CORP SNAPSHOT: Super six emerge from the pipeline

The pace of bond activity has picked up sharply across all asset classes on Tuesday as issuers continue to make funding plays following the vacation season and ahead of looming central bank verdicts.

Six IG corporates are contributing to the latest supply rush with all emerging from the pipeline after recent roadshows/calls with a mixture of EUR and GBP transactions, and the sextet are offering up some rarity value.

SNAM (EUR PNC5.25 hybrid), Loomis (exp EUR300m 5yr SLB) and Welsh Water (GBP 20yr Class B secured sustainability) are offering debut deals in the respective formats, whilst Castellum (EUR500m n/g Dec 2030s), Experian (exp EUR500m Oct 2034s), and Mercialys (EUR300m n/g 7yr) are extending their fledgling curves.

As a reminder, two issuers were out on Monday and backed up the sector’s second biggest euro week of the year last week.

Kerry Group (EUR1bn no grow 8.5yr/12yr two-part) emerged from the pipeline on the day, whilst Veolia Environnement (EUR500m, in line with expected size, 10yr) took an opportunistic approach.

Both issuers found plenty of buyers, but there was some noticeable price resistance put up by investors after the issuers cut 33-35.5bps from IPTs to reoffer.

Irish food company Kerry Group, which benefited from some pre-marketing and a capped size, attracted combined demand of EUR3bn (EUR4.6bn peak) and appeared to offer little in the way of NICs at reoffer versus its limited existing curve.

French utility company Veolia also saw a decent response although books fell from a peak of EUR2.2bn to a final EUR1.45bn and landed with a premium of 5-10bps.

Castellum offers first senior since 2021

** Swedish property company Castellum AB (Baa3) mandated JP Morgan and Nordea as Joint Global Coordinators and Danske Bank and Swedbank as Active Bookrunners to arrange a series of European fixed income investor calls commencing 30-Aug and 2-Sep. A EUR500m no grow long 6yr is now out. Passive bookrunners on the trade are DNB, Handelsbanken, Nykredit and SEB

IPTs: Books open for EUR500m no grow Dec 2030s at m/s +225 area IPTs

• Financial covenants: Consolidated Solvency Ratio ≤ 65% - Secured Solvency Ratio ≤ 45% - Consolidated Coverage Ratio ≥ 1.5:1
• The company concurrently announced a capped EUR200m notional purchased Tender Offer for its outstanding EUR400m 0.75% notes due Sep 2026. The proceeds from the new issue will be used for general corporate purposes including financing the Tender Offer
• Castellum’s existing euro curve currently extends to a EUR650m 0.875% ex-8yr maturing in Sep 2029, with that bid on screens at i +170 on screens this morning
• Building out from the existing Sep 2029s, bankers off the trade were seeing fair value in the region of m/s +180-185 although with the existing bond old and having a low coupon it is fairly subjective

Experian extends with long 10yr

** British consumer credit reporting company Experian PLC (A3/A-) hired Bank of China, BofA Securities, HSBC, J.P Morgan, and TD Securities as Joint Bookrunners to arrange a series of fixed income investor calls commencing 2-Sep. A EUR 10.1yr benchmark offering is now live

IPTs: Books open for EUR500m (exp) Oct 2034s at m/s +130 area

• The notes are being issued through Experian Finance PLC
• Funds generated from the bonds are to be used for general corporate purposes, including acquisitions
• Experian last issued single currency paper in Feb 2022, bringing a EUR500m 1.56% May 2031 line at m/s +78 on demand of EUR3bn (EUR3.7bn peak). That is the borrower’s longest euro trade and was bid at i +72 bid by leads pre-announcement
• Fair value for this one was seen in the region of m/s +95 when equating for the additional tenor

€€€ Experian Long 10y - COMPS €€€

(indicative bid I-spread pre-announced)

