CORP SNAPSHOT: 2025 up and running

The IG corporate bond market has been slower than other sectors to get underway in the new year, but we are certainly up and running now with six names out in euros on the day with a combined nine tranches.

This marks the latest start to the year for euro IG corporate supply since 2020 when the first deals of the year were also on the 7th of Jan, but there appears to be plenty more on the way soon with respondents in our weekly issuance survey conducted last Friday calling for an average EUR10.5bn of euro IG corporate paper to come to fruition this week.

It is usual for automakers to be amongst those to kick off the year’s euro IG/split-rated corporate bond activity and in 2025 it is no different with three from the sub-sector out this morning.

That includes RCI Banque, the financing arm of French borrower Renault Group, which is helping kick off yearly supply for an eight consecutive year, this time with a EUR 3yr benchmark.

RCI is being joined by automaker peers General Motors Financial Company (EUR 6.5yr) and TRATON (EUR 3/6yr two-part), whilst making up Tuesday’s sextet of corporate names are Nestle (EUR 7yr/10yr two-part), Digital Dutch Finco (EUR long 10yr) and Enel (EUR PNC5.25/PNC8 two-part hybrid).

On top of that, German pair Evonik (EUR500m no grow 5yr green) and Lufthansa (EUR 30NC6 hybrid) have announced investor calls today ahead of possible execution on Wednesday, as has La Poste (EUR PNC6.5 hybrid).

RCI Banque keeps up tradition by going first

** French issuer RCI Banque S.A (Baa1/BBB-), operating under the commercial brand Mobilize Financial Services, is out with a EUR 3yr benchmark via Credit Agricole CIB, CIC, Natixis and SMBC as Joint Bookrunners

IPTs: Books open for EUR Jan 2028 benchmark at m/s +155-160

Expected issue ratings are Baa1/BBB- (Moody’s/S&P)
Proceeds are to be used for general corporate purposes
It is no surprise to see RCI Banque in the market early, with the borrower having opened up corporate supply in each of the last seven years
RCI has a well-stocked euro curve in place, with us seeing the closest maturing bonds to the new line as per the below
Looking at the screen quotes from this morning, we saw fair value for the new 3yr RCI bond at around m/s +115 (40-45bp NICs), which bankers away from the trade agreed with
Demand for the new trade was over EUR2bn at the first update

Secondary screen quotes as of 9am UKT

RENAUL EUR800m 3.75% Oct 2027 +112 (Apr 2024)

RENAUL EUR750m 4.875% Jun 2028 +118 (Jun 2023) – Green

RENAUL EUR650m 4.875% Sep 2028 +132 (Sep 2022)

RENAUL EUR700m 3.875% Jan 2029 +133 (Jan 2024)

GM goes early again

** US automaker General Motors Financial Company Inc (Baa2/BBB/BBB) hired Barclays, BNP Paribas, CA-CIB, ICBC, IMI – Intesa Sanpaolo and UniCredit for a EUR 6.5yr benchmark bond

IPTs: Books open for EUR Jul 2031 benchmark at m/s +165 area

Expected ratings (M/S/F) are Baa2 / BBB / BBB
Use of proceeds: general corporate purposes
GM issued two euro bonds last year in the form of a EUR750m 4% Jul 2030 in Apr and a EUR850m 3.9% Jan 2028 on the 8-Jan, with the latter coming alongside GBP350m 5.5% Jan 2030s
Both of the euro deals launched last year were included on the official comps list sent this morning, as detailed below
Equating for the additional curve from the aforementioned 4% Jul 2030s, one banker running the trade was pitching fair value for the new Jul 2031s at m/s +130

*** GM FINANCIAL COMPS ***

(indicative pre-announcement bid side levels vs i-spread)

