SSAR
US DOLLARS
EIB FIRES UP SHORT-END US DOLLARSThe EUROPEAN INVESTMENT BANK stirred up the US
dollar market last week, pricing a US$3bn
three-year bond right on top of fair value,
adding supply to the previous week’s
oversubscribed deals from OeKB, FMO and SEK.
The Triple A-rated issuer took advantage of
the supply/demand imbalances in the US dollar
market, and with books over US$6bn, it
aggressively managed to move 2bp from initial
guidance to price at mid-swaps less 1bp.
Timing was key for the deal’s success,
with EIB managing to price flat to fair value
without any new issue concession in a
market gasping for supply.
“The demand for dollars is very strong,
especially coming from central banks for
their reserve portfolios, and bank
treasuries,” said a lead.
Regardless of strong demand for
supranationals and agencies dollar deals,access to the short end of the curve remains
costly for euro-based issuers.
“It looks like a very expensive trade for
them (EIB) versus their previous euro deals,”
said a syndicate banker.
On the other hand, there is scant demand
for euros at the short end of the curve.
“Dollars is indeed an expensive currency
for them to issue, but it would be weird for
them to come in euros with a three-year
maturity,” said the lead banker.
A third banker agreed that a three-year
euro issue was out of the picture for EIB,
considering that its €1bn October 2020s
were quoted at less 27bp and its €300m
March 2022s at less 22bp when the US$3bn
trade launched.
“It is good to see a top European issuer
coming to the market with a strong US
dollar trade,” he said, adding that the fresh
paper came at a euro equivalent in the less
21bp-22bp area.
“Last week (week commencing on August
27), all the US dollar transactions from
European issuers went quite well; OeKB
tightened by 3bp and priced inside the
secondary,” said the first banker.
Weighing up all the funding costs, market
expectation is that European issuers with USdollar funding programmes will add further
supply.
Issuers have to assess how much it is
worth to keep a presence in that market,
said a fourth banker the week before.
Barclays, Citigroup and RBC arranged the deal.EUROS
LOWER SAXONY ADDS TO LONG EURO
FLOW, KFW AND NRW TAPThe FEDERAL STATE OF LOWER SAXONY brought a
€750m 15-year to market last Tuesday at 4bp
through mid-swaps, extending its curve and
adding to the recent trend of longer-dated
SSA euro supply.
After guidance of swaps less 2bp area, the
spread was tightened to a final less 4bp on a
book last seen at over €1bn.
“It is interesting to look at how far they
have moved,” said a syndicate banker.
Lower Saxony is a recurrent euro issuer,
coming to market at least once a month in- Its previous longest bond, due
February 2028, was launched in a €500m
size in late January but subsequently
increased six times to a current €1.35bn.
International Financing Review September 8 2018 27BONDS SSAR
EUROPEAN SOVEREIGN BOND AUCTION RESULTS WEEK ENDING SEPTEMBER 7 2018
Pricing date Issuer Size Coupon (%) Maturity Average Yield (%) Bid-to-cover
Sep 4 2018 Austria €600m 0 .00 Sep 20 2022 - 0.294 2.36
Sep 4 2018 Austria €500m 0 .75 Feb 20 2028 0 .534 3. 28
Sep 4 2018 Germany €453.8m 0 .50 Apr 15 2 030 - 0.97 1.39
Sep 4 2018 Germany €154m 0 .10 Apr 15 2 046 - 0.67 1. 13
Sep 6 2018 Spain (i) €545m 0 .30 Nov 30 2021 - 1.292 3. 06
Sep 6 2018 Spain €1.908bn 0 .35 Jul 30 2 023 0 .41 1. 70
Sep 6 2018 Spain €1.587bn 1. 40 Jul 30 2 028 1. 432 1. 41
Sep 6 2018 Spain €880m 2. 70 Oct 31 2048 2.583 1.58
Sep 6 2018 France €3.36bn 0 .75 Nov 25 2028 0 .71 1.95
Sep 6 2018 France €2.153bn 1.50 May 25 2031 0 .92 1.38
Sep 6 2018 France €1.375bn 1. 25 May 25 2034 1. 11 1.60
Sep 6 2018 France €1.252bn 1. 75 May 25 2066 1.8 1 1.69
Sep 6 2018 UK £3bn 1. 00 Apr 22 2 024 1. 106 1.9 2
Source: IFRALL US DOLLAR FIXED-RATE GLOBALS
BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 BAML 144 54,353. 71 11.6
2 JP Morgan 144 52,022.50 11. 1
3 Citigroup 126 4 5,527.31 9 .7
4 Barclays 86 4 3,544.88 9 .3
5 Goldman Sachs 87 3 4,942.97 7 .4
6 Wells Fargo 89 28,764.74 6. 1
7 Morgan Stanley 84 26,347.76 5.6
8 Deutsche Bank 52 2 4,030.16 5. 1
9 HSBC 48 23,554.82 5. 0
10 RBC 63 22,665.9 7 4 .8
Total 291 47 0,268.64
Excluding equity-related debt, ABS/MBS.Source: Thomson Reuters SDC code: O5ALL INTERNATIONAL BONDS (ALL CURRENCIES)
BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 JP Morgan 723 19 7,728.60 7 .4
2 Citigroup 686 183,745.78 6.9
3 HSBC 671 16 3,466.64 6. 1
4 Barclays 516 159,038.50 6. 0
5 BAML 564 149,344.57 5.6
6 Goldman Sachs 419 135,979.65 5. 1
7 Deutsche Bank 535 128,007.31 4 .8
8 Morgan Stanley 428 106,847.95 4 .0
9 BNP Paribas 442 105,789.71 4 .0
10 Credit Suisse 383 75,580.63 2.8
Total 3,988 2,658,232.45
Including Euro, foreign, global issues. Excluding equity-related debt,
US Global ABS/MBS.
Source: Thomson Reuters SDC code: J1ALL BONDS IN EUROS
BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues €(m) (%)
1 BNP Paribas 247 58,745.01 7 .1
2 HSBC 238 49,202.69 6. 0
3 Deutsche Bank 226 4 8,788.32 5.9
4 SG 204 4 8,724.19 5.9
5 Credit Agricole 190 4 6,268.03 5.6
6 JP Morgan 177 4 3,940.48 5.3
7 Barclays 151 40,046.31 4 .9
8 UniCredit 208 39,506. 74 4 .8
9 Citigroup 145 35,678.33 4 .3
10 Goldman Sachs 111 33,640.39 4 .1
Total 1,2 01 82 4,541.69
Including Euro-preferreds. Excluding equity-related debt,
US Global ABS/MBS.
Source: Thomson Reuters SDC code: N16 Bonds 2250 p25-55.indd 27 07/09/2018 19:29:58