Ticker Rating (M/S/F) Amt Cpn Mat i-sprd

>> Experian

EXPNLN A3/A-/- 500 1.375 Jun-26 36

EXPNLN A3/A-/- 500 1.560 May-31 72

>> Services

CPGLN A2/A/- 500 3.000 Mar-30 78

CPGLN A2/A/- 750 3.250 Feb-31 83

EDENFP -/A-/- 500 3.625 Aug-32 118

RELLN A3/BBB+/BBB+ 500 0.875 Mar-32 80

RELLN A3/BBB+/BBB+ 850 3.375 Mar-33 95

WKLNA NR/BBB+/- 700 3.750 Apr-31 83

>> Select recent supply

SCMNVX A1/A/- 500 3.250 Sep-34 85

TLSAU A2/A-/- 700 3.500 Sep-36 98

SUFP -/A-/- 750 3.375 Sep-36 85

DGELN A3/A-/- 700 3.375 Aug-35 94

BMW A2/A/- 750 3.375 Aug-34 104

Mercialys touts sub-bmk 7yr

** French borrower Mercialys (BBB), a key player in shopping centres in France, mandated BNP Paribas and Credit Agricole CIB as Global Co-ordinators and Active Bookrunners, along with CIC, La Banque Postale, Natixis and Societe Generale as Active Bookrunners, to arrange a series of fixed income investor calls on 30-Aug and 2-Sep. A EUR300m no grow 7yr bond offering now live

IPTs: Books open for EUR300m no grow Sep 2031s at m/s +210 area

• An amount equal to the net proceeds of the bonds will be used by the issuer for its general corporate purposes, including to refinance part of the existing debt of the issuer by redeeming all of the 4.625% bonds due Jul 2027 (EUR200m currently outstanding)
• Mercialys’ EUR500m 2.5% Feb 2029 bond launched in Feb 2022 was highlighted on the official comps list sent along with the original mandate on Friday at +148 bid
• Using the Feb 2029s as a building block and equating for the additional curve, fair value was seen in the m/s +170 area

Indicative pre-announcement bid side levels vs I-spd

MERYFP -/BBB/- 2.500 Feb-29 500m 4.5 +148

CARDFP -/BBB/- 5.500 Oct-28 500m 4.1 +117

CARDFP -/BBB/- 1.625 Apr-29 325m 4.6 +136

GMGAU Baa1/BBB+/- 4.250 May-30 500m 5.7 +122

FMUFP -/BBB+/- 4.125 May-33 500m 8.7 +171

COVFP -/BBB+/- 4.625 Jun-32 500m 7.8 +160

Loomis emerges with debut SLB

** Loomis AB (BBB), a Swedish leading payments and cash handling service provider, hired BofA Securities, Danske Bank and Nordea as Joint Active Bookrunners, and Danske Bank as Sustainability Structuring Coordinator to arrange a series of fixed income investor calls 29-30 Aug. An inaugural 5yr Sustainability-Linked Bond is now out. NatWest Markets is a Passive Bookrunner

IPTs: Books open for EUR300m (exp) Sep 2029 SLB at m/s +160 area

• Two-day marketing exercise concluded Friday where the company engaged with over 60+ investors during the marketing process. Balance of feedback was said to be coming in around the m/s +low to mid 100s
• Proceeds are to be used for general corporate purposes, including refinancing of existing indebtedness
• The SLB will be issued in accordance with the Loomis Sustainability-Linked Finance Framework and is linked to the issuer achieving the following Sustainability Performance Target (SPT): Reduction of absolute Scope 1 and 2 emissions by 34% by 2027 from baseline year 2019. More details as follows:

1. In relation to the year ending 31-Dec-2027, the reduction in tCO2e of GHG Scope 1 & 2 emissions compared to the baseline year 2019, is equal to or greater than 34%
2. In relation to each financial year of the Issuer’s Group (commencing with the financial year in which the Issue Date of the Notes falls) up to and including the SPT Reference Year, the Sustainability-Linked Financing Report and the Assurance Report have been published by no later than 150 days after the last day of the relevant financial year

• Premium payment amount: 75bps (i.e redemption at 100.75%)
• CEZ a.s (EUR500m no grow 7yr) offered the first euro corporate sustainability-linked bond since 15-Jul last week. CEZ started out with a chunky looking 50bp NIC on the EUR500m 7yr SLB, but despite the large carrot only attracted demand of EUR1.3bn (1.86x cover) and tweaked pricing 15bps from m/s +185 area IPTs. Euro IG corporate SLBs have totalled just EUR7.3bn, or 9.7% of the overall 2024 ESG issuance so far, with the format having accounted for a much larger 23.19% and 23.11% in 2023 and 2022 respectively
• Loomis has no outstanding euro bonds in any format

