DAILY CLOSE: Monday deals find plenty of buyers, Tuesday set to be frenetic

** Volume worth EUR9.75bn kicked off what is expected to be another bumper week for single currency issuance to follow the fourth biggest week of 2024 last week at EUR55.9bn. That made a sizeable dent in the EUR38.5bn average combined forecast given in our latest weekly issuance estimates report, with the highest combined guess of EUR55.5bn already looking like a distinct possibility, especially given the bulging public pipeline (details below). All asset classes contributed to Monday’s euro haul, as detailed in IGM’s DAILY EUR NICS & BOOKS, and were complimented by a couple of banks in sterling (see the IGM DAILY GBP NICS & BOOKS)

** In non-covered FIG, a trio hit euros to raise EUR2bn, kicking off a week expected to deliver a further EUR8.5bn in single currency supply, according to the average estimate in our poll weekly poll. Seeing easily the day’s biggest book, ABN Amro reopened AT1 market (EUR750m from bmk PNC10; bks EUR4.75bn) which marked the first euro AT1 deal since 9th July, with leads able to carve 62.5bps off 7% area IPTs. Banco BPM refreshed its SNP curve (EUR750m from bmk 6nc5 social; bks EUR3.3bn) with strong demand delivering cost-effective funding (NIC -3) while Novo Banco stuck to the short end for its senior pref return (EUR500m no grow 4.5nc3.5; bks EUR1.2bn) which landed flat to the estimated fair value level. And offering rarity in sterling, Credit Agricole brought what is just the second GBP Tier 2 of the year, and its first since June 2021 (GBP500m long 10nc5; bks GBP2.4bn). Otherwise, the focus was on a ballooning pipeline where six names joined the two already in situ. See IGM’s FIG SNAPSHOT

** The covered market saw ample supply arrive on Monday thanks to four borrowers raising a total EUR4.25bn – surpassing the lowest (EUR3bn) and nearing the average (EUR5bn) forecasted figures in our weekly survey. Commonwealth Bank of Australia printed the bulk of this with a EUR1.5bn Nov 2030 issue which landed at m/s +40, 4bp inside guidance and on books of EUR1.9bn (1.27x cover). CFF went with a longer Mar 2033 maturity for its EUR1bn OF and also saw a 4bp compression to land at m/s +48 reoffer (EUR1.2bn book). ING-DiBa added another EUR1bn issue to the day’s mix via a Sep 2029 HP. The borrower conceded a 3.5bp premium after leads placed fair value in the region of 23/24 (m/s +27 reoffer, EUR1.2bn final & EUR1.3bn peak demand). LBBW offered the smallest and shortest deal, a EUR750m Nov 2027 OP. Strong investor demand throughout execution allowed for a 6bp refinement from m/s +20a guidance, leaving a 2.5bp NIC on offer. While Lloyds Bank GmBH is yet to emerge, Banco Desio added another EUR500m no grow 5yr CB to the pipeline

** The IG corporate market saw two issuers out on the day, and back up the sector’s second biggest euro week of the year last week. Kerry Group (EUR1bn no grow 8.5yr/12yr two-part) emerged from the pipeline Monday, whilst Veolia Environnement (EUR500m, in line with expected size, 10yr) took an opportunistic approach. The former, which benefited from some pre-marketing and a capped size, outperformed as the Irish food company attracted combined demand of EUR3bn (EUR4.6bn peak) and appeared to offer little in the way of NICs versus its limited existing curve. Veolia saw a more measured response with books falling from a peak of EUR2.2bn to a final EUR1.45bn and landing with a premium of 5-10bps. Looking ahead and six issuers are known to be readying deals across euro and sterling as early as Tuesday’s business following recent roadshows, whilst another three are starting or continuing their own meetings on the day. See the IGM CORP SNAPSHOT

** Monday marked a slow start to the week in the SSA space with just a solitary euro denominated deal making it onto screens. That saw the European Stability Mechanism (ESM) moving at the first opportunity following an RfP sent to banks last week. We had wondered whether they could issue EUR4bn today and satisfy the annual funding requirement of EUR6bn but it opted for a more pragmatic approach and went with half of that size at the 10yr tenor. Orders were robust enough for 2bp spread compression but at EUR9.3bn still lacked some of the headline grabbing clout that some of its previous transactions wielded. Also, at 3bp the NIC was a little larger than we are accustomed to seeing from the issuer (ESM has a 0.88bp average NIC since 2019), a fact that is arguably attributable to some recent 'issuance indigestion' given the late August flurry (EUR21.65bn last week incl EUR3bn Bulgaria dual-tranche). Two Scandinavian municipality financiers will likely share the market on Tuesday with Swedish Kommuninvest looking at a 4yr whilst Danish peer KommuneKredit is bringing a long 7yr. See IGM's SSA SNAPSHOT

** The IGM European Weekly Credit Overview is your comprehensive round-up of primary European new issue activity including pricing, order book information, new issue concessions and ISINs

