CORP SNAPSHOT: Surprising issuance blank, but two announce mandates

Risk markets are rallying sharply on Thursday morning as participants digest the outsized 50bps cut from the Fed overnight, but so far, no corporate borrowers are making the most of what looks like a window of opportunity.

The supply blank on the day comes with the focus moving from the Fed to the BoE (no further cut expected), and also comes with issuers having deliberately front-loaded this week ahead of the central bank activity and any potential downside risks that may have followed.

Thursday’s goose egg comes after it was an all real estate affair on Wednesday where emerging from the pipeline and offering rarity value were Amvest Residential Core Fund (EUR300m 5.5yr green) and Great Portland Estates plc (GBP250m 7yr sustainable), which picked ESG formats for their first ever public bond offerings.

Both of Wednesday’s issuers found plenty of buyers and saw their deals 3.67x and 5.2x covered respectively at the reoffer spreads that were 32bps and 28bps inside IPTs.

Given the success of yesterday’s deals and the fact the Stoxx600 has risen as much as 1.1% this morning, it is perhaps a surprise to not see at least one opportunistic corporate deal out Thursday.

With that, the weekly corporate single currency haul is set to fall short of expectations with the total currently at EUR5.85bn versus the average weekly estimate of EUR7.5bn.

Whilst supply is off the menu today, two issuers have this morning mandated trades to come next week.

One of those is Germany’s Knorr-Bremse AG (A3/A-), the global market and technology leader for braking systems and leading supplier of other rail and commercial vehicle systems.

The borrower this morning hired BNP Paribas, Deutsche Bank, HSBC and UniCredit as Joint Active Bookrunners to arrange a series of fixed income investor calls today and tomorrow (19-20 Sep).

A dual-tranche EUR benchmark sized unsecured 5yr offering and 8yr green offering are expected to follow, subject to market conditions.

The green offering will be issued in accordance with Knorr-Bremse’s Green Finance Framework.

Knorr-Bremse last tapped the euro market in Sep 2022, printing a EUR700m 3.25% Sep 2027 sustainability-linked bond that was 1.77x covered at its m/s +85 reoffer.

Also joining the pipeline this morning is unrated Austrian steel-based technology and capital goods group voestalpine AG.

Credit Agricole CIB as Global Coordinator and Credit Agricole CIB, Erste Group, Raiffeisen Bank International, Santander and UniCredit as Joint Lead Managers are conducting calls Friday and Monday (20-23 Sep) ahead of a EUR500m no grow 5yr green.

The net proceeds of the issuance will be used for (re-)financing of eligible green projects according to the Green Finance Framework of the issuer.

Leads sent comps for the voestalpine deal this morning as follows:

€€€ voestalpine EUR Green offering - Comparables €€€

Ticker Rating

(M/S/F) Coupon Size (mln) Issuance Dt Maturity Dt Tenor (ytm) I-Sprd (BID) ESG

VOEAV -/-/- 1.750% 500 Apr-19 Apr-26 1.6 114 -

UCBBB -/-/- 5.200% 300 Nov-23 Nov-29 5.2 144 -

UCBBB -/-/- 4.250% 500 Mar-24 Mar-30 5.5 158 -

FBELFP -/-/- 4.375% 350 Apr-24 Apr-29 4.6 153 -

FRAGR -/-/- 4.250% 650 Jun-24 Jun-32 7.7 127 -

PORSCH -/-/- 3.750% 750 Apr-24 Sep-29 5.0 131 -

PORSCH -/-/- 4.250% 750 Jul-23 Sep-30 6.0 140 -

WIEAV Baa3/-/- 4.875% 350 Oct-23 Oct-28 4.0 102 SLB

HEIGR Baa2/BBB/- 3.375% 500 Sep-24 Oct-31 7.1 112 Green

HOLNSW Baa1/BBB+/BBB 0.500% 1,000 Sep-21 Sep-30 6.0 102 -

AALLN Baa2/BBB *-/BBB+ 3.750% 500 Mar-24 Jun-29 4.7 120 -

AALLN Baa2/BBB *-/BBB+ 4.125% 750 Mar-24 Mar-32 7.5 140 -

NK Baa3/BBB-/- 4.750% 500 Nov-23 Nov-29 5.2 142 SLB

TVOYFH Baa3/BBB-/BBB- 4.750% 600 Jun-23 Jun-30 5.7 134 -

MTXGR Baa3/-/BBB 3.875% 750 Sep-24 Sep-31 7.0 144 -

HOTGR -/BBB-/- 4.250% 650 May-24 May-30 5.7 142 -

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

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