SNAM makes hybrid debut

** Italian utility SNAM SpA (Baa2/BBB+/BBB+) mandated BNP Paribas, Goldman Sachs International and J.P. Morgan to arrange a series of fixed income investor calls on 2-Sep. A debut EUR PNC5.25 benchmark hybrid transaction is now out. The Joint Lead Managers on the notes are Barclays, BBVA, BNP Paribas, BofA Securities, Citi, Goldman Sachs International, IMI – Intesa Sanpaolo, J.P. Morgan, Morgan Stanley, MUFG, Societe Generale and UniCredit

IPTs: Books open for EUR perp non-call 5.25 (Dec 2029 reset) benchmark at 5.125-5.25% annual yield

• Expected instrument rating of Ba1, BBB-, BBB- by Moody’s, S&P and Fitch
• The notes include a first coupon step-up of 25bps if not called on 10-Dec-2034 and a further step-up of 75bps (100bps cumulative) if still not called on 10-Dec-2049
• New issue proceeds will be used for general corporate purposes
• To help gauge fair value for the inaugural SNAM hybrid, leads highlighted the borrower’s similar-maturity senior lines and the 2024 issued hybrid bonds of utility peers

Comps are as follows:

Ticker Rating (M/S/F) Amt Out Coupon Maturity i-sprd Yrs Yield

>> Senior SRGIM curve

SRGIM Baa2/BBB+/BBB+ 850 0.750 Jun-29 +76 4.8 3.27%

SRGIM Baa2/BBB+/BBB+ 650 4.000 Nov-29 +90 5.2 3.41%

>> Select 2024 EUR Utility Hybrids

Ticker Rating (M/S/F) Amt Out Coupon Reset-Dt Px i-sprd YTR Reset Sen/Sub

ALLRNV A3/BBB+/- 500 4.500 Jun-32 101.625 +172 4.25% 185 113

ENGIFP Baa3/BBB-/BBB- 800 4.750 Jun-30 101.450 +194 4.46% 194 109

AEMSPA Ba1/BB+/- 750 5.000 Sep-29 100.875 +229 4.80% 225 150

EDPPL Ba1/BB+/BB+ 750 4.750 May-30 100.500 +214 4.64% 205 117

TRNIM Ba1/BBB-/- 850 4.750 Apr-30 100.625 +211 4.62% 214 118

TENN Baa3/BB+/- 550 4.625 Jun-29 100.250 +205 4.56% 195 140

ORSTED Baa3/BB/BBB- 750 5.125 Dec-29 102.250 +213 4.63% 259 119

ENELIM Baa3/BB+/BBB- 900 4.750 May-29 100.875 +202 4.54% 213 126

ENBW Baa3/BBB-/- 500 5.250 Jan-30 103.125 +204 4.58% 266 139

IBESM Baa3/BBB-/BBB 700 4.871 Apr-31 103.150 +179 4.31% 228 119

Welsh Water offers sterling option

** Welsh utility company Welsh Water, rated A3/A-/A by Moody’s, S&P and Fitch, mandated BNP Paribas, HSBC and Lloyds as Joint Lead Bookrunners to arrange a series of fixed income investor meetings commencing 2-Sep. A debut GBP 20yr Class B secured sustainability benchmark is now live

IPTs: Books open for GBP Sep 2044 secured benchmark at mid gilts (UKT 3.25% Jan 2044) +155-160

• The notes are being issued through Dwr Cymru (Financing) UK Plc
• Net proceeds will be on-lent by the issuer to DCC to allocate an amount equal to finance and/or refinance, in whole or in part, eligible green projects and/or eligible social projects The company’s Sustainable Finance Framework can be found here
• Welsh Water last issued a bond issue in Mar 2031, bringing a GBP 2.375% Mar 2034 Class C secured line at gilts +130 on a GBP925m final book

Stryker Corp to tap EUR & USD ahead of upcoming maturities

** US name Stryker Corporation (Baa1/BBB+), a global leader in medical technologies, has mandated Citigroup, Goldman Sachs & Co. LLC, Barclays, BNP Paribas, BofA Securities, Mizuho, Morgan Stanley, and Wells Fargo Securities to organize a series of global fixed income investor calls to be scheduled on 3-Sep.