Tuesday's primary prospects

Corp:

** Loomis AB (BBB), a Swedish leading payments and cash handling service provider, hired BofA Securities, Danske Bank and Nordea as Joint Active Bookrunners, and Danske Bank as Sustainability Structuring Coordinator to arrange a series of fixed income investor calls 29-30 Aug. An inaugural EUR300m (exp) 5yr Sustainability-Linked Bond is expected to follow. The SLB will be issued in accordance with the Loomis Sustainability-Linked Finance Framework and will be linked to the issuer achieving the following Sustainability Performance Target (SPT): Reduction of absolute Scope 1 and 2 emissions by 34% by 2027 from baseline year 2019

** French borrower Mercialys (BBB), a key player in shopping centres in France, has mandated BNP Paribas and Credit Agricole CIB as Global Co-ordinators and Active Bookrunners, along with CIC, La Banque Postale, Natixis and Societe Generale as Active Bookrunners, to arrange a series of fixed income investor calls on 30-Aug and 2-Sep. A EUR300m no grow 7yr bond offering is expected to follow. An amount equal to the net proceeds of the Bonds will be used by the Issuer for its general corporate purposes, including to refinance part of the existing debt of the Issuer by redeeming all of the EUR300m 4.625% bonds due Jul 2027. Comps here

** Sweden’s Castellum AB (Baa3) mandated J.P. Morgan and Nordea as Joint Global Coordinators and Danske Bank and Swedbank as Active Bookrunners to arrange a series of European fixed income investor calls commencing 30-Aug and 2-Sep. A EUR500m no grow long 6yr might follow. The company has concurrently announced a capped EUR200m notional purchased Tender Offer for its outstanding EUR400m 0.75% notes due Sep 2026. The proceeds from the new issue will be used for general corporate purposes including financing the Tender Offer

** British consumer credit reporting company Experian Finance plc (A3/A-) hired Bank of China, BofA Securities, HSBC, J.P. Morgan, and TD Securities as Joint Bookrunners to arrange a series of fixed income investor calls commencing 2-Sep. A EUR 10yr benchmark offering will follow

** Italian utility SNAM SpA (Baa2/BBB+/BBB+) mandated BNP Paribas, Goldman Sachs International and J.P. Morgan to arrange a series of fixed income investor calls on 2-Sep. A debut EUR PNC5.25 benchmark hybrid transaction with an expected instrument rating of Ba1, BBB-, BBB- by Moody’s, S&P and Fitch is expected to follow. New issue proceeds will be used for general corporate purposes.The Joint Lead Managers on the Notes will be Barclays, BBVA, BNP Paribas, BofA Securities, Citi, Goldman Sachs International, IMI – Intesa Sanpaolo, J.P. Morgan, Morgan Stanley, MUFG, Societe Generale and UniCredit

** Welsh utility company Dwr Cymru (Financing) UK Plc, rated A3/A-/A by Moody’s, S&P and Fitch, mandated BNP Paribas, HSBC and Lloyds as Joint Lead Bookrunners to arrange a series of fixed income investor meetings commencing 2-Sep. A debut GBP 20yr Class B secured sustainability benchmark is expected to follow. Net proceeds will be on-lent by the Issuer to DCC to allocate an amount equal to finance and/or refinance, in whole or in part, eligible green projects and/or eligible social projects The company’s Sustainable Finance Framework can be found here

SSAs:

** The United Kingdom (Aa3/AA/AA-) hired BofA Securities, GSIB, HSBC, Lloyds Bank Corporate and Santander to lead manage the syndication of a new FBP conventional gilt maturing on Jan 2040

** Kommuninvest I Sverige AB (Aaa/AAA) hired BofA Securities, Citi, Credit Agricole CIB and Nordea for a EUR 4yr benchmark transaction

** KommuneKredit (Aaa/AAA) mandated Barclays, BNP Paribas, Danske Bank and TD Securities to lead manage its forthcoming EUR benchmark long 7y transaction

** Development Bank of Japan Inc (A1/A) mandated Daiwa Capital Markets Europe, BNP Paribas, Citi and Morgan Stanley as Joint Lead Managers to arrange a series of fixed income investor conference calls commencing 30-Aug. A potential EUR 4yr benchmark senior unsecured sustainability bond may follow

FIG:

** Macquarie Bank Limited mandated Credit Agricole CIB, Natixis and Societe Generale to arrange a series of fixed income investor meetings commencing 29-Aug. A EUR benchmark Green Senior Unsecured offering with a short to intermediate tenor may follow

** Luminor Bank AS mandated DNB Markets, Erste Group, J.P. Morgan, Luminor Markets and Natixis to act as Joint Bookrunners for a new EUR300m no grow 4NC3 Senior Preferred transaction. The notes are expected to be rated A3 (Moody's)

