CORP SNAPSHOT: Floodgates open

Supply got properly back up and running on Tuesday following recent key risk events, but activity has stepped up another gear or two on Wednesday with seven corporates live.

The septet are offering a combined ten euro tranches, with them joined in the market by six unsecured FIG issuers and a sole SSA, with the overall seventeen euro lines the most of any day since 25-Sep (22 tranches).

Representing the corporate sector Wednesday we have an eclectic bunch with various sectors and countries being represented.

Joining US borrowers Equinix (long 6yr/10yr two-part), Zimmer Biomet (8yr) and Otis Worldwide Corporation (3yr), we have European names Stellantis (4yr/long 9yr two-part), EnBW (4.5yr vanilla/11yr green two-part), Coca-Cola HBC (8yr) and KION Group (5yr).

The latest batch come after four IG corps (via eight separate tranches) provided the bulk of Tuesday’s paper as they raised a total of EUR7.15bn via deals in senior, green and hybrid format on combined bumper demand of EUR25.7bn (EUR29.3bn peak).

As a reminder and leading the way was Volkswagen Financial Services with its latest green three-part (EUR1bn 2.5yr, EUR1.1bn 4.5yr & EUR650m 7yr) which at EUR2.75bn marked the joint-ninth largest euro corp trade of 2024.

The longer tranche outperformed having landed with a 5bp NIC on books of EUR5.1bn, versus the EUR2.6bn demand/15bp NIC & EUR3.4bn book/12.5bp NIC on the 2.5yr and 4.5yr lines respectively.

Also going for size on Tuesday was TotalEnergies SE (equally weighted EUR2.5bn PNC5/PNC10 two-part) with the first euro corp hybrid trade in almost a month ahead of an upcoming call date.

Demand here was also strong at EUR8bn combined (EUR9.3bn peak), allowing the French utility to print with zero NICs.

Also securing economic funding Tuesday were GSK plc (EUR700m 7yr & EUR600m 12yr two-part; joint-demand EUR3.6bn) and WP Carey (EUR600m 10yr; books EUR3bn), with NICs on the former at -2bps and zero, and at an eye-catching -8bps on WP Carey.

Given Tuesday’s flurry, Wednesday’s live deals and the fact there are more names still in the pipeline (see below), we look set to take out even the highest euro corporate estimate of EUR12.5bn given in our latest weekly issuance poll.

Stellantis offers another two-part

** Dutch headquartered automotive manufacturing corporation Stellantis N.V (Baa1/BBB+) is out with an opportunistic EUR two-part benchmark made up of 4yr and long 9yr tranches. Active Bookrunners are Barclays, BBVA, BofA Securities, Goldman Sachs Bank Europe SE, IMI-Intesa Sanpaolo, Mizuho, Societe Generale, Standard Chartered Bank AG and UniCredit

IPTs:

EUR Nov 2028 benchmark at m/s +160 area

EUR Mar 2034 benchmark at m/s +210 area

• Proceeds from the bonds are to be used for general corporate purposes
• This is the borrower’s second dual-tranche euro offering of 2024, following a EUR750m 3.5% Sep 2030 and EUR500m 3.75% Mar 2036 green trade in Mar that attracted combined demand of EUR8.3bn
• The lines that made up this year’s earlier offering were highlighted on the official comps list (below). Adjusting the curve accordingly we saw fair value for the new Nov 2028s at m/s +115 and at +165 on the Mar 2034s

