Basis: Slow start as six-week sprint eyed; NOK talk

After fizzling out in the second half of last week, cross-border issuance is taking its time to come alive. Basis swappers like NOK.

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  • Slow start as six-week sprint eyed; NOK talk

  • Flow

  • New issues


    Slow start as six-week sprint eyed; NOK talk

    While EUR new issuance had a fairly good stab at springing back into life after the long weekend in the UK and parts of Europe, swappable cross-border issuance remains at a premium after fizzling out somewhat in the latter half of last week.


    Summarizing the state of play by lunchtime in London today, one long-serving swapper at a European bank said that “there’s nothing special going on… yesterday was a waste of time and today is heading the same way.”


    Looking ahead though the trader said that “we have got one to one-and-a-half months of good issuance to come though before summer, so I’m sure it will pick up quickly from here.”


    Asked if any big deals are lurking just below the radar, the trader said that this was not obviously the case but that he expected any revival in EUR and USD cross-currency issuance to follow the long term trend. “We normally see the USD issues that are swapped to EUR coming up in the 3y to 5y sector, while flows the other way tend to be via EUR long end issuance by US corporates, like Coca-Cola last week.”


    If he were to pick a currency likely to outperform from an issuance perspective in the upcoming pre-Summer period, he avoided plumping for either USD or EUR and instead pinpointed NOK. Last week saw NOK emerge as a wildcard participant in the  cross-border market, with deals from the EIB, LandNRW and the SPV SPIRE.


    The above basis swapper said that “NOK issuance prospects are looking good. In the 10y sector it yields about 170bps more than EUR so we are seeing it benefit from a combination of relatively high yields and a favourable basis spread, we should see more,” said the trader.


    But going back to today, he said things have been “super quiet,” and asked about standout flows it took a little bit of thought before he suggested 5y EUR/USD activity at -8.75bps. It is currently +0.375bps (in line with most of the EUR/USD curve) at -8.625bps. In addition, 4y cable flow at +0.75bps, was widely linked to the EIB’s £300m, 4-year tap that priced today.   




    On the SDR today, EUR/USD flows were reported in:

    • 3y at -7.75bps

    • 5y at -8.875bps

    • 10y at -13.25bps and -13bps

    • 15y at -14.5bps


    Also on the SDR today, flows were reported in:

    • 4y cable at +0.75bps

    • 15y cable at +0.25bps

    • 7y NOK/USD at -5.5bps



    New issues: 


    USD new issues:

    • Australia’s Newcastle Coal is close to pricing a benchmark-sized, USD-denominated 10y bond at USTs +320bps via Citi and SMBC.  


    • Shinhan Financial Group is close to pricing a $500m, perpetual NC5 bond at around 2.875% via BNP, Citi (B&D), CS, HSBC, Mizuho and Shinhan.


    EUR new issues:

    • DNB Boligkreditt plans a 7-year Covered Bond via Credit Agricole, Deutsche Bank, DNB Markets, NordLB and UBS.


    • Etisalat, a UAE telecoms company, plans to sell EUR benchmark 7y and 12y bonds in the near future through BNPP, First Abu Dhabi, HSBC and SocGen.


    • Californian janitorial business Allied Universal Holdco plans a EUR/GBP-denominated bond split between a €813m 7yNC3 at around 4% and a £367.7m 8yNC3 tranche at circa 5% for the acquisition of G4S.  Leads are CS and MS (B&D).


    GBP new issues:

    • The EIB has priced a £300m tap of its 1.375% Mar 2025 bond at gilts +22bps via BofA, BMO and RBC (B&D).  


    JPY new issues:

    • SPV Harp Issuer PLC yesterday priced a JPY 1bn, Mar 2027, 0.84% repack bond at par via UBS.