** Alpha Services and Holdings S.A hired Morgan Stanley as Sole Structuring Advisor and Citi, HSBC, J.P. Morgan, Morgan Stanley, UBS Investment Bank and UniCredit as Joint Lead Managers of its upcoming EUR300m (exp) PNC6 Additional Tier 1 transaction with an expected rating of B2 by Moody’s

** Norddeutsche Landesbank - Girozentrale mandated ABN AMRO, BBVA, BNP Paribas, BofA Securities, Deutsche Bank and NORD/LB as Joint Bookrunners for its upcoming EUR500m no grow 5yr Senior Non-Preferred transaction. The notes are expected to be rated A1 by Moody’s and A+ by Fitch. Calls take place 2-Sep

** MONETA Money Bank a.s. hired BNP Paribas and J.P. Morgan as Joint Global Coordinators and Joint Lead Managers, and Goldman Sachs Bank Europe SE as Joint Lead Manager, and J&T Banka as Co-Manager to arrange a series of fixed-income investor calls commencing 2-Sep. A EUR300m 6NC5 Senior Preferred offering may follow. The notes are expected to be rated A3 by Moody's

** Banco de Sabadell S.A mandated Banco Sabadell, Barclays, HSBC and Nomura as Joint Bookrunners to arrange a series of investor calls commencing 2-Sep. An inaugural GBP benchmark long 5yr Senior Preferred transaction is expected to be launched. Expected ratings of the instrument are BBB+ (S&P) / BBB+ (Fitch) / AL (DBRS)

Covered:

** Lloyds Bank GmbH mandated BBVA, Commerzbank, LBBW, Lloyds and UniCredit to arrange a series of fixed income investor calls commencing 27-Aug. A new EUR500m no grow 5yr debut Pfandbrief transaction will follow in the near future. The issue is expected to be rated Aaa (Moody's)

** Banco di Desio e della Brianza S.p.A hired BNP Paribas, IMI-Intesa Sanpaolo, Natixis, Raiffeisen Bank International, Santander and UniCredit as Joint Bookrunners to lead manage its EUR500m 5yr Obbligazioni Bancarie Garantite Europee (‘OBG’ or Mortgage Covered Bonds). The covered bonds are backed by 100% Italian residential mortgages and are expected to be rated AA by Fitch

HY:

** B2 Impact ASA (Ba2/BB-) mandated DNB Markets and Nordea as Global Coordinators and SpareBank 1 Markets as Joint Lead Manager to arrange a series of fixed income investor meetings commencing 2-Sep. A EUR200m 4.5yr senior unsecured floating rate bond issue may follow

** 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

Monday's broader market developments

** EU stocks were on the backfoot at the start of the new week after the Stoxx600 index hit a fresh all-time peak on Friday. That also came after a negative Asia handover Monday where Chinese stocks were on the defensive (Hang Seng -1.65%) after the official PMI report for August came out over the weekend showed the manufacturing sector contracting at a slightly faster pace than expected, amplifying eco worries. Following that, final eurozone aggregate manufacturing PMI was revised up to 45.8 (45.6 flash), whilst first-time data from peripheral countries Spain (miss) and Italy (beat) was mixed – as fully detailed below. US cash markets closed for Labor Day holiday

** Stoxx600 fell as much as 0.6% but pared worse losses. Consumer stocks underperformed on Monday. German automaker Volkswagen saw its share price pop as much as 2.95% higher on reports that it was considering German factory closures

** Govvies: EGB yields nudged higher across the board. Bunds underperformed after German Chancellor Scholz’s ruling coalition struggled in regional elections. AfD claimed victory in the eastern state of Thuringia, marking the first win for a far-right party since WWII

** Data:

• JN Jibun Bank Manufacturing PMI rose to 49.8 (prev 49.5)
• CH Aug Caixin Manufacturing PMI beat at 50.4 (f/c 50.0, prev 49.8bn)
• SP Aug HCOB Manufacturing PMI missed at 50.5 (f/c 51.6, prev 51.0)
• IT Aug HCOB Manufacturing PMI beat at 49.4 (f/c 48.5, prev 47.4)
• FR Aug F HCOB Manufacturing PMI revised up to 43.9 (flash 42.1)
• GE Aug F HCOB Manufacturing PMI revised up to 42.4 (flash 42.1)
• EC Aug F HCOB Manufacturing PMI revised up to 45.8 (flash 45.6)
• UK Aug S&P Global Manufacturing PMI matched flash at 52.5

What to watch Tuesday

** Key Data: SP Aug Unemployment Change (08:00), US Aug F S&P Global Manufacturing PMI (14:45), US Jul Construction Spending (15:00) and US Aug ISM Manufacturing (15:00)

** Key Events: ECB’s Nagel speaks (17:45)

** Auctions: AT to sell EUR1.4375bn of 2034 & 2086 Bunds (10:00) and GE to sell EUR4.5bn 2026 (10:30) Schatz (10:30)

** Earnings: 3 Stoxx600 companies release results

All times BST

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