€€€ Stellantis EUR Dual-Tranche Benchmark - Comps €€€

** Indicative Pre-Announce Bid-Side Levels **

Ticker Coupon Maturity Tenor i-Sprd Rating Green

STLA 4.500 07/07/2028 3.6 108 Baa1 / BBB+

STLA 0.750 18/01/2029 4.2 120 Baa1 / BBB+

STLA 4.375 14/03/2030 5.3 138 Baa1 / BBB+ Y

STLA 3.500 19/09/2030 5.8 141 Baa1 / BBB+

STLA 4.250 16/06/2031 6.6 154 Baa1 / BBB+

STLA 2.750 01/04/2032 7.4 157 Baa1 / BBB+

STLA 1.250 20/06/2033 8.6 163 Baa1 / BBB+

STLA 3.750 19/03/2036 11.3 167 Baa1 / BBB+ Y

EnBW offers both vanilla and green paper

** German energy company EnBW Energie Baden-Wuerttemberg AG (Baa1/A-) is working an opportunistic EUR 4.5yr vanilla and 11yr green two-part transaction. Global Coordinators are BNP PARIBAS, NatWest Markets and UniCredit, whilst Bayerische Landesbank, BBVA, BofA Securities and SEB are Joint Bookrunners

IPTs:

EUR May 2029 benchmark at m/s +115-120

EUR Nov 2035 green benchmark at m/s +175 area

• The notes are being issued through the company’s Dutch arm EnBW International Finance B.V
• Funds from the 4.5yr are to be used for general corporate purpose, whilst it is the intention to apply an amount equivalent to the 11yr proceeds to finance Eligible Green Projects (as defined in the issuer’s Green Financing Framework)
• Looking at EnBW’s own bonds and the curves of sector peers, one source close to the trade was seeing fair value at m/s +65-70 on the vanilla bond and +135 on the green

*** EnBW Senior EUR Bmk Dual-Tranche 4.5yr & Green 11yr: Comparables ***

Indicative pre-announcement levels vs I-spread (bid)

* 4.5Y German Utility Secondaries *

Rating Coupon Maturity Tenor Size I-sprd

ENBW Baa1/A-/WD 0.125 Mar-28 3.3y 500m +24

ENBW Baa1/A-/- 3.500 Jul-28 3.7y 500m +57

ENBW Baa1/A-/- 4.049 Nov-29 5.0y 500m +73 (Green)

EOANGR Baa2/BBB+/A- 3.750 Mar-29 4.3y 750m +59 (Green)

EOANGR Baa2/BBB+/A- 1.625 May-29 4.5y 750m +47

RWE Baa2/-/BBB+ 3.625 Feb-29 4.3y 500m +63 (Green)

* 11Y German Utility Secondaries *

ENBW Baa1/A-/- 4.300 May-34 9.5y 850m +127 (Green)

ENBW Baa1/A-/- 4.000 Jan-35 10.2y 750m +129

ENBW Baa1/A-/- 4.000 Jul-36 11.7y 550m +140 (Green)

EOANGR Baa2/BBB+/A- 3.875 Jan-35 10.2y 1000m +114 (Green)

EOANGR Baa2/BBB+/A- 3.750 Jan-36 11.2y 750m +117 (Green)

RWE Baa2/-/BBB+ 1.000 Nov-33 9.0y 600m +127 (Green)

RWE Baa2/-/BBB+ 4.125 Feb-35 10.3y 500m +140 (Green)

Coca-Cola HBC extends with 8yr

** Bottling company Coca-Cola HBC AG (Baa1/BBB+) this morning hired Global Coordinators BNP Paribas, Citi, Goldman Sachs Bank Europe SE, ING, Societe Generale and UniCredit, as well as Joint Bookrunners IMI-Intesa Sanpaolo, Raiffeisen Bank International AG and Standard Chartered Bank AG for a EUR 8yr benchmark

IPTs: Books open for EUR500m (exp) Nov 2032s at m/s +130-135

• The bonds are being issued via Coca-Cola HBC Finance B.V
• Funds generated from the deal are earmarked for general corporate purposes, including refinancing of existing indebtedness
• Included on the official comps list was the borrower’s last euro offering, a EUR600m Feb 2028 line that printed earlier this year with a -7bp NIC on books of EUR2.6bn (EUR4bn peak)
• One banker running the trade was pitching fair value for the new 8yr trade at m/s +100

