(Bloomberg) -- Concerns about a potential no-deal Brexit are a boost for one corner of the sterling-bond market -- overseas sovereign agency sales.
The market has already seen 16 offers this year, totaling at least 7.65 billion pounds ($10 billion), trumping the 12 deals totaling about the same amount sold in the whole of January 2018, according to data compiled by Bloomberg. The tally of offers by non-U.K. government agencies or supranational bodies includes an Inter-American Development Bank note set to price on Friday.
The boom partly reflects investor demand for safe assets amid uncertainty about whether Prime Minister Theresa May can win parliamentary support for her European Union withdrawal agreement. Issuers are also rushing to lock in “attractive funding levels,” particularly swapped into dollars, before new volatility emerges, said Mark Byrne, director of syndicate at TD Securities Inc.
It’s a “perfect storm,” he said. There’s been “robust investor demand, particularly from bank treasury investors” and risks surrounding next week’s parliamentary Brexit vote is spurring issuers in action, he said.
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