CORP SNAPSHOT: Five more make most of pre-FOMC window

Its proving to be another busy session for the IG corporate bond market on Tuesday with a quintet making the most of the issuance window ahead of the looming FOMC verdict.

Real estate companies SEGRO (exp EUR500m 8yr) and Carmila (EUR300m n/g Jan 2032 green debut) have emerged from the pipeline after recent roadshows, and are joined by opportunistic trades from Heidelberg Materials (EUR500m n/g 7yr green), RCI Banque (EUR 6yr) and LSEG Netherlands (exp EUR500m 3yr).

The latest flurry comes after the corporate sector was the most active across all asset classes Monday, as five more names offered both EUR and GBP paper.

All of Monday’s borrowers were opportunistic, in the form of Daimler Truck (EUR650m long 3yr & EUR600m 6yr two-part; 5bp NICs), Iren S.p.A (EUR500m n/g 8yr green; zero NIC), APRR (EUR500m n/g long 9yr; zero NIC), Coca-Cola Europacific Partners (EUR600m 7.5yr; -2bp NIC) and Land Securities Capital Markets (GBP350m 10yr green; 5bp NIC & 575m bk).

Combined demand for the EUR2.85bn of euro paper was strong at a final EUR9.7bn (down from EUR11.95bn peak), which allowed for some economic funding to be secured by the borrowers. See below for a full recap.

Summary of Mon's EUR corp trades:

SEGRO extends with 8yr

** British property investment and development company SEGRO plc (A-) mandated Barclays, Santander, SMBC Nikko and Wells Fargo Securities as Active Joint Bookrunners to arrange a series of fixed income investor calls commencing 16-Sep. A EUR 8yr benchmark-size senior unsecured fixed-rate transaction is now live. Bank of China, BNP Paribas, Lloyds and NatWest are Passive Bookrunners

IPTs: Books open for EUR500m (exp) Sep 2032s at m/s +155-160

• Investor marketing concluded Monday with over 50 participating firms on group calls
• Use of proceeds will be for general corporate purposes of the group including the repayment of certain unsecured indebtedness of members of the group, which indebtedness may include amounts owed to one or more of the joint lead managers
• Covenants:
  • Net Borrowings not to exceed 175% Adjusted Capital and Reserves
  • Secured and priority debt not to exceed 50% Adjusted Capital and Reserves
• The new deal extends SEGRO’s euro curve from a EUR500m 0.5% Sep 2031 line which was issued at m/s +55 through the company’s Luxembourg arm SEGRO Capital S.a r.l in Sep 2021
• Ahead of the new deal, the Sep 2031s were spotted by leads at +105 bid, whilst the shorter and more recent Mar 2030s launched in Mar 2022 were actually trading wider at +110, with the inverted curved making ascertaining fair value tricky
• That said, one source close to the trade was seeing fair value for the new deal in the context of m/s +120-125

*** SEGRO EUR BMK 8yr - Secondary Comparables ***

Bond Rating Amt (€mn) Tnr I+Bid

SGROLN 1.875 03/30 NR / NR / A- 500 5.5yr 110

SGROLN 0.500 09/31 NR / NR / A- 500 7.0yr 105

PLD 0.500 02/32 A3 / A / NR 850 7.4yr 111

PLD 4.625 05/33 A3 / A / NR 750 8.7yr 121

PLD 4.000 05/34 A3 / A / NR 550 9.7yr 133

PRIFII 1.625 06/32 A3 / A- / NR 500 7.8yr 117

PRIFII 0.750 03/33 A3 / A- / NR 500 8.5yr 122

PRIFII 4.375 07/36 A3 / A- / NR 500 11.8yr 147

O 4.875 07/30 A3 / A- / NR 550 5.8yr 126

O 5.125 07/34 A3 / A- / NR 550 9.8yr 141

Pre-announcement, indicative bid levels

Carmila makes green debut

** French retail property company Carmila SA (BBB) hired Credit Agricole CIB, Morgan Stanley and Natixis as Global Coordinators and Active Bookrunners to arrange a series of investor calls on 16-Sep. A EUR300m no grow long 7yr fixed rate senior unsecured inaugural green bond has now come out. Passive Bookrunners are CIC and La Banque Postale

IPTs: Books open for EUR300m no grow Jan 2032 green debut at m/s +200 area

• The net proceeds of the green bond issue will be used to finance or refinance eligible green assets as further described in the Green Bond Framework
• This inaugural green bond extends Carmila’s existing single currency curve from a EUR325m 1.625% ex-8yr line that matures in Apr 2029 and was bid by leads at i +132 pre-announcement
• Given the large curve extension and the debut green format this is very much a price discovery process for the issuer. However, one banker saw fair value for the new line somewhere in the m/s +160-165 region when building out from the more recently issued Oct 2028 line that was spotted by leads at +130 bid on the official comps list

*** Carmilla EUR300m WNG long 7yr - Comps ***

Indicative, Pre announcement, Bid side, Vs Mid Swap (Ispd):

