SSA issuers go short in US dollars

摘要

European supranationals and agencies took advantage of improved conditions for short-dated issuance in the US dollar market last week, including the largest SSA trade of the year so far in that currency. The European Investment Bank, Council of Europe, KfW and Caisse d'Amortissement de la Dette Sociale raised US$11bn between them through bonds with tenors of five years or below. So far this year, many SSA issuers in dollars have opted for seven and 10-year tenors for benchmark trades, led by demand from investors and squeezed by low Treasury yields in the short maturities. However, five-year yields had risen 41bp since the start of February to 1.60% as of Thursday midday, according to Thomson Reuters prices, making short-dated bonds more attractive. At the same time, issuers are finding it difficult to sell short-term bonds in the euro market because of ultra-low yield levels.