CORP SNAPSHOT: Three come out despite delicate backdrop

The pace of bond sales in Europe has slowed on Wednesday amid a delicate backdrop which has impacted go/no-go calls.

Global stocks are being led lower by tech names which comes after a report (via BBG) that the US DoJ has issued Nvidia with subpoenas in a deepening of its anti-trust case, whilst growth worries are also persisting following weak US ISM manufacturing data released on Tuesday.

Despite the Stoxx600 having dumped as much as 1.24% at today’s open, three IG corporates have decided to take the plunge with single currency offerings.

Emerging from the pipeline we have Stryker Corporation (EUR 8/12yr two-part benchmark) and Scandinavian Tobacco Group (EUR300m no grow 5yr), whilst more familiar name Unibail-Rodamco-Westfield (exp EUR1bn 5/10yr green two-part) is taking an opportunistic approach.

The slowdown comes after six corps contributed to Tuesday’s supply rush with all emerging from the pipeline after recent roadshows. Tuesday’s sextet offered up some rarity value on the day with either first time or infrequent offerings.

As a reminder, SNAM (EUR1bn, from bmk PNC5.25 hybrid), Loomis (EUR300m, from exp EUR300m 5yr SLB) and Welsh Water (GBP600m, from bmk 20yr Class B secured sustainability; 1.2bn bk) offered debut deals in the respective formats, whilst Castellum (EUR500m n/g Dec 2030s; -5bp NIC), Experian (EUR650m, from exp EUR500m Oct 2034s; +2bp NIC), and Mercialys (EUR300m n/g 7yr; -5bp NIC) extended their fledgling curves.

Combined demand for the EUR2.75bn of single currency paper on the day was strong at a final EUR10.94bn, although some issuers saw investors put up some resistance to tight looking pricing levels.

One of the most noticeable drops was witnessed on the higher-beta hybrid debut from SNAM where orderbooks peaked at EUR4.2bn before falling to EUR2.7bn after leads printed at a 4.625% yield versus IPTs of 5.125-5.25%.

Elsewhere, Castellum's senior line saw books fall from a peak of EUR4.5bn to a final EUR3.35bn after an eye-catching 50bps was slashed from m/s +225 area IPTs.

Stryker offers two-part EUR ahead of upcoming maturities

** US name Stryker Corporation (Baa1/BBB+), a global leader in medical technologies, 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 on 3-Sep. A EUR 8yr and 12yr fixed-rate SEC-registered benchmark transaction is now live via Citigroup, Goldman Sachs, Barclays, BNP Paribas, and BofA Securities as Joint Active Bookrunners

IPTs:

EUR 8yr (Sep 2032) benchmark at m/s +130 area

EUR 12yr (Sep 2036) benchmark at m/s +155 area

• The net proceeds of the offering will be used to repay at maturity the EUR500m Nov 2024 floating-rate and the EUR850m outstanding aggregate principal amount of the 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
• A USD SEC-registered benchmark transaction via Citigroup, Goldman Sachs, Mizuho, Morgan Stanley, and Wells Fargo Securities as Joint Active Bookrunners is also expected to follow today. That after the US credit market on Tuesday saw the busiest ex-SSA issuance day in terms of the number of deals on record (2) the busiest day of the year in terms of volume and (3) the third busiest ex-SSA issuance day of all time. For more details see THE ENDGAME
• 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 along with the initial mandate on Tuesday morning (below)
• Looking at Stryker’s own curve and the bonds of similar-rated US peers, one source close to the trade was seeing fair value for the 8yr at m/s +90-95 (35-40 NIC) and at m/s +115 (40bp NIC) on the 12yr

Issuer Ratings Outlook Size (EUR) 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

STG make rare visit

** Scandinavian Tobacco Group A/S (Baa3), a Danish manufacturer of handmade and machine-rolled cigars, 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 senior unsecured bond offering with a 5yr maturity is now live

IPTs: Books open for EUR300m no grow (from exp EUR300m) Sep 2029s at m/s +290-300

• A coupon step-up event of 125bps is applicable if the issuer's rating falls below Baa3/BBB-
• The net proceeds will be used for general corporate purposes, including to refinance certain existing debt. STG separately announced a tender offer for its EUR300m 1.375% Sep 2025 bonds
• Those EUR300m Sep 2025s, launched in Sep 2020, mark the borrower’s only existing single currency bond

URW touts opportunistic green two-part

** French multinational commercial real estate company Unibail-Rodamco-Westfield SE (Baa2/BBB+) this morning hired Credit Agricole CIB, Deutsche Bank, JP Morgan, Natixis and RBC Capital Markets as Active Bookrunners for a EUR two-part 5yr and 10yr green benchmark transaction

IPTs:

Exp EUR500m Sep 2029s at m/s +145-150

Exp EUR500m Sep 2034s at m/s +180-185

• The bonds are guaranteed by Unibail-Rodamco-Westfield N.V
• An amount equivalent to the net proceeds will be allocated to finance and/or refinance one or more eligible green assets managed or owned by URW. Definition of eligible green assets is further described in the URW Green Financing Framework available here
• URW has issued three euro green bonds in the past, the most recent of which being a EUR750m 4.125% Dec 2030 in Dec 2023 at m/s +145 (7bp NIC) into a EUR2.9bn (EUR4.25bn peak) book
• Referencing URW’s curve as a whole, we saw the starting NICs on each tranche at 35-40bps, which bankers running the trade said they broadly agreed with

*** UNIBAIL GREEN 5yr+10yr EUR - COMPS ***

* Indicative i-spread (bid side) before announcement

BID I-Spd

URWFP 0 3/4 10/25/28 90

URWFP 1 1/2 05/29/29 81

URWFP 2 5/8 04/09/30 45

URWFP 1 3/8 04/15/30 99

URWFP 4 1/8 12/11/30 123 - Green

URWFP 1 7/8 01/15/31 112

URWFP 1 3/8 12/04/31 123

URWFP 0 7/8 03/29/32 123

URWFP 2 06/29/32 122

URWFP 1 3/8 05/25/33 120

URWFP 1 3/4 02/27/34 105

Still in the pipeline

** 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

** 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

** 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

** Anglian Water Services Financing Plc (A3/A-/A-) mandated BNP Paribas, HSBC and SMBC as Active Bookrunners to arrange a series of fixed income investor calls commencing on 3-Sep. a GBP 20yr benchmark secured green bond may follows. The company is exploring a potential GBP15-20yr inflation linked secured bond. New issue proceeds on the nominal benchmark bond will be used to finance and/or refinance eligible green projects as defined by Anglian Water's Sustainable Finance Framework and on the inflation linked bond will be general corporate purposes

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.