--- title: "SSAs and Financials: Weekly Market Update" url: https://www.helaba.com/en/ssas-and-financials-weekly-market-update-3 type: dd_research language: en updated: 2026-09-28 keywords: Renten, Weekly Market Update_englisch --- # SSAs and Financials: Weekly Market Update Focus on: SSAs & Financials 7 June 2024 © Helaba | Research & Advisory | 7 June 2024 1 of 7 Research & Advisory Weekly Market Update Primary market environment: The European Central Bank has decided to reverse course on in- terest rates, pre-empting the US Federal Reserve. The first rate cut since 2019 had been an- nounced by the ECB for some time, so it comes as no great surprise. Speculation about rate cuts has also increased in the US recently, although not all the data has been weak. The overall market environment remains favourable, with covered bank bonds in particular performing very well since the beginning of the year. Investors are focusing on quality. Primary market barometer The primary market in the SSA seg- ment continues to be receptive. This week three issuers took advantage of the good conditions and had no trou- ble filling their order books, as evi- denced by the significant oversub- scription in some cases. Notably, all three were ESG rated. New issues continue to meet with good to very good demand. This week 4 issues were placed for a total of EUR 2.25bn. Maturities between 3 and 6 years are in line with the trend, alt- hough longer maturities have been seen to a lesser extent recently. Issuing activity in this segment re- mains buoyant, albeit repeatedly in- terrupted by central bank decisions. This week has been dominated by is- suance from large institutions. We ex- pect open market windows to con- tinue to be used until the summer break. Covered Bonds Senior Unsecured SSAs Risk trend indicator (heat map): Covered bonds in high demand Relative\* ASW spread change \* ASW levels standardized and 2T-smoothed Sources: LSEG, Helaba Research & Advisory IBOXX EURO 1 day 1 week 4 week 13 weeks 52 weeks 104 weeks Germany -0,04 -0,10 0,24 0,10 2,31 3,28 European Union -0,09 0,01 0,09 -0,20 0,79 2,20 Germany Covered -0,07 -0,03 -0,12 -0,37 1,77 2,44 EU Covered -0,08 0,00 -0,14 -0,60 0,97 2,38 Banks senior preferred -0,01 0,10 0,02 -0,18 -0,79 -0,24 Banks senior bail-in (SNP) 0,01 0,12 0,04 -0,09 -1,12 -0,82 Banks subordinated 0,01 0,09 -0,13 -0,27 -1,44 -1,24 Supranational -0,10 0,00 0,03 -0,16 0,95 2,41 Agencies -0,13 0,00 0,06 -0,13 1,79 2,93 Sub-Sovereigns Germany -0,06 0,00 -0,04 -0,05 0,84 1,33 Sub-Sovereigns -0,10 0,06 0,03 -0,14 1,04 1,99 strong middle weak unchanged weak middle strong spread widening\* spread tightening\* Focus on: SSAs & Financials – Weekly Market Update © Helaba | Research & Advisory | 7 June 2024 2 of 7 SSAs Last week's tightening of bund/swaps led to increased selling in the SSA market over the last few trading days. E-names came under the most pressure, especially EU bonds, which saw spreads over swaps fall by up to 5 bps during the week. The new issues of the last few days were also unable to make further gains and some issues (Walloo 54) are trading wider than when they were issued. Spreads over swaps are now quite tight and should provide a good opportunity to take a tactical long position before the summer break. The downgrade of France's credit rating had little impact on the spreads of the country's SSAs as the move was already expected. The Dutch BNG Bank (EUR 1bn, 7 years, sustainability) and the Spanish Instituto de Credito Oficial (ICO) (EUR 500m, 5 years, social, WNG) successfully opened the primary market this week. The ICO issue met with strong in- vestor demand and was more than 4 times oversubscribed. The spread tightened by 2bps to SPGB +9bps com- pared to the marketing. BNG Bank also met its funding target with a bookbuilding of 1.3bn. Final pricing at MS +18 was 2bps tighter than the marketing. CPPIB (EUR 1bn, 5 years, green, WNG) (wholly owned and guaranteed by the Canada Pension Plan Investment Board) also had no trouble filling the order