CORP SNAPSHOT: Four take the plunge despite uncertain backdrop

The euro IG corporate bond market has snapped back into life on Tuesday with us seeing our first supply in a week this morning thanks to a quartet of issuers.

Utility companies Ausgrid (exp EUR500m 8yr secured) and Stedin (EUR500m no grow 12yr green) have emerged from the pipeline, whilst telecoms T-Mobile USA (EUR 7/12/20yr three-part benchmark) and BT Group (EUR 7yr benchmark) have taken an opportunistic approach.

The quartet are live despite what remains a far from ideal broader market backdrop with stocks again in the red as investors digest news surrounding Trump’s tariffs and retaliatory measures from those countries he has slapped them on.

As a reminder and the Stoxx600 dumped as much as 1.64% on Monday before paring that to a final 0.87% as markets took some comfort from the delay in tariffs on Canada and Mexico, although is currently down another 0.35% this morning with Trump turning his attentions to China.

The dire tone yesterday kept issuers away and extended the single currency IG corporate supply drought into a fourth straight session after earnings (and associated blackouts) crimped activity along with the key central bank meetings from the FOMC and ECB.

Following days of inactivity and what remains a fragile backdrop, today’s four transactions offer a litmus test for investor sentiment toward corporate debt and will be closely watched by any other issuers potentially wanting to access the market.

T-Mobile USA makes second visit to euro market

** T-Mobile USA Inc (Baa2/BBB/BBB+), a wholly owned subsidiary of American wireless network operator T-Mobile US Inc, this morning came out with an opportunistic SEC-registered EUR three-part benchmark comprising 7yr, 12yr and 20yr benchmarks. Joint Active Bookrunners are Citi, Goldman Sachs, JP Morgan and Societe Generale

IPTs:

EUR Feb 2032 benchmark at m/s +120-125

EUR Feb 2037 benchmark at m/s +150 area

EUR Feb 2045 benchmark at m/s +185 area

• Expected issue ratings are Baa2 (Positive) / BBB (Stable) / BBB+ (Stable) by Moody’s / S&P / Fitch
• Guarantors are T-Mobile US Inc and each wholly-owned subsidiary of the issuer that is not an excluded subsidiary and is an obligor under the credit agreement
• Funds generated from the triple-tranche are to be used for general corporate purposes, which may include among other things, share repurchases, any dividends declared by T-Mobile US Inc’s Board of Directors and refinancing of existing indebtedness on an ongoing basis
• This is just T-Mobile’s second ever visit to the single currency market after a debut trade in Apr last year that also came in three-part format. That was made up of EUR600m 3.55% May 2029, EUR750m 3.7% May 2032 and EUR650m 3.85% May 2036 lines which attracted final combined demand of EUR7.6bn
• The debut bonds were bid on screens at i +67, +86 and +108 respectively this morning with an adjustment of the curve pointing to fair value for the new 7yr, 12yr and 20yr benchmarks at around m/s + 85, +110-115 and +145 respectively

BT offers another telecom option

** UK telecom BT Group plc (Baa2/BBB/BBB) this morning hired JP Morgan, NatWest Markets, Santander, SEB and Societe Generale as Joint Lead Managers for a EUR 7yr benchmark transaction

IPTs: Books open for EUR Feb 2032s at m/s +130-135

• The notes are being issued through British Telecommunications public limited company
• Expected issue ratings (Moody’s / S&P / Fitch) are Baa2 / BBB / BBB
• Proceeds are earmarked for general corporate purposes
• BT’s existing adjacent euro senior bonds were highlighted as comparables (below) with a slight adjustment of the curve putting fair value for the Feb 2032s at around m/s +95 (35-40bps NIC)

€€€ British Telecommunications plc 7yr EUR Benchmark: Comps €€€

Indicative pre-announcement bid-side comps:

I+

BRITEL 3 3/4 05/13/31 81

BRITEL 3 3/8 08/30/32 98

BRITEL 4 1/4 01/06/33 102

BRITEL 3 7/8 01/20/34 112

Ausgrid extends fledgling curve with 8yr secured

** Australian electricity distributor Ausgrid Finance Pty Ltd (Baa1/BBB) hired BNP PARIBAS, BofA Securities, Credit Agricole CIB and ING to arrange a series of fixed income investor meetings and calls commencing from 27-31 Jan. A EUR 8yr benchmark senior secured transaction is now live

IPTs: Books opened for EUR500m (exp) Feb 2033s at m/s +160 area

• Expected issue ratings are Baa1 / BBB (Moody’s / S&P)
• Funds from the new deal are to be used for general corporate purposes and refinancing of existing indebtedness. On the latter, Ausgrid has a EUR650m 1.25% ex-7yr bond maturing in Jul this year
• Ausgrid wrapped up a weeklong roadshow on Friday where it met with over 75 investors
• This is Ausgrid’s first single currency offering since Sep 2021 when it printed a EUR525m 0.875% Oct 2031 line at m/s +75 on a 3.33x covered book
• Ausgrid has only one other euro trade outstanding in the form of a EUR650m 1.25% ex-7yr maturing in Jul this year
• The Oct 2031s were highlighted on the updated comps list sent this morning at i +122 bid
• Equating for the additional curve, one banker running the new transaction was seeing fair value for the 8yr at m/s +130

