SSAR
EUROS
NRW PASSES ULTRA LONG TESTDuration proved a happy hunting ground
for two SSA issuers on Wednesday, with
Land NRW in particular rewarded for a trip
into virgin territory.
The issuer sold a €1.25bn debut 50-year
note - becoming one of the few non-
sovereigns to have such bonds outstanding.
Aside from ESM and EFSF, most public-
sector borrowers have restricted themselves
to at most 40-year maturities.
NRW has adopted a strategy of hitting the
long end. It raised €625m through a 22-year
at swaps plus 6bp in early June, and last year
sold a €1bn 40-year, which was then tapped
for €250m in November.
“Apart from our semi-annual euro
benchmark deals with medium tenors, we
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TREASURERûATûTHEûMINISTRYûOFûlNANCEûOFû.27
“We look at the short end, where
preferably we would issue in dollars, but
that doesn’t work out right now because of
the euro/dollar basis. Our focus is on yield
and duration, and the current yield is very
INTERESTINGûFORûAûBULLETûBONDûATûAûlXEDûRATEû
for such a long time.”
NRW began marketing the July 2068
benchmark on Tuesday afternoon at IPTs of
37bp area over swaps, equivalent to a yield
of around the 1.80% mark.
A lead said calculating fair value was not a
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EXTENDINGûFROMû.27SûSûANDûSû
would get to a spread of around 32.5bp over
swaps.
“It will give a pick-up versus Bunds, but
ALSOûANûOUTRIGHTûYIELDûTHATûTICKSûTHEûBOXESûFORû
a few insurers,” he said.
“Also, whenever you are able to sell
German paper that looks cheap relative to
France, you will get accounts interested as
well,” said the banker.
France’s May 2066 notes were bid around
1.69% on Tuesday afternoon.
Orders for the bond were substantial,
peaking at over €1.35bn, including lead
interest. Pricing was tightened by 1bp to a
lNALûPLUSûBP
“We knew it would be very ambitious
to place even €500m at the 50-year
point and we decided that a new issue
concession of 5bp-6bp was appropriate,”
said Bendiek.
“It is a tricky part of the curve for demand
and we thought we might only see a handfulof accounts, but the demand was very strong
indeed.”
In the end, more than 60 accounts
participated, with insurers and pensions
funds dominating allocations and taking
58% between them. Banks were also big
players, taking 24%. By geography, 50% was
placed in Germany.
“It was a good deal,” said a banker away
from the deal. “It helps that there is a large
pick-up for investors compared to if the
Land had done a seven or 10-year bond,
which would have been through swaps by
anywhere between 13bp and 16bp.”
Goldman Sachs, HSBC, JP Morgan and
UniCredit were lead managers.FLANDERS IN EUROS
The Flemish Community didn’t go out
as far as Land NRW but still placed its
lRSTûBENCHMARKûOFûTHEûYEARûATûTHEûLONGû
end, raising €750m through a 20-year
note at a handful of basis points inside
IPTs.
Since mid 2015, the issuer has engaged
with the capital markets as part of a
programme to centralise the funding needs
of some of the region’s public entities,
including social housing companies and
public private partnership school buildings.
Previously, the entities had raised bank
loans with a guarantee from Flanders.BONDS SSAREUROPEAN SOVEREIGN BOND AUCTION RESULTS WEEK ENDING JULY 5 2018
Pricing date Issuer Size Coupon (%) Maturity Average Yield (%) Bid-to-cover
Jul 3 2018 Austria €632.5m 0.750 Feb 20 2028 0.554 2.09
Jul 3 2018 Austria €517.5m 4.150 Mar 15 2037 1.047 2.16
Jul 3 2018 UK £2.5bn 1.625 Oct 22 2028 1.434 2.30
Jul 5 2018 Spain (linker) €923m 0.650 Nov 30 2027 -0.176 1.59
Jul 5 2018 Spain €1.565bn 0.005 Jan 31 2021 -0.089 2.22
Jul 5 2018 Spain €961m 1.950 July 30 2030 1.580 1.92
Jul 5 2018 Spain €1.307bn 4.700 July 30 2041 2.216 1.27
Jul 5 2018 France €4.248bn 0.750 Nov 25 2028 0.670 1.91
Jul 5 2018 France €2.405bn 1.500 May 25 2031 0.860 1.39
Jul 5 2018 France €1.345bn 1.250 May 25 2034 1.040 2.23
Source: IFR
ALL US DOLLAR FIXED-RATE GLOBALS
BOOKRUNNERS: 1/1/2018–30/6/2018
Managing No of Total Share
bank or group issues US$(m) (%)
1 BAML 120 44,668.38 11.8
2 JP Morgan 112 40,800.80 10.8
3 Barclays 69 37,195.43 9.8
4 Citigroup 102 36,219.29 9.6
5 Goldman Sachs 70 28,842.87 7.6
6 Wells Fargo 73 25,116.16 6.6
7 HSBC 39 20,072.90 5.3
8 RBC 46 18,791.34 5.0
9 Deutsche Bank 42 18,322.38 4.8
10 Morgan Stanley 61 18,055.26 4.8
Total 227 378,785.75
Excluding equity-related debt, ABS/MBS.Source: Thomson Reuters SDC code: O5ALL INTERNATIONAL BONDS (ALL CURRENCIES)
BOOKRUNNERS: 1/1/2018–30/6/2018
Managing No of Total Share
bank or group issues US$(m) (%)
1 JP Morgan 589 161,511.71 7.5
2 Citigroup 547 148,891.40 6.9
3 HSBC 556 133,417.72 6.2
4 Barclays 413 132,450.61 6.2
5 BAML 454 120,509.94 5.6
6 Goldman Sachs 330 107,184.96 5.0
7 Deutsche Bank 432 103,946.18 4.8
8 BNP Paribas 356 86,853.72 4.0
9 Morgan Stanley 329 79,732.61 3.7
10 SG 236 60,219.74 2.8
Total 3,031 2,147,579.99
Including Euro, foreign, global issues. Excluding equity-related debt,
US Global ABS/MBS.
Source: Thomson Reuters SDC code: J1
ALL BONDS IN EUROS
BOOKRUNNERS: 1/1/2018–30/6/2018
Managing No of Total Share
bank or group issues €(m) (%)
1 BNP Paribas 197 47,209.64 7.1
2 SG 171 40,924.85 6.2
3 HSBC 199 39,042.61 5.9
4 Deutsche Bank 178 38,662.00 5.8
5 JP Morgan 147 37,945.11 5.7
6 Credit Agricole 153 37,433.84 5.7
7 Barclays 123 33,941.39 5.1
8 UniCredit 163 31,404.03 4.7
9 Citigroup 115 27,450.50 4.1
10 Goldman Sachs 88 27,031.26 4.1
Total 893 662,314.93
Including Euro-preferreds. Excluding equity-related debt,
US Global ABS/MBS.
Source: Thomson Reuters SDC code: N1