DAILY CLOSE: Monday's deals attract lots of demand, Tuesday to be frenetic

** The pace of European bond activity felt busier than the final supply haul would suggest on Monday, probably due to the sheer number of mandates that hit the screens as issuers teed up pre-ECB deals. In the end we saw EUR4bn cross the tape in euros on Monday, thanks to four IG corp names and a singular non-covered FIG name – as fully detailed in the IGM DAILY EUR NICS & BOOKS. Alongside those were a quartet of sterling bonds worth a combined GBP2.55bn across corps, FIG and SSA sectors, with more info in IGM’s DAILY GBP NICS & BOOKS. Headlining the barrage of pipeline updates on the day were the European Union (EUR new long 7yr & 2050 green tap) and Italy (EUR 30yr BTP) which will provide the backbone of a busy session Tuesday ahead of looming US CPI data (Weds) and the ECB verdict (Thurs)

** Variety was on offer in the IG corporate market as four issuers launched opportunistic EUR & GBP trades across hybrid, green and sustainability formats, and like last week’s barrage of borrowers found markets receptive. Noticeable (again) though was some attrition at final books which finished up at a combined EUR8bn for the EUR3bn of single currency paper on offer, having earlier peaked at a more substantial EUR11.85bn. Out on the day with ESG-tagged deals were Compass Group (EUR500m n/g 9yr sustainability; -4.5bp NIC & 2.5bn bk), Digital Dutch Finco (EUR850m 9yr green; 2bp NIC & 2.6bn bk) and EDP (EUR850m 30NC6.5 green hybrid; zero NIC & 1.6bn bk), alongside BP plc (EUR800m 7yr EU& GBP300m 12yr; 5bp/15bp NICs & 1.3bn/475m bk) which took a dual-currency approach. Monday’s trio of ESG trades pushed the year-to-date sale of EUR IG corp ethical trades to EUR78.85bn and beyond 2023’s full-year haul of EUR78.55bn, but still well short of 2021’s all-time high of EUR92.17bn. Much more supply is on the way soon with Terega (exp EUR500m 10yr), Royal Schiphol (EUR 12yr bmk), Haleon (EUR 4yr & GBP 9yr two-part bmk), Carrefour (EUR 8.1yr sustainability-linked bmk) and Bayer AG (EUR 30NC5.25 hybrid bmk) all joining a duo of names already sat in the pipeline after mandates last week. See the IGM CORP SNAPSHOT

** In non-covered FIG, encouraged by strong demand seen for higher beta trades last week, two more banks joined the AT1 party. UniCredit offered its first EUR line since June 2021 (EUR1bn from bmk PNC 6/32) into a EUR2.8bn final book which peaked at EUR3.75bn before leads slashed 50bps off 7% area IPTs. And bringing the first GBP AT1 since 4th June was Nationwide (GBP750m PNC 6/31) on an impressive book last touted at GBP3.7bn. Also making a GBP appearance was HSBC with a 1.73x covered GBP750m sale of 8nc7 senior Holdco notes. Otherwise, the pipeline mushroomed with a sextet of mostly EUR trades joining the queue as issuers seek to square away near-term plans ahead of any volatility that could stem from US CPI (Wed) and the ECB (Thu). See IGM’s FIG SNAPSHOT

** The SSA sector was spared a complete blank (across all currencies) by the welcome presence of KfW in the GBP space. Not only was the German development bank in the market for a relatively large deal by sterling standards (at GBP750m) but it did so with a green label. The 3yr deal came via DB, HSBC and Natwest with final pricing of SONIA m/s+25 guided from the outset and made the most of a final GBP850m order book. Looking ahead, the days when the EU had the market to itself are well and truly gone with its expected dual-tranche (new 7yr and Feb 2050 green label) all set to be joined by a seemingly ever growing list of prospective names. Notably, the Republic of Italy has mandated for a new 30yr BTP, Spanish issuer ICO is looking to bring a new 6yr (Oct 2030) and Polish development bank BGK has mandated for a dual-tranche of its own (10yr and 20yr). If all that wasn't enough several names are already live in the dollar market, with deals covering the mid to intermediate tenors (3-7yr) and coming from IDB Invest, Kommuninvest, AfDB (social), Ontario and IADB (in order of maturity)

** 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

** IGM's Global Monthly Snapshot is now available (and best viewed in the original PDF format). The key take-aways:

• Europe: Corp & SSA issuance hit new August records thanks to late charge
• APAC: Chinese issuance accounts for biggest share of regional sales this year
• US: Domestic issuers drove supply, cover ratios climbed to an eye-catching high of 4.46x

