DAILY CLOSE: Another active session, DSV waits in wings with six-part EUR

** The pace of single currency bond issuance remained brisk on Tuesday despite the distraction of a number of corporate earnings. Overall single currency supply came in at EUR8.35bn (including a EUR350m HY trade from Takko Fashion), to add to Monday’s EUR6.75bn total, putting the weekly IG haul at EUR14.75bn already. With several more deals in the pipeline, including DSV's jumbo EUR six-part issue, we look set to easily take out the average EUR19.5bn weekly euro estimate on Wednesday. For full details of Tuesday’s single currency bonds, see the IGM DAILY EUR NICS & BOOKS

** In non-covered FIG, a further trio hit the euro market and raised EUR1.75bn, in turn taking the week to EUR6.75bn and above the EUR6bn highest guess. Consistent with the recent script, Tuesday’s senior trades once again delivered funding at minimal NICs although there was some selective attrition in order books where Skandinaviska Enskilda Banken priced a EUR500m (from bmk) 7yr green SNP some 25bps inside m/s +110a IPTs (NIC ~2bps) but final orders fell to EUR740m (peak EUR1.5bn). Seeing more durable demand, Jyske Bank‘s EUR500m no grow 4.5NC3.5 senior pref landed some 30bps inside m/s +100a IPTs (NIC 0-5bps) on final & peak demand of EUR1.5bn. At the riskiest end of the capital structure, Landesbank Baden-Wuerttemberg saw final orders fall away to EUR825m on its EUR750m no grow PNC 3/31 AT1 after leads cut 37.5bps off 7.125%a IPTs. Notably, LBBW’s sale takes 2024 into the record books where issuers have now raised a total of EUR17.4bn via euro AT1 sales, eclipsing the prior annual record of EUR16.94bn set in 2020. Away from primary, thoughts remain on earnings where Wednesday’s line up comprises Banco Commercial Portugues, Standard Chartered, Sydbank, RBI and UBS

** There were two ESG related trades in the SSA space Tuesday with one performing far better than the other in terms of coverage. Agence France Local saw a final EUR1.4bn placed in the order book for its EUR500m short 8yr sustainability line and whilst that was lower than we had expected, given how well French issuers have recently shown on that front, it still far and away outshone what happened with Kommunalbanken AS. The Norwegian issuer brought a EUR500m 7yr green line but failed to see the deal size fully covered, achieving just EUR430m peak and final books and pricing in line with IPTs of m/s +31a. Fair value on this one was a little more troublesome than most to arrive at with bonds of similar maturities from Scandinavian peers MuniFin, KommuneKredit (et al) implying a figure in the mid to high-20s (with a large caveat on stale secondary pricing levels) and a recently issued 7yr from SEK (Sept 2031 maturity) indicated on screens at around i+33-34a. Whatever the case, issuers appeared to swerve this one with a huge differential apparent between this and its last green EUR outing in Apr this year that saw the placement of a EUR500m 5yr into a EUR2.3bn book. The Slovak Republic followed its own script to the letter seeing 20bp cut from IPTs to land with a 10bp NIC on a EUR2bn 7yr line. The Islamic Development Bank is looking to place a euro-denominated sukuk with a 5yr maturity which could be Wednesday's business alongside a rare USD deal from the Kingdom of Belgium (USD1bn 10yr at m/s+64). It has issued only one dollar deal since 2020 with that coming earlier this year in the shape of a new 30yr (placed in Apr 2024). See IGM's SSA SNAPSHOT

** It was a slightly busier session for the European IG corporate sector Tuesday with two borrowers out via three tranches in the single currency. Emerging from the pipeline we had Heimstaden Bostad with a EUR500m no grow 5yr, whilst L’Oreal brought an opportunistic EUR750m 3yr and EUR500m 7yr dual-tranche. The latter’s low-beta issue saw solid enough combined demand of EUR3.4bn (EUR3.6bn peak) which allowed the borrower to shave 25bps off IPTs to print each tranche having started with fairly aggressive starting NICs of 25-30bps. Heimstaden started out with a juicer-looking NIC of 35bps at m/s +220 area IPTs and that, along with the no grow size, spurred more impressive peak demand of EUR3.6bn. However, that dropped considerably to EUR2.3bn at the final count after the Swedish name printed some 45bps inside IPTs and with a negative 5bps NIC. Looking ahead and the pace of supply looks set to pick up again Wednesday despite another raft of data releases and earnings. The main focus will of course be on DSV’s jumbo trade to help fund a ~EUR14.3bn acquisition of Schenker AG from Deutsche Bahn, with it set to be the first six-part euro corporate trade of the year and likely to be one of the sector’s biggest trades of 2024. See the IGM CORP SNAPSHOT

** La Banque Postale Home Loan SFH represented the covered sector on Tuesday with a EUR1bn Oct 2030 social bond. Orders ended at EUR2.1bn (also peak), facilitating a 5bp spread refinement to m/s +45bp reoffer (ca. 2bp NIC). This latest line boosts ESG covered issuance which now stands at EUR19.15bn YTD, EUR7.65bn of that in social format

Wednesday's primary prospects

Corp:

** DSV Finance B.V. (A3/A-), a global leader in transport and logistic services, mandated BNP Paribas, Danske Bank, HSBC and Nordea as Joint Bookrunners to arrange a series of fixed income investor calls 25-29 Oct. A multi-tranche EUR senior unsecured benchmark offering across 2yr fixed and floating, as well as 4yr, 6yr, 8yr and 10yr fixed tenors will follow. The net proceeds of the issuance will be used for funding the acquisition of Schenker AG including reducing the commitments under the Bridge Facilities Agreement

