DAILY CLOSE: Seven more make most of shrinking issuance window
** Single currency bond issuance ticked over Tuesday as issuers spanning all asset classes made funding plays ahead of the looming ECB verdict on Thursday. The day's total came in at EUR5.84bn from seven issuers, adding to the EUR4.75bn to price on Monday thanks to three fewer names. Overall demand was again strong, despite a risk-off tone in the wake of some disappointing earnings results. Another couple of names are lining up for Wednesday's business, with them set to go before the summer lull takes an even stronger grip. See the IGM DAILY EUR NICS & BOOKS for full details of Tuesday's single currency trades
** In non-covered FIG, while earnings and seasonals dictate that a slower pace can be expected this week, there was still business to be done Tuesday with two banks raising EUR1.25bn via no grow SNP deals on plentiful demand worth EUR5.7bn, in the process bringing the week bang in line with the EUR4bn average estimate. Taking an opportunistic approach, well-regarded issuer Credit Agricole trimmed 32.5bps off the mid-point of IPTs to price a EUR750m 6.5NC5.5 social SNP into a hefty EUR4bn book. The borrower is no stranger to jumbo demand though with its two prior SNP lines launched in February and November having amassed respective books worth EUR5.7bn and EUR6bn. And following a Monday mandate, Hamburg Commercial Bank AG priced a LM driven EUR500m 4yr some 30bps inside its m/s +210 area starting point into ample books of EUR1.7bn. Looking ahead and earnings will remain a focus where Svenska Handelsbanken reports on Wednesday. See IGM's FIG SNAPSHOT
** SSA euro supply was back on the menu Tuesday thanks to a pair of previously pipelined names. That saw The Asian Development Bank follow up on Monday's sterling tap with a new EUR1bn 10yr, whilst going bigger and longer was the Province of Quebec with a EUR1.25bn 15yr. Coincidentally, both deals landed 1bps inside initial guidance and attracted EUR2.8bn worth of demand apiece. More 10yr single currency paper is on the way Wednesday with NRW.BANK having hired leads for a EUR1bn no grow Jul 2034 Social Bond. See the IGM SSA SNAPSHOT
** Just one IG corporate was out for the second straight day Tuesday in the form of American Honda Finance Corp, a finance arm of the North American subsidiary of Japanese automaker Honda Motor Company Ltd. The issuer extended its single currency curve with an SEC-registered EUR750m (from benchmark) Apr 2031 bond that landed at m/s +98 (~10bp NIC) from a +120-125 IPTs starting point on an undisclosed book. That added to Monday's EUR1.2bn 7/12yr green two-part from EnBW, meaning the weekly IG corp total is at EUR1.95bn versus the average estimate of EUR3bn given by market participants in our weekly issuance poll. See IGM's CORP SNAPSHOT for more details
** In covered, Credit Mutuel Home Loan SFH priced a EUR1.5bn issue via a Jul 2029 OFH on Tuesday - the first deal to emerge yet this week. Investor demand was strong from the outset, with peak books reaching EUR3.7bn+ before the spread was set at m/s +34 reoffer, 8bp inside guidance (2bp NIC). Final books came to EUR3.1bn+, offering the deal a 2.07x cover
** The latest CSPP update showed that the ECB's CSPP holdings fell by EUR1.599bn to EUR304.158bn in the week to 12-Jul. The central bank also announced that holdings under its pandemic emergency purchase programme (PEPP) increased by EUR2.18bn to put total holdings at EUR1,660.945bn
** The IGM European Weekly Cheat Sheet provides proprietary intelligence on Euro primary market trends using various key data points in an easily digestible Excel spreadsheet. This includes Euro new issue volumes, average new issue concessions and book cover ratios across asset classes, as well as other key credit proxies
Tuesday's primary prospects
SSA
** NRW.BANK (Aa1/AA/AAA) mandated Barclays, BofA Securities, DekaBank and J.P. Morgan for its upcoming EUR 1bn no grow 10yr Social Bond
Covered:
** Bendigo and Adelaide Bank Limited (A-/A-/Baa1) delegated Barclays, Natixis and UBS Investment Bank on a EUR Long 5y Reg S (Bearer form) Soft Bullet Covered Bond transaction, backed by prime Australian residential mortgages. The Covered Bond is guaranteed by Perpetual Corporate Trust Limited and is expected to be rated AAA/Aaa
HY:
** Afflelou (B2/B/B) hired MS, CACIB, GS as Joint Global Coordinators for a EUR EUR560m 5NC2 Reg S/144A Senior Secured Fixed Rate Notes issue, rated B2/B/B+. IPTs are 6.5- 6.75%
** TeamSystem S.p.A (exp B2/B-/B) mandated BofAS/GSBE as Joint GloCos & Joint Physical Bookrunners, BNPP/JPM/MS as Joint GloCos and Joint Bookrunners and BARC/DB/IMI - Intesa Sanpaolo/MEDIOBANCA/NOM/UBS/Unic as Joint Bookrunners for a EUR700m 7yr (NC1, par) Reg S/144A Senior Secured Floating Rate Notes offering, expected ratings B2/B-/B+. IPTs are E+375-400
** HELLENiQ ENERGY Holdings S.A. appointed Citi and Goldman Sachs as Global Coordinators and Joint Physical Bookrunners on a EUR400m 5NCL Reg S Senior Notes issue
** Greenalia S.A mandate Clarksons Securities AS, Pareto Securities AS, and Nordea Bank Abp, filial i Norge on a EUR220m 5y senior secured green bond issue
** 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 extended Monday's weakness on disappointing earnings while US markets remained more buoyant. A better-than-expected US retail sales print slightly dented rate cut hopes though while the IMF warned slow disinflation risks high interest rates 'for even longer'. Hugo Boss slumped as much as 10.6% after slashing outlook on weaker China/UK demand while French reinsurer Scor dumped up to 30% on a profit warning. German ZEW Expectations weaker in July, ending an 11-month run of improving readings while the ECB's lending survey showed that Eurozone loan demand from households rose for the first time in Q2 since 2022 but continued to fall from businesses
** Stoxx600 -0.64% at worst, losses led by Consumer Discretionary
** Govvies: German curve bull steepened while USTs stayed bid on underlying hopes for Fed cuts
** Data:
- GE Jul ZEW Expectations above f/c at 41.8 (exp 41.0, prev 47.5)
- US Adv Jun Retail Sales MoM above f/c at 0.0% (exp -0.3%, prev rev up to 0.3%)
What to watch Wednesday - UK CPI
** Key Data: UK Jun CPI/PPI/RPI (07:00), EC Jun F CPI (10:00), US Weekly MBA Mortgage Applications (12:00), US Jun Housing Starts (13:30), US Jun Building Permits (13:30), US Jun Industrial Production (14:15) and US Jun Capacity Utilization (14:15)
** Key Events: Fed's Barkin (14:00) and Waller (14:35) speak, whilst the Fed releases Beige Book (19:00). Republican National Convention
** Auctions: UK to sell GBP4bn 2029 Gilts (10:00), GE to sell EUR2bn 2052 & 2054 Bunds (10:30) and US to sell USD13bn 20yr Bonds (18:00)
** Earnings: 9 Stoxx600 & 13 S&P500 companies release results, Former includes Svenska Handelsbanken
All times BST
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