Strong demand for high-quality assets amid a sell-off in riskier instruments on Wednesday boosted demand for KfW’s €5bn bond issue.

More than 150 investors placed orders worth €7.6bn for the German development bank’s second benchmark eurobond of the year.

“We have decided to offer this three-year euro benchmark bond because investors are currently looking for safe-haven investments,” said Petra Wehlert, head of bond issues at KfW.

The three-year note was priced to yield 12.6 basis points more than the equivalent German government bond. It followed KfW’s 15-year issue in January.

“The high volatility in some emerging markets and the weakness of the stock markets had forced institutional investors to be sidelined recently. The KfW bond was optimally timed for these investors,” said Jeremy Walsh, of ABN Amro, which managed the sale with Dresdner Kleinwort Wasserstein and HSBC.

About a third of the issue was sold to asset managers and funds while banks and central banks bought most of the remaining bonds. About 11 per cent went to Asian investors.

HSBC raised SFr650m from selling two Swiss franc-denominated bonds with five and 10-year maturities.

The UK bank sold SFr300m of the 2011 note to yield 15bp above mid-swap rates and SFr350m of the 2016 issue at a yield 30bp over swaps. The bonds were issued through HSBC Finance Corp US and the deal was lead-managed by Credit Suisse and UBS.

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