book, which was ultimately 4.5 times oversubscribed. On Wednesday, the Autonomous Community of Andalusia (EUR 500m, 6 years, sustainable) completed this week's successful of- fering with the book four times oversubscribed. Outlook: Overall, the issuance environment remains supportive. Another synchronised EU issue is on the agenda for next week. Covered Bonds LBBW opened the primary market this week with a EUR 750m benchmark. The 5-year covered bond saw very strong demand with a bookbuilding of over EUR 1.6bn, resulting in pricing 5bp tighter than the marketing at MS+22bp. Achmea Bank (BMK, 12 years) and Singapore's Oversea-Chinese-Banking Corpora- tion (OCBC) (EUR 500m, 3 years, WNG) were two more issuers to successfully take advantage of the market's con- tinued strong absorption capacity on Tuesday. This was Achmea's first issue with such a long maturity since Sep- tember 2021. Bookbuilding totalled EUR 1bn and the spread was set 4bps tighter than guidance at MS + 46bps. OCBC's first EUR issue in around 6 years was significantly oversubscribed at EUR 1.45bn and the final spread was Coupon Issuer Rating (M/F) Volume € Tap Maturity Launch-Spread vs. Mid-Swaps ESG Launch Orderbook 1st Spread- Indication 2,875% BNG A2 /AA- 1,000bn 11.06.2031 ms +18 bps  04.06.2024 1,300bn ms + 20 area 3,050% ICO Aa3 /AA 0,500bn 31.10.2029 SPGB + 9 Bp  04.06.2024 2,100bn SPGB + 14 area 3,125% CPPIB Capital Inc. - /- 1,000bn 11.06.2029 ms +25 bps  04.06.2024 7,300bn ms + 25 3,200% Junta de Andalucía A1 /- 0,500bn 30.04.2030 SPGB +24 Bp  05.06.2024 2,000bn SPGB +29 area Sources: Bloomberg, Helaba DCM € SSAs issues week of 3 June 2024 "Looking at trading patterns over the last few days/weeks, it is clear that with very few exceptions, spreads on the latest issues are trading wider than at fixing! Depending on the geographical origin, the spreads are be- tween 2-5 bps. The trend is particularly clear for maturities above 10 years. Achmea's issue from the Nether- lands (Lfz. 12 Y MS+46) was an attempt to revive demand, which has been lacklustre of late. The final spread is well above current levels for comparable subordinated bonds, and the final result was only pulled down by 4 basis points. This set a new price level. Unfortunately, the bond failed to generate a large order book and subsequently traded sluggishly around the reoffer spread." Comment from Helaba’s trading floor Focus on: SSAs & Financials – Weekly Market Update © Helaba | Research & Advisory | 7 June 2024 3 of 7 set 5bp tighter at MS + 20bp. On Wednesday, the Credit Agricole (CA) Public Sector SCF (EUR 500m, 6 years, WNG) had the primary market stage to itself. There has been little change in overall market sentiment. Trading books are still well-filled given the sluggish sec- ondary demand, while the structural overhang of supply in the market - especially in 'young bonds' - has not yet been reduced. Spreads remain under some pressure due to a lack of fresh impetus. Fresh money is needed to counter the unabated high supply - not just of covered bonds, but of all FI asset classes. Since this is no longer coming from the printing press, the private sector will have to step in. As long as the main players in this year's spread tightening are somewhat more cautious, as is currently the case, a resumption of the trend is not to be ex- pected. In addition, what appears to be a rather one-sided positioning of intermediaries against the backdrop of the approaching end of the first half of the year, the start of the summer season and, in particular, the politically exciting autumn (US elections), is not conducive to a more constructive approach, according to our dealers. As a result, traders expect spreads to move sideways to slightly higher at best next week. At the ICMA conference in Frankfurt on Thursday, the year to date was reviewed and it was noted that the momen- tum in the primary market in particular is impressive. The trend towards maturities between 3 and 7 years was also highlighted. According to our calculations, around 