CORP SNAPSHOT: IBM latest US issuer to go big

IG corporate supply is on the menu for a second straight day on Wednesday with two out in the single currency and one more in sterling.

Today’s issuers will have been encouraged by Tuesday’s activity where the IG corp market burst back into life after a weeklong drought with the asset class seeing a quartet of names offering the first litmus test for investor sentiment toward primary corporate euro debt since the rise in trade tensions.

Going off the pricing metrics of Tuesday’s trades, investors certainly gave the green light, with huge demand and minimal (or negative) NICs observed, something today’s names will be looking to replicate.

Leading the way on Tuesday was T-Mobile USA Inc which printed the largest euro corporate deal year-to-date at EUR2.75bn, made up of EUR1bn 7yr, EUR1bn 12yr and EUR750m 20yr tranches.

No demand was communicated on just the company’s second-ever euro trade, due to its SEC-registered nature, but it was sufficient for T-Mobile to shave 34.5-37bps off IPTs to print with NICs in the low-single digits.

More telecom paper came from BT Group plc (EUR850m, from benchmark 7yr) which printed around 2bps inside fair value having been ramped in 39.5bps from initial talk on final books of EUR3.1bn (EUR5.1bn peak).

Previously pipelined utility companies Ausgrid (EUR500m 8yr secured) and Stedin (EUR500m no grow 12yr green) were able to price at even more attractive levels with the final NICs pegged at -5bps and -7.5bps after respective spread compressions of 40bps and 45bps.

Ausgrid saw orders settle at EUR3.6bn (EUR4.5bn peak) and Stedin attracted the biggest book of the day at an eye-watering EUR4.8bn (EUR5.9bn peak).

Totalling EUR4.6bn, Tuesday’s deals alone exceeded the lowest average estimate of EUR4bn put forward in our issuance poll, with today’s activity to push us above the average guess of EUR6bn.

The big contributor on Wednesday is another US issuer in the form of International Business Machines Corporation with the first four-part euro corporate trade of 2025 (5/8/12/20yr tranches) which could mean that compatriot T-Mobile USA's deal is only the biggest YTD for a very short time.

Also offering euro paper on Wednesday is UK issuer Imperial Brands (EUR 9yr), whilst British peer Whitbread Group (GBP long 7yr) is kicking off the week's sterling supply.

IBM goes big in euros again

** US tech giant International Business Machines Corporation (A3/A-/A-) is out with an opportunistic euro four-part benchmark trade made up of SEC-registered 5yr, 8yr, 12yr and 20yr tranches. Active Bookrunners are BNP Paribas, Barclays, Deutsche Bank, RBC Capital Markets, Santander, SMBC, Societe Generale, US Bancorp and Wells Fargo Securities

IPTs:

EUR Feb 2030 benchmark at m/s +100 area

EUR Feb 2033 benchmark at m/s +120 area

EUR Feb 2037 benchmark at m/s +140 area

EUR Feb 2045 benchmark at m/s +175 area

• Expected issue ratings are A3 / A- / A- by Moody’s / S&P / Fitch
• The borrower will use the funds from this issue for general corporate purposes
• IBM didn’t tap the euro market in 2024, with its last trip across the Atlantic coming in Jan 2023 when it printed the second biggest euro corporate trade of that year. That came in the form of a EUR1bn Feb 2027, EUR1.25bn Feb 2031, EUR1bn Feb 2035 and EUR1bn Feb 2046 four-part EUR4.25bn single currency offering that was complimented by a GBP750m Feb 2038 bond
• Referencing the company’s existing euro curve, giving more weight to the more recently issued bonds, we saw the starting NICs at 35bps on each tranche

* NEW € CORP DEAL: IBM COMPS ***

** Pre-Announcement Indicative Bid-Side Levels **

Ticker Ratings Coupon Amount Maturity Term Isprd Issue Date

IBM A3/A-/A- 1.500% 1,000 23-May-29 4.3yr +59 23-May-17

IBM A3/A-/A- 0.875% 1,000 09-Feb-30 5.0yr +67 09-Feb-22

IBM A3/A-/A- 1.750% 1,250 31-Jan-31 6.0yr +75 31-Jan-19

IBM A3/A-/A- 3.625% 1,250 06-Feb-31 6.0yr +74 06-Feb-23

IBM A3/A-/A- 0.650% 1,600 11-Feb-32 7.0yr +80 11-Feb-20

IBM A3/A-/A- 1.250% 1,000 09-Feb-34 9.0yr +85 09-Feb-22

IBM A3/A-/A- 3.750% 1,000 06-Feb-35 10.0yr +94 06-Feb-23

IBM A3/A-/A- 1.200% 850 11-Feb-40 15.0yr +113 11-Feb-20

IBM A3/A-/A- 4.000% 1,000 06-Feb-43 18.0yr +130 06-Feb-23

Imperial Brands extends with 9yr

** UK tobacco company Imperial Brands PLC (Baa2/BBB/BBB) this morning mandated BBVA, HSBC, Morgan Stanley and NatWest as Active Bookrunners for a EUR 12yr benchmark transaction

