Basis: Revving up ahead of new season

New issuance continues to pick up as the dreaded Autumn approaches, with EUR new issuance marginally outdoing USD in numbers but not in size.

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  • Revving up ahead of new season

  • Flows

  • New issues


Revving up ahead of new season

New issuance continues to pick up as the dreaded Autumn approaches, with EUR marginally outdoing USD issuance in numbers but not in size, as illustrated by a $5bn deal from KfW yesterday. But volumes remain tempered by school holidays on both sides of the Atlantic and by the final burst of Summer vibes in the US ahead of the season-ending Labor Day Holiday on Monday.


The standout basis-swappable deals in USD are a $1.5bn 10y from Quebec which has just launched, a $1bn, 30y NC10 Tier 2 from Allianz yesterday and that 3y KfW deal, also yesterday. In EUR they are a €850m long 9y from BT and a €1bn 3y NC2 from Nordea yesterday.


With tomorrow being both NFP and the last Friday of the Summer period proper, a long weekend for issuance from here is expected, while the moves in basis swaps today reflect better bids for choice in EUR/USD and also in cable.


In terms of flow today, there was decent size going through in 2y NOK/USD at -19.5bps which smacks of a lingering bit of flow from the Nordea deal yesterday. GBP may have been quite slow to restart the new issues activity but that has not stopped pockets of flow in cable a lot went through in 6y today at -21.75bps (American Honda priced a £450m 7y) while a decent rally in long gilts seems an obvious trigger for quite heavy 30y flow at -43.5bps.     


Other bursts of flow standing out today include 5y CAD/USD a few times at 8bps, a lot of 7y CHF/USD at -62bps and multiple flows in both 5y and 10y EUR/USD at -27.5bps and -29.75bps respectively. As for market direction, the extended bellies of both cable and EUR/USD were better bid, with cable basis pushing 0.25bps less negative at most points apart from that active 30y sector which dropped 0.375bps to -43.625bps. EUR/USD is even better bid, across its curve, with 3m +1bp, 10y +0.675bps and 30y +0.75bps at the time of writing.   



Basis trades on the SDR can be seen here: Total Derivatives SDR.


New issues

 USD new issues:

  • Quebec is working on a 10y $1.5bn bond via BofA, BMO, HSBC, NBC and TD.  Aa2/AA-/AA-.  Price talk swaps + 72bps.


  • LG Energy plans USD 3y and/or 5y Green bonds after meeting investors from Aug 30. Leads are BofA, Citi, MS, StanChart and KDB.


  • Japan’s Aozora Bank yesterday priced a $300m 3y Green bond at Treasuries +133bps. Leads were Citi, GS and MS (B&D).


  • Allianz yesterday priced a $1bn 30y NC10 Tier 2 bond at 6.35% through BofA, BNPP, Citi (B&D), CA and HSBC. 


  • KfW priced a $5bn short 3y Global at swaps +25bps. Leads are Barclays, MS, and RBC.


EUR new issues:

  • Molnlycke Holding, a Swedish based company, has priced a €400m 5y bond at swaps +118bps through BNPP (B&D), Danske, HSBC and SEB.


  • British Telecom yesterday priced a €850m, Jan 2033 bond at swaps +125bps via Mizuho, NatWest, SEB, SMBC and SocGen.


  • Nordea Bank yesterday priced €1bn of 3y NC2 SNP bonds at swaps +68bps through BofA, JPM, Nordea, SocGen and UBS.  


CHF new issues:

  • Korea Water Resources has priced a CHF 250m, Sep 2025 bond at SARON +38bps via BNPP.


GBP new issues:

  • American Honda Finance is close to pricing a £450m 7y bond at around gilts +128bps via BNPP, Citi and WFS.  


  • Bpifrance yesterday priced a £250m tap of its 4% Jan 2026 note to give 5.558% and 85bps over gilts. Leads are Barclays (B&D) and DB.


  • NIB sold a £50m 2y EMTN 5.40% due Sep 2025. Lead is GS.


  • IBRD sold a £50m 2y Sustainability note 5.45% due Sep 2025. Lead is HSBC.


  • EDC sold a £100m 2y EMTN 5.375% due Sep 2025. Lead is RBC.


  • EBRD sold a £100m 2y EMTN 5.32% due Sep 2025. Lead is SMBC Nikko.


CNY new issues:

  • African Development Bank has priced a CNY 300m, Sep 2025, 2.61% bond at par via Citi.