SSA SNAPSHOT: EIB back in the EUR market, Land NRW targets dollars
The SSA bond market is set for another active session with a diverse mix of issuers from Europe and beyond bringing new deals to the market. Among today’s highlights, Germany’s Kreditanstalt für Wiederaufbau (KfW) is set to raise USD1bn via the tap of a Nov 2026 bond, while Land Baden-Württemberg is issuing EUR1bn with a 10yr tenor. Continuing the German theme and going back to the dollar market for the first time since this time last year is Land Nordrhein-Westfalen. The regional issuer tapped the USD market via a USD2bn 3yr on 6th Feb 2024 and is coming a day earlier this year with a new 5yr transaction. The issuer is almost unique in this respect, with only Land Sachsen Anhalt (most recently back in Oct 2016) and Lower Saxony (in Feb 2008) the only other German regions to issue dollar paper.
Sustainability issuance remains a key pillar, with Comunidad Autónoma de Madrid and the International Development Association (IDA) both bringing new 10yr ESG-linked deals in EUR and USD, respectively. Madrid was last seen in May 2024 with a EUR600m green 5yr that came after a Feb 2024 issued EUR1bn 10yr sustainability line (both deals received significant order interest and priced 6bp tighter than IPTs). The pattern of an early (Feb or March) 10yr sustainability followed by a shorter 5 / 7yr green now stems back as far as 2017 - and on that basis we should anticipate a EUR1bn deal size today (and likely a EUR600-700m 5 or 7yr green later in the year). The IDA has recently relied more heavily on the EUR market for longer dated issuance (including an exceptionally well received EUR1.25bn 15yr deal on 16th Jan - on EUR13bn of orders!) but does have a limited history of 10yr placements in the dollar market. Its last outing of that nature was in Nov 2020 and so today's 10yr sees a significant extension of the issuer's USD benchmark curve (currently extends to Sept 2031). Issuance in the 10yr bucket from larger supranationals has been limited and there really is only EIB's USD3bn 10yr from yesterday to work from in terms of comps. That deal landed at SOFR m/s+57 after starting with IPTs of m/s+60 and battling to satisfy USD25.5bn of demand.
Other euro-denominated supply includes new mandates from European Investment Bank (EIB) with a long 5yr and Kommunalbanken Norway (KBN) with a new 7yr. The EIB is likely to dominate proceedings on the demand front. Having seen EUR47.3bn of orders lining up to take a slice of the EUR5bn 10yr that was issued on 8th Jan (0bp NIC, 9.46x cover) today's deal has a latest order book update of EUR40bn. Meanwhile, Kommunalbanken (which has historically relied upon USD funding and has not placed a new 10yr in euros since Oct 2019) is accustomed to a little less fanfare. That said, its two outings of 2024, for a new EUR500m 5yr green (in Apr) and a new EUR500m 7yr green (in Oct) appeared to be launched with very differing receptions demand-wise. The former was 4.6x covered and landed 3bp inside IPTs (with a 0bp NIC) whereas the latter was 0.86x covered and priced 2bp above fair value after zero basis points of spread compression. So far we appear to be in line to closely replicate 2024's better supported deal as the latest update indicates demand of EUR2.2bn and spreads have already been set 2bp inside IPT at m/s+40.
Live deals
| Issuer | ESG Deal Type | CCY | Amount (mn) | Maturity | Initial Price Talk | Latest Px Talk | Final Pricing | Book Size (mn) |
| Comunidad Autonoma de Madrid | Sustainability | EUR | TBD | 30/04/2035 | SPGB+16a | - | - | Awaiting Update |
| European Investment Bank (EIB) | EUR | 5,000 | 15/05/2030 | m/s+25a | - | m/s+23 | 40,000 | |
| Kommunalbanken Norway (KBN) | EUR | 1,000 | 12/02/2032 | m/s+42a | - | m/s+40 | 2,200 | |
| Land Baden-Wuerttemberg | EUR | 1,000 | 12/02/2035 | m/s+38a | - | - | Awaiting Update | |
| International Development Association (IDA) | Sustainability | USD | TBD | 12/02/2035 | SOFR m/s+63a | SOFR m/s+62a | - | 3,500 |
| Kreditanstalt fuer Wiederaufbau (KfW) | USD | 1,000 | 05/11/2026 | SOFR m/s+20 | - | - | 1,250 | |
| Land Nordrhein-Westfalen (Land NRW / Federal State of North Rhine-Westphalia) | USD | TBD | 12/02/2030 | SOFR m/s+48a | m/s+46 | 2,300 |
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