CORP SNAPSHOT: Flying start to the week

A trio of names are getting euro corporate supply underway for the week, bringing opportunistic trades despite a slight drop in equities at the open as market participants digest the German election results.

Becoming the latest corporate to launch a multi-tranche deal is French utility company TotalEnergies which is offering an 8yr, 12yr and 20yr benchmark three-part in what are its first euro senior bonds since 2020, whilst compatriot and beverage company Pernod Ricard is refreshing its well-stocked single currency curve with a 7yr benchmark.

Offering up some rarity value on the day is TCC Group which has finally emerged from the pipeline with a debut EUR500m no grow 5yr green, which marks the first euro benchmark Chinese corporate deal since Nov 2021.

Monday’s trio are backing up the sector’s busiest week of the year last week where we saw an octet print a bumper EUR14.25bn in euros (and GBP500m in sterling).

That meant we beat the average weekly corporate supply estimate for a third-straight week, where market participants had called for ~EUR9.5bn to be issued.

We did, however, fall just short of the most bullish estimate of EUR15bn.

Last week’s total was, of course, flattered by M&A-driven multi-tranche transactions from Carlsberg and Johnson & Johnson which were each sized at EUR4bn and marked the sector’s largest offerings of the year so far.

Huge demand allowed the latest batch of corporates to secure economic funding, with the average NIC coming in negative for the second consecutive week at -0.97bps.

For more takeaways from last week’s bumper corporate haul, see the IGM CORP WEEKLY

Monday’s trio are kicking off the new week which market participants in our latest issuance poll expect to yield another EUR9.5bn of euro IG corporate paper.

The notion of another busy week has been supported by activity in the pipeline on Monday where Germany’s Metro AG (exp EUR500m 5yr) has mandated a euro deal along with US pair PPG Industries (EUR 7yr) and Emerson Electric (EUR 6yr & 12yr two-part) which will add to the recent flurry of reverse yankee bonds.

As a reminder, the aforementioned J&J was one of three US corporates that crossed the Atlantic to raise euro funding last week, joined by Kraft Heinz Foods and Boston Scientific, which between them raised EUR6.1bn to put reverse yankee supply for the year at EUR17.25bn so far.

This makes it the fastest start to a year for reverse yankee issuance since 2020 (EUR19.25bn had been issued by this stage), with US companies flocking to euros to make the most of lower borrowing costs this side of the pond amid the ECB’s much lower deposit rate versus the Fed.

TotalEnergies offers first senior paper since 2020

** French multinational integrated oil and gas company TotalEnergies SE (Aa3/A+) this morning hired Mizuho, Santander, Societe Generale, Standard Chartered Bank AG and UniCredit as Joint Bookrunners for a EUR three-part benchmark across 8yr, 12yr and 20yr tenors

IPTs:

EUR Mar 2033 benchmark at m/s +115 area

EUR Mar 2037 benchmark at m/s +135 area

EUR Mar 2045 benchmark at m/s +170 area

• The notes are being issued through TotalEnergies Capital International
• Expected ratings of the notes are Aa3 by Moody’s / A+ by S&P
• Proceeds are to be used for general corporate purposes
• TotalEnergies issued two-part euro hybrid trades in both 2022 and 2024, but hasn’t issued single currency senior paper since bringing a EUR1.5bn May 2031 & May 2040 two-part in May 2020
• The bonds which comprised that trade were highlighted on the official comps list sent this morning alongside TotalEnergies’ older lines and the more recent trades from other high-quality corporates
• Given the age of the borrower’s existing senior curve and the fact it only extends to the aforementioned May 2040s, ascertaining fair value for the new three-part is tricky. However, looking at the comps as a whole, we saw fair value for the 8, 12 and 20yr tranches in the region of m/s +75-80, +95 and +130 respectively which bankers on and off the trade broadly agreed with
• The new deal has started off well, with combined demand over EUR6bn at the mid-morning update

€€€ TOTALENERGIES – EUR MULTI TRANCHE SENIOR 8YR / 12YR / 20YR - Comparables €€€

(Bid side vs I-Sprd, - Pre-Announce)

