FIG SNAPSHOT: Issuers steer clear as political risk fuels volatility

With stocks and also bonds falling on Monday, and lots of political news to unpack, the non-covered FIG market is starting the week with a blank while just a single mandate has been announced.

On average, participants in our supply poll predicted that EUR7.5bn of non-covered single currency debt will price this week although that was before the weekend's political developments pulled the rug from beneath markets.

Whatever the case, a substantial amount of issuers opted to take care of near-term funding plans last week where non-covered FIG supply totalled a relatively hefty EUR11.175bn, well above even the highest estimate.

Top-level demand metrics suggest that investor cash was plentiful for last week's deals although it needs to be acknowledged that EUR10bn of the EUR26.96bn in total orders were directed at one deal, namely Deutsche Bank's blowout EUR1.5bn PNC 4/30 AT1.

In secondary, its deal remains bid way above reoffer on Monday while the balance of last week's offerings are putting in a mixed performance relative to their launch spreads.

Recent supply from France is naturally under pressure this morning although near term outlook will be highly dependent on the extent to which any spread widening is symptomatic of bids being marked back vs actual selling, and also the degree to which any widening remains localised.

Summary of last week's EUR supply

New to the pipeline

** Powszechna Kasa Oszczednosci Bank Polski S.A. (PKO BP ; Ticker: PKOPW), rated A2 (stable by Moody's), has mandated Erste Group as Global Coordinator and BNP Paribas, Erste Group, J.P. Morgan, PKO Bank Polski S.A. and UniCredit as Joint Lead Managers to arrange a series of Fixed Income investor calls on 10-Jun. A EUR Benchmark Reg S Bearer, Senior Non-Preferred offering with a 5NC4 maturity will follow subject to market conditions. The Notes are expected to be rated Baa3 (Moody's) and issued under the EMTN Programme. Additionally, an investor presentation with pre-recorded voiceover will be made available.

Performance tracker of recent EUR benchmark deals

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