CORP SNAPSHOT: Coca-Cola making quick return

The European bond market has been conspicuously bereft of supply this week but that is changing on Thursday courtesy of The Coca-Cola Company which hit the screens with a 2-part sale of 13yr & 29yr notes, each for a no grow size of EUR500m.

That marks a quick return to markets for the issuer which conducted a 3-part USD3bn sale on Wednesday comprising new USD750m 8/2034 & USD1.5bn 1/2055 lines, along with a USD750m tap of an existing 5/2064 trade, for which respective books totalled USD3.8bn, USD4.7bn & USD3.7bn.

US primary markets have been on fire this week where Wednesday was the busiest ex-SSA issuance day of the year. In all, 17 high grade borrowers, through 37 tranches, raised a staggering USD31.8bn, also comprising trades from Meta Platform (USD10.5bn 5-pt), BMW US Capital (USD3.7bn), HCA Inc (USD3bn) & Volkswagen Group of America (USD2bn). That brought ex-SSA issuance for the week to USD38.75bn, easily topping not only the lowest weekly estimate of US25bn, but also the average estimate of USD37.5bn. For more colour see IGM's THE ENDGAME.

In contrast, today’s sale marks the first high-grade corp deal in the single currency since last Wednesday when French manufacturing company Compagnie de Saint-Gobain got in ahead of the latest FOMC verdict, and a subsequent downturn in sentiment, to raise EUR1.5bn via a 2-part 5yr & 11yr sale into final books which totalled EUR4.15bn.

That trade capped off a EUR4bn week for the single currency high-grade corporate market which also delivered trades from Vodafone (EUR600m 9yr), AstraZeneca (EUR650m 6yr / EUR750m 9yr) and Edenred (EUR500m 8yr).

Coca-Cola Company working 2-part 13yr & 29yr sale

** The Coca-Cola Company (Ticker: KO; Country: US), rated A1 (Stable) / A+ (Stable) (Moody’s / S&P), has mandated Barclays, BNP Paribas, J.P. Morgan (B&D) as Joint Bookrunners for a EUR1bn WNG two-part Senior Unsecured Notes, SEC Registered with EUR500mm WNG 13-year (15 August 2037) and EUR500m WNG 29-year (15 August 2053) tranches, exp ratings A1 / A+ (Moody’s / S&P). Pay date 15 August.

IPTs:

EUR500m WNG 13yr @ ms+125 bps area

EUR500m WNG 29yr @ ms+185 bps area

Books open, today's business

• This marks the issuer’s first euro sale since May which came in the form of a SEC-registered two-parter made up of EUR500m no grow 8yr (3.125% 5/32) and EUR500m no grow (3.5% 5/2044) 20yr tranches. Demand was slightly skewed in favour of the longer line where final books were touted at EUR1.75bn & EUR2.15bn respectively. Those lines were seen bid on screens at around i+59 and i+100.
• The new 13yr line will sit between the issuer’s existing 1.1% 9/2036 and 1.0% 03/2041 which we saw bid on screens at i+69 and i+79 respectively. The new 29yr line, meanwhile, will extend the borrower’s curve beyond the aforementioned 3.5% 5/2044 line sold in May.
• With that, IPTs appear fairly pragmatic and there will plenty of interest in seeing how pricing dynamics have been impacted by the recent correction. For reference, last week’s quartet of euro corporate issuers all achieved good outcomes with the average NIC paid just 6.5bps after issuers were able to ramp in pricing on average 32.67bps from IPTs on the back of combined demand which was strong at EUR11.2bn (EUR14.8bn peak).

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

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