CORP SNAPSHOT: Will we get anything at all this week?

Equity markets remain in tariff turmoil on Monday with the Stoxx600 having dumped as much as 6.46% this morning, leaving the index 13.95% down versus where we closed last Tuesday ahead of Trump’s Liberation Day.

Given that backdrop, it is to the surprise of absolutely no one that the primary bond market is set to record a goose egg at the start of the week, whilst the seismic moves seen over the last few sessions has got participants wondering whether we will see any euro IG corporate bond supply at all this week.

Participants in our supply survey for the week were calling for an average EUR5bn of IG corporate paper to price across the week, but most of those estimates came on Friday morning before China announced retaliatory tariffs on the US and sent risk markets into a further tailspin.

Instead, the couple of people that estimated a zero-issuance week look like they may be on the money with the sheer volatility across the globe hardly providing an enticing backdrop to launch a new trade.

With the risk-off tone having been so prominent, we will likely need a day or two of “stability” before issuers entertain the idea of going, and it is hard to see when that will occur at this stage.

Even if we do get that period of relative calm, whether there will be investor appetite to put cash to work in primary and/or issuers will be prepared to pay to play at now-elevated pricing levels amid the widening in spreads remains to be seen.

Should conditions allow then Aussie issuer Woolworths Group (EUR 7.5yr) and Japanese borrower Japan Tobacco (EUR Jun 2035s) are amongst those waiting in the wings with both having wrapped up roadshows last Wednesday.

Another couple of Aussie issuers in the form of AusNet (EUR 10yr) and Transurban (EUR 10yr & debut GBP 15yr) are also getting ready to go after roadshows, with the former concluding meetings Friday and Transurban set to finish engaging with investors today.

Those projects may, obviously, be pushed back, but given the onset of earnings season and the looming Easter break/school holidays, the issuance window looks to be shrinking.

All the commotion seen in the wake of Trump’s Liberation Day makes the decision made by a handful of corporates to go live with euro deals in the first half of last week look like a very astute one.

As a reminder, EUR3.65bn was priced across last Tuesday and Wednesday, making it the lowest volume week for the corporate sector since the w/e 31-Jan (EUR1.6bn) and it also meant we fell well short of the average EUR7bn average supply forecast.

Those deals which did price found a receptive investor base at the time though, with combined demand finishing up at EUR15.65bn and a chunky average cover ratio of 4.46x recorded.

Orders were higher at EUR20.6bn earlier in the execution processes, but some investors dropped out of the book after an average 35.5bps was cut from IPTs to reoffer.

For a more in-depth look at last week’s euro IG corporate supply, see the IGM CORP WEEKLY.

Summary of last week's EUR corporate (ex-HY) trades:

In the pipeline

** Australian retail giant Woolworths Group Limited (Baa2/BBB) has mandated BNP Paribas, Citigroup, Goldman Sachs, HSBC and ING as Joint Bookrunners to arrange a series of European fixed income investor meetings 31-Mar until 2-Apr. A EUR benchmark 7.5yr senior unsecured offering may follow

** Japan Tobacco Inc (A2/A+) mandated Citigroup and J.P. Morgan as Global Coordinators, and BofA Securities, Citigroup, Deutsche Bank, J.P. Morgan, Mizuho, MUFG, SMBC Nikko, Standard Chartered Bank as Joint Active Bookrunners to arrange a series of virtual and physical fixed income investor calls/meetings to take place on 31-Mar until 2-Apr. A USD multi-tranche benchmark 144A/Reg S senior unsecured across May 2028, Jun 2030, and Jun 2035 tenors from Japan Tobacco Inc, as well as a EUR benchmark Jun 2035 senior unsecured notes offering from JT International Financial Services B.V, fully guaranteed by Japan Tobacco Inc, may follow

** Australian diversified energy infrastructure business AusNet Services Holding Pty Limited (Baa1/BBB+) mandated BNP Paribas, Citigroup, ING and SMBC to arrange a series of fixed income investor meetings and calls commencing 2-4 Apr. A EUR 10yr benchmark senior unsecured transaction may follow

** Aussie toll road developer and operator Transurban Group (Baa1/BBB+) hired BNP Paribas, BofA Securities and Goldman Sachs International to organise a series of fixed income investor meetings and calls in Asia, the UK and Europe from 3-7 Apr. A EUR 10yr benchmark and a debut GBP 15yr benchmark senior secured transaction is to follow

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

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