Ticker Coupon Maturity Size (Em) M S&P F i-spd

TTEFP 0.952 May-31 500 Aa3 A+ AA-u 68

TTEFP 1.994 Apr-32 1,500 Aa3 A+ AA-u 65

TTEFP 1.535 May-39 650 Aa3 A+ AA-u 103

TTEFP 1.618 May-40 1,000 Aa3 A+ AA-u 111

JNJ 3.050 Feb-33 700 Aaa AAA *- NR 59

JNJ 3.350 Feb-37 1,000 Aaa AAA *- NR 84

JNJ 3.600 Feb-45 700 Aaa AAA *- NR 107

JNJ 3.700 Feb-55 1,000 Aaa AAA *- NR 134

NESNVX 2.875 Jan-32 600 Aa3 AA- A+u 57

NESNVX 3.125 Oct-36 650 Aa3 AA- A+u 85

NESNVX 3.500 Jan-45 500 Aa3 AA- A+u 111

IBM 3.150 Feb-33 1,100 A3 A- A- 90

IBM 3.450 Feb-37 900 A3 A- A- 110

IBM 3.800 Feb-45 750 A3 A- A- 145

Pernod Ricard refreshes with 7yr

** French beverage company Pernod Ricard (Baa1/BBB+) is out with a EUR 7yr benchmark trade on Monday via Joint Active Bookrunners Barclays, BNP Paribas, BofA Securities, CIC, ING, Santander, SMBC and Wells Fargo Securities

IPTs: Books open for EUR Mar 2032 benchmark at m/s +125 area

• Funds generated from the new trade are to be used for general corporate purposes
• Pernod Ricard is a regular issuer of euro debt, with its last visit to the market coming in Apr last year when it printed EUR700m 3.375% Nov 2030s and EUR800m 3.625% May 2034s at m/s +70 and +92 respectively into combined demand worth EUR2.6bn
• Looking at the borrower’s curve as a whole, one banker running the new deal was pitching fair value for the Mar 2032s at m/s +90 (35bp NIC)

Comps:

Issuer Ratings (M/S/F) Size Coupon Maturity Tenor Spread

RIFP Baa1/BBB+ € 700m 3.375 Nov-30 5.7 ms+80

RIFP Baa1/BBB+ € 500m 0.875 Oct-31 6.7 ms+82

RIFP Baa1/BBB+ € 500m 3.750 Nov-32 7.7 ms+96

RIFP Baa1/BBB+ € 750m 3.750 Sep-33 8.6 ms+101

RIFP Baa1/BBB+ € 800m 3.625 May-34 9.2 ms+110

DGELN A3/A- € 700m 3.125 Feb-31 6.0 ms+76

DGELN A3/A- € 1,000m 2.500 Mar-32 7.1 ms+77

DGELN A3/A- € 700m 3.375 Aug-35 10.5 ms+97

CARLB Baa1/-/BBB+ € 1,000m 3.000 Aug-29 4.5 ms+64

CARLB Baa1/-/BBB+ € 1,000m 3.250 Feb-32 7.0 ms+87

CARLB Baa1/-/BBB+ € 1,150m 3.500 Feb-35 10.0 ms+104

TCC Group offers rare Chinese euro paper

** TCC Group Holdings CO LTD (BBB-), an ESG-centric leading cement group and the largest cement manufacturer in Taiwan, the Republic of China with main business segments consisting of cement, electricity, energy, waste management and maritime transportation, mandated Credit Agricole CIB as the Sole Green Structuring Advisor, and together with Deutsche Bank as Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers, as well as DBS Bank Ltd as Joint Bookrunner and Joint Lead Manager to arrange a series of fixed income investor calls 13-14 Feb. A EUR500m no grow 5yr green trade is live

IPTs: Books open for EUR500m no grow Mar 2030 green at m/s +180 area

• Roadshow concluded back on 14-Feb, with 60+ investors engaged
• The notes are being issued by TCC Dutch Holdings B.V (incorporated as a private company with limited liability under the laws of the Netherlands) and unconditionally and irrevocably guaranteed by TCC Group Holdings Co Ltd. (incorporated as a company limited by shares in Taiwan, the Republic of China)
• Expected issue ratings are BBB- by both S&P and Fitch
• An amount equivalent to the net proceeds from the issuance of the notes will be used to finance or refinance, in part or in full, eligible green projects that meet the eligibility criteria set out in the TCC Group Holdings Green Financing Framework
• TCC has never issued euro debt before, whilst you have to go way back to Nov 2021 to find the last time a Chinese corporate issued benchmark euro paper. That was from chemicals and fertilizer conglomerate Sinochem Hong Kong (Group) Company Limited which printed a EUR500m 0.75% 4yr line at m/s +100 on a final book of EUR950m
• Updated comps provided for the new TCC deal were the bonds of similar-rated European sector peers as follows:

