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DAILY CLOSE: Romgaz debut stands out at start of week

** It was a slow start to the week for primary bond issuance where just four names jumped in with euro offerings Monday as European stocks came under some pressure. The quartet printed a combined EUR2.05bn and kicked off a week that is expected to yield an average EUR22.5bn of euro paper (excluding HY corps) according to our most recent issuance poll. Given Thursday’s German holiday (Unity Day) and Friday’s key US payroll print, the next couple of sessions are going to have to be busy to get us up to that average estimate. All of Monday’s deals came from IG corporate and non-covered FIG issuers, as fully detailed in IGM’s DAILY EUR NICS & BOOKS

** The final trades of September meant that the final euro haul for the month finished up at EUR149.12bn from 199 separate tranches. That was the fourth largest of any month this year, whilst ranking as the second biggest euro volume September on record, having only been beaten by Sep 2021 when just under EUR165bn was issued

** Two borrowers kicked off the IG corporate week and rounded off a typically busy September for the asset class. From the pipeline we had a debut offering from CEE name Romgaz (EUR500m no grow 5yr), whilst blue chip Dutch utility company Alliander (EUR750m, from benchmark 10yr green) extended its senior ESG curve. The former’s inaugural trade stood out with rarity value, a juicy spread and the no grow size spurring investor interest that peaked at EUR5.9bn before settling at EUR4.9bn. That gave the deal the fourth biggest cover ratio of any euro IG corporate deal of 2024, and allowed the borrower to cut a hybrid-like 55bps from m/s +310 area IPTs. Alliander also wasn’t short of buyers, with books of EUR2bn (EUR2.5bn peak) seeing the deal land 35bps inside IPTs and with a zero NIC. Monday’s trades meant that the monthly single currency corporate (excluding HY) issuance ended up at EUR41.6bn, with only 2020 (EUR47bn) and 2019 (EUR59.3bn) having seen more September activity. See the IGM CORP SNAPSHOT for more background on Monday’s offerings. Away from primary and automakers saw their shares and bonds come under pressure after VW on Friday issued another profit warning and then Stellantis cut its profit forecast

** In non-covered FIG, two opportunistic issuers raised EUR800m via no grow green senior lines to start the week and simultaneously close out the month. According to our survey conducted Friday, participants envisage (on average) that EUR6.5bn will price this week, most of which is expected to emerge before Thursday. Conducting its first EUR sale since June 2023 was Sumitomo Mitsui Financial Group Inc (SMFG) via a EUR500m no grow 7yr green senior unsecured where 30bps was carved from IPTs of m/s +135 area on books which peaked at EUR2.2bn, but fell to EUR1.2bn, a similar demand outcome to EUR1.3bn book on its last visit (also a 7yr). Shorter on the curve came Landsbankinn (EUR300m 5yr senior pref) where 25bps was shaved off m/s +180 area IPTs to leave a NIC of ~10bps on offer (bks EUR825m+). With that, September issuance from banks (ex-covered) and insurers totalled EUR39.3bn, topping the amount raised in July & August combined (EUR33.75bn) and is easily the highest amount of any single month since January when a considerably EUR54.22bn was priced

** The SSA sector started the week with a complete blank which is perhaps surprising given the narrower issuance window (German holiday on Thursday and NFP on Friday) and also the EUR8.5bn weekly estimate. That said, our estimates survey did show a range of guesses from EUR4-15bn and if anything, responses fell into one of two camps - mid-single digit or low teens (billions). That would appear to suggest that some respondents may have been anticipating a single large transaction whilst others were not. If that is the case then we have not yet seen the relevant mandate, with the only action in euros coming in the shape of a pair of mandates from German issuers (Land Schleswig-Holstein and Investitionsbank Berlin). The former is looking at a 7yr LSA whilst the latter is looking to bring a short 5yr social line with deal sizes capped from the outset at EUR500m apiece. In dollars, the pace was lethargic too with Africa Finance Corp starting investor updates Monday ahead of a potential new 5yr transaction

** 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:

** Spanish environmental services company FCC Servicios Medio Ambiente Holding S.A (BBB) rated BBB (stable) by Fitch has mandated BBVA as Global Coordinator, BBVA and CaixaBank as Green Structuring Advisors and Banco Sabadell, BBVA, CaixaBank, Credit Agricole CIB, HSBC and Santander as Joint Active Bookrunners to arrange a series of fixed income investor calls starting 30-Sep. a EUR500m (exp) 7yr green bond may follow. The net proceeds of the issuance will be allocated to the financing and/or refinancing, in whole or in part, the development, construction, installation, maintenance of new or existing projects, assets or activities that meet eligibility requirements set out in the issuer’s Green Financing Framework

** Adecco Group AG (Baa1/BBB+), a leading provider of talent and technology expertise headquartered in Zurich, mandated Barclays, BofA Securities, Commerzbank and UniCredit as Joint Bookrunners on a potential EUR300m no grow 8yr senior unsecured bond offering. The notes will issued out of Adecco International Financial Services B.V. Proceeds will be used for general corporate purposes, including repayment of debt maturities


SSA:

** Investitionsbank Berlin (Aa1/AAA) hired Credit Agricole CIB, Danske Bank, DekaBank, Deutsche Bank and DZ BANK as joint lead managers for its upcoming EUR500m no grow short 5yr social bond, due 28 Sep 2029

