CORP SNAPSHOT: Trio line up deals

The IG corporate market is seeing its fourth consecutive euro blank on Monday, but supply is set to restart soon with three names joining the pipeline this morning.

That is namely bpost (EUR1bn no grow 5/10yr two-part), Southern Gas Networks (EUR 6yr) and Tornator Oyj (exp EUR350m 7yr green), which are set to offer some rarity value following roadshows.

Monday's mandates come after a slow week last week where just four IG corp euro issues were priced (along with one sterling) for a combined EUR2.15bn – marking the lowest total since mid-Aug.

Despite the slower week, year-to-date single currency corporate (excluding HY) supply is at EUR308.7bn and 6.7% more than we saw price across the whole of 2023.

Given the limited supply this week, it is perhaps unwise to draw any meaningful conclusions about issuance conditions at present.

That said, it would appear that despite volatility in adjacent markets, investors do have cash to put to work for the right name at the right price.

Exhibiting that, last week’s EUR2.15bn of paper attracted combined final demand of EUR9.9bn (EUR11.55bn peak), translating into a simple cover ratio of an eye-catching 4.74x.

That was dragged significantly higher by Romgaz’s inaugural euro trade which could have been sold almost 10x over.

Summary of last week's EUR corp trades:

bpost mandates M&A-driven two-part

** bpost SA/NV (A-), Belgium’s leading postal operator and a provider of international third party logistics and global cross border services, has mandated JP Morgan as Global Coordinator, and BNP Paribas, BofA Securities, ING, and JP Morgan as Joint Active Bookrunners, to arrange a series of fixed income investor calls 7-8 Oct. A EUR1bn no grow transaction across 5yr and 10yr tenors, is expected to follow subject to market conditions

• The notes are expected to be rated A- by S&P
• New issue proceeds will be used for general corporate purposes, including (without limitation) the repayment of the existing EUR1bn bridge facility in connection with the (~EUR1.3bn) acquisition of French contract logistics operator Staci Group
• bpost has just the one euro bond outstanding in the form of a EUR650m 1.25% ex-8yr that matures in Jul 2026. That bond landed at m/s +72 in Jul 2018 on demand of ~EUR1.25bn, but was spotted trading tighter at i +40 bid by leads and included on the official comps list sent this morning

(Bid side vs I-Sprd)

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

BPOST -/A-/- 650 1.250 Jul-26 +40

FRPTT -/A/A+ 875 0.625 Oct-26 +48

1,050 0.000 Jul-29 +67

750 3.750 Jun-30 +78

600 3.125 Mar-33 +92

950 4.000 Jun-35 +97

1,150 0.625 Jan-36 +101

DHLGR A2/-/A- 750 0.375 May-26 +23

500 3.375 Jul-33 +62

1,000 3.500 Mar-36 +98

FDX Baa2/BBB/- 1,250 1.625 Jan-27 +50

600 0.450 May-29 +81

500 1.300 Aug-31 +94

650 0.950 May-33 +116

POSIM Baa3/BBB/- 500 0.500 Dec-28 +80

Southern Gas Networks to make euro fixed debut

** UK gas distribution company Southern Gas Networks plc (Baa1/BBB/BBB+) has hired Barclays, NatWest Markets and RBC Capital Markets as Active Bookrunners to arrange a series of fixed income investor calls commencing 7-8 Oct. A EUR 6yr benchmark is expected to follow, subject to market conditions

• The notes are expected to be rated Baa1 / BBB / BBB+ by Moody’s, S&P and Fitch
• SGN has issued a host of sterling trades in the past, but has never issued a fixed rate euro line. Instead, leads have highlighted the single currency bonds of sector peers National Gas Transmission and Cadent as a barometer for fair value

Indicative pre-announce bid side levels

* EUR Comparables *

Ticker Rating Cpn (%) Issue Dt Mty Dt Tenor Amt(€m) I+(bid)

CDTFIN Baa1/BBB/A- 0.625 Mar-21 Mar-30 5.5y 625 108

CDTFIN Baa1/BBB/A- 0.750 Mar-20 Mar-32 7.4y 500 114

CDTFIN Baa1/BBB/A- 3.750 Apr-24 Apr-33 8.5y 640 133

NGTRAN Baa1/NR/A- 4.250 Apr-23 Apr-30 5.5y 550 105

* GBP Comparables *

Ticker Rating Cpn (%) Issue Dt Mty Dt Tenor Amt(£m) G+(bid)

SGN Baa1/BBB/BBB+ 1.250 Dec-20 Dec-31 7.2y 450 111

SGN Baa1/BBB/BBB+ 6.625 Sep-23 Mar-35 10.4y 300 140

SGN Baa1/BBB/BBB+ 3.100 Mar-28 Sep-36 11.9y 400 141

CDTFIN Baa1/BBB/A- 5.750 Mar-23 Mar-34 9.4y 300 133

CDTFIN Baa1/BBB/A- 2.250 Oct-29 Oct-35 11.0y 300 142

CDTFIN Baa1/BBB/A- 5.625 Jan-24 Jan-36 11.3y 315 147

NGTRAN Baa1/NR/A- 5.750 Apr-23 Apr-35 10.5y 250 143

Tornator preps a green

** Tornator Oyj (Baa3), a leading European forestry company specialized in sustainable forestry, has mandated Danske Bank, OP Corporate Bank and SEB as Joint Bookrunners to arrange a series of fixed income investor meetings, commencing 8-9 Oct. An expected EUR300m 7yr fixed-rate senior secured green transaction will follow

• The bonds are expected to be rated Baa3 (stable) by Moody’s
• The green bond offering will be issued in accordance with Tornator’s updated Green Finance Framework
• Tornator has no euro benchmarks outstanding with its largest bond being a EUR350m 1.25% Oct 2026 green secured line launched in Oct 2020

€€€ TORNATOR OYJ - COMPARABLES €€€

* Indicative pre-announce bid-side (i-Spread)

Ticker Issuer Rating (m/s/f) Coupon Issue Date Maturity Tenor Size I-sprd ESG

TORNAT TORNATOR OYJ -/-/- 1.250 2020-10-14 2026-10-14 2y 350m +94 Green

STERV STORA ENSO OYJ Baa3/-/BBB- 4.250 2023-06-01 2029-09-01 4.9y 500m +110 Green

STERV STORA ENSO OYJ Baa3/-/BBB- 0.625 2020-12-02 2030-12-02 6.2y 500m +113 Green

SMDSLN DS SMITH PLC -/BBB-/- 4.375 2023-07-27 2027-07-27 2.8y 850m +65 Green

SMDSLN DS SMITH PLC -/BBB-/- 4.500 2023-07-27 2030-07-27 5.8y 650m +111 Green

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

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