SSAR
US DOLLARS
WORLD BANK GETS DEAL AWAY DESPITE
QUESTIONS OVER TIMINGThe WORLD BANKûPULLEDûOFFûTHEûlRSTû33!û53û
dollar trade since the spread of the coronavirus
all but shut primary markets, though the deal’s
timing was questioned by some.
The Washington-based supranational,
fresh from announcing a US$12bn “fast
TRACKvûlNANCINGûPACKAGEûTOûHELPûTACKLEûTHEû
OUTBREAK ûPRINTEDûAû53BNûlVE
YEARû'LOBALû
in line with guidance at mid-swaps plus 10bp
after drawing demand in excess of US$4bn.
)TûPROVIDEDûTHEûlRSTûGLIMPSEûOFûINVESTORSû
interest for public sector debt since a
surprise 50bp rate cut from the Fed to 1.0%–
1.25% on Tuesday.
)TûWASûTHEûlRSTûTIMEûTHATûTHEûCENTRALûBANKû
had cut rates between scheduled meetings
SINCEûTHEûûlNANCIALûCRISIS
Despite the oversubscription, some
bankers away from the transaction
questioned the trade’s timing.“Their timing was questionable at best,”
said a senior banker.
“Announcing the deal without seeing the
market reaction to the Fed cut seemed a
little bit risky, even though the spread to
Treasuries will be attractive.”
Another banker believed the “very
constructive” secondary trading in bonds
had driven the deal more than the rate cut.
“If anything, the Fed added uncertainty
since it wasn’t clear if there would be co-
ordinated global action,” he said, suggesting
that the transaction might have been
announced earlier on Tuesday if not for the
central bank’s action.
However Andrea Dore, head of funding at
the issuer, said the decision to go ahead with
the trade had been driven by a number of
factors including a relatively calmer
window.
“It was calmer than in the previous sessions
and we thought it was the best opportunity,”
she said. “We’re in uncharted territory and we
felt this was a decent window.”
4HEûhmIGHTûTOûQUALITYûBIDvûFORMEDûPARTûOFû
the World Bank’s background, a lead said.
“It wasn’t really about making a
statement,” Dore said. “But we are happy to
provide leadership and offer investors a safe
product to buy.”An historically attractive spread to
Treasuries (15.65bp, compared with 7.6bp
ONûTHEû7ORLDû"ANKSûPREVIOUSûlVE
YEARûnû
January’s US$3.5bn Global) also supported
the deal, along with a 2bp premium to the
January 2025 bond.
The sharp fall in US Treasury yields meant
the coupon was much lower than its January
trade at 0.75% versus 1.625%.
“In this market, issuers have to pay a new
issue concession. The current dynamic is
that investors are asking for that and it’s
going to be the state of play for now,” the
lead said. HSBC, JP Morgan, Morgan Stanley and
Nomura are lead managers.
The deal emerged as the Washington
supranational has come under scrutiny for a
pandemic bond issued in 2017.
While both tranches of the US$320m
offering – which featured a further US$105m
traded in swap format – specify coronavirus
as a “covered peril”, neither has yet triggered
payments from the Pandemic Emergency
Financing Facility (PEF) they fund.
The World Bank announced the PEF in
May 2016 as an innovation that “will quickly
channel funding to countries facing a major
disease outbreak with pandemic potential”.
A year later the supranational structured
the bond and swap offering in tandem withInternational Financing Review March 7 2020 27BONDS SSAREUROPEAN SOVEREIGN BOND AUCTION RESULTS WEEK ENDING MARCH 6 2020
Pricing date Issuer Size Coupon (%) Maturity Average Yield (%) Bid-to-cover
Mar 3 2020 Austria €450m 0.000 Feb 20 2030 -0.316 2.34
Mar 3 2020 Austria €450m 1.500 Feb 20 2047 0.186 3.23
Mar 3 2020 Germany (i) €184.1m 0.100 Apr 15 2026 -1.40 2.12
Mar 3 2020 Germany (i) €181.5m 0.100 Apr 15 2030 -1.41 2.83
Mar 4 2020 UK £3.5bn 0.625 Jun 7 2025 0.209 1.75
Mar 5 2020 Spain €1.47bn 0.000 Apr 30 2023 -0.416 2.14
Mar 5 2020 Spain €1.35bn 0.000 Jan 31 2025 -0.26 1.82
Mar 5 2020 Spain €1.711bn 0.500 Apr 30 2030 0.169 1.38
Mar 5 2020 Spain (€i) €450m 0.700 Nov 30 2033 -0.621 1.48
Mar 5 2020 France €5.109bn 0.000 Nov 25 2029 -0.32 2.17
Mar 5 2020 France €3.054bn 1.250 May 25 2034 -0.09 1.88
Mar 5 2020 France €1.335bn 0.750 May 25 2052 0.45 2.26
Mar 5 2020 UK (i) £1.1bn 0.125 Aug 10 2028 -2.725 2.51
Source: IFRALL INTERNATIONAL BONDS (ALL CURRENCIES)
BOOKRUNNERS: 1/1/2020 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)Including Euro, foreign, global issues. Excluding equity-related debt,
US Global ABS/MBS.
Source: Refinitiv SDC code: J11 JP Morgan 275 73,899.10 8.1
2 Barclays 223 59,276.96 6.5
3 Citigroup 222 56,954.63 6.3
4 BofA 191 46,188.36 5.1
5 HSBC 198 43,901.25 4.8
6 Goldman Sachs 154 42,797.28 4.7
7 Deutsche Bank 176 40,401.70 4.4
8 BNP Paribas 146 39,771.73 4.4
9 Morgan Stanley 113 36,336.22 4.0
10 Credit Agricole 128 31,687.35 3.5
Total 1,143 910,742.45ALL 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: N11 JP Morgan 79 26,867.49 8.0
2 BNP Paribas 91 24,678.14 7.4
3 Barclays 87 22,909.55 6.8
4 Credit Agricole 69 20,788.99 6.2
5 HSBC 71 19,573.41 5.8
6 SG 57 18,909.56 5.6
7 Deutsche Bank 69 17,002.39 5.1
8 UniCredit 69 15,624.74 4.7
9 Citigroup 50 13,660.40 4.1
10 BofA 44 12,707.75 3.8
Total 350 335,411.81ALL 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 10.2
2 Credit Agricole 11 2,097.07 8.4
3 Barclays 10 2,087.01 8.3
4 Santander 9 1,816.89 7.3
5 SG 5 1,812.20 7.2
6 JP Morgan 9 1,481.69 5.9
7 HSBC 11 1,077.58 4.3
8 BofA 7 845.02 3.4
9 UniCredit 4 706.08 2.8
10 Morgan Stanley 4 697.73 2.8
Total 51 25,028.136 IFR Bonds 2323 p 25 - 53 .indd 27 06 / 03 / 2020 19 : 18 : 06