Bond Rating Iss. Dt. Amt. Tenor i-spd

CCHLN 3.375 2/28 Baa1 / BBB+ / - Feb-24 600 3.3yr +62

CCHLN 0.625 11/29 Baa1 / BBB+ / - Nov-19 500 5.0yr +70

CCHLN 1.625 5/31 Baa1 / BBB+ / - May-19 577 6.5yr +80

CCEP 0.700 9/31 Baa1 / - / BBB+ Sep-19 500 6.8yr +86

CCEP 3.250 3/32 Baa1 / - / BBB+ Sep-24 600 7.4yr +97

CCEP 0.875 5/33 Baa1 / - / BBB+ May-21 1000 8.5yr +102

(Pre-announcement, indicative, bid levels)

KION creates EUR curve with 5yr

** KION Group AG (BBB-/BBB), a leading German manufacturer of forklifts and warehouse equipment as well as supply chain services, automation technology and software solutions, mandated JP Morgan as Sole Global Coordinator and DZ BANK, Helaba, JP Morgan and Santander as Joint Bookrunners to arrange a series of fixed income investor calls 11-12 Nov. A EUR500m no grow 5yr senior unsecured bond offering is now live

IPTs: Books open for EUR500m no grow Nov 2029s at m/s +215 area

• The proceeds will be used for general corporate and financing purposes, including the refinancing of existing debt
• KION currently has just euro publicly issued euro benchmark outstanding in the form of EUR500m 1.625% Sep 2025s launched back in Sep 2020

Equinix makes second trip across the pond this year

** US digital infrastructure company Equinix Inc (Baa2/BBB/BBB+) this morning mandated BofA Securities, Deutsche Bank, Goldman Sachs & Co LLC, MUFG and RBC Capital Markets as Active Bookrunners for a EUR long 6yr and 10yr two-part green benchmark

IPTs:

EUR500m (exp) Mar 2031 green at m/s +135-140

EUR500m (exp) Nov 2034 green at m/s +165-170

• The bonds are being issued via Equinix Europe 2 Financing Corporation LLC
• Equinix intend to allocate an amount equal to the net proceeds from this offering to finance or refinance, in whole or in part, one or more Eligible Green Projects. The company's Green Framework can be found here
• The borrower has already issued one green this year as recently as Aug when it printed EUR600m 3.65% Sep 2033s on a measured book of EUR1bn
• Adjusting Equinix’s existing curve, a source close to the transaction was seeing fair value for the Mar 2031 and Nov 2034 lines at m/s +100 and +130 respectively

€€€ Equinix (Baa2/BBB/BBB+) - Pre-Announce Comparables €€€

(Bid side levels vs. I-spd)

EQIX (Baa2/BBB/BBB+)

EUR 0.250% €500m Mar-27 ms+54 Green

EUR 1.000% €600m Mar-33 ms+116 Green

EUR 3.650% €600m Sep-33 ms+120 Green

USD 2.150% $1.1bn Jul-30 G+69 (=> €ms+82 eq.)

USD 2.500% $1.0bn May-31 G+69 (=> €ms+85 eq.) Green

USD 3.900% $1.2bn Apr-32 G+70 (=> €ms+88 eq.) Green

USD 5.500% $750m Jun-34 G+96 (=> €ms+115 eq.)

Zimmer Biomet ends 5yr euro hiatus

** US medical device company Zimmer Biomet Holdings Inc (Baa2/BBB/BBB) mandated Barclays, Goldman Sachs & Co LLC, HSBC, and RBC Capital Markets to arrange a series of fixed-income investor calls commencing 12-Nov. A EUR 8yr SEC-registered senior unsecured benchmark is now live

IPTs: Books open for EUR Nov 2032 benchmark at m/s +150-155

• Zimmer Biomet intend to use net proceeds for general corporate purposes, which may include the repayment of indebtedness (which could include the repayment at maturity of a portion of the USD850m outstanding aggregate principal amount of ZBH’s 1.450% notes due 2024), share repurchases, financing capital commitments and financing future acquisitions
• The company’s existing limited euro curve currently only extends to a EUR500m 1.164% Nov 2027 line which launched back in Nov 2019 (its last euro visit) and was trading a i +66 on screens this morning