Ticker Ratings (M/S/F) Cpn Mat TTM Amt I-Sprd

** Sector Comps **

HEIGR Baa2/BBB/WD 1.125 Dec-27 (2.8y) 750 43

HEIGR Baa2/BBB/WD 1.750 Apr-28 (3.2y) 750 47

HEIGR Baa2/BBB/- 3.375 Oct-31 (6.7y) 500 87

WIEAV Baa3/-/- 4.875 Oct-28 (3.6y) 350 110

HOLNSW Baa1/BBB+/BBBu 0.125 Jul-27 (2.4y) 500 46

HOLNSW Baa1/BBB+/- 2.250 May-28 (3.3y) 1150 56

HOLNSW Baa1/BBB+/- 1.750 Aug-29 (4.5y) 750 71

HOLNSW Baa1/BBB+/BBBu 0.625 Apr-30 (5.1y) 500 90

HOLNSW Baa1/BBB+/BBBu 0.500 Sep-30 (5.5y) 1000 91

** Recent BBB/BBB- Deals **

SCRSBE -/BBB-/- 5.125 Jul-30 (5.4y) 500 153

SDFGR -/BBB-/- 4.250 Jun-29 (4.3y) 500 129

HOTGR -/BBB-/- 4.250 May-30 (5.3y) 650 108

ORANOF -/BBB-/- 4.000 Mar-31 (6.1y) 500 117

CEPSA Baa3/BBB-/BBB- 4.125 Apr-31 (6.1y) 750 156

ERGIM -/-/BBB- 4.125 Jul-30 (5.4y) 500 104

REDEXS -/BBB-/- 4.375 May-31 (6.3y) 350 161

KGXGR -/BBB-/BBB 4.000 Nov-29 (4.8y) 500 128

MTNA Baa3/BBB-/- 3.125 Dec-28 (3.8y) 500 95

MTNA Baa3/BBB-/- 3.500 Dec-31 (6.8y) 500 131

PRYIM -/BBB-/- 3.625 Nov-28 (3.8y) 850 102

PRYIM -/BBB-/- 3.875 Nov-31 (6.8y) 650 121

SZUGR -/BBB/- 4.125 Jan-32 (6.9y) 500 161

PPG Industries to make rare euro visit

** PPG Industries Inc (A3/BBB+/BB+), the US-based global manufacturer of paints, coatings, and specialty materials, hired BNP Paribas and J.P. Morgan to organize a series of fixed income investor calls on Monday and Tuesday (24-25 Feb) ahead of a EUR SEC-registered 7yr benchmark transaction

• DealRoadshow presentation: https://dealroadshow.com Password: PPG2025
• The new deal will extend PPG’s euro benchmark curve from a EUR700m 2.75% Jun 2029 line which was launched in May 2022 alongside a soon-maturing sub-benchmark EUR300m 1.875% Jun 2025 line
• When the new mandate was announced on Monday, the Jun 2029s were trading on screens at around i +80 bid

Emerson Electric to cross The Atlantic for first time since 2019

** US technology, software and engineering company Emerson Electric Co (A2/A) mandated BofA Securities, Goldman Sachs & Co. LLC, and J.P Morgan to arrange a series of fixed income investor calls to take place on Monday (24-Feb). An SEC-registered EUR 6yr and 12yr SEC-registered two-part trade, as well as a USD benchmark, will follow

• NetRoadshow details: www.netroadshow.com/nrs/home/#!/?show=7681f44a or visit www.netroadshow.com and enter the entry code: EMR7839
• Emerson hasn’t tapped the euro market since May 2019 when it issued a now-matured EUR500m 0.375% May 2024 line which came on the heels of a debut EUR500m Oct 2025 and EUR500m Oct 2029 two-part from Jan that same year
• The company's longest Oct 2029s were included on the official comps list sent this morning at i +57 bid

(Pre-announcement, Bid side vs I-Sprd)