Ticker Ratings Coupon Amt Maturity Term Isprd

GM Baa2/BBB/BBB 4.500% 600 22-Nov-27 2.9yr +90

GM Baa2/BBB/BBB 3.900% 850 12-Jan-28 3.0yr +92

GM Baa2/BBB/BBB 0.650% 600 07-Sep-28 3.7yr +94

GM Baa2/BBB/BBB 4.300% 750 15-Feb-29 4.1yr +107

GM Baa2/BBB/BBB 4.000% 750 10-Jul-30 5.5yr +117

TRATON goes with two-part EUR

** German heavy duty truck manufacturing company TRATON SE (Baa2/BBB) mandated BBVA, Citigroup, JP Morgan and UniCredit as Joint Bookrunners for a EUR 3yr and 6yr two-part benchmark

IPTs:

Exp EUR500m Jan 2028s at m/s +150 area

Exp EUR500m Jan 2031s at m/s +175-180

The bonds are being issued via TRATON Finance Luxembourg S.A
Use of proceeds are for general corporate purposes
TRATON opened its account last year with a sterling line (GBP450m 5.625% Jan 2029s on 9-Jan) and backed that up with a EUR500m 3.75% Mar 2027 & EUR500m 3.75% Mar 2030 two-part in Mar that attracted combined demand of EUR3.29bn
Looking at the issuer's most recently issued bonds, we saw fair value for the new 3yr at m/s +110 and at around +135 on the 6yr – something bankers on and off the trade said they agreed with

€€€ Traton (Baa2/BBB) : 3Y + 6Y Senior – Comparables €€€

Indicative bid side levels (pre-announcement)

Ticker Amt Out Coupon Maturity i-sprd

TRAGR

500 3.750 Mar-27 +93

500 4.250 May-28 +113

1,250 0.750 Mar-29 +117

750 3.750 Mar-30 +126

750 1.250 Mar-33 +119

Nestle includes long 20yr tranche

** Swiss food and drink conglomerate Nestle S.A (Aa3/AA-) this morning hired BofA Securities, Citigroup, HSBC, JP Morgan and RBC Capital Markets for a EUR 7yr and 20yr two-part benchmark transaction

IPTs:

EUR500m (exp) Jan 2032 at m/s +90 area

EUR500m (no grow) Jan 2045 at m/s +150 area

The notes are being issued through the company’s Luxembourg subsidiary Nestle Finance International Ltd
Expected issue ratings are Aa3 / AA- (Moody’s / S&P)
Proceeds from the bonds are to be used for general corporate purposes
Nestle has a host of bonds already outstanding, with bankers on the deal seeing fair value for the new 7yr at around m/s +55 when looking at pre-announcement quotes. Fair value for the 20yr line is more subjective given the large curve extension from the borrower’s current longest bond (EUR650m Jun 2041s), but some saw it around m/s +110-115

€€€ Nestle (Aa3/AA-) - Indicative Pre-Announce Comps €€€

(Bid side vs I-Sprd)

