CORP SNAPSHOT: Flying start to the week

Tariff promises from US President Trump are again in the headlines at the start of the week, but unlike Monday last week when a dump in stocks shut the issuance window, equities are actually in the green this morning and that has provided the springboard for a handful of corporate names to launch new offerings today.

Four names are out with opportunistic single currency offerings and are kicking off a week which is expected to yield an average EUR7.5bn of euro IG corp paper according to participants in our latest issuance poll.

With a range of EUR5bn and EUR10bn it seems that opinions differed quite widely but given the fast start it would suggest that the highest guess could be more likely, especially should the tone remain fairly positive.

That is further enforced by activity in the pipeline where another two names have also announced mandates for euro lines this morning (details below).

Offering encouragement to those tapping the market today and going forward would be the strong response seen for last week’s batch of trades.

As a reminder and the sector was back to seeing more “typical” issuance volumes last week to follow an underwhelming couple of weeks which produced just EUR5.6bn combined.

Last week we saw EUR10.35bn price, meaning that we beat the average supply estimate of EUR6bn and also the highest guess of EUR10bn, impressive given the uncertain broader market backdrop.

The latest total was spearheaded by a couple of chunky reverse yankee transactions from T-Mobile USA Inc (EUR2.75bn three-part) and International Business Machines Corporation (EUR3.5bn four-part), which marked comfortably the sector’s largest euro trades of the year so far.

More reverse yankee supply comes today from Air Products and Chemicals (EUR1bn no grow 6.25/12yr two-part), whilst European issuance comes from Linde (EUR 4/8/12yr three-part), TERNA (EUR 7yr green) and Koninklijke KPN (EUR 10yr).

Summary of last week's EUR IG/split-rated corp trades:

Linde sticks with tried and tested three-part format

** Dublin-headquartered global chemicals company Linde plc (A2/A) this morning hired BofA Securities, Citigroup and Mizuho as Active Bookrunners for a EUR three-part benchmark comprising 4yr, 8yr and 12yr tranches. Passive Bookrunners are JP Morgan and TD Securities

IPTs:

EUR Feb 2029 benchmark at m/s +90 area

EUR Feb 2033 benchmark at m/s +115 area

EUR Feb 2037 benchmark at m/s +135 area

• Expected issue ratings are A2 / A (both stable) by Moody’s / S&P
• Funds generated from the new offering are to be used for General Corporate Purposes
• This marks a familiar approach from Linde where its last five euro deals have been made up of three tranches. The most recent of which was a EUR2bn trade in May last year comprising 6, 10 and 20yr lines
• Looking at Linde’s well-stocked existing curve, we saw fair value for the new 5, 8 and 12yr tranches in the region of m/s +55, +80 and +100-15 respectively which bankers on and off the trade said they broadly agreed with

€€€ Linde (A2/A) - Indicative Pre-Announce Comps €€€

(Bid side vs I-Sprd)

Issuer Ratings Size Coupon Maturity Tenor I-Sprd

Linde A2/A € 700m 3.000 Feb-28 3.0 +56

€ 750m 3.375 Jun-29 4.3 +56

€ 750m 3.375 Jun-30 5.3 +64

€ 850m 3.200 Feb-31 6.0 +71

€ 750m 0.550 May-32 7.3 +80

€ 500m 0.375 Sep-33 8.6 +81

€ 750m 3.500 Jun-34 9.3 +91

€ 800m 1.625 Mar-35 10.1 +94

€ 700m 3.400 Feb-36 11.0 +99

€ 700m 3.750 Jun-44 19.3 +124

Air Liquide A2/A € 600m 2.875 Sep-32 7.6 +67

€ 500m 3.375 May-34 9.3 +72

Air Products and Chemicals adds to reverse yankee flurry

** US industrial Gases company Air Products and Chemicals Inc (A2/A) hired BNP Paribas, Citigroup, Mizuho, Santander and SMBC as Active Bookrunners for an SEC-registered EUR1bn no grow 6.25yr and 12yr two-part trade

IPTs:

EUR500m no grow May 2031s at m/s +110-115

EUR500m no grow Feb 2037s at m/s +150 area

• Expected issue ratings are A2 (stable) / A (negative) by Moody’s / S&P
• Proceeds from the deal are to be used to repay a portion of outstanding commercial paper obligations, including commercial paper obligations that APD expects to incur to repay, at maturity, APD’s EUR300m 1% ex-10yr notes due to mature this Wednesday, plus accrued interest, and for general corporate purposes
• APD last crossed the Atlantic in Feb 2023 when it printed a EUR700m 4% Mar 2030 green at m/s +92 from +120-125 IPTs
• Using that bond as the main reference point and adjusting the curve, fair value for the 2031s appears to be in the m/s +75 and at +115 on the 2037s