Ticker Issuer Ratings Coupon Maturity Tenor I-Sprd

EMR Emerson A2/A 2.000 Oct-29 4.6 57

ITW ITW A1/A+ 3.375 May-32 7.2 84

ITW ITW A1/A+ 3.000 May-34 9.2 87

ATCOA Atlas Copco -/A+ 0.750 Feb-32 6.9 69

DE Deere A1/A 3.450 Jul-32 7.4 76

SUFP Schneider Electric -/A 3.000 Sep-30 5.5 59

SUFP Schneider Electric -/A 3.500 Nov-32 7.7 66

SUFP Schneider Electric -/A 3.375 Sep-36 11.5 84

ABBNVX ABB A2/A 3.375 Jan-31 5.9 66

ABBNVX ABB A2/A 3.375 Jan-34 8.9 78

LRFP Legrand -/A- 1.875 Jul-32 7.4 66

LRFP Legrand -/A- 3.500 Jun-34 9.3 92

ASSABS Assa Abbloy -/A- 3.875 Sep-30 5.5 69

ASSABS Assa Abbloy -/A- 4.125 Sep-35 10.5 99

TEL TE Connectivity A3/A- 3.250 Jan-33 7.9 91

ETN Eaton A3/A- 3.601 May-31 6.2 84

ETN Eaton A3/A- 3.802 May-36 11.2 105

PH Parker Hannifin A3/BBB+ 2.900 Mar-30 5.0 68

Metro AG to extend fledgling curve with 5yr

** German multichannel food wholesaler Metro AG (BBB-) mandated Citi, Deutsche Bank, Raiffeisen Bank International, Societe Generale and UniCredit as Joint Bookrunners to arrange a series of fixed-income investor calls on Monday and Tuesday (24-25 Feb). An expected EUR500m 5yr line is set to follow

• www.netroadshow.com Entry Code: metro2025. Direct Link: www.netroadshow.com/nrs/home/#!/?show=b9a73de6
• Notes expected to be rated BBB- (S&P)
• Included is to be a sub-IG coupon step-up of 125bps (in case of downgrade by one notch or withdrawal)
• The net proceeds of the potential bond offering will be used for general corporate purposes, including the refinancing of existing debt. Note, the borrower has a EUR600m 1.5% ex-10yr line maturing 19-Mar-2025
• Metro’s only other outstanding euro benchmark is a EUR500m Mar 2029 launched in Feb last year at m/s +190 on the back of a 1.25x covered book. That bond was spotted by leads at i +146 bid pre-announcement and highlighted on the official comps list as follows:

€€€ Metro AG EUR 5yr - Secondary Market Comparables €€€

BBB Retail/Consumer:

Bond Rating Iss. Dt. Amt. Tnr i-spd Sub-IG CpnSteps?

MEOGR 4.625 3/29 - / BBB- / - Mar-24 500 4.0yr +146bp N

CAFP 3.250 6/30 - / BBB / - Jan-25 500 5.3yr +98bp N

CRTING 4.250 6/31 - / BBB- / BBB- Jun-24 500 6.3yr +122bp N

ITMENT 4.125 1/30 - / BBB- / - Jan-25 500 4.9yr +150bp N

TSCOLN 4.250 2/31 Baa3 / BBB- / BBB- Feb-23 500 6.0yr +98bp N

REWEEG 4.875 9/30 - / BBB / - Sep-23 900 5.6yr +110bp N

BARY 4.250 8/31 Baa3 / BBB- / - Feb-25 850 6.5yr +176bp Y

Sage Group readies sterling trade

** UK software company The Sage Group plc (BBB+) appointed BofA Securities, HSBC, J.P Morgan and NatWest to arrange a series of fixed income investor calls commencing Monday (24-Feb). A GBP 12yr benchmark line will follow

• https://dealroadshow.com Entry Code: SAGE2025. Direct Link: https://dealroadshow.com/e/SAGE2025
• The notes are expected to be rated BBB+ (S&P) and will be guaranteed by Sage Treasury Company Limited
• Sage Group has just two sterling bonds outstanding in the form of Feb 2031 and Feb 2034s launched in 2021 and 2022 respectively. Those were spotted as follows by leads:

£££ The Sage Group (BBB+ S&P) Pre-Announce Secondary Comps £££

(Bid side vs Gilts)

SGELN -/BBB+ £350m 1.625% Feb-31 G+87

SGELN -/BBB+ £400m 2.875% Feb-34 G+88

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.