skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

Wednesday's primary highlights

** Primary EUR supply totalled a decent EUR4.03bn on Wednesday courtesy of seven separate tranches, whilst there was also a jumbo GBP trade from Annington Funding (more on that in the next bullet). For a breakdown of Wednesday's EUR issuance see the IGM DAILY EUR NICS & BOOKS

** The corporate market sprang back into life on Wednesday, spearheaded by a jumbo liability management exercise from UK company Annington Funding Plc which brought four Sterling tranches totalling GBP2.475bn (combined books ~GBP7.9bn) and a EUR600m 7yr line (books ~EUR3.1bn). The Sterling part of the issue marks the second largest corporate Sterling transaction ever, only falling short of the GBP3bn three-parter from National Grid Gas Finance which printed in Sep 2016. Elsewhere on Wednesday there was a EUR500m 7yr trade from National Grid North America and a EUR350m 5yr from Kedrion which also both attracted strong demand of EUR3.3bn+ and EUR750m+ respectively. For more see IGM's CORP SNAPSHOT

** In FIG, the spotlight was on sub where CaixaBank S.A. got a strong reception for its second T2 trade of 2017 with its EUR1bn 11NC6 trade covered >2.5 times, pricing 25bps inside IPTs and landing with a zero NIP. See IGM FIG SNAPSHOT

** Covered supply on the day came courtesy of ABN Amro Bank NV which reopened its 1.375% Jan 2037 Dutch covered trade for EUR1.25bn, more than doubling the outstanding value of the bond to EUR2.25bn. The tap priced at m/s +17 from a +20 area guidance starting point with books at around EUR1.65bn. See IGM's COVERED SNAPSHOT for more

Thursday's primary prospects

** Bank Nederlandse Gemeenten (BNG), rated Aaa/AAA/AA+, is taking IoIs for a USD 3yr floater at 3mL +10 area IPTs via Barclays, Goldman Sachs and HSBC

** Lietuvos Energija UAB (BBB+), is eyeing an expected EUR200m 7-10yr Green Bond via BNP Paribas and SEB after the conclusion of a roadshow which began last Thursday

** Kyobo Life Insurance Co (A1/A+) may launch a new USD 144A/RegS subordinated capital benchmark issue after holding a series of investor meetings via JP Morgan, Citi, Nomura, and UBS

Wednesday's broader market developments

** EU equities struggle to gain significant traction in either direction as markets await Fed and ECB minutes (due Wednesday evening/Thursday resp), while markets also fall into the shadow Friday's Non-Farm Payrolls

** Brent fails to push towards the psychological USD50 mark, on course for second day of decline. Price action follows a rise in 8 of the last 9 sessions

** Govvies - Gilt curve bear steepens as BoE's Saunders points to rate hike round the corner, while markets also absorb chunky GBP supply (see above). Other EGB yields move in tandem as attention shifts to Thursday's ECB minutes and the prospects of policy normalization

** iTraxx indices sea-sawed, Crossover underperforms Main having touched an almost 1-month wide

Market snapshot (14.43 BST)

SXXP +0.16% / SX7P +0.35%

GER 2yr +1.0bp at -0.614% / 10yr +0.5bp at 0.477%

Brent -0.69% at USD49.27

iTraxx Main flat at 55.4 / Crossover +1.4bp at 248.6

What to watch Thursday

** Data: Light European agenda with German Factory Orders seen rebounding to 1.9% from -2.1%. Across the pond, watching ADP Employment and Jobless Claims ahead of Friday's NFPs. Also watching ISM Non-Mfg Composite, Final Markit Services PMI and Trade figures

** Events: ECB policy minutes (12.30) follow hot on the heels of Wednesday's Fed Minutes. Also watching ECB's Villeroy (06.50), Praet (11.00), Weidmann and Nowotny (17.00) with markets to take note of any further hints on policy normalization

** Supply: Spain to sell EUR3-4bn 2022, 2040 and 2046 bonds, and EUR0.5-1bn 2030 Linkers. France looks to raise EUR7.5-8.5bn via May 2027, Oct 2027 and May 2048 OATs, while UK has GBP2.5bn Gilts up for grabs

SSA Priced / SSA Pipeline

CORP Priced / CORP Pipeline

FIG + Covered Priced / FIG + Covered Pipeline

Recommended Articles

  • IGM Credit, IGM FX and Rates

    China Insight: A return of focus to credit clean-up in 2021

    14 Dec 2020

    Concerns over China corporate credit risk have come to the forefront since the beginning of Q4, highlighted by three high-grade issuers' defaults: 1. AAA-rated Huachen Auto Group (onshore), 2. AAA-rated Yongcheng Coal & Electricity Group (onshore), 3. AAA-rated Tsinghua Unigroup (offshore) Coincidentally, all of these three issuers are state-owned enterprises (SOEs) in nature. This, to a certain extent reflects central government's bias in favour of a return to policy normalisation and possibly a second round of financial deleveraging (following the first round in 2017). Chart 1 shows that China's total debt to GDP ratio may have reached as high as 290% by the end of this year, so there is a need for deleveraging regardless of the defaults YTD being smaller than those in the previous two years both in terms of the total number and the total size of events (chart 2). From the perspective of the policymakers, with various kind of economic activities having returned to their pre-COVID levels, a return of the focus to credit clean-up should be more beneficial to long-term economic development... 

    Topics Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: Slower and bumpier RMB appreciation in year ahead

    07 Dec 2020

    There is good chance China will be the only major economy in the world to generate positive GDP growth (around 2%) in 2020 due largely to its effective pandemic containment measures and consequently the faster recovery of the production and consumption. As far as the FX is concerned, RMB has been appreciating against USD since the beginning of June on the back of broad-based weakness of greenback (chart 1). Besides, RMB has also been appreciating against all EM Asia currencies (except KRW) since USD's multi-month downtrend kicked off in early-summer. We attribute the RMB's outperformance relative to the rest of EM Asia to growing hopes of a victory of Biden in the 2020 presidential election, who's obviously far less hostile to China and promised to remove the existing tariffs on China in case he becomes the next US president...

    Topics Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: Deleveraging already starts to kick in, as per PBOC Q3 report

    30 Nov 2020

    PBOC Q3 monetary policy report released on 26 November reinforces our view that liquidity will be going tighter and deleveraging may be getting more prominent in the months ahead. The report, echoing the need to stabilize leverage, direct financing and control financial risk suggested by PBOC governor Yi Gang in a research paper published on 17 Nov, indicates second-phase deleveraging is kicking in, though it, in terms of magnitude, may be more gentle than the first-phase in 2017 (chart 1).

    Topics Industry News


Any questions? Speak to a specialist

Would you like to request sample data or analysis from Informa Financial Intelligence? 

See how our tailored solutions can help you gain a competitive advantage: