EUR Swaps: Big issuance; Dutch pension reform delay?

Euro notes pile
Big issuance has arrived including a €4bn Italian 15y linker. In the news, reports suggest the deadline for Dutch pension reform is set to be delayed.

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  • Big issuance; Long-end receiving
  • Dutch pension reform deadline pushed back to 2028?
  • ESMA WG on risk-free rates winding down
  • New issues

    Big issuance; Long-end receiving
    Global fixed income is once again selling off with the 10y Bund yield earlier testing the 2.50% (+4bps) level while the euro swap curve has bear flattened. Earlier, the session began with Eurozone PMIs printing slightly lower-than-consensus with the composite at 53.3 vs 53.5, down from 54.1 the previous month.

    “It’s the US debt ceiling abroad and then issuance (in euros) that we are mainly trading at the moment,” said one euro swapper.

    In terms of issuance, a steady stream of deals continues to hit the screen with Italy’s €4bn inflation-linked 15y one of today’s stand out deals and a possible candidate for asset swapping. Other names pricing include a €3bn three-part Bayer deal, €2bn 10y AFD and €1bn NRW Bank 7y Green.

    Bund asset swaps are mixed with the spread curve slightly flatter and last prices putting the Schatz at 80.6bps (+1.6bp), Bobl at 73.0bps (unch), Bund at 67.8bps (-0.4bp) and Buxl at 30.3bps (-0.3bp).

    Elsewhere, the euro swap curve has seen more flattening in the longer-end with 10s/30s last -37bps (-1bp). Note that following recent steepening across 10s/30s there has been speculation there could be a near-term pullback as real money accounts look to receive. “There’s been a bit of opportunistic but nothing major at these levels,’ one trader reported.


    Dutch pension reform deadline pushed back to 2028?
    The newswire today reports that the deadline for Dutch pension funds to switch to the new pension system is likely to be delayed by one year to 1 Jan 2028 from 2027, with the government prepared to monitor whether further delays are needed, even to 2029, following calls from some parties in the Dutch parliament and concern about capacity at advisors and regulators to handle the change. Further details can be found here. A vote on the pensions act is expected on May 30, with the reforms to be introduced from 1 July 2023.


    For more background on Dutch pension fund reforms see Dutch election and pensionsDutch pension fund changes in 2023 and Dutch pension fund law and long-end

    ESMA WG on risk-free rates winding down
    The minutes from the 3 April ESMA Working Group on Euro Risk-Free Rates meeting have been released and include an update on the future of the Working Group (WG). The WG plans to hold two further meetings this year before concluding its programme. Ahead, it plans “to keep the network and contact lists of stakeholders for ad-hoc activities related to benchmarks” such as surveys.


    New issues 

  • Italy is pricing €4bn 15y inflation-linked bond BTPei-39 at BTPei-33 +27bps through Barclays, Citi (B&D), DB, JPM and SocGen. Latest order book reported to be above €23bn.

  • Agence France Locale plans €500m (max) 15y through DB, GS, HSBC and NatWest.

  • CaixaBank is pricing €1bn 11y NC6 Tier 2 at swaps +300bps through BNPP (B&D), Caixa, Citi, MS and Natixis.

  • AFD is pricing €2bn 10y at OATs +41bps through CA, DB, HSBC, MS and Natixis. Latest order book reported to be above €4.5bn.

  • Bayer is pricing €750m 3.25y at swaps +68bps, €750m 6.25y at +115bps and €1.5bn 10y at +163bps through BofA (B&D), Citi and DB.

  • DZ Hyp plans €500m 10y Covered through BNPP, DZ, Erste, ING, LBBW and NatWest.

  • NRW Bank is pricing €1bn 7y Green at swaps -2bps through Barclays, CA, Deka and DB.

  • TVO Oyj is pricing €600m 7y at swaps +165bps through Danske, NatWest, Op (B&D) and SEB.

  • Merlin Entertainments, a UK company, is pricing €650m Senior Secured around 7.5% through DB (B&D), BofA, Barclays, HSBC, Mizuho, Santander, SMBC Nikko, UniCredit and IMI.

  • Legrand is pricing €700m 6y SLB at swaps +38bps through CA (B&D), GS, SocGen, BNPP, CIC and HSBC.

  • Credito Emiliano is pricing €400m (max) 6y NC5 Green SNP at swaps +250bps through Barclays, BNPP, CA and IMI (B&D).

  • CDC is pricing €500m 5y Sustainable at OATs +27bps through BNPP, CA, DB, JPM and La Banque Postal.

  • Dexia Credit Local plans EUR 5y through Citi, CA, JPM, Natixis and SocGen.

  • ING Belgium is pricing €1.25bn 4y Covered at swaps +17bps through Barclays, CA, Helaba, ING (B&D), LBBW and UniCredit.

  • Aktia Bank is pricing €500m (max) 4y Covered at swaps +17bps through Danske, DZ, Erste, LBBW and Nordea.

  • Equitable Bank is pricing €300m 3y Covered at swaps +52bps through Barclays, DZ, LBBW, Scotia and TD.

  • NIBC Bank plans €500m (max) 2.5y SNP through ABN Amro, JPM, MS, SocGen and UBS.