Otis follows up USD with rare EUR

** US transport company Otis Worldwide Corporation (Baa1/BBB) asked HSBC, JP Morgan, Morgan Stanley, and SMBC Nikko, to organize a series of European fixed income investor calls on 12-Nov. A EUR 3yr SEC-registered benchmark senior unsecured trade is now live via Highland Holdings S.a r.l

IPTs: Books open for EUR Nov 2027 benchmark at m/s +105 area

• Otis intends to use the net proceeds from this offering, together with the net proceeds from yesterday’s USD600m 5.125% 7yr issue and cash on hand, to fund the repayment at maturity of Otis’ 2.056% notes due 2025, of which USD1.3 billion principal amount is currently outstanding. Otis intends to use the remainder of the proceeds, if any, to fund the repayment of certain of Otis’ commercial paper borrowings and for other general corporate purposes
• Otis has just two euro lines outstanding in the form of EUR600m Dec 2026s and EUR500m Dec 2031s which both launched in Nov 2021 and were highlighted on the official comps list
• With Otis’ own curve limited and old, fair value for the new bond is tricky to accurately pinpoint. However, we saw the starting NIC on this one at 35bps which one banker on the trade agreed with

€€€ Industrial Secondaries €€€

Indicative bid side levels (pre-announcement)

Ticker Rating Coupon (%) Maturity Date Residual Tenor (y) I-Spread (bps) I-Spread Δ (bps)

OTIS Baa1 / BBB / - 0.318 Dec-26 2.1 +50 4

OTIS Baa1 / BBB / - 0.934 Dec-31 7.1 +113 1

CARR Baa2 / - / BBB+ 4.125 May-28 3.5 +75 0

CARR Baa2 / - / BBB+ 4.500 Nov-32 8.0 +117 0

JCI Baa2 / BBB+ / - 3.000 Sep-28 3.8 +85 0

JCI Baa2 / BBB+ / WD 1.000 Sep-32 7.8 +113 0

SKFBSS Baa1 / - / BBB+ 3.125 Sep-28 3.8 +73 -6

In the pipeline

** French betting and gaming operator gaming company La Francaise des Jeux (Baa1) hired BNP Paribas, Credit Agricole CIB and Societe Generale as Global Coordinators and Active Bookrunners, together with BofA Securities, CIC, Goldman Sachs Bank Europe SE, HSBC and Natixis as Active Bookrunners to arrange a series of fixed income investor calls 12-13 Nov. An inaugural multi-tranche EUR1.5bn of 6yr, 9yr, and 12yr (EUR500m no grow on each tranche) senior unsecured bond offering may follow. Net proceeds will be used by the issuer to refinance partially the bridge acquisition facility of EUR2bn entered into by the issuer with inter alia the Active Bookrunners or their affiliates in the context of the acquisition of Kindred (the remaining part of the bridge acquisition facility being refinanced by (i) a EUR400m 5yr amortising term-loan, syndicated with French and international first rank banks and (ii) group cash flow)

** Roquette Freres SA (BBB), a French family-owned global leader in plant-based ingredients and a provider of pharmaceutical excipients, mandated BNP Paribas, Credit Agricole CIB and Societe Generale as Global Coordinators along with CIC, Goldman Sachs Bank Europe SE, HSBC, JP Morgan, and Natixis as Active Bookrunners to arrange a series of fixed income investor meetings on 12-14^th Nov. An inaugural EUR benchmark 7yr senior unsecured notes offering, expected to be rated BBB by S&P and an inaugural EUR PNC5.25 hybrid benchmark with an expected issue rating of BB+ by S&P, may follow. The estimated net proceeds of the issue of the notes will be used for the refinancing of, or replacement of the remaining available commitments under, the bridge acquisition facility granted to the Issuer pursuant to a bridge facility agreement entered into by the Issuer with some of the Joint Bookrunners or their affiliates in the context of the acquisition of most of the business, operations and activities of IFF’s Pharma Solutions segment, and in the case of senior notes only, and/or other facilities already used by the issuer for general corporate purposes

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

---- Subscribe to read more ----

To receive this analysis plus much more, subscribe to IGM. Request your free trial of the service today.