*** Selected EUR Chemicals Comparables ***

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

APD 0.500 5/28 A2 / A / - May-20 500 3.2yr +58

APD 0.800 5/32 A2 / A / - May-20 500 7.2yr +82

APD 4.000 3/35 A2 / A / - Mar-23 700 10.1yr +105

AIFP 2.875 9/32 A2 / A / - Sep-22 600 7.6yr +67

AIFP 0.375 9/33 A2 / A / - Sep-21 500 8.6yr +74

AIFP 3.375 5/34 A2 / A / - May-24 500 9.3yr +72

BASGR 4.250 3/32 A3 / A- / A Mar-23 500 7.1yr +85

BASGR 1.625 11/37 A3 / A- / A Nov-17 750 12.8yr +108

LIN 3.200 2/31 A2 / A / - Feb-24 850 6.0yr +71

LIN 1.625 3/35 A2 / A / - Mar-22 800 10.1yr +94

LIN 3.400 2/36 A2 / A / - Feb-24 700 11.0yr +99

Pre-announcement, indicative, bid levels

TERNA offers green option

** Italian utility TERNA – Rete Elettrica Nazionale S.p.A (Baa2/BBB+) appointed Banca Akros, BNP Paribas, BofA Securities, Citi, Deutsche Bank, Goldman Sachs International, IMI-Intesa Sanpaolo, Mediobanca, Santander and UniCredit for a EUR 7yr green benchmark

IPTs: Books open for Feb 2032 green benchmark at m/s +125 area

• Expected issue ratings are Baa2 (Moody’s) / BBB+ (S&P)
• An amount equivalent to the net proceeds of the notes will be used to finance or refinance, in whole or in part, Eligible Green Projects as defined in the Green Bond Framework
• TERNA already has a number of euro green seniors outstanding including EUR500m 0.75% Jul 2032s that launched in Jul 2020 and were bid at i +92 bid by leads pre-announcement
• With a slight adjustment of the curve leads were seeing fair value for the latest green at m/s +90 (35bp starting NIC)

€€€ TERNA (Baa2/BBB+) EUR bmk 7y Green Bond - Comparables €€€

Indicative bid side levels (pre-announcement)

Ticker Rating (M/S/F) Coupon Size (mln) Maturity Dt Tenor (yrs) I-Sprd (BID) Label

TRNIM Baa2/BBB+/- 0.375% 600 Jun-29 4.4 73 Green

TRNIM Baa2/BBB+/WD 0.375% 500 Sep-30 5.6 86 -

TRNIM Baa2/BBB+/- 3.500% 850 Jan-31 5.9 89 -

TRNIM Baa2/BBB+/WD 0.750% 500 Jul-32 7.4 92 Green

TRNIM Baa2/BBB+/- 3.875% 650 Jul-33 8.4 106 Green

Koninklijke KPN opens 2025 account with 10s

** Dutch telecom Koninklijke KPN N.V (BBB/BBB) mandated Barclays, Deutsche Bank, Rabobank, Santander and SEB as Joint Bookrunners for a new EUR 10yr benchmark transaction

IPTs: Books open for Feb 2035 benchmark at m/s +150 area

• Notes are expected to be rated BBB / BBB by S&P / Fitch
• Funds generated from the new bond are being earmarked for general corporate purposes including the refinancing of existing debt. For note, the borrower has a EUR625m 0.625% bond maturing in Apr this year
• Fair value for this one was seen by bankers on and off the trade in the region of m/s +110-115

*** KPN: € COMPS ***

Ms+

KONINKLIJKE KPN NV 3.875 600 7/2031 82

KONINKLIJKE KPN NV 0.875 600 12/2032 92

KONINKLIJKE KPN NV 0.875 700 11/2033 102

KONINKLIJKE KPN NV 3.875 1000 2/2036 119

* indicative bid side i sprd

Fastighets AB Balder to extend curve with 7s

** Nordic property company Fastighets AB Balder (BBB) this morning asked Danske Bank, Deutsche Bank, Nordea, Nykredit and SEB to lead manage a series of calls on Tuesday 11-Feb ahead of a EUR500m no grow 7yr offering

• The net proceeds from the issue of the notes will be applied to finance the concurrent EUR250m capped tender offer for a number of outstanding bonds (detailed here), with the remaining proceeds to be applied for general corporate purposes
• Balder’s curve currently currently extends to a EUR500m 2% Jan 2031 line which printed in Jan 2022 and was highlighted on the official comps list sent this morning at i +180