Issuer Ratings Size Coupon Maturity Tenor I-Sprd

Nestle Aa3/AA- € 500m 3.500 Jan-30 5.0 +47

Nestle Aa3/AA- € 500m 2.625 Oct-30 5.8 +52

Nestle Aa3/AA- € 500m 3.250 Jan-31 6.0 +52

Nestle Aa3/AA- € 750m 3.000 Jan-31 6.0 +53

Nestle Aa3/AA- € 1,000m 0.375 May-32 7.3 +60

Nestle Aa3/AA- € 850m 3.750 Mar-33 8.2 +71

Nestle Aa3/AA- € 500m 3.750 Nov-35 10.9 +89

Nestle Aa3/AA- € 650m 3.125 Oct-36 11.8 +91

Nestle Aa3/AA- € 750m 3.250 Jan-37 12.1 +98

Nestle Aa3/AA- € 750m 1.750 Nov-37 12.8 +88

Nestle Aa3/AA- € 500m 0.375 Dec-40 15.9 +85

Nestle Aa3/AA- € 650m 0.875 Jun-41 16.4 +85

J&J Aaa/AAA € 700m 3.200 Jun-32 7.4 +58

J&J Aaa/AAA € 800m 3.350 Jun-36 11.4 +85

J&J Aaa/AAA € 1,000m 3.550 Jun-44 19.4 +103

Deutsche Bahn Aa1/AA- € 650m 4.000 Nov-43 18.9 +115

L'Oreal Aa1/AA € 500m 2.875 Nov-31 6.8 +60

Roche Aa2/AA € 650m 3.227 May-30 5.3 +45

Roche Aa2/AA € 900m 3.586 Dec-36 11.9 +94

Roche Aa2/AA € 850m 3.564 May-44 19.3 +115

P&G Aa3/AA- € 650m 3.250 Aug-31 6.6 +56

Coca-Cola A1/A+ € 500m 3.125 May-32 7.4 +76

Coca-Cola A1/A+ € 500m 3.375 Aug-37 12.6 +99

Coca-Cola A1/A+ € 500m 3.500 May-44 19.4 +120

Digital Dutch Finco extends with Mar 2035s

** US REIT Digital Realty Trust Inc (Baa2/BBB/BBB), through is Dutch subsidiary Digital Dutch Finco B.V, is touting a EUR long 10yr benchmark through Active Bookrunners BBVA, Citi, Deutsche Bank and TD

IPTs: Books open for EUR Mar 2035 benchmark at m/s +180-185

Expected issue ratings are Baa2 / BBB / BBB (M/S/F)
The deal includes the following covenants:
- Total Indebtedness to Total Assets ≤ 60%
- Secured Indebtedness to Total Assets ≤ 40%
- Consolidated EBITDA to Interest Expense ≥ 1.50x
- Unencumbered Assets to Unsecured Indebtedness ≥ 150%
The company intends to use the net proceeds from the offering of the notes to temporarily repay borrowings outstanding under the operating partnership’s global revolving credit facilities, acquire additional properties or businesses, fund development opportunities, invest in interest-bearing accounts and short-term, interest-bearing securities which are consistent with Digital Realty Trust, Inc’s intention to qualify as a REIT for US federal income tax purposes, and to provide for working capital and other general corporate purposes, including potentially for the repayment of other debt, or the redemption, repurchase, repayment or retirement of outstanding equity or debt securities, or a combination of the foregoing
The new bond extends the issuer’s single currency curve from a EUR850m 3.875% Sep 2033 green which launched in Sep last year at m/s +150 but was spotted tighter at +141 bid on screens this morning

Screen quotes at time of announcement:

DLR EUR750m 1.375% Jul 2032 +132 (Jan 2022)

DLR EUR850m 3.875% Sep 2033 +141 (Sep 2024) - Green

Enel gets 2025 hybrid activity underway

** Italian utility company Enel SpA (Baa1/BBB+/BBB+) is touting a two-part hybrid benchmark trade comprising PNC5.25 and PNC8 lines. Joint Bookrunners on the deal are BNP Paribas, BofA Securities, Citi, Deutsche Bank, Goldman Sachs International, HSBC, IMI-Intesa Sanpaolo, JP Morgan, MUFG, Societe Generale, SMBC and UniCredit

IPTs:

** EUR PNC5.25 (Apr 2030) hybrid benchmark at 4.875% area (annual yield)

** EUR PNC8 (Jan 2033) hybrid benchmark at 5.25% area (annual yield)

Expected hybrid ratings are Baa3 / BB+ / BBB- (M/S&P/F)
Funds generated are to be used for general corporate purposes
The PNC5.25 includes step ups of 25bps and a further 75bps if not called on 14-Apr-2035 and 14-Apr-2050 respectively. The PNC8s step up 25bps on 14-Jan-2038 and a further 75bps on 14-Jan-2053
Enel issued one euro hybrid in 2024, namely EUR900m 4.75% non-call Feb 2029s that saw final books shrink to EUR1.75bn from an earlier peak of EUR4.8bn after leads took pricing from 5.5% area IPTs to a final 4.875%
Prior to that, in 2023, Enel again opened up hybrid activity for the year with a EUR1bn 6.375% non-call Jul 2028 and EUR750m 6.625% non-call Jul 2031 two-part
Looking at Enel’s existing lines and the hybrids of sector peers, bankers both on and off the trade were seeing fair value at 4.375% on the PNC5.25 line and at 4.75% on the longer PNC8

