16th May 2025

This week there turned out to be a perfect storm for primary bond activity as a risk-on tone spurred by a breakthrough in US/China trade relations combined with the absence of any major holidays or central bank meetings, as well as a slowdown in corporate earnings, meant the issuance window was wide open.

A deluge of IG corporate names decided to make the most of that window, in the end marking the sector’s second-largest week for euro supply on record, with the final haul finishing up at a mammoth EUR27.575bn from 26 issuers and 40 separate tranches.

That smashed through both the average (EUR13bn) and highest (EUR20bn) estimates put forward in our latest issuance poll and was only beaten on a historical basis by a EUR39.65bn flurry in the w/e 3-Apr-2020 when issuers were hitting the market amid the Covid-19 pandemic.

The huge total this week comes after some issuers were forced to postpone funding plans last month in the wake of Trump’s Liberation Day tariff announcements, which sent global risk markets into a tailspin.

With conditions improving this week a lot of those names went live, whilst others brought issuance plans forward in order to make the most of what was a strong backdrop, just in case the recent risk rally fades.

Over EUR100bn of orders chase supply

Given we had 40 tranches this week, it was no surprise that investors were treated to some variety. This probably aided strong orderbooks along with the broader risk-on tone, as well as pent-up investor demand following a slow Apr for bond sales.

On the menu we had conventional, green, sustainable and hybrid this week from issuers from various countries and across the ratings scale, whilst there was also some scarcity value with a number of this week’s transactions coming from rare or first-time names.

Taking a topline view for now, this week’s transactions (excluding Equinix’s SEC-registered EUR1.5bn two-part green where no demand was communicated) were covered an average 3.93x at reoffer.

That with demand for the paper (again excluding Equinix) finishing up over EUR100bn, or EUR101.95bn to be precise.

Orders had earlier peaked at EUR125.55bn for the issues, but investors pared back interest on some of the deals with this week’s names cutting pricing an average 39.73bps from IPTs to reoffer.

With some of the transactions coming from rare or first-time names, fair value was rather subjective, but across the deals where fair value was pinpointed the average NIC this week was driven down to just 2.92bps.

US names continue assault on euro market

A major theme this week, as has been the case of late, was the prominence North American names in the single currency market as issuers made the most of what are attractive issuance conditions this side of The Atlantic.

In all, five North American names tapped the single currency this week and raised EUR7.975bn via a combined 11 tranches.

They propelled the year-to-date reverse yankee total up to a bumper EUR48.41bn, versus the full-year 2024 total of EUR61.02bn.

Given the fast start to 2025, the all-time yearly record of EUR99.08bn set in 2019 looks like it could be within reach, with more likely to cross the pond and make the most of what are lower underlying rates in Europe compared to the US, whilst also diversify their funding sources.

This week’s reverse yankee issuance was headlined by pharma company Pfizer Inc which printed its first euro trade since 2017.

That that came in the form of a EUR3.3bn four-part (750m 4yr, 1bn 7yr, 750m 12yr & 800m 20yr) that marked the fifth-largest EUR IG corp transaction of 2025.

Investors were extremely keen to gain exposure to the name in the single currency for the first time in eight-years, with combined demand of EUR14.8bn (EUR19.5bn peak) allowing the pharma company to shave 40-45bps off IPTs.

Compatriot McDonald’s Corp (EUR1.25bn 7yr) also crossed The Atlantic on the same day (Wednesday) and saw supersized demand which settled at EUR3.5bn (EUR4.7bn peak). That allowed the fast-food giant to print 35ps inside IPTs and with a 2.5bp NIC.

The first reverse yankee issuance this week came on Monday via Equinix (equally weighted EUR1.5bn 4/9yr two-part green; -3/zero NICs) and PACCAR (EUR350m 3yr; 750m bk & 2.5bp NIC).

That was followed on Tuesday by Canadian name Magna International which backed up a series of calls with a EUR575m (from benchmark) 6yr. Demand was very strong for this deal at EUR3.2bn, with the final NIC pegged at around 5bps.

Following the Pfizer and McDonald’s trades on Wednesday, US pharmaceutical solutions organization Cencora Inc went live with a debut offering of single currency paper.

That came in the form of an equally weighted EUR1bn no grow 3/7yr two-part, where orders were last communicated at a combined EUR4.1bn.

Hybrid flurry amid risk-on tone

The accommodative backdrop seen this week saw somewhat of a resurgence in the high-beta corporate hybrid market which has been treading water for much of the year.

In total, five printed in the format, which are bonds issued by companies that combine characteristics of both debt and equity.

The quintet totalled EUR4.4bn (six lines) and came after just EUR6.865bn of bonds were printed in the format this year before this week.

Two of this week’s hybrid issuers also included a green tag, including Volkswagen which picked a two-part (EUR750m PNC5.5 & EUR1.15bn PNC8.5) for what was its first subordinated offering since Aug 2023.