** US borrower Avery Dennison Corporation (Baa2/BBB), a global materials science and digital identification solutions company, hired BofA Securities, Mizuho, and SMBC Nikko as Joint Active Bookrunners to organize a series of European fixed income investor calls on Tuesday 29-Oct. A EUR500m no grow 10yr SEC registered fixed rate senior unsecured transaction may follow

** Vier Gas Transport GmbH (BBB+), 100% owner of Open Grid Europe GmbH, Germany’s largest gas transmission system operator, has mandated BNP PARIBAS, Commerzbank, ING, RBC Capital Markets and UniCredit as Active Bookrunners to arrange a series of fixed income investor calls commencing on Tuesday 29-Oct. A EUR500m no grow 7yr senior unsecured offering is expected to follow

SSA:

** The Islamic Development Bank (Aaa/AAA/AAA) hired Abu Dhabi Commercial Bank, BNP Paribas, Credit Agricole CIB, GIB Capital, ING, J.P. Morgan, Landesbank Baden-Württemberg and NATIXIS as Joint Lead Managers and Bookrunners to lead manage a new EUR 5yr fixed rate Regulation S benchmark sukuk issuance

** The Kingdom of Belgium (Aa3/AA/AA-) mandated BofA Securities, Credit Agricole CIB, Deutsche Bank and Nomura as bookrunners to lead manage its forthcoming USD1bn no grow 10yr RegS/144a. IoIs are being taken at a final spread of m/s +46

HY:

** Techem Verwaltungsgesellschaft 675 mbH, a leading energy services provider to residential and commercial real estate across Europe, has mandated GS (B&D), UBS as JGCs and Joint Physical Bookrunners and JPM, SMBC, BNPP, CA-CIB, NatWest Markets, UniCredit, Natixis, Commerzbank, DB, LBBW as Joint Bookrunners for a EUR750m tap of the outstanding EUR500m 5.375% Jul 2029 144A/Reg S senior secured notes. Expected ratings B2/B+/B+. IPTs are 99.75-100.00

** Transportes Aereos Portugueses S.A the state-owned leading airline in Portugal, has mandated JPM, MS (B&D) as Joint Global Coordinators and JPM, MS (B&D), BofA, Citi as Joint Bookrunners for a EUR350m 5NCL senior unsecured notes. IPTs are mid-high 5%

** Neinor Homes S.A, a leading Spanish homebuilder, mandated JPM (B&D), SG as Global coordinators and Bookrunners, BBVA, Santander as Co-global coordinators and Bookrunners and DB, Kutxabank as Bookrunners on a EUR300m 5.25NC2 green senior secured notes

** The IGM Roadshow Calendar is your one stop window on who, when and where. The calendar view provides an instant snapshot of which days are already earmarked for meetings in a convenient PDF format, with clickable links that take you directly to the known schedule

Tuesday's broader market developments

** European stocks made tentative gains Tuesday morning, supported by some upbeat European earnings, before turning negative in the afternoon. That as investors waded through a slew of US earnings and some mixed data. That saw US job openings fall in Sep to the lowest since early 2021, while consumer confidence increased in Oct to the highest level since the start of 2024. Elsewhere, German GfK Consumer Confidence improved by more than expected in Nov to -18.3

** Stoxx600 turns a gain of as much as 0.38% into a loss of up to 0.51%. Financial sub-sector outperformed early on, spearheaded by HSBC which saw its share price rise as much as 5.4% after beating earnings estimates and announcing a share buyback

** Govvies: EGB yields rose across the board with longer end slightly underperforming and highest levels hit post-US data

** Data:

• GE Nov GfK Consumer Confidence rose more than exp to -18.3 (f/c -20.5, prev rev to -21.0 from -21.2)
• UK Sep Mortgage Approvals higher than exp at 65.6k (f/c 64.4k, prev rev to 65.0k from 64.9k)
• US Sep P Wholesale Inventories missed at -0.1% (f/c 0.1%, prev rev to 0.2% from 0.1%)
• US Aug FHFA House Price Index higher than exp at 0.3% (f/c 0.1%, prev rev to 0.2% from 0.1%)
• US Sep JOLTS Job Openings lower than exp at 7443k (f/c 800k, prev rev to 7861k from 8040k)
• US Oct Conference Board Consumer Confidence big beat at 108.7 (f/c 99.5, prev rev to 99.2 from 98.7)

What to watch Wednesday – Busy day for data and earnings

** Key Data: FR Sep Consumer Spending (06:30), FR Q3 P GDP (06:30), SP Q3 P GDP (08:00), SP Oct P CPI (08:00), GE Oct Unemployment Change (08:55), GE Q3 P GDP (09:00), IT Q3 P GDP (09:00), EC Oct Economic/Industrial/Services Confidence (10:00), EC Q3 A GDP (10:00), US Weekly MBA Mortgage Applications (11:00), US Oct ADP Employment Change (12:15), US Q3 A GDP Annualized (13:30), US Q3 A Personal Consumption (13:30), US Q3 A Core PCE Price Index (13:30), GE Oct P CPI (13:00), US Sep Pending Home Sales (14:00)

** Key Events: UK Chancellor Reeves reveals budget (12:30). ECB’s Schnabel (15:00), Villeroy (15:15) and Nagel (18:00) speak

** Auctions: IT to sell up to EUR5.5bn 2029 & 2035 BTPs, as well as EUR3.5bn 2033 FRNs (10:00)

** Earnings: 23 Stoxx600 & 58 S&P500 companies release results. Former includes Raiffeisen Bank, Standard Chartered, UBS and Volkswagen

All times GMT

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