• A EUR 8- and 12-yr fixed-rate SEC-registered benchmark transaction, and a USD SEC-registered benchmark transaction, are expected to follow
• Citigroup, Goldman Sachs, Barclays, BNP Paribas, and BofA Securities will serve as Joint Active Bookrunners on any subsequent EUR offering and Citigroup, Goldman Sachs, Mizuho, Morgan Stanley, and Wells Fargo Securities will serve as Joint Active Bookrunners on any subsequent USD offering
• The net proceeds of any potential offerings would be used to repay at maturity the EUR500m Nov 2024 floating-rated and the EUR850m outstanding aggregate principal amount of 0.25% fixed-rate notes due Dec 2024, and for general corporate purposes, which may include working capital, acquisitions and other business opportunities and repayment at maturity, redemption or retirement of indebtedness
• Stryker Corp issued a euro line as recently as Dec 2023, printing EUR600m 3.375% Dec 2028s which was included on the official comps list sent Tuesday morning as follows

€€€ Healthcare Sector - Indicative Pre-Announce Comps €€€

(Bid side vs I-Sprd)

Issuer Ratings Outlook Size Coupon Maturity Tenor I-Sprd

SYK Baa1/BBB+ P/S € 600m 3.375 Dec-28 4.3 +70

SYK Baa1/BBB+ P/S € 800m 0.750 Mar-29 4.5 +68

SYK Baa1/BBB+ P/S € 650m 2.625 Nov-30 6.2 +76

SYK Baa1/BBB+ P/S € 750m 1.000 Dec-31 7.3 +85

MDT A3/A S/S € 1,000m 3.125 Oct-31 7.1 +79

MDT A3/A S/S € 1,000m 3.375 Oct-34 10.1 +95

MDT A3/A S/S € 850m 3.875 Oct-36 12.1 +109

TMO A3/A- P/S € 600m 2.375 Apr-32 7.6 +78

TMO A3/A- P/S € 750m 3.650 Nov-34 10.2 +91

BSX Baa1/BBB+ S/S € 750m 3.375 Mar-29 4.5 +79

BSX Baa1/BBB+ S/S € 1,250m 3.500 Mar-32 7.5 +97

BDX Baa2/BBB S/S € 800m 3.553 Sep-29 5.0 +89

BDX Baa2/BBB S/S € 1,000m 3.828 Jun-32 7.8 +112

BDX Baa2/BBB S/S € 800m 4.029 Jun-36 11.8 +129

Gas Networks Ireland holding calls for EUR300m 6yr

** Utility company Gas Networks Ireland (A2/A+) has hired Barclays, BNP Paribas, Danske Bank and NatWest Markets as Active Bookrunners to arrange a series of fixed income investor calls commencing 3-Sep for a EUR300m no grow 6yr offering

• Concurrently, Gas Networks Ireland will also conduct a tender offer capped at EUR200m for its existing EUR500m 1.375% Dec 2026 notes. Barclays, BNP Paribas and NatWest Markets are Dealer Managers on the tender offer
• This will end a near five-year euro hiatus with it last having tapped the market in Nov 2019 for a EUR300m 0.125% bond that matures in Dec this year

Already in the pipeline

** Scandinavian Tobacco Group A/S (Baa3), a Danish manufacturer of handmade and machine-rolled cigars, has mandated Citi, Danske Bank, Jyske Bank and Nordea as Joint Bookrunners to arrange a series of fixed income investor calls commencing 2-3 Sep. A EUR300m exp senior unsecured bond offering with a 5yr maturity will follow. The net proceeds will be used for general corporate purposes, including to refinance certain existing debt. A coupon Step-Up Event of 125bps is applicable if the rating falls below Baa3/BBB-. STG has separately announced a tender offer for its EUR300m 1.375% Sep 2025 bonds

** UK lifelong learning company Pearson Funding plc (Baa2/BBB) asked BNP Paribas, Citi, JP Morgan as Active Bookrunners to arrange a series of fixed income investor calls commencing 3-Sep. A GBP 10yr senior unsecured benchmark offering is expected to follow

** Luxembourgish satellite telecommunications network provider SES S.A. (Baa3/BBB) mandated Deutsche Bank and Morgan Stanley as Global Coordinators and Active Bookrunners, as well as BNP Paribas, Citi, HSBC and SMBC as Active Bookrunners to arrange a series of fixed income investor calls 2-4 Sep. A EUR benchmark dual-tranche 30NC5.25 and 30NC8 hybrid transaction, with an expected issue rating of Ba2 and BB+ by Moody’s and Fitch respectively, may follow

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

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