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DAILY CLOSE: Spain drives a EUR24.95bn day

** The public IG pipeline all but emptied on Wednesday as issuers across all sectors made funding plays ahead of the Corpus Christi holiday in parts of Europe on Thursday. Single currency volume on the day finished up at EUR24.95bn, although that was given a big boost by the Kingdom of Spain's latest syndicated 10yr line that was sized at EUR10bn on a bumper EUR125bn book. Also boosting the overall number was US corporate Medtronic which took EUR3bn out the market via a four-part that was the sixth largest single currency IG corporate deal of 2024. See the usual IGM DAILY EUR NICS & BOOKS for full details of Wednesday's single currency deals that pushed the weekly euro total to EUR33.4bn. With that, YTD euro supply has busted through the EUR900bn mark and is running 15% ahead of the 2023 pace

** A total of EUR13.25bn passed through the SSA new issue market Wednesday, eclipsing the average weekly estimate for the sector which had stood at EUR12bn. The Kingdom of Spain was pivotal in advancing that total with a new 10yr that was sized at EUR10bn. Pricing was 2bp inside IPTs and finalised at SPGB+6 (a 3bp NIC) with the order book reaching EUR125bn, its second highest ever. The Region of Wallonne brought EUR750m of new social paper at the 30yr tenor. It remains the only recent issuer of long-dated social paper with the disappearance of the EU's SURE issuance programme ensuring that since 2023 it has been the only name in euros to place >20yr social paper (the Republic's of Columbia and Chile placed various long-dated social labelled transactions in EUR and USD in 2020-2021 but nothing since). Land NRW used the momentum of a EUR3.4bn order book to price its new EUR1.5bn 5yr LSA at m/s+6 (a -1bp NIC when looking at similar lines from peers and its own curve) whilst NWB Bank saw the largest spread compression on the day (4bp from IPT to re-offer) as its 7yr water bond (green label) attracted a very healthy looking EUR4.4bn order book. The flavour was Canadian in the dollar market as CDP Financial Inc and Export Development Canada (EDC) launched 5yr and 10yr green lines respectively. The longer green line appeared to gather more momentum as demand peaked at USD5.6bn. Its popularity was no doubt helped by the fact that 10yr green lines are a fairly scarce commodity in the USD SSA space with only KfW (USD2bn priced in Feb) and the State of Qatar (USD1.5bn priced in May) having broken that ground so far this year. See IGM's SSA SNAPSHOT

** IG corporate activity picked up but further signs of pricing resistance emerged, perhaps indicating that some indigestion is building due to the sheer volumes seen of late. Leading the way on the day was Medtronic with a EUR850m 5.5yr, EUR850m 12.5yr, EUR600m 19.5yr and EUR700m 29.5yr four-part. The deal saw combined demand last touted at EUR10.7bn from an earlier peak of EUR10.9bn after the borrower shaved between 25-30bps off IPTs and print with NICs ranging from 5-15bps. Also on the day, LVMH (EUR850m short 6yr & EUR650m long 10yr two-part; 5bp NICs), ISS Global (EUR500m no grow 5yr; 5bp NIC) and HOWOGE (EUR300m 6yr social; 5bp NIC) came out but saw demand settle at EUR3bn, EUR1.35bn and EUR1.1bn from peaks of EUR4.2bn, EUR1.75bn and EUR1.15bn respectively. See the IGM CORP SNAPSHOT

** In non-covered FIG, a further trio took advantage of this week's remaining window. From the pipeline came Raiffeisenbank a.s. (EUR500m 6NC5 sustainable SNP) while taking an opportunistic approach were Banco Bilbao Vizcaya Argentaria SA (EUR1bn 3yr FRN & EUR750m 6yr FXD senior pref) and Jyske Bank (EUR500m n/g 6.25NC5.25 SNP). The latter was able to land its deal 30bps inside m/s+150 area IPTs (NIC zero to 5bps) on a EUR1.075bn final book while BBVA also secured relatively cost-effective funding with its 6yr FIX leg landing just a few bps over the estimated fair value level. See IGM's FIG SNAPSHOT

** In covered, a quartet raised a combined EUR3.5bn on Wednesday, taking the mid-week volume to EUR6.5bn. The bulk came from Danske Bank's two-part EUR500m 3yr FRN & EUR750m 7yr issue, which garnered orders of EUR2.2bn+ in total. DNB Boligkreditt also went with a 7yr for its EUR1bn issue and priced flat to fair value after a 6bp compression from m/s +31a guidance (EUR1.1bn+ final, EUR1.5bn+ peak). ICCREA Banca's EUR750m 10yr OBG was the longest deal of the day, while Maybank Singapore followed up on its mandate to price a EUR500m 3yr at m/s +25

Thursday's supply prospects:


** The Asian Infrastructure Investment Bank has mandated BMO Capital Markets and CITI as joint bookrunners for a USD 2.5y Reg S Digitally Native Note on Euroclear's Digital Financial Market Infrastructure (D-FMI) platform, expected ratings Aaa/AAA/AAA.

** PSP Capital Inc. (Aaa/AAA/AAA/AAA), wholly owned and debt outstanding guaranