When the Federal Republic of Germany enters the capital markets for a syndicated foreign-currency deal you know the circumstances must be special. Past weeks were remarkable as Austria joined its neighbour: both returning to the dollar market for the first time in four years. A number of Europe’s frequent issuers took advantage of the substantial saving available from issuing in dollars and swapping back to euros.
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| value of SSA issuance in first half of September |
"It has been a remarkable September. The volume of issuance in the sovereign, agency and supranational sector has been huge," says Phillip Brown, head of public sector origination, EMEA, at Citi. "We’ve had over $30 billion of supply in the first half of the month, which is as busy as you’d expect in January, not September." It is unusual for the market to reopen in September with the vigour it has shown this year. Before Germany and Austria’s entrance, Spain and Canada sold deals for $2.5 billion and $5 billion respectively. All were three-year deals.
Canada had not issued in US dollars for 10 years before its issue – it was able to obtain a spread 15 basis points through Libor.