IPTs: Books open for Feb 2034 benchmark at m/s +205 area

• The notes are being issued through Imperial Brands Finance PLC
• Expected issue ratings are Baa2 / BBB (Moody’s / S&P)
• Proceeds from the bond are to be used for general corporate purposes
• This new bond extends the company’s euro curve from a 1.75% Mar 2033 bond launched in 2021, whilst more recently the company printed 5.25% Feb 2031s in 2023. Looking at the more recently issued 2031s which were spotted by leads at I +139 bid pre-announcement of the new line, and then extending the curve, we saw fair value for the new Feb 2034s at around m/s +165

** New Issue : Imperial Brands € B'mark 9yr : Pre-Announce Comp Levels **

Ratings Size Coupon Maturity Yrs i_sprd

IMBLN (Baa2/BBB/BBB) 650mm 3.375% 26/02/2026 1.1 --

IMBLN (Baa2/BBB/BBB) 750mm 2.125% 12/02/2027 2.0 +66

IMBLN (Baa2/BBB/BBB) 1050mm 5.250% 15/02/2031 6.0 +139

IMBLN (Baa2/BBB/BBB) 1000mm 1.750% 18/03/2033 8.1 +148

BATSLN (Baa1/BBB+/BBB+) 800mm 5.375% 16/02/2031 6.0 +132

BATSLN (Baa1/BBB+/BBB+) 900mm 4.125% 12/04/2032 7.2 +145

PM (A2/A-/A) 500mm 3.750% 15/01/2031 5.9 +104

PM (A2/A-/A) 750mm 0.800% 01/08/2031 6.5 +97

PM (A2/A-/A) 500mm 3.125% 03/06/2033 8.3 +81

PM (A2/A-/A) 500mm 2.000% 09/05/2036 11.3 +138

PM (A2/A-/A) 500mm 1.875% 06/11/2037 12.8 +157

MO (A3/BBB/BBB) 1250mm 3.125% 15/06/2031 6.4 +113

IMBLN (Baa2/BBB/BBB) $ 750mm 5.875% 01/07/2034 9.4 T+136 (eqv.~€ms+155)

Whitbread pulls trigger on sterling

** 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 and 3-Feb. A GBP long 7yr benchmark senior unsecured guaranteed bond is now out

IPTs: Books open for GBP May 2032s at mid-gilts (UKT 1% Jan 2032) +155-160

• Marketing concluded Tuesday with 80+ investors engaged across meetings and the dealroadshow (Entry Code: Whit2025)
• The notes are expected to be rated BBB by Fitch
• Funds from the issue are being earmarked for general corporate purposes of the group including refinancing of existing debt. Note the borrower has a GBP450m 3.375% ex-10yr maturing in Oct this year
• This new line extends Whitbread’s existing sterling curve from a GBP250m 3% May 2031 green bond which launched alongside a GBP300m 2.375% May 2027 green in Feb 2021. Both those issues were highlighted on the official comps sent Tuesday, as were the more recently sterling lines of sector peers

£££ Whitbread Group Plc - Indicative Pre-Announce Comps £££

Indicative pre-announcement comparables vs Gilts (bid)

* Consumer BBB Secondaries *

Rating Coupon Maturity Tenor Size Bmk Sprd

WTBLN -/-/BBB 2.375 May-27 2.3y 300m +85 (Green)

WTBLN -/-/BBB 3.000 May-31 6.3y 250m +131 (Green)

* Recent BBB New Issues *

PSON Baa2/-/BBB 5.375 Sep-34 9.6y 350m +94 (Social)

SBRYLN Baa3/BBB/- 5.125 Jun-30 5.4y 250m +88

SBRYLN Baa3/BBB/- 5.625 Jan-35 10.0y 300m +104

TSCOLN Baa3/BBB-/BBB- 5.125 May-34 9.3y 350m +108

GPELN Baa2/-/- 5.375 Sep-31 6.6y 250m +142 (Sustainable)

CPKLN -/BBB/BBB 5.940 Aug-30 5.6y 346m +143

HMSOLN Baa2/-/BBB+ 5.875 Oct-36 11.7y 400m +153

In the pipeline

** US manufacturing company Parker-Hannifin Corporation (Baa1/BBB+/A-) mandated Citigroup, HSBC, and Morgan Stanley to arrange a series of fixed income investor calls to take place 4-5 Feb. A EUR 5yr SEC-registered benchmark is expected to follow

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

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