80% of all covered bond issuance this year up to the end of May was in this maturity range. More recently, issuers have started to venture into longer maturities with correspond- ing spread concessions, so we believe that the strong concentration in the second half of the year may ease some- what. Another issue has been the development of new issue premiums, which have declined so far this year. Outlook: We expect issuance to continue until the summer holidays, which start in about 4 weeks, have a dampen- ing effect. Senior Unsecured The primary market for senior unsecured bank bonds remains active, with transactions concentrated on the first two days of the week due to yesterday's ECB decision. The week was dominated by large leading institutions in their respective domestic markets. The trend of relatively high initial spread indications followed by significant spread tightening during bookbuilding continued. The ongoing favourable market environment is reflected in the good secondary market performance of new issues in recent weeks. Total issuance for the week was around EUR 7bn. There was a good balance between preferred (4 transactions totalling EUR 3.2bn) and non-preferred (2 double tranches totalling EUR 3.75bn). In the preferred segment, transactions with maturities between 3 and 6 years were issued (Scotia, Nordea, OTP and Belfius), with spreads Coupon Issuer Rating (M/F) Volume € Tap Maturity Launch-Spread vs. Mid-Swaps ESG Launch Orderbook 1st Spread- Indication 3,125% LBBW Aaa /- 0,750bn 13.11.2029 ms +22 bps 03.06.2024 1,650bn ms + 27 area 3,125% Achmea Bank N.V. - /- 0,500bn 11.06.2036 ms +46 bps 04.06.2024 1,000bn ms + 50 area 3,290% OCBC Aaa /AAA 0,500bn 11.06.2027 ms +20 bps 04.06.2024 1,450bn ms + 25 area 3,000% Credit Agricole Public Sector SCF Aaa /- 0,500bn 14.06.2030 ms +30 bps 05.06.2024 1,075bn ms + 35 area Sources: Bloomberg, Helaba DCM € Covered Bond issues week of 3 June 2024 „Investor flows were again affected by the public holiday last week, but remained at an average level. It is worth noting that this time the monthly rebalancing by asset managers was postponed until the beginning of the new month. This has never happened before in these volumes. Otherwise, real money continues to be a provider at long maturities, creating room for new issuance. At the short end, asset managers are active on both sides in large sizes, mostly looking for 3.8% yields.“ Comment from Helaba’s trading floor Focus on: SSAs & Financials – Weekly Market Update © Helaba | Research & Advisory | 7 June 2024 4 of 7 tightening between 20 and 30 basis points during the bookbuilding process, depending on the issuer and the initial level. In the non-preferred segment, JP Morgan and UniCredit each issued a double tranche. Again, spreads tightened by around 30bp. Deutsche Pfandbriefbank is sending a positive signal this week with its offer to par- tially buy back three benchmark bonds. Outlook: Issuers will continue to take advantage of favourable market windows before the summer break. How- ever, upcoming central bank decisions (such as the Fed's next week) will cause interruptions in primary market activity. Chart of the Week Weak loan demand and tight credit standards sug- gest that loan growth will re- main subdued. Rates charged by banks on new loans to households and non-financial corporations have already lost momen- tum over recent months and appear to have reached their peak, according to the ECB’s recent Financial Stabil- ity Review. Year-to-date bank lending flows to the non-financial private sector thus were at record lows at the end of March, driven by large reductions in mortgage lending and loans to non-financial corporations. Banks have tightened their credit standards further since the previous issue of the Financial Stability Review was pub- lished and expect those standards to tighten again over the second quarter of 2024, which should further dampen loan growth over the medium term. At the same time, the demand for loans from households and non-financial