Sovereign, supranational and agency (SSA) is not the most glamorous of the primary fixed-income markets. Much of the time it is a high-volume, repetitive grind, rewarded largely by stress and thin margins. Given its fundamental role in the financial system and the energy it imparts to other issuance, SSA bankers think it deserves more recognition than it gets. Yet every now and then they pull off a deal that gets their tails up again – and Deutsche Bank has already done two this year.
Deutsche Bank has topped the primary rankings for western European SSA for some years, and last year clocked up 25% more deals than the bank that came second. Yet business is not quite as effortless as it once seemed to be. “There is more balance sheet pressure from regulators, and how you allocate capital across various asset classes has implications for risk appetite,” says Bill Northfield, Deutsche Bank’s head of SSA origination. “That translates into trading flows, and we have seen the impact in diminished liquidity in secondary. This may well increase this year.”