The German national champion found plenty of support from investors, with final orders of EUR9.85bn (EUR13.2bn peak) seeing 75bps chopped off each tranche from IPTs to print well inside the company’s existing hybrid curve.

VW intends to use the net proceeds of the new lines to partially refinance its 3.5% non-call 2025 hybrid (ISIN XS2187689034) and to refinance its 4.625% non-call 2026 hybrid (ISIN XS1048428442).

Elsewhere this week, French utility company Veolia Environnement (EUR500m no grow PNC5.25) brought its first hybrid in green format, with the trade landing 50bps inside 4.875% area IPTs and flat to fair value on the back of a 4x covered (5.4x peak) book.

Two battled for hybrid attention amid a Wednesday bond flurry. Prysmian (1bn PNC5.25 hybrid; 5.9bn bk) offered a debut in the format to help fund the acquisition of Channell Commercial Corporation, whilst Abertis (EUR500m PNC5.75; 12.5bp NIC & 1.9bn bk) was also out, with the rarity value of the former helping to drive much stronger demand.

Last, but not least, Thursday saw Air France-KLM (EUR500m no grow PNC5.25 hybrid; 2.4bn bk) also make its debut foray into the hybrid arena.

Summary of all this week's EUR IG/split-rated corporate trades:

Plenty more issuance on the way

Given the glut of issuance seen this week, one may think that the near-term pipeline of potential issuance would be fairly small, but feedback from market participants suggests that isn’t the case.

They are expecting another busy week for EUR IG corporate bond supply, with some believing as much as another EUR20bn could cross the tape as issuers look to lock in funding at a time where the market is very accessible.

Again, like this week, the coast looks clear with us devoid of any major European holidays and/or central bank meetings, so assuming the better tone seen this week holds up we would expect some very busy sessions to come.

Five issuers are already sat in the pipeline waiting to go in the form of NBN Co, Shurgard, Metsa Board, Fluxys and Syensqo SA – with more details below.

In the pipeline

** Australian state-owned telecom NBN Co Limited (Aa3/AA+) mandated Barclays, BNP Paribas, Credit Agricole CIB, Deutsche Bank and HSBC as Joint Bookrunners to arrange a series of fixed income investor meetings commencing 16-May. A EUR 7.5yr senior unsecured benchmark sustainability offering may follow, subject to market conditions. The notes will be issued in accordance with NBN Co Limited’s Sustainability Bond Framework. The net proceeds from the Offering will be exclusively applied to finance or refinance, in part or in full, new and/or existing eligible green and social projects that meet one or more of the categories of eligibility as recognised in the Green Bond Principles as Eligible Green Projects or the Social Bond Principles as Eligible Social Projects, each as outlined in the Framework. The allocation of funds is estimated to be a minimum of 80% for eligible green projects

** Shurgard Self Storage Limited (BBB+), the largest owner and operator of self-storage centres in Europe, has mandated BNP Paribas and ABN AMRO as Global Coordinators, and ABN AMRO, BNP Paribas, Belfius Bank, HSBC, and KBC as Joint Active Bookrunners, to arrange a series of fixed income investor calls on 15-16 May. A EUR500m no grow 10yr line is set to follow. The notes will be issued via Shurgard Luxembourg S.a r.l. and are expected to be rated BBB+ by S&P. New issue proceeds will be used for general corporate purposes, including refinancing of existing bank facility and US private placement maturity. Comps here

** Finnish producer of folding boxboard and white kraftliners Metsa Board (Baa2/BBB-) mandated Danske Bank and SEB as Joint Lead Managers to arrange a series of fixed income investor calls and meetings commencing 19-20 May. A EUR 200-250m 6yr senior unsecured green bond offering will follow. The bonds are expected to be rated Baa2 by Moody’s. The Green Bond offering will be issued in accordance with Metsa Board's Green Finance Framework

** Unrated Belgian international energy infrastructure company Fluxys SA mandated BNP Paribas as Global Coordinator along with Belfius, Credit Agricole CIB, ING and SMBC as Active Bookrunners to arrange a series of investor calls on 19-20 May. An inaugural EUR500m no grow 5yr senior unsecured bond offering is expected to follow. The net proceeds of the issue of the notes will be used for general corporate purposes. Comps here

** Belgian specialty chemicals company Syensqo SA (Baa1/BBB+) hired BNP PARIBAS, BofA Securities and Crédit Agricole CIB as Global Coordinators together with Citi, JP Morgan, KBC and Morgan Stanley as Active Bookrunners to arrange a series of fixed income investor calls 19-20 May.

A EUR two-part 6yr and 10yr benchmark fixed rate trade is expected to follow. The issuer intends to use the net proceeds for general corporate purposes. The notes are expected to be rated Baa1 by Moody’s and BBB+ by S&P. Comps here

Performance tracker of recent EUR IG/split-rated benchmark deals

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