The scale of the sterling bid prompted KfW to raise its size expectations in its latest visit to the currency on Monday, a clear positive in a market that has been peppered with both underwhelming and well-received deals since the end of the summer period.
The German agency initially announced a £300m tap of its 4.125% February 2026 line via Barclays and Bank of America. After receiving demand of more than £740m, however, the issuer decided to make the most of the interest and upsized the tap to £600m. The leads kept the spread flat to the Gilts plus 58bp area guidance – a common approach in sterling, where SSAs are often more concerned with maximising size and making the most of arbitrage rather than squeezing the price.
KfW has now appeared three times in the sterling market since the start of August, raising £1.7bn.
KfW's trade is the first SSA offering in a week that presents a narrower issuance window than usual. The US Federal Reserve's next monetary policy meeting over Tuesday and Wednesday makes Monday and Tuesday the most viable times to execute.
After KfW priced its sterling tap, the World Bank mandated a five-year US dollar sustainable development bond, naming Barclays, Citigroup, HSBC and Nomura as leads. They began marketing the deal with IPTs of SOFR mid-swaps plus 35bp area.
In euros, the supply looks decidedly mid-curve, perhaps unsurprising given many bankers are reporting that buyers are looking for longer paper to capitalise on peaking rates. Along with the mid-curve exposure, the supply is also predominantly ESG-labelled, encompassing sustainable, social and green transactions.
Rentenbank announced its intention to raise €1bn via a no-grow 10-year green bond, via Bank of America, Credit Agricole, LBBW and Rabobank.
The Flemish Community opted for a more unusual pair of tenors for its dual-tranche deal. It mandated Deutsche Bank, HSBC, ING and UniCredit to place a conventional nine-year bond and a 19-year sustainability issue.
Meanwhile, BNG has mandated Bank of America, BNP Paribas, Deutsche Bank and JP Morgan to run a 15-year social bond syndication.