MS+

CARDFP 1.625 5/27 Nr/BBB/Nr 111

CARDFP 2.125 3/28 Nr/BBB/Nr 128

CARDFP 5.5 10/28 Nr/BBB/Nr 130

CARDFP 1.625 4/29 Nr/BBB/Nr 132

MERYFP 1.8 2/26 Nr/BBB/Nr 117

MERYFP 2.5 2/29 Nr/BBB/Nr 140

MERYFP 4.00 9/31 Nr/BBB/Nr 177

URWFP 3.5 9/29 Baa2/BBB+/Nr 113

URWFP 4.125 12/30 Baa2/BBB+/Nr 129

URWFP 3.875 9/34 Baa2/BBB+/Nr 148

LIFP 2.00 5/29 Nr/BBB+/A- 85

LIFP 0.625 7/30 Nr/BBB+/A- 107

LIFP 0.875 2/31 Nr/BBB+/A- 105

LIFP 3.875 9/33 Nr/BBB+/A- 133

Heidelberg Materials adds to green flurry

** German building material company Heidelberg Materials AG (Baa2/BBB) has launched an opportunistic EUR500m no grow 7yr green bond this morning. Joint Bookrunners are BNP Paribas, Danske Bank AS, Deutsche Bank, Helaba, IMI-Intesa Sanpaolo and Morgan Stanley

IPTs Books open for EUR500m no grow Oct 2031s at m/s +150 area

• An amount equivalent to the net amount of the proceeds from the green bond will be used for the financing and/or refinancing of a portfolio of eligible green projects as defined and described in Heidelberg Materials’ Green Finance Framework
• Heidelberg Materials only issued a debut single currency green in Jun this year, in the form of EUR700m 3.95% Jul 2034s that landed at m/s +140 and could have been sold 2.5x over
• Before the debut green, Heidelberg Materials issued sustainability-linked bonds the previous two times it hit the market. Those May 2032s and Nov 2033s, both launched last year, were highlighted on the official comps list along with the inaugural green bond
• Fair value for this one was being pitched by leads in the m/s +110 region when referencing the borrower’s existing ESG bonds

Ticker (M/S/F) Coupon Maturity YTM I-Spread ESG

HEIGR Baa2/BBB/- 3.750 May-32 7.7 113 SLB

HEIGR Baa2/BBB/- 4.875 Nov-33 9.2 138 SLB

HEIGR Baa2/BBB/- 3.950 jul-34 9.8 141 Green

RCI touts fifth euro of 2024

** RCI Banque S.A (Baa1/BBB-) - the financing arm of French automaker Renault group – this morning hired BNP Paribas, BofA Securities, Commerzbank and IMI - Intesa Sanpaolo as Joint Bookrunners for a EUR 6yr benchmark issue

IPTs: Books open for Sep 2030s at m/s +190 area

• UoP: General corporate purposes
• RCI is a very regular issuer of euro bonds and has already printed four lines this year worth EUR2.85bn, including Oct 2027s, Jan 2029s and Apr 2031s which were highlighted on the official comps list sent this morning
• Adjusting the issuer’s existing curve, bankers both on and off the new 6yr trade were seeing fair value at around m/s +150 (40bp starting NIC)

*** RCI BANQUE S.A. 6YR EUR Benchmark - COMPS ***

Indicative pre-announcement bid-side levels vs. I-spd

RENAUL Baa1/BBB-/- 3.750 Oct-27 3.0 +111

RENAUL Baa1/BBB-/- 4.875 Jun-28 3.7 +121

RENAUL Baa1/BBB-/- 4.875 Sep-28 4.0 +121

RENAUL Baa1/BBB-/- 3.875 Jan-29 4.3 +126

RENAUL Baa1/BBB-/- 4.875 Oct-29 5.0 +132

RENAUL Baa1/BBB-/- 4.125 Apr-31 6.5 +156

LSEG offers short tenor

** UK-based stock exchange and financial information company London Stock Exchange Group plc, is out with a new EUR500m (exp) 3yr on Tuesday via its Dutch arm LSEG Netherlands B.V (A3/A). Active Bookrunners are Deutsche Bank, Intesa Sanpaolo, RBC Capital Markets and SMBC

IPTs: Books open for EUR500m (exp) Sep 2027s at m/s +85-90

• UoP: General corporate purposes
• LSEG last tapped the euro market in Sep last year when it brought EUR700m 4.125% Sep 2026s and EUR700m 4.231% Sep 2030s which were bid on screens at i +52 and +90 respectively this morning

In the pipeline:

** Amvest Residential Core Fund (Baa2), a Dutch residential real estate fund of affordable high-quality homes in the Netherlands, mandated ABN AMRO, BNP Paribas, ING and SMBC as Joint Bookrunners to arrange a series of fixed income investor calls commencing 16-Sep. An inaugural EUR300m (exp) 5.5yr green bond offering will follow

** Great Portland Estates plc (Baa2), a London-focused REIT, mandated NatWest Markets and Santander as Joint Active Bookrunners to arrange a series of fixed income investor calls and meetings commencing 16-Sep. An inaugural GBP benchmark 7yr senior unsecured sustainable bond is expected to follow. Net proceeds will be used for sustainable purposes in accordance with the Sustainable Finance Framework

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

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