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DAILY CLOSE: Early Dec deals see solid demand on the whole

** Wednesday saw another batch of issuers across the Corp, FIG, SSA and HY sectors make late-2024 funding plays, despite a concoction of distractions in the form of headline data, lots of central bank speak and political uncertainty both in South Korea and France. In euros we had five print (two of which were IG corps) a combined EUR2.02bn to put the overall weekly single currency figure at EUR3.95bn, whilst another corp (South West Water) tapped the sterling market for GBP250m. For full details of Wednesday’s offerings the IGM DAILY EUR NICS & BOOKS and IGM DAILY GBP NICS & BOOKS respectively

** IG corp names did the bulk of Wednesday’s work, with two out in euros and one in sterling despite the headline distractions elsewhere. In euros and leading the way was American Irish-domiciled conglomerate Johnson Controls International with its first deal in the currency which came via a EUR500m (in line with exp) 9yr. The deal landed flat to fair value having been ramped in to a m/s +110 reoffer from +145-150 IPTs on demand that peaked and finished at EUR2.8bn. Offering a second single currency green line of 2024 was Citycon with a EUR350m (from EUR300m exp) Mar 2030 which saw pricing cut a hybrid-like 55bps from IPTs on books of EUR3.3bn (EUR3.6bn peak). Away from the single currency and UK utility South West Water printed its second green sterling of the year, bringing a GBP250m (in line with exp) 8yr at gilts +165 from +175-180 on a 3.56x covered book. See the IGM CORP SNAPSHOT for background

** In non-covered FIG, Achmea Bank (EUR500m no grow 3yr green senior pref) followed up on a mandate Tuesday and a well-received deal from Commerzbank (EUR500m no grow 4NC3 senior pref; EUR3.8bn book) the previous session to make a further dent in this week’s average EUR2bn supply estimate. Like Commerzbank, Achmea also wasn’t short of buyers with demand for the lender’s rare senior preferred line at EUR2bn when the spread was set at m/s +75 from +100 area IPTs. Even after that, books continued to grow, with orders over EUR2.7bn at the allocation stage

** The SSA space, rather predictably as it turned out, saw activity from two German regional issuers on Wednesday. Land Baden Wuerttemberg brought a new EUR500m no grow Oct 2027 FRN, its 7th floating rate instrument of the year and priced the deal in line with IPTs at 6mE+19. Order books are never anything to write home about on LSA FRNs, primarily as on the majority of deals they are not communicated (and where they are they tend to be lower than for fixed coupon). This time around a final figure of EUR380m provided cover of just 0.76x. Looking to do better than that and arguably having an advantage in offering a fixed rate is the second German name of the day - the Free State of Bavaria. They have mandated banks for a new EUR500m no grow long 8yr LSA that will likely price Thursday. Away from syndicated issuance markets will be keeping a close eye on tomorrow's French auction activity which sees it offering up to EUR5bn of long-dated bonds. See IGM's SSA SNAPSHOT

** Geopolitics continue to rub against domestic economic data for central banks. How the Dollar plays out will be crucial for many CBs as will tariffs. These are not mutually exclusive. Uncertainty has become elevated once more, which reduces confidence in central bank models. The zero lower bound has re-entered the lexicon via the SNB outlook. See the IGM December 2024 Monthly Interest Rate Outlook



Thursday's primary prospects

Corps:

** 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


SSA:

** The Free State of Bavaria (Aaa/AAA/AAA) mandated BayernLB, DekaBank, Deutsche Bank, LBBW, TD Securities and UniCredit to lead manage its upcoming new EUR500m no grow long 8yr (Jan 2033) Landesschatzanweisung


HY:

** Domestic and General (B2/B) mandated Barclays (B&D) as Joint Global Coordinator and Lead Left Physical Bookrunner, Bank of America, Lloyds Bank, NatWest as Joint Global Coordinators and Joint Physical Bookrunners and CVC Capital Markets, GS, Mizuho, UBS as Joint Bookrunners for a GBP350m 5NC2 senior secured notes. IPTs are Low-Mid 8s


** 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



Wednesday's broader market developments

** European stocks made gains in an event and data-packed session, with key indexes set for a fifth straight day of gains. Focus was on a looming no-confidence motion in France, ahead of which OATs were ever so slightly outperforming amid a rise in EGB yields. Sticking with politics and unrest revolving around South Korea weighed on Asian bourses Wednesday with President Yoon declaring martial law late Tuesday before subsequently lifting that with Yoon bending to pressure from the opposition who are now seeking to impeach President Yoon, saying in a statement that the declaration was done illegally. Mixed set of PMI numbers saw Spain & Italy flash numbers miss estimates, whilst pan-eurozone and UK final figures were revised higher, and final US print lower

** Stoxx600 rose as much as 0.62%. Tech stocks led the advance

** Govvies: EGB yields higher across all tenors and jurisdictions, with OATs slightly outperforming

** Data:

  • JN Nov F Jibun Bank Japan Composite / Services PMI rose to 50.1/50.5 (prev 49.8/50.2)
  • CH Nov Caixin China Composite / Services PMI mixed from pev at 52.3/51.5 (prev 51.9/52.0)
  • SP Nov HCOB Spain Composite / Services PMI missed at 53.2/53.3 (f/c 53.8/53.3 (prev 55.2/54.9)
  • IT Nov HCOB Italy Composite/ Services PMI missed at 47.7/49.2 (f/c 49.6/50.8, prev 51.0/52.4)
  • FR Nov F HCOB France Composite / Services PMI revised up to 45.9/46.9 (flash 44.8/45.7)
  • GE Nov F HCOB Germany Composite / Services PMI revised down to 47.2/49.3 (flash 47.3/49.4)
  • EC Nov F HCOB Eurozone Composite / Services PMI revised up to 48.3/49.5 (flash 48.1/49.2)
  • UK Nov F S&P Global UK Composite / Services PMI revised up to 50.5/50.8 (flash 49.9/50.0)
  • EC Oct PPI rose as exp to -3.2% YoY / 0.4% MoM (prev -3.4%/-0.6%)
  • US Weekly MBA Mortgage Applications fell to 2.8% (prev 6.3%)
  • US Nov ADP Employment Change lower than exp at 146k (f/c 150k, prev rev to 184k from 233k)
  • US Nov F S&P Global US Composite / Services PMI revised down to 54.9/56.1 (55.3/57.0 flash)
  • US Nov ISM Services Index lower than exp at 52.1 (f/c 55.7/prev 56.0)
  • US Oct Factory Orders as exp at 0.2% (prev rev to -0.2% from -0.5%)
  • US Oct F Durable Goods Orders revised up to 0.3% (from 0.2%)




What to watch Thursday – OAT sale in focus

** Key Data: GE Oct Factory Orders (07:00), FR Oct Industrial Production (07:45), SP Oct Industrial Production (08:00), GE Nov HCOB Construction CPI (08:30), UK Nov S&P Global Construction CPI (09:30), EC Oct Retail Sales (10:00), US Oct Trade Balance (13:30) and UK Weekly Initial/Continuing Jobless Claims (13:30)

** Key Events: ECB’s Vujcic (10:00), BoE’s Greene (17:00) and Fed’s Barkin (17:15) speak

** Auctions: SP to sell EUR2-3bn 2030 & 2034 Bonds (09:30), FR to sell EUR3-5bn 2038, 2040, 2050 & 2072 OATs (09:50) and UK to sell GBP350m 2073 Linkers (10:00)

** Earnings: 2 Stoxx600 & 8 S&P500 companies report


All times GMT


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