€€€ Enel EUR Hybrid PerpNC5.25 / PerpNC8 - Comps €€€

** Indicative Pre-Announcement Bid-Side Levels **

TICKER INST. RATING COUPON RESET DATE BID PX YTC YTR I-SPREAD

ENELIM Baa3/BB+/BBB- 6.375% JUL-2028 107.125% 4.00% 4.15% +181

ENELIM Baa3/BB+/BBB- 4.750% MAY-2029 102.000% 4.22% 4.23% +189

ENELIM Baa3/BB+/BBB- 6.625% JUL-2031 111.250% 4.52% 4.58% +220

AEMSPA Ba1 /BB+/ - 5.000% SEP-2029 102.800% 4.29% 4.32% +199

EDPPL Ba1 /BB+/BB+ 4.625% MAR-2031 101.250% 4.39% 4.39% +203

ENBW Baa3/BBB-/ - 5.250% JAN-2030 105.000% 4.13% 4.08% +180

ENGIFP Baa3/BBB-/BBB- 4.750% JUN-2030 103.000% 4.09% 4.12% +175

IBESM Baa3/BBB-/BBB 4.247% AUG-2030 100.875% 4.07% 4.07% +171

SRGIM Ba1 /BBB-/BBB- 4.500% DEC-2029 101.750% 4.08% 4.10% +176

TRNIM Ba1 /BBB-/ - 4.750% APR-2030 102.875% 4.10% 4.13% +178

Added to the pipeline

** German chemicals company Evonik Industries AG (Baa2/BBB+) mandated J.P. Morgan as Sole Global Coordinator and Citi, Helaba, HSBC, J.P. Morgan and Societe Generale as Joint Bookrunners to arrange a series of fixed-income investor calls on 7-Jan. A EUR500m no grow 5yr green bond may follow. The net proceeds of the potential bond offering will be used for financing and/or refinancing, in whole or in part, existing and/or future Eligible Green Projects in accordance with Evonik’s Green Finance Framework

** German airline Deutsche Lufthansa Aktiengesellschaft (Baa3/BBB-/BBB-) hired Citigroup, HSBC and J.P. Morgan as Joint Global Coordinators and Citigroup, Credit Agricole CIB, HSBC, J.P. Morgan, Morgan Stanley, Societe Generale and UniCredit as Joint Bookrunners, to arrange a series of fixed income investor calls on 7-Jan. A EUR benchmark 30NC6 hybrid offering will follow. The notes are expected to be rated Ba1/BB/BB by Moody’s/S&P/Fitch. The use of proceeds of the new issue is for general corporate purposes including the refinancing of the existing EUR500m Subordinated Resettable Fixed Rate Notes due 2075 callable as from 12 Feb 2026. Comps here

** French Postal service company La Poste (A/A+) mandated BNP Paribas, Deutsche Bank and NatWest Markets as Structuring Advisors and Global Coordinators, and Barclays, BNP Paribas, Deutsche Bank, NatWest Markets and Societe Generale as Joint Bookrunners to arrange a series of fixed income investor calls beginning 7-Jan. A EUR PNC6.5 benchmark size issuance hybrid capital securities (expected instrument rating: BB+/BBB+ by S&P and Fitch) will follow. La Poste will also conduct a tender offer for their existing EUR750m hybrid callable in Oct 2025.

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