demand last week as central banks, drawn
by the attractive spreads over Treasuries,
threw their weight behind new issues.
&ORûTHEûPASTûYEARûTOûûMONTHS ûONEûOFû33!û
bankers’ biggest laments when it came to
dollar issuance had been the razor-thin
spreads at which new issues were coming
over Treasuries, curtailing some of the
investor appetite for new issues.
However, this has changed in recent weeks,
helped by the widening in swap spreads.
Three-year swap spreads have widened to
BPûFROMûBPûINûEARLYû*ANUARY ûFORûEXAMPLE
This enabled the ASIAN DEVELOPMENT BANK
and SWEDISH EXPORT CREDIT to attract some
53BNûOFûDEMANDûFORûTHEIRûTWOûANDûTHREE
year offerings, for instance, while books for
CPPIB Capital, L-Bank (see separate stories)
ANDû&-3û7ERTMANAGEMENTûWEREûEQUALLYû
well oversubscribed.
4HEûDEALSûREmECTûAûNOTABLEûINCREASEûINû
central bank buying as spreads against
Treasuries have widened recently. An ADB
lead manager noted “the dramatic uptick in
CENTRALûBANKûPARTICIPATIONvûASûTHEûDElNINGû
FEATUREûOFûRECENTû53ûDOLLARû33!ûISSUES
(EûALSOûCITEDû3WEDENSû53BNûTWO
YEARûONû
March 24 as a “great step forward” that “gave
INVESTORSûCONlDENCEûINûRELATIVEûVALUEv!MONGûTHEûSUPPLY û!$"Sû53BNû!PRILû
2022 bond stood out.
Lead managers Goldman Sachs, Morgan
Stanley and RBC uncovered more than
53BNûOFûDEMANDûFORûTHEû3%#
EXEMPTû
Global – the supranational’s largest ever
bond issue.
The jumbo marked the Triple A issuer’s
lRSTûBENCHMARKûINûTHEû53ûCURRENCYûSINCEûAû
LONGER
DATEDû53BNû'LOBALûINû*ANUARYû
Underscoring the drastic pricing shift
OVERûTHEûSUBSEQUENTûûWEEKS ûITûPRICEDûTHEû
new issue at mid-swaps plus 20bp –
COMPAREDûWITHûTHEûPREVIOUSû
YEARûATûAû
BPûSPREADAnother was also positive but regarded
pricing as underwhelming for the Triple A
name. “What a trade, but dirt cheap for a
credit like that,” he said.
“I would have been 20bp to start, but good
for them to get it out of the door and the
funding on board. As someone said, do a
deal today and you look like a smart guy
tomorrow – funding requirements are only
going to go up.”SEK GOES FOR SIZE
Also a record deal size for the issuer,
ACCORDINGûTOûBANKERS û3%+Sû53BNû
THREE
YEARûDREWû53BNûOFûINTERESTûFROMû
investors.
Bank of Montreal, Deutsche Bank, JP Morgan
and Toronto-Dominion were the agency’s lead
managers. They priced the deal at 40bp over
mid-swaps.
h)TSûTHEûlRSTûOFûTHEûMOREûSPREADIERûOFûTHEû
33!S ûSOûPRICEûDISCOVERYûWASûIMPORTANT vû
said a lead. “It was successful and we had a
nice stable backdrop in terms of rates, swap
spreads, underlying govvies and equities.”
Pricing was challenging, the lead said. “It
was a tough one to call on fair value. The
outstanding March 2023s were plus 40bp,
and BNGs, KBNs the same level or high 30s.
If it were to price at this minute, it would be
in the 50s.”
He reported “a good geographical and
type of investor spread” for the deal.30 International Financing Review April 4 2020ALL SUPRANATIONAL BONDS IN EUROS
BOOKRUNNERS: 1/1/2020–31/3/2020
Managing No of Total Share
bank or group issues €(m) (%)Excluding ABS/MBS.
