerzbank 5 2,603.59 8.3

6 Credit Agricole 11 2,506.69 8.0

7 Deutsche Bank 3 1,924.71 6.1

8 SG 6 1,818.79 5.8

9 BNP Paribas 7 1,776.23 5.6

10 Natixis 7 1,615.10 5.1

Total 37 31,439.72

ALL SUPRANATIONAL 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: N5

1 Goldman Sachs 6 3,930.72 13.6

2 JP Morgan 5 3,083.30 10.7

3 Deutsche Bank 6 3,003.72 10.4

4 BofA Securities 3 2,534.24 8.8

5 UniCredit 3 2,498.62 8.6

6 Credit Agricole 4 2,461.20 8.5

7 SG 5 2,281.46 7.9

8 BNP Paribas 4 2,035.03 7.0

9 Barclays 3 1,562.25 5.4

10 HSBC 2 1,513.69 5.2

Total 18 28,901.11

MUNICIPAL, CITY, STATE, PROVINCE ISSUES 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: N7

1 UniCredit 11 2,907.57 18.4

2 JP Morgan 5 2,036.46 12.9

3 DGZ-DekaBank 10 1,283.94 8.1

4 Nord/LB 9 1,237.83 7.8

5 Barclays 5 777.09 4.9

6 HSBC 6 749.13 4.7

7 DZ Bank 6 636.22 4.0

8 Deutsche Bank 6 636.10 4.0

9 BayernLB 6 617.19 3.9

10 LBBW 4 578.69 3.7

Total 30 15,816.69

6 IFR Bonds 2325 p 23 - 45 .indd 28 20 / 03 / 2020 19 : 59 : 39