Issuer Ratings Coupon Maturity Tenor I-Sprd

Ausgrid Baa1/BBB 0.875 Oct-31 6.7 122

* Australian Utilities & Infrastructure *

AusNet Baa1/BBB+ 0.625 Aug-30 5.5 87

Transurban Baa1/BBB+ 3.713 Mar-32 7.1 107

Transurban Baa1/BBB+ 4.225 Apr-33 8.2 114

Sydney Airport Baa1/BBB+ 4.375 May-33 8.3 114

Melbourne Airport Baa1/BBB+ 4.375 May-33 8.3 118

* European Electricity & Gas Distribution *

Fluvius System Operator A3/- 3.875 May-33 8.3 117

Fluvius System Operator A3/- 3.875 May-34 9.3 120

NatGrid Electricity Distribution Baa1/BBB+ 3.949 Sep-32 7.6 104

E.ON Baa2/BBB+ 3.5 Apr-33 8.2 99

Snam Baa2/BBB+ 3.375 Nov-31 6.8 106

Snam Baa2/BBB+ 3.875 Feb-34 9 117

Cadent Baa1/BBB 0.75 Mar-32 7.1 121

Cadent Baa1/BBB 3.75 Apr-33 8.2 130

Ellevio -/BBB 4.125 Mar-34 9.1 129

* European Electricity & Gas Transmission *

SSE Hydro Electric Transmission Baa1/BBB+ 3.375 Sep-32 7.6 102

Elia Transmission -/BBB+ 3.625 Jan-33 8 98

Terna Baa2/BBB+ 3.875 Jul-33 8.4 108

Amprion Baa1/- 3.625 May-31 6.3 86

Amprion Baa1/- 4.125 Sep-34 9.6 109

Eurogrid -/BBB 0.741 Apr-33 8.2 103

Eurogrid -/BBB 3.915 Feb-34 9 115

Stedin offers another green

** Dutch-regulated electricity and gas grid operator Stedin Holding N.V hired ABN AMRO, BNP PARIBAS, NatWest and Rabobank as Joint Bookrunners for calls on 3-Feb, with a EUR500m no grow 12yr green line now live

IPTs: Books open for EUR500m no grow Feb 2037 green at m/s +155 area

• The notes are expected to be rated A- by S&P
• An amount equal to the net proceeds of the issue of the notes will be allocated to finance and/or refinance a portfolio of Eligible Green Projects, as set out in Stedin’s Green Finance Framework
• Stedin tapped the euro market just once last year, also for a green bond, printing EUR500m 3.625% Jun 2031s at m/s +78 on demand of EUR1.35bn. That trade was highlighted on the official comps list sent Monday morning at i +95 bid
• Given the large curve extension fair value for this one is fairly subjective, but looking at the curve of similar-rated peers we saw it in the region of m/s +115-120

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

* Stedin Curve *

Rating Coupon Maturity Tenor Size I-sprd

STEDIN -/A-/- 0.000 Nov-26 1.8y 500m +41 (Green)

STEDIN -/A-/- 1.375 Sep-28 3.6y 500m +67

STEDIN -/A-/- 0.500 Nov-29 4.8y 500m +78 (Green)

STEDIN -/A-/- 2.375 Jun-30 5.3y 500m +84 (Green)

STEDIN -/A-/- 3.625 Jun-31 6.4y 500m +95 (Green)

* Dutch / Electricity Distribution Comparables *

Rating Coupon Maturity Tenor Size I-sprd

ALLRNV Aa3/-/- 3.000 Oct-34 9.7y 750m +74 (Green)

ENEXIS Aa3/NR/- 3.625 Jun-34 9.4y 500m +86 (Green)

ENEXIS -/AA-/- 3.500 May-36 11.3y 500m +93 (Green)

AMPRIO Baa1/-/- 4.125 Sep-34 9.6y 700m +108 (Green)

AMPRIO Baa1/-/A- 3.850 Aug-39 14.6y 600m +132 (Green)

FLUVIU A3/-/- 3.875 May-34 9.2y 700m +119

NEGANV A2/-/- 0.750 Oct-36 11.7y 300m +119 (SLB)

NEGANV A2/-/- 3.875 Apr-44 19.2y 500m +133 (Green)

In the pipeline

** British hospitality company Whitbread Group PLC (BBB) mandated BNP PARIBAS, Lloyds, NatWest and Santander as Active Bookrunners to arrange a series of fixed income investor calls commencing 31-Jan. A GBP long 7yr benchmark senior unsecured guaranteed bond will follow. The notes are expected to be rated BBB by Fitch

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

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