SSA SNAPSHOT: Another tap added to the pile, EIB does more digital

We have a total of three SSA issuers live in the capital markets Thursday. This time around we have a little more variety on offer than the week has offered up so far. One issuer is bringing a new transaction in dollars, another is following the week's overarching trend and going down the tap route whilst the third of the rather eclectic trio is offering a EUR100m digital bond (which may end up pricing on Friday morning).

Landeskreditbank Baden-Wuerttemberg-Foerderbank, or L-Bank for short, is the one targeting USD, bringing a long 3yr line with a Feb 2028 maturity and only a matter of weeks since it successfully launched a USD1.5bn long 2yr. When we say 'successfully' we can definitely back that up with data - pricing dynamics were textbook in nature and highlighted by a 2bp spread compression to land with a zero NIC, all made possible by orders that topped out at a rather impressive USD4.25bn (the highest ever for the issuer according to IGM records). That left a 2.83x cover ratio which was also the highest ever for the issuer barring a USD275m tap of a 2023 maturity FRN all the way back in May 2018 that achieved 3.27x.

Looking to put the finishing touches to the week's 6th tap deal and with a EUR250m (no grow) size to take tap issuance (alone) to EUR8.8bn is the Free State of Thuringia. An early morning start to proceedings was met with ample demand of EUR370m which saw the deal quickly finalised (in terms of pricing) in line with the IPTs of m/s+30 (book was subsequently updated at EUR450m). The issuer is relatively small in terms of issuance volumes with today's transaction taking YTD issuance to just EUR750m. Incidentally, the issuer's only other prior activity this year was the initial launch (on 27th Aug) of the bond being targeted today (EUR500m Sept 2029). Showing just how far swap spreads have widened in the intervening period the initial deal was launched at m/s+8 compared to today's tap at m/s+30.

The day's other live deal (even if it may carry over into Friday), a EUR100m digital bond from the European Investment Bank (EIB) is set to come with a 5yr maturity and comes hot on the heels of a similar 3yr deal that was conducted just last week. It appears that a different platform provider will be used this time around (GS DAP as opposed to HSBC Orion for last week's 3yr) which all fits neatly with these types of transactions currently being used in an 'exploratory manner'.

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