** The Federal State of Schleswig-Holstein (AAA) mandated DekaBank, LBBW and NORD/LB to lead manage its upcoming EUR500mn 7yr FRN transaction

** The Cities of Bochum, Dortmund, Essen, Hagen, Remscheid, Solingen and Wuppertal, located in the State of North Rhine-Westphalia (Gemeinsame NRW Kommunen) have mandated DekaBank, Helaba and UniCredit as Joint Lead Managers for their upcoming new EUR 9yr sub-benchmark fixed rate bond transaction (Staedteanleihe No. 8). The bond will not be rated

Covered:

** Aareal Bank AG mandated Barclays, BBVA, Commerzbank, DZ BANK, Helaba and HSBC as Joint Lead Managers for the issue of its upcoming EUR Apr 2030 Mortgage Covered Bond (Hypothekenpfandbrief). The issue is expected to be rated Aaa (Moody’s)


HY:

** INEOS Quattro Finance 2 Plc (exp B1/BB/BB-) employed Goldman Sachs Bank Europe SE, ING, Santander as Joint Physical Bookrunners and ABN AMRO, CACIB, CCB, FADB, ICBC, JP Morgan, Mizuho as Joint Bookrunners for a EUR600m 5.5NC2 (50%, 25%, Par) Reg S/144A for life Senior Secured Notes issue, expected ratings B1/BB/BB+. IPTs are 6.75-7.00%.



** 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

** European reversed the gains seen on Friday which had propelled the Stoxx600 index to a fresh all-time peak. Focus on company news after VW issued its second profit warning in three months and Stellantis cut its profit margin forecast for the year, citing its US struggles and a global slowdown in the auto industry. European performance (and lower Wall Street open) was in contrast to China markets which were in full risk-on mode ahead of this week’s national holidays with the easing of homebuying rules in major cities unveiled over the weekend helping to keep the party going to the extent that CSI300 jumped another 8.48%. In contrast, Nikkei fell by 4.8% as markets assessed the potential rate and fiscal path amid the choice of Ishiba as the new PM who indicated he may call a snap election in October. German CPI came in lower than expected in Sep, whilst Italy's number was as forecast.

** Stoxx600 dumps as much as 1.1% with all sub-sectors in the red. Consumer Discretionary stocks the main laggard

** Govvies: EGB yields jump higher across the board in the morning, before dropping in the wake of the lower-than-expected GER CPI data

** Data:

  • JN Aug P Industrial Production missed at -3.3% MoM (f/c -0.5%, prev 3.1%)
  • JN Aug Retail Sales beat at 2.8% YoY (f/c 2.6%, prev rev to 2.7% from 2.6%)
  • CH Sep Manufacturing/Non-Manufacturing PMIs mixed at 49.8/50.0 (f/c 49.4/50.4, prev 49.1/50.3)
  • CH Sep Caixin Manufacturing/Services PMIs missed at 49.3/50.3 (f/c 50.5/51.6, prev 50.4/51.6)
  • GE Aug Import Price Index as exp at -0.4% MoM / 0.2% YoY (prev -0.4% / 0.9%)
  • UK Sep Nationwide House Prices rose more than exp MoM at 0.7% (f/c 0.2%, prev -0.2%)
  • UK Q2 F GDP revised lower to 0.5% QoQ (flash 0.6%) and 0.7% YoY (flash 0.9%)
  • UK Q2 F Imports/Exports revised lower to -0.3%/6.3% QoQ (flash 0.8%/7.7%)
  • UK Aug Mortgage Approvals beat at 64.9k (f/c 63.9, prev rev to 62.5k from 62.0k)
  • UK Aug M4 Money Supply fell to 1.7% (prev 2.1%)
  • IT Sep P EU Harmonized CPI as exp at 1.2% MoM (prev rev to -0.2% from -0.1%)
  • GE Sep P CPI lower than exp at 0.0%/1.6% MoM/YoY (f/c 0.1%/1.7%, prev -0.1%/1.9%)
  • US Sep MNI Chicago PMI beat at 46.6 (f/c 46.0, prev 46.1)
  • US Sep Dallas Fed Manufacturing Activity higher than exp at -9.0 (f/c -10.8, prev -9.7)


What to watch Tuesday - Manufacturing PMI

** Key Data: JN Q3 Tankan Large Manufacturing/Non-Manufacturing Index (00:50), JN Sep F Jibun Bank Manufacturing PMI (01:30), SP Sep HCOB Manufacturing PMI (08:15), IT Sep HCOB Manufacturing PMI (08:45), FR Sep F HCOB Manufacturing PMI (08:50), GE Sep F HCOB Manufacturing PMI (08:55), EC Sep F HCOB Manufacturing PMI (09:00), UK Sep F S&P Global Manufacturing PMI (09:30), EC Sep P CPI (10:00), US Sep F S&P Global Manufacturing PMI (14:45) and US Sep ISM Manufacturing/Prices Paid (15:00)

** Key Events: ECB’s Guindos (08:00), Nagel (08:00), Rehn (09:00) & Schnabel (16:30), BoE’s Pill (15:00), as well as Fed’s Bostic (16:00 & 23:15), Barkin (23:15) & Collins (23:15) all speak

** Auctions: UK to sell GBP2.25bn 2043 Gilts (10:00) and GE to sell EUR4bn 2026 Bobls (10:30)

** Earnings: 4 S&P500 companies report

** Holidays: Chinese National Day


All times BST


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