corporations has weakened further but is expected to recover slightly during the second quarter of 2024. Coupon Issuer Rating (M/F) Volume € Tap Maturity Launch-Spread vs. Mid-Swaps ESG Launch Orderbook 1st Spread- Indication 3m€+53 Bank of Nova Scotia A2 /AA- 0,750bn 10.06.2027 ms +53 bps 03.06.2024 0,900bn 3m€ + 75 area 3,375% Nordea Bank Abp Aa3 /AA 1,000bn 11.06.2029 ms +48 bps 03.06.2024 1,350bn ms + 75 area 4,750% OTP Bank Nyrt. - /- 0,700bn 12.06.2028 ms +180 bps  04.06.2024 1,700bn ms + 210 area 3,625% Belfius Bank SA/NV A1 /- 0,750bn 11.06.2030 ms +82 bps  04.06.2024 2,000bn ms + 110 area Sources: Bloomberg, Helaba DCM € Senior Preferred issues week of 3 June 2024 Coupon Issuer Rating (M/F) Volume € Tap Maturity Launch-Spread vs. Mid-Swaps ESG Launch Orderbook 1st Spread- Indication 3,674% JPM Chase & Co A1 /AA- 1,250bn 06.06.2028 ms +55 bps 03.06.2024 2,300bn ms + 80/85 area 3m€+61 JPM Chase & Co A1 /AA- 0,500bn 06.06.2027 ms +61 bps 03.06.2024 1,300bn 3m€ + 61 Bp 3,875% UniCredit S.p.A. Baa1 /BBB 1,000bn 11.06.2028 ms +85 bps 04.06.2024 2,000bn ms + 120 area 4,200% UniCredit S.p.A. Baa1 /BBB 1,000bn 11.06.2034 ms +145 bps 04.06.2024 1,400bn ms + 180 area Sources: Bloomberg, Helaba DCM € Senior Non-preferred issues week of 3 June 2024 Bank loan rates have peaked amid weak lending dynamics Policy rate and bank loan rates on new business, % Sources: ECB Financial Stability Review, Helaba Research & Advisory -1 0 1 2 3 4 5 6 7 8 9 -1 0 1 2 3 4 5 6 7 8 9 Deposit facility rate Non-financial corporations Household mortgage lending Household consumer lending Focus on: SSAs & Financials – Weekly Market Update © Helaba | Research & Advisory | 7 June 2024 5 of 7 Short news 6/5 ECB to approve Greek banks' request to resume dividend payment after 16 years: The Euro- pean Central Bank (ECB) is expected to approve a request by Greek banks to resume the payment of dividends after 16 years, four bankers told Reuters. The Greek banking sector is returning to normality after the country was rocked by a financial crisis that broke out in late 2009. 6/5 Fitch Ratings: New Zealand Covered Bond Programme Ratings Remain Stable Amid Economic Stress: New Zealand’s covered bond ratings remain stable due to the high Issuer Default Ratings (IDRs) of all issuers, which, along with the overcollateralization of mortgage portfolios, would allow ‘AAA’ ratings to be retained even if a bank’s IDR was downgraded by three notches, or five notches in the case of Kiwibank Limited, all else being equal. Underlying mortgage performance in New Zealand covered bond pools has remained excellent, even with the stress of official interest rates rising by 5.25%, to 5.50%, between October 2021 and May 2023 and the country’s economy entering recession twice since 2Q22. Unemployment has also reached 4.3% in March 2024, from a low of 3.2% in December 2021. 6/4 ECB ready to force banks to tackle climate risk, Buch says: Eurozone banks are making progress in tackling climate-related risk but need to do more and the European Central Bank is ready to force them to act if neces- sary, Claudia Buch, Head of the ECB Supervisory Board, said as noted by Reuters. 5/31 Banks are driving the green transition via climate tech: Commercial banks remain hesitant to finance large- scale, largely unproven climate tech projects needed for the low-carbon transition without policy support aimed at reducing risk. According to the Banker, ING’s global head of sustainable finance says export credit agencies or blended finance are needed to make climate tech investments for Europe’s green transition ‘bankable’. \* Closing prices from the previous day Sources: Refinitiv, Helaba Research & Advisory Market Data (current\*, vs. 1 week, vs. 4 weeks) E-STOXX 600 Banks 202 -0,59% 0,90% iBoxx € Cov. Germany 24,7 -0,6 -1,7 iTraxx Senior Financial 58,7 -0,1 -0,7 10Yr-Yield 2,54 -0,11 0,05 iBoxx € Cov. Bonds 29,7 -0,5 -1,8 iBoxx € Supranational 29,6 -1,4 -0,5 Swap 10J 2,79 -0,09 0,01 iBoxx € Banks PS 65,6 1,5 0,2 iBoxx € Agencies 15,1 -1,7 -0,6 iBoxx € Germany -12,93 -2,11 3,44 iBoxx Banks NPS 85,3 2,6 0,9 iBoxx € Sub-Sov. Germany 22,3 -1,0 -1,3 iBoxx € EU 35,85 -1,38 0,41 iBoxx Banks Subordinated 134,7 2,9 -6,5 iBoxx € Sub-Sovereign 37,6 -0,8 -0,5 Leisure tip for the weekend: Thuringian CHORAL Treasures 2024 Do you have ideas for leisure tips? 