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CORP SNAPSHOT: Trio test the waters post French elections

Just four borrowers are out in the euro market across all asset classes on Monday as market participants assess the fallout from the French elections which has left the country facing a hung parliament where the left wing New Popular Front which will hold the most seats.

Three of those out at the start of the week hail from the cororate arena with Italian corporate Leasys SpA is refreshing its euro curve with an EUR500m no grow Oct 2027 line and Toyota Motor Credit Corporation extending its single currency curve with a Jul 2031 benchmark, whilst Eesti Energia has emerged with a debut PNC5.25 green hybrid after recent calls.

That after the sector saw easily its slowest week of 2024 with just EUR800m raised by two issuers.

Combined demand for the deals from Grand City Properties and RAI Radiotelevisione Italiana worth EUR7.6bn suggests plenty of residual demand is in place though, something Monday's trio and any other issuers this week will want to try and make the most off.

However, with political uncertainty in France on top of looming earnings blackouts and the traditional summer slowdown, supply isn't expected to be bumper this week.

Participants in our issuance survey conducted last Friday predicted that an average EUR4bn of euro corporate (ex-HY) paper would cross the tape this week with a range of EUR2-5bn given.

Leasys makes second visit of 2024

Out first this week was Italy's Leasys SpA (A-), one of the largest specialized lease and rental companies operating in Europe, equally held by Stellantis and Credit Agricole Consumer Finance.

The borrower is refreshing its single currency curve with a EUR500m no grow long 3yr (Oct 2027) bond at m/s +125-130 IPTs via Joint Bookrunners Barclays, Credit Agricole CIB (Global Coordinator), IMI-Intesa Sanpaolo, Mediobanca, Societe Generale and UniCredit.

Proceeds from the bond are to be used for general corporate purposes.

Leasys has already issued one euro bond this year, printing a EUR500m no grow 3.875% Mar 2028 line in Feb.

That line landed at m/s +120 from +165 area IPTs on the back of final demand of EUR3.3bn (EUR2.8bn peak), but was spotted trading tighter at +99 by leads pre-announcement of the new offering and highlighted on the official comps list.

Adjusting the issuer's existing curve and leads were pitching fair value for the new Oct 2027s in the region of m/s +90, implying a starting NIC of 35-40bps.

Investor demand for the new deal was already over EUR1.5bn the mid-morning.

*** Leasys S.p.A. new EUR long 3y 500mn NG - Comps ***

Indicative, Pre announcement, Bid Side, Vs Mid Swap (Ispd):

Security Ratings BID I-Spd

LEASYS 4 1/2 07/26/26 -/-/A- 73

LEASYS 4 5/8 02/16/27 -/-/A- 64

LEASYS 3 7/8 03/01/28 -/-/A- 99

BSTLAF 3 7/8 01/19/26 A3/BBB+/- 41

BSTLAF 4 01/21/27 A3/BBB+/- 46

BSTLAF 3 1/2 07/19/27 A3/BBB+/- 72

CAABNK 4 3/4 01/25/27 Baa1/-/A- 58

CAABNK 3 3/4 04/12/27 Baa1/-/A- 72

ALDFP 4 1/4 01/18/27 A1/A-/A- 57

ALDFP 3 7/8 02/22/27 A1/A-/A- 63

ALDFP 3 7/8 01/24/28 A1/A-/A- 90

ALDFP 4 7/8 10/06/28 A1/A-/A- 91

ARVASL 4 1/8 04/13/26 -/A-/A 57

ARVASL 4 09/22/26 -/A-/A 62

ARVASL 4 3/4 05/22/27 -/A-/A 67

Toyota extends with 7s

More unsecured paper is on the menu Monday thanks to Toyota Motor Credit Corporation (A1/A+/A+), the US financial services subsidiary of Japanese automotive giant Toyota, which is extending its single currency curve with a new 7yr line.

Marketing has started for the Jul 2031 benchmark issue at IPTs of m/s +115-20.

Active Bookrunners on this one are Barclays, HSBC, Societe Generale and UniCredit, with proceeds earmarked for general corporate purposes.

Toyota has a well-stocked euro curve having issued through a number of its various subsidiaries, with the longest highlighted on the official comps list sent this morning (below).

Taking into account the issuer's own bonds and those of sector peers BMW and Mercedes-Benz, bankers both on and off the trade were seeing fair value for the latest issue at around m/s +80 (35-40bps NIC).

Toyota Motor Credit Corp - EUR Bmk 7yr Comparables

Indicative pre-announcement levels vs I-spread (bid)

Issuer Rating Coupon Size Issue Dt. Maturity Years to Mat I-Sprd

TOYOTA A1 / A+ / - 3.125% 500m Jan-24 Jul-29 5.0 +60

TOYOTA A1 / A+ / A+ 4.050% 1000m Mar-23 Sep-29 5.2 +62

TOYOTA A1 / A+ / - 3.386% 500m Mar-24 Mar-30 5.7 +67

TOYOTA A1 / A+ / A+ 3.850% 850m Jul-23 Jul-30 6.0 +73

BMW A2 / A / - 3.000% 1000m Jan-24 Nov-27 3.3 +40

BMW A2 / A / - 3.250% 850m May-24 Nov-28 4.4 +47

BMW A2 / A / - 3.500% 850m May-24 Nov-32 8.4 +72

BMW A2 / A / - 3.375% 1000m Jan-24 Feb-34 9.6 +82

MBGGR A2 / A / A 3.000% 850m Jan-24 Jul-27 3.0 +38

MBGGR A2 / A / - 3.250% 850m May-24 Sep-27 3.2 +39

MBGGR A2 / A / - 3.250% 1150m May-24 Nov-30 6.4 +64

MBGGR A2 / A / A 3.250% 850m Jan-24 Jan-32 7.5 +62

Eesti Energia takes plunge with debut green hybrid

Offering a high-beta option at the start of the week is Estonian mining company Eesti Energia AS (Baa3/BBB-) which is making its hybrid debut after a series of calls conducted last week.

The deal is coming in the form of a EUR400m no grow PNC5.25 green hybrid, having been touted as an expected EUR300m size during the roadshow.

Joint Lead Managers Goldman Sachs Bank Europe SE (Global Coordinator) and AS LHV Pank have released IPTs for the non-call Oct 2029s at 8.5% area (yield).

New issue proceeds will be used to finance and/or refinance, in whole or in part, new or existing Eligible Green Projects in accordance with the Green Finance Framework.

Included is a 25bps coupon step-up if the bonds are not called by 15-Oct-2034 and a further 75bps if still not called on 15-Oct-2049.

Expected instrument ratings are B1/B+ (Moody's/S&P).

Eesti has no euro lines outstanding and hasn't issued single currency paper since Sep 2015 when pricing a now matured EUR500m 2.384% Sep 2023 line.

The borrower had been hoping to tap the market in May 2022 but in the end postponed a potential EUR 5yr senior deal having held investor meetings but not pulling the trigger.

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