€€€ COMPARABLES - FASTIGHETS AB BALDER €€€

*Indicative pre-announcement bid-side

Nordic Real Estate

Issuer M/S/F Issue Cpn Mat Size Life Yld ESG I-spread

BALDER -/BBB/- jan-21 1.000 jan-29 600 3.9y 3.585 - +138

BALDER -/BBB/- may-21 1.375 may-30 500 5.3y 3.942 - +172

BALDER -/BBB/- jan-22 2.000 jan-31 500 5.9y 4.034 - +180

AKFAST -/BBB-/WD nov-20 1.125 jan-29 500 3.9y 3.457 - +126

AKFAST -/BBB-/WD feb-21 0.750 feb-30 600 5.0y 3.669 - +145

CASTSS Baa3/-/- sep-21 0.875 sep-29 650 4.6y 3.659 - +145

CASTSS Baa3/-/- sep-24 4.125 dec-30 500 5.8y 3.862 - +163

SAGAX Baa2/-/- may-21 1.000 may-29 500 4.3y 3.428 - +122

SAGAX Baa2/-/- may-24 4.375 may-30 500 5.3y 3.503 Green +129

Recent EUR real estate supply

Issuer M/S/F Issue Cpn Mat Size Life Yld ESG I-spread

SEGPLP Baa2/-/BBB+ jan-25 3.750 jan-32 500 6.9y 3.563 - +131 bp

LEGGR Baa2/-/- jan-25 3.875 jan-35 300 9.9y 3.892 - +157 bp

Barry Callebaut readying rare euro trade

** Swiss-Belgian company Barry Callebaut (Baa3/BBB-), the world’s leading manufacturer of high-quality chocolate and cocoa products, mandated ING, Rabobank, Societe Generale and UBS to act as Joint Bookrunners to arrange a series of fixed income investor calls taking place Monday and Tuesday (10-11 Feb). A EUR 3yr and 6.5yr two-part benchmark transaction issued by Barry Callebaut Services NV is expected to follow

• The notes are expected to be rated Baa3 / BBB- by Moody’s and S&P respectively
• Net proceeds of the offering will be used for general corporate purposes, including for the refinancing of existing debt. The commitments of the issuer and guarantor under the term loan agreement entered into by the issuer and the joint lead managers will be reduced or cancelled by the net proceeds of the notes
• To be included is sub-IG coupon step-ups of 25bp per notch per rating agency (capped at 150bp total)
• Barry Callebaut has just the one outstanding single currency trade in the form of EUR700m 4% Jun 2029s which were included on the official comps list sent Monday at i +167 bid

Pre-announcement indicative secondary levels vs I-spread (bid)

Ticker Rating Coupon Size Tenor i-spread

* Barry Callebaut Outstanding*

BARY 4 06/14/29 BBB- 4.000% 700 4.3y 167

* Sector Comparables *

JDEPNA 0 5/8 02/09/28 Baa3/BBB-/BBB 0.625% 600 3.0y 84

JDEPNA 0 1/2 01/16/29 Baa3/BBB-/BBB 0.500% 750 3.9y 103

JDEPNA 4 1/8 01/23/30 Baa3/BBB-/BBB 4.125% 500 4.9y 114

JDEPNA 1 1/8 06/16/33 Baa3/BBB-/BBB 1.125% 500 8.3y 140

JDEPNA 4 1/2 01/23/34 Baa3/BBB-/BBB 4.500% 500 8.9y 148

GIS 3.907 04/13/29 Baa2/BBB 3.907% 750 4.2y 71

GIS 3.65 10/23/30 Baa2/BBB 3.650% 500 5.7y 86

GIS 3.85 04/23/34 Baa2/BBB 3.850% 500 9.2y 103

SZUGR 5 1/8 10/31/27 BBB 5.125% 400 2.7y 109

SZUGR 4 1/8 01/29/32 BBB 4.125% 500 7.0y 177

* Recent BBB’s *

MTNA 3 1/8 12/13/28 Baa3/BBB- 3.125% 500 3.8y 115

MTNA 3 1/2 12/13/31 Baa3/BBB- 3.500% 500 6.8y 153

PRYIM 3 5/8 11/28/28 BBB- 3.625% 850 3.8y 103

PRYIM 3 7/8 11/28/31 BBB- 3.875% 650 6.8y 127

ROQFRE 3.774 11/25/31 BBB 3.774% 600 6.8y 159

ITMENT 4 1/8 01/29/30 BBB- 4.125% 500 5.0y 177

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

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