CORP SNAPSHOT: Trio forge ahead despite headline distractions

It’s a busy session for European corporate bond supply Wednesday, relatively speaking anyway, with two out in euros and one in sterling.

That despite a host of distractions including headline data, lots of central bank speak and political uncertainty both in South Korea and France.

On the latter and as a reminder a no-confidence vote is scheduled today with the French government standing on the brink of collapse.

Given that, it was a surprise to see Tuesday’s only corporate euro being issuer French-domiciled Veolia Environnement.

It brought a new long 6yr (Jan 2031 maturity) conventional line at m/s+95 and a full 40bp inside IPTs, to print with a zero NIC.

Orders had peaked at EUR3.6bn at the time of final guidance but dwindled to a final EUR1.7bn albeit still leaving a healthy 3.4x cover ratio.

Veolia kicked off a week that was expected to yield on average EUR2bn in euro IG corporate supply, with us set to get closer to that with today’s deals from Citycon (exp EUR300m 5.25yr green) and Johnson Controls International (EUR 9yr benchmark), whilst Public Property Invest is readying a debut EUR300m (exp) 5.25yr senior unsecured offering for Thursday.

JCI leaves it late to make first euro visit of 2024

American Irish-domiciled conglomerate Johnson Controls International plc (co-issuer Tyco Fire & Security Finance S.C.A), rated Baa2/BBB+, this morning hired BofA Securities, Credit Agricole CIB and ING as Joint Active Bookrunners for an EUR 9yr SEC-registered benchmark

IPTs: Books open for EUR500m (exp) Dec 2033s at m/s +145-150

• Proceeds from the bond are to be used for general corporate purposes, including the repayment, redemption or refinancing of outstanding commercial paper and other near-term indebtedness
• JCI is also considering, subject to market conditions, a potential USD senior unsecured notes offering by means of a separate prospectus supplement. Neither offering will be subject to the completion of the other
• JCI last issued euro paper in May last year, printing a debut EUR800m 4.25% May 2035 green at m/s +135 on demand of EUR2.1bn. That line was spotted trading tighter at i +110 pre-announcement by leads, with one banker seeing fair value for the shorter vanilla line being launched this morning at around the same level

(Bid side vs I-Sprd)

Ticker Ratings Coupon Maturity Tenor I-Sprd

JCI Baa2/BBB+ 3.000 Sep-28 3.7 81

JCI Baa2/BBB+ 1.000 Sep-32 7.8 105

JCI Baa2/BBB+ 4.250 May-35 10.4 110 Green

$$ USD $$

JCI Baa2/BBB+ 5.500 Apr-29 4.3 G+56 (= €MS+62)

JCI Baa2/BBB+ 4.900 Dec-32 8.0 G+74 (= €MS+91)

Citycon offers second green of 2024

** Citycon Treasury B.V (BBB-), a Dutch domiciled subsidiary of Citycon Oyj, a leading owner, manager and developer of necessity-based retail properties in the Nordics & Estonia, mandated Deutsche Bank and Nordea as Global Coordinators & Joint Bookrunners, and Danske Bank, OP Corporate Bank, SEB and Swedbank as Joint Bookrunners to arrange a series of fixed income investor calls to be held 3-Dec. A EUR300m (exp) 5.25yr fixed rate senior unsecured green bond is now live

IPTs: Books open for EUR300m (exp) Mar 2030 green at m/s +365 area (~5.68% equiv)

• The full net proceeds will be used to finance the concurrent any-and-all NOK tender offers as well as to repay existing indebtedness. Citycon separately announced a tender offer on its 3.9% NOK1.4bn notes due Sep 2025 (of which NOK1.3bn remains outstanding) (ISIN: NO0010744139) and 2.75% NOK1bn notes due Sep 2025 (ISIN: NO0010805898)
• An amount equivalent to the net proceeds will be used for financing and/or refinancing of Eligible Green Assets under Citycon’s Green Financing Framework
• Citycon has already issued green paper in 2024, raising EUR300m via 6.5% Mar 2029s at m/s +378.6 on a sizable 6.67x covered book. That was spotted trading at +305 bid by leads on the official comps list, with fair value for the new 5.25yr green seen around m/s +325 when equating for the additional curve
• Books were in excess of EUR1bn by 09:15 UKT
• Citycon is stealing a March on sector peer Public Property Invest ASA with the Norwegian borrower wrapping up a roadshow today ahead of an inaugural vanilla line that is also coming in a EUR300m (expected) 5.25yr format

Comps are as follows:

Issuer M/S/F Issue Cpn Mat Size (EURm) Life Yld I-Sprd ESG

CITCON -/BBB-/- Mar-21 1.625 Mar-28 345 3.3y 4.860 +282 Green

CITCON -/BBB-/- Mar-24 6.500 Mar-29 300 4.3y 5.063 +305 Green

South West Water touts another green sterling

** UK utility South West Water Limited (Baa1/BBB+) is working a GBP 8yr green bond via sole bookrunner Morgan Stanley

IPTs: Books open for GBP250m (exp) Dec 2032 green at mid-gilts (UKT 4.25% Jun 2032) +175-180

• The bonds are being issued through South West Water Finance Plc
• Expected issue ratings are Baa1 / A- (Moody’s/Fitch)
• An amount equal to the net proceeds from the issue will be allocated by the Issuer to finance or refinance, in whole or in part, new or existing eligible projects as set out in the Pennon Group plc’s Sustainable Financing Framework
• South West Water ended a 14yr senior sterling drought in Jul this year when it issued a GBP400m 6.375% Aug 2041 green which was issued at gilts +185 and attracted final demand of GBP1.1bn

Ticker Rating Amount Coupon Maturity Years to Maturity G-Spread ESG Indicator

*NEW PNNLN* Baa1/-/A- £250m [ ] Dec-2032 8.0y [ ] Y (G)

PNNLN Baa1/-/A- £400m 6.375% May-2041 16.5y +150/+145 Y (G)

UU A3/BBB+/A- £350m 2.000% Jul-2033 8.7y +105/+98 -

UU A3/BBB+/A- £400m 5.750% Jun-2036 11.6y +123/+116 Y (S)

UU A3/BBB+/A- £300m 5.125% Oct-2038 13.8y +127/+120 Y (S)

SVTLN Baa1/BBB+/A- £400m 2.625% Feb-2033 8.2y +113/+107 Y (S)

SVTLN Baa1/BBB+/A- £400m 4.625% Nov-2034 9.9y +117/+110 Y (S)

SVTLN Baa1/BBB+/A- £450m 5.250% Apr-2036 11.4y +121/+114 Y (S)

SVTLN Baa1/BBB+/A- £350m 5.875% Jul-2038 13.7y +120/+113 Y (S)

GLCCUK A3(*-)/A-(*-)/A £300m 1.375% Mar-2033 8.3y +112/+103 -

GLCCUK A3(*-)/A-(*-)/A £300m 2.500% Mar-2036 11.3y +113/+103 -

GLCCUK A3(*-)/A-(*-)/A £300m 5.750% Sep-2044 19.8y +116/+109 Y (S)

In the pipeline:

** Norwegian real estate company Public Property Invest ASA (BBB-) mandated Citi, Danske Bank, DNB Markets, J.P. Morgan and Nordea as Joint Lead Managers to arrange a series of fixed-income investor calls commencing 3-4 Dec. An inaugural EUR300m (exp) 5.25yr senior unsecured offering, expected to be rated BBB by Fitch, will follow. Use of proceeds will be general corporate purposes and to repay existing secured debt

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

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