Tuesday's primary prospects

SSA:

** The European Union (Aaa/AA+/AAA/AAA) mandated Citi, Deutsche Bank, JP Morgan, Societe Generale and UniCredit as Joint Lead Managers for its upcoming EUR dual tranche transaction comprising a new long 7yr benchmark due Dec 2031 and an increase of the green EU 3.250% benchmark due Feb 2050

** The Republic of Italy (Baa3/BBB/BBB/BBBH/BBB+) mandated Barclays, BofA Securities, BNP Paribas, Citi and Societe Generale to joint lead manage a new EUR 30yr BTP

** Instituto de Credito Oficial (Baa1/A/A-/A) mandated BNP Paribas, Citi, Credit Agricole CIB and Santander as joint bookrunners to lead manage its new EUR 6yr benchmark

** Bank Gospodarstwa Krajowego (A2/A-) mandated BNP PARIBAS, ING, J.P. Morgan, Santander and Societe Generale as Joint Lead Managers in connection with EUR dual-tranche benchmark transaction consisting of long 10yr and 20yr tranches

** The African Development Bank (Aaa/AAA/AAA/AAA) hired BofA Securities, BMO Capital Markets, Citi, Goldman Sachs International and Morgan Stanley to lead manage a new USD 5yr Global SEC-exempt social benchmark transaction. IPTs are SOFR m/s +42 area

** Inter-American Development Bank (Aaa/AAA/AAA) mandated Barclays, JP Morgan, Nomura and RBC Capital Markets on a USD 7yr Global SDB. IPTs are SOFR m/s +52 area

** Kommuninvest i Sverige Aktiebolag (Aaa/AAA) is working a USD1bn no grow Aug 2027 line at SOFR m/s +40 area IPTs via Danske Bank, JPM, Nomura and TD Securities

** IDB Invest (Aa1/AA+/AAA) is taking IoIs for a USD750m no grow Feb 2027 global at SOFR m/s +39 area IPTs via BNP Paribas, Deutsche Bank, HSBC and Scotiabank

** Province of Ontario (Aa3/A+/AA-/AA) is working a USD 5yr benchmark at SOFR m/s +58 area IPTs via BMO, Goldman Sachs, JP Morgan and RBCCM

** Caisse des Depots et Consignations (Aa2/AA-/AA-) mandated HSBC, Natwest Markets and RBC as JLMs for a GBP Jul 2027 benchmark

Corp:

** Terega SA (Baa2/), the owner and operator of gas transmission and storage network in the southwest of France, has mandated BNP Paribas, Credit Agricole CIB, Natixis, Societe Generale and UniCredit to arrange a series of fixed income investor calls on 9-Sep. a EUR500m (exp) 10yr senior unsecured bond is set to follow. New issue proceeds will be used for general corporate purposes, including the funding of future investments and the refinancing of the EUR550m 2.2% notes due Aug 2025 issued in Aug 2015

** Dutch airport management company Royal Schiphol Group N.V (A2/A) has hired ABN AMRO, BNP Paribas, NatWest Markets and Rabobank as Joint Bookrunners to arrange a series of fixed income investor calls commencing 9-Sep. A EUR 12yr fixed rate, benchmark senior unsecured bond offering may follow. The net proceeds will be used for general corporate purposes

** French retailer Carrefour (BBB) hired BofA Securities, CIC, Santander and Societe Generale as Global Coordinators for a potential EUR benchmark 8.1yr fixed sustainability-linked senior unsecured bond offering. Sustainability Performance Targets (SPTs) are (1) SPT for Greenhouse Gas Emissions reduction (KPI 1.A): reduce Scope 1 and 2 GHG emissions by 50% by 31-Dec-2030 compared to 2019 and (2) SPT for food Waste generated by the stores (in tonnes/m2) (KPI 3): reduce its food waste by 55% by 31-Dec-2027 compared to 2016. Step up mechanism +25bps from Oct 2028, up to the Maturity Date, if one or two of the SPTs are not met. Use of Proceeds will be for general corporate purposes

