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SSA SNAPSHOT: EU & UK lead renewed charge

SSA supply has accelerated on Tuesday in line with other asset classes as issuers rush to market in the wake of the French elections and ahead of Thursday's key US CPI print.

We have EUR, GBP and USD all on the menu with the EU and UK leading the way with their well-flagged offerings.

The uptick in activity comes after just one deal priced in the SSA arena on Monday thanks to Cassa Depositi e Prestiti S.p.A (CDP), the Italian National Promotional Institution and Development Finance Institution.

Taking an opportunistic approach and offering its second euro line of 2024, CDP started touting a EUR 7yr benchmark at BTPS +45 area before demand of EUR2.6bn (EUR2.8bn peak) allowed it to take EUR750m out the market at BTPS +37 (~1bp NIC).

From Monday's pipeline, the European Union firmed up plans for its latest euro offering which is coming Tuesday and comprises a new EUR5bn Oct 2029 and a EUR4bn increase of the existing 3.375% benchmark due Oct 2054.

Elsewhere, German Federal State of Rhineland Palatinate announced a EUR500m no grow 2yr LSA that is now live, whilst JBIC (USD 3yr) and IADB (USD 10yr SDB) started taking IoIs for global dollar deals that are also set to price today. In sterling, the UK has launched its well-flagged GBP Nov 2054 Linker tap.

On top of those previously announced deals, we also have an opportunistic EUR May 2034 line on the menu Tuesday courtesy of Bpifrance.

EU kicks off H2 funding with 2-part

** The European Union (Aaa/AA+/AAA/AAA) mandated BofA Securities, BNP Paribas, DZ BANK, Morgan Stanley and Nomura as Joint Lead Managers for its EUR dual tranche transaction comprising a new EUR long 5yr benchmark line due Oct 2029 and an increase of EU 3.375% benchmark due Oct 2054

Guidance: New EUR5bn Oct 2029s at m/s +13 area and EUR3bn Oct 2054 tap at m/s +105 area

Final terms: EUR5bn Oct 2029s at m/s +11 (EUR50bn book) and upsized EUR4bn Oct 2054 tap at m/s +103 (EUR67bn book)

- This is the bloc's first deal of H2 2024 having priced eight lines worth EUR42bn in H1

- Its last outing was a new EUR6bn 15yr that priced into orders of EUR37.5bn, although it should be noted that demand had earlier peaked at EUR40bn

- Existing lines i+ bid levels at time of announcement on Monday:

EU 3.125% Dec 2028 +5 (Nov 2023)

EU 1.625% Dec 2029 +9 (Jul 2022)

EU 3.125% Dec 2030 +15 (Sep 2030)

EU 3.375% Oct 2054 +100 (May 2024)

- Above levels would suggest fair value for the new 2029s at m/s +8 and at +100 on the tap, implying final NICs of 3bps on each tranche

RHIPAL sticks with 2yr format

** The German Federal State of Rhineland Palatinate, rated AAA by Fitch, mandated DekaBank, LBBW and NORD/LB to lead manage its upcoming EUR500m no grow 2yr (Jul 2026) fixed rate Landesschatzanweisung

Talk: Books open at m/s -7 area

- The German state has already issued three euro lines in 2024 worth EUR2.25bn

- Its last deal was also a 2yr, namely EUR750m 3.25% May 2026s that landed in line with m/s -6 area guidance on a book that wasn't covered - demand last communicated at EUR614m (incl EUR250m JLM interest)

- The aforementioned line was bid wide of its reoffer at i -5 on screens Tuesday morning

Bpifrance takes opportunistic approach

** Bpifrance (Aa2/AA-) this morning hired BNP Paribas, HSBC, Morgan Stanley, NATIXIS and Societe Generale as Joint Bookrunners for a EUR May 2034 benchmark issue

Guidance: Books open at FRTR 1.25% May 2034 (mid) +27 area

- This extends Bpifrance's existing euro benchmark curve from a EUR3.125% May 2033 green line that printed in Jun 2023 and was on screens at FRTR +17 on screens this morning

UK pulls trigger on Linker

** The United Kingdom Debt Management Office (DMO) announced the appointment of a syndicate to sell by subscription the forthcoming re-opening of 1.25% Index-linked Treasury Gilt due Nov 2054. Joint Bookrunners are BNP Paribas, J.P. Morgan, Morgan Stanley and Nomura. Rated Aa3/AA/AA-

Guidance: Books open at UKTi 1.25% 22-Nov-2055 +4-4.25

- This is the UK's first syndicated bond offering since Labour's UK election landslide

- The UK has issued four syndicated bonds in 2024 worth GBP27.75bn, including the bond it is tapping today, the GBP4bn 1.25% Nov 2054s which priced at UKTi +1.5 into a huge GBP56bn book in Mar

IADB extends USD SDB curve with 10s

** Inter-American Development Bank (Aaa/AAA) is working a USD 10yr global SDB benchmark via BofA, BMO, Citi and Wells Fargo.

Guidance: Books open at SOFR m/s +57 area from SOFR m/s +58 area IPTs. IoIs over USD2.9bn

- This extends IADB's SDB curve from a USD2bn 4.5% Sep 2033 that launched in Sep last year and was bid at +59 ahead of the latest announcement

JBIC goes back to 3s

** Japan Bank For International Cooperation (A1/A+) is working a USD 3yr global benchmark via Barclays, Citigroup, Goldman Sachs International and Mizuho

Guidance: Books open at SOFR m/s +45 area from SOFR m/s +46 area IPTs. IoIs over USD1.6bn

- This is JBIC's shortest dollar offer of 2024 so far having issued USD1bn 4.375% Jan 2031s and USD1bn 4.625% Apr 2034s into demand of USD7bn and USD7.4bn respectively

- JBIC last issued 3yr paper in Apr last year when bringing a USD2.5bn 4.25% Apr 2026 at SOFR m/s +47 on a 1.3x covered book

Live Deals

DateIssuerDeal TypeCCYAmount (mn)Maturity/TenorInitial Price TalkLatest Px TalkFinal PricingBook Size (mn)
09-JulBpifrance FinancementSenior unsecuredEUR
09-JulEuropean UnionSenior unsecuredEUR5,00005-Oct-2029m/s+13a-m/s+1150,000
09-JulEuropean UnionSenior unsecuredEUR4,00005-Oct-2054m/s+105a-m/s+10367,000
09-JulUnited Kingdom of Great Britain and Northern IrelandLinker, TapGBP
09-JulInter-American Development Bank (IADB)Global, SDBUSD
17-Jul-2034SOFR m/s+58aSOFR m/s+57a-2,900
09-JulJapan Bank for International Cooperation (JBIC)GlobalUSD
22-Jul-2027SOFR m/s+46aSOFR m/s+45a-1,600

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