Source: Refinitiv SDC code: N51 Goldman Sachs 7 4,685.00 14.2
2 JP Morgan 7 4,089.57 12.4
3 UniCredit 4 3,252.91 9.9
4 Deutsche Bank 6 3,003.72 9.1
5 BofA Securities 3 2,534.24 7.7
6 HSBC 4 2,519.96 7.7
7 Credit Agricole 4 2,461.20 7.5
8 BNP Paribas 5 2,287.01 6.9
9 SG 5 2,281.46 6.9
10 Barclays 3 1,562.25 4.7
Total 20 32,926.17ALL AGENCY BONDS IN EUROS
BOOKRUNNERS: 1/1/2020–31/3/2020
Managing No of Total Share
bank or group issues €(m) (%)Excluding equity-related debt. Including publicly owned institutions.
Source: Refinitiv SDC code: N61 JP Morgan 12 5,847.18 13.6
2 HSBC 16 5,289.64 12.3
3 Barclays 12 4,356.25 10.1
4 BofA Securities 9 3,957.70 9.2
5 Deutsche Bank 6 3,371.36 7.8
6 Credit Agricole 14 3,147.38 7.3
7 Commerzbank 9 2,686.73 6.2
8 Natixis 9 2,184.71 5.1
9 BNP Paribas 8 2,175.54 5.1
10 SG 6 1,818.79 4.2
Total 46 43,071.20ALL INTERNATIONAL GREEN BONDS
BOOKRUNNERS: 1/1/2020–31/3/2020
Managing No of Total Share
bank or group issues US$(m) (%)Excludes social bonds and mixed use of proceeds.
Source: Refinitiv SDC code: JG11 Barclays 13 2,715.44 8.0
2 JP Morgan 13 2,615.38 7.7
3 BNP Paribas 12 2,548.82 7.5
4 Credit Agricole 12 2,346.31 6.9
5 SG 7 2,152.00 6.4
6 Santander 9 1,816.89 5.4
7 BofA Securities 12 1,752.23 5.2
8 HSBC 14 1,521.79 4.5
9 Deutsche Bank 6 1,216.64 3.6
10 Citigroup 8 1,201.42 3.5
Total 61 33,884.39Investors rain orders on
Belgium record-breaker
SSAR Largest ever book for largest ever syndicationInvestors rallied behind the latest sovereign
bond to finance a national coronavirus response,
amassing a record €57bn-plus peak of demand
for a new October 2027 issue from BELGIUM.
The €8bn syndicated OLO forms one element
of the Belgian Debt Agency’s four-point plan “[in]
response to the anticipated increase in funding
needs caused by the Covid-19 crisis”.
Belgium’s order book exceeded the non-EM
SSA market demand record set by an EU peer
earlier this year. In January, Spain attracted more
than €53bn for a new 10-year bond.
Spain also inaugurated the recent sovereign
push for coronavirus financing in international
capital markets, with a seven-year. The kingdom’s
issue drew more than €36bn of demand.
In addition, last week, Austria saw €30bn and
€13bn of respective interest for its three-years
and 31-years.
“We feel the deal went very well – actually better
than we hoped for, given the still uncertain marketbackdrop” said Maric Post, director treasury and
capital markets at the Belgian Debt Agency.
“It shows that the Pandemic Emergency
Purchase Programme has managed to start
calming markets down, and that – despite
challenging circumstances – investors are
definitely there and ready to engage in primary
transactions.”RECORD-BREAKER
Despite its new senior borrowing team under Post
only being in place since the retirement of Anne
Leclercq at the end of July, Belgium surpassed its
fellow sovereigns and completed its largest ever
syndication.
“The team has made a huge step forward in
pricing power going into this period of increased
borrowing. There is no doubt after this fantastic
result that they can finance themselves and they
will get better pricing tension,” said one lead
manager.6 IFR Bonds 2327 p 25 - 65 .indd 30 03 / 04 / 2020 20 : 28 : 58