qr5t5}f]vego9q[6ua0wlwyz_media_dl_1.png Markit iTraxx Crossover index

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(Bloomberg) — A handful of some of the safest borrowers are leading a tentative restarting of primary issuance in Europe on Tuesday, as ongoing conflict in the Middle East sends risk gauges surging.

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Germany has opened books on a new euro-denominated green twin bond of its May 2041 bund, while Austria is tapping existing green notes due in 2029 and offering new 30-year debt. German development bank Investitionsbank Schleswig-Holstein makes up Tuesday’s trio of deals with a €500 million ($581 million) sale, according to separate people familiar with the offerings, who asked not to be identified.

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Germany and Investitionsbank Schleswig-Holstein both have the highest AAA rating, while Austria is rated one notch lower at AA+.

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The US sent conflicting messages about how long a war with Iran might last as Israel launched new air strikes on Tuesday, as the widening conflict reverberates across the Middle East and upends energy markets. US-Israeli strikes on Iran over the weekend have quickly escalated into a broader conflict and halted what had been expected to be a busy week of bond sales.

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There were no deals priced in the main fund-raising markets in Europe and the US on Monday as risk gauges surged. Prior to the weekend, the majority of respondents to a Bloomberg survey on issuance expectations had expected volumes of more than €45 billion in Europe this week.

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Instead, risk measures have continued to flare, with the iTraxx Crossover index of junk-rated credit default swaps, a key gauge of risk sentiment, rising nearly 12 basis points on Tuesday, according to data compiled by Bloomberg.

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It could be several days before corporates are able to consider a return to debt markets, with higher-rated issuers in the sovereign and supranational space often the first to dip back in after periods of volatility.

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