SSA SNAPSHOT: Where did all the action go?

With the EU expected to have completed its first syndication of 2025 by Wednesday - it provides a week-long window in its issuance ‘calendar’ but almost always uses the Tuesday - we had anticipated that another of the major sovereign issuers may have stepped up for a mid-week syndicated outing (Spain, Austria, Ireland, France and Germany all still to surface). However, as the EU reached its pricing stage late on Tuesday afternoon that looked increasingly unlikely and so it transpired that only two names mandated banks for new deals for today’s business and there are no sovereigns (or large supranationals for that matter) in sight in either euros, dollars or sterling.

Danish municipality financier KommuneKredit has hit screens with a new 8yr conventional line whilst Land Baden Wuerttemberg brought a new 15yr LSA. KommuneKredit is a fairly frequent issuer in the EUR space with 2-3 outings annually in more recent years with deal sizes ranging from EUR500m-1bn. Today’s deal therefore lands in the middle of that range at EUR750m. There are two standout statistics, firstly the order book which settled at over EUR3bn and therefore equalled the second highest ever for the issuer in the currency. Secondly, the 3bp spread compression from IPT to re-offer which saw the deal land at m/s+41. There have been very few 7 to 8 year deals priced so far in 2025 to compare that level against (Rentenbank - but probably not the best comp) although an interpolation across the KOMMUN curve suggested a fair value close to m/s+40a.

Achieving the same 3bp of spread compression Land Baden Wuerttemberg went even better on the demand front with an order tally that touched EUR4.9bn. The issuer's 15yr transaction is the first LSA of that tenor since State of Hessen priced a EUR1bn 15yr last February. Interestingly, Baden Wuerttemberg has opened its 2025 account with a fixed coupon transaction having heavily relied upon FRN's in 2024. Indeed, six of its eleven (yes, eleven) outings were for floating rate paper accounting for EUR3.2bn of the EUR6.85bn total. For context, the issuers total issuance across the prior three years was EUR1.8bn (3 deals), EUR350m (1 deal) and EUR1.1bn (2 deals).

Live deals

New Mandates

** Central American Bank for Economic Integration (CABEI), rated AA/Aa3/AA (S&P, St. / Moody’s, St.) has mandated Barclays, BofA Securities, BNP Paribas and CACIB as lead managers for its new USD-denominated 3yr 144A/Reg S bond due January 2028. The new issue will be a Sustainability Benchmark Bond. The Bond is expected to be rated AA by S&P and Aa3 by Moody’s . An amount equal to the net proceeds of the Notes will be allocated by CABEI to finance and/or refinance new and/or existing Eligible Green, Blue, and Social Projects as further described in CABEI’s 2024 Sustainable Bond Framework. An Investor Presentation is available here.

** EFSF, the European Financial Stability Facility, rated Aaa (Moody’s) / AA- (Fitch) / AA- (S&P), has sent a Request for Proposal to a selection of banks from the EFSF/ESM Market Group with regards to an upcoming transaction, subject to market conditions. Expect next week's business - Monday/Tuesday

** Region Wallonne, rated A3 (Moody's, negative) has mandated ABN AMRO, Credit Agricole CIB, Deutsche Bank, HSBC, and LBBW as Joint Lead Managers for its upcoming EUR dual tranche transaction comprising a new long 10yr benchmark due 22 June 2035 and an increase of the Social 3.90% benchmark due 22 June 2054 (BE0390135011). The transaction will be launched in the near future, subject to market conditions. The proceeds of the social bond notes (tap of the 3.900% benchmark due 22 June 2054) will be used to finance social expenditures and other recurrent social investments within Région Wallonne's Green, Social & Sustainability Bond Framework.

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