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Find out more: CHORALTreasures Focus on: SSAs & Financials – Weekly Market Update © Helaba | Research & Advisory | 7 June 2024 6 of 7 Chartbook SSAs, Covered Bonds, Senior Unsecured Senior Unsecured: Primary volumes Senior Unsecured: Spread development EUR benchmark issue volume cumulative by weeks, bn EUR ASW spread, bp Sources: Bloomberg, Helaba Research & Advisory Sources: LSEG, Helaba Research & Advisory 0 20 40 60 80 100 120 0 20 40 60 80 100 120 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 2023 Senior Non-preferred 2023 Senior Preferred 2024 Senior Preferred 2024 Senior Non-preferred 0 50 100 150 200 250 300 0 50 100 150 200 250 300 06/23 08/23 10/23 12/23 02/24 04/24 06/24 Banks Subordinated Banks Senior Bail-in Banks Senior Preferred Covered Bonds: Primary volumes Covered Bonds: Spread development EUR benchmark issue volume cumulative by weeks, bn EUR ASW spread, bp Sources: Bloomberg, Helaba Research & Advisory Sources: LSEG, Helaba Research & Advisory 0 20 40 60 80 100 120 140 160 180 200 220 0 20 40 60 80 100 120 140 160 180 200 220 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 2023 2022 2024 0 5 10 15 20 25 30 35 40 0 5 10 15 20 25 30 35 40 06/23 08/23 10/23 12/23 02/24 04/24 06/24 EUR Covered Covered Germany SSAs: Primary volumes SSAs: Spread development EUR benchmark issue volume cumulative by weeks, bn EUR ASW spread, bp Sources: Bloomberg, Helaba Research & Advisory Sources: LSEG, Helaba Research & Advisory 0 50 100 150 200 250 300 350 400 0 50 100 150 200 250 300 350 400 1 4 7 1013161922252831343740434649 2022 2024 2023 -5 5 15 25 35 45 -5 5 15 25 35 45 06/23 08/23 10/23 12/23 02/24 04/24 06/24 Sub-Sovereigns Agencies Supranationals Sub-Sovereigns Germany Focus on: SSAs & Financials – Weekly Market Update © Helaba | Research & Advisory | 7 June 2024 7 of 7 News from Research & Advisory  Focus on Credit: Primary market update EUR benchmark bank bonds Q1 2024  Focus on Credit: Corporate Schuldschein - Primary market Q1 2024  Focus on Credit: EUR Corporate bonds – Primary market Q1 2024  Focus on Covered Bonds: APAC Covered Bonds - Popular instruments with limited sup- ply  Focus on Credit – Major European Banks:- Heading into 2024 with strong credit risk buffers  Focus on: Credit – European banks: The sharpening contours of ESG disclosure  Markets & Trends 2024 – Global economy in a transition game Please feel free to contact us Publisher and editorial office Helaba Research & Advisory Editor: Stefan Rausch Corporate Research & Advisory Responsible: Dr. Gertrud R. Traud Chefvolkswirtin/ Head of Research & Advisory Neue Mainzer Str. 52-58 60311 Frankfurt am Main T +49 69 / 91 32 – 20 24 Internet: www.helaba.com Disclaimer This publication has been prepared with the greatest care. However, it contains only non-binding analyses and forecasts of current and future market conditions. The information is based on sources which we consider to be reliable, but for whose accuracy, completeness or up-to-dateness we cannot assume any liability. All state- ments made in this publication are for information purposes only. They must not be understood as an offer or recommendation for investment de- cisions. Here you can subscribe to our newsletter: https://news.helaba.de/research/ Dr. Susanne Knips Senior Credit Analyst T 069/91 32-32 11 Sabrina Miehs, CESGA Head of FI & SSA Research Senior Advisor Sustainable Finance T 069/91 32-48 90 Christian Schmidt Covered Bond & SSA Analyst T 069/91 32-23 88 SSAs: All issues with ESG label. Covered bonds: Good sentiment continues. Senior Unsecured: Issuance this week driven by large institutions. Chart of the week: Bank loan rates have peaked amid weak lending dynamics.