** German pharmaceutical giant Bayer Aktiengesellschaft (Baa2/BBB/BBB) asked Barclays, HSBC, Mizuho, and Standard Chartered Bank AG as active Joint Bookrunners to organize a series of one-on-one and small group fixed income investor calls 9-Sep. A EUR benchmark 30NC5.25 hybrid offering will follow. The notes are expected to be rated Baa3 by Moody’s, BB+ by S&P and BB+ by Fitch. The issuer intends to use the net proceeds for general corporate purposes including the refinancing of the existing EUR1bn EUR411.5m outstanding) hybrid notes due 2079, callable as from 12-Feb-2025

FIG:

** Hellenic Bank Public Company Limited mandated J.P. Morgan as Sole Bookrunner to arrange a series of fixed income investor calls commencing 9-Sep. A EUR 100m no grow 2NC1 senior preferred transaction may follow. The notes are expected to be rated Ba2/BBB- by Moody’s/Fitch

** Hamburg Commercial Bank AG mandated Citi, Credit Agricole CIB, Deutsche Bank, HSBC and Jefferies as Joint Lead Managers for its upcoming EUR 3.5yr benchmark senior preferred offering. The securities are expected to be rated A3 by Moody's

** BAWAG Group AG mandated UBS Investment Bank as Global Coordinator and Citi, Jefferies, JP Morgan, Morgan Stanley and UBS Investment Bank as Joint Bookrunners to arrange a series of investor calls commencing 9-Sep. A EUR500m no grow PNC5.5 Additional Tier 1 transaction will follow. The notes are expected to be rated Ba1 by Moody’s

** Macquarie Bank Limited (Aa2/A+/A+) mandated Credit Agricole CIB, Natixis and Societe Generale to arrange a series of fixed income investor meetings commencing 29-Aug. A EUR 5yr benchmark Green Senior Unsecured offering is to follow

** Piraeus Financial Holdings S.A mandated Barclays, Deutsche Bank, Goldman Sachs Bank Europe SE, Morgan Stanley, Nomura and UBS Investment Bank as Joint Bookrunners to arrange a series of investor calls commencing 9-Sep. A EUR 11NC6 benchmark Tier 2 transaction is expected to follow in the near. The notes are expected to be rated Ba3 by Moody’s

** Just Group plc mandated HSBC and Morgan Stanley as Joint Structuring Agents and Deutsche Bank, HSBC, Morgan Stanley and RBC Capital Markets as Joint Lead Managers to arrange a series of fixed income investor calls commencing 9-Sep. A GBP400m (expected) 10.5yr sustainability Tier 2 transaction will follow. The notes are expected to be rated BBB by Fitch

** 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 (and US) stocks were firmly in the green as battered bulls enjoyed relief having taken a hammering last week as poor data spooked markets (Stoxx600 lost 3.52% last week while S&P500 and Nasdaq shed a respective 3.28% and 4.71%). Brent was attempting to move off Friday’s long-term lows of USD70.61 (session high USD72.21). Eurozone investor sentiment unexpectedly weakened in Sep to its lowest levels since Jan. Former ECB Chief Draghi (via the EU’s competitiveness report) called for a whopping extra EUR750bn-800bn of investment per year (around 5% of EU GDP) and also suggested more and regular joint debt issuance. Overnight, Asian markets took their cue from Friday’s weaker Wall Street handover while China PPI and CPI both undershot forecasts, adding to deflation/growth concerns

** Stoxx600 +1.06% at best and was looking to snap a 5-session losing streak. Beaten up Tech among best gainers

** Govvies: 10yr bund yield up to 6.6bps higher in early trade before the bulk of the move reversed

** Data:

• CH Aug PPI YoY below f/c at -1.8% (exp -1.5%, prev -0.8%)
• CH Aug CPI YoY below f/c at 0.6% (exp 0.7%, prev 0.5%)
• EC Sep Sentix Investor Confidence missed at -15.4 (exp -12.2, prev -13.9)

What to watch Tuesday – UK jobs data

** Key Data: GE Aug F CPI (07:00), UK Jul ILO Unemployment Rate (07:00), UK Jul Average Weekly Earnings (07:00), UK Aug Employment Change (07:00), SP Jul Industrial Production (08:00), IT Jul Industrial Production (09:00) and US Aug NFIB Small Business Optimism (11:00)

** Key Events: Fed’s Barr speaks (15:00)

** Auctions: NE to sell EUR2bn 2052 Bonds (09:00), UK to sell GBP900m 2045 Linkers (10:00), GE to sell EUR500m 2029 Bobls & EUR500m 2050 Bunds (10:30) and US to sell USD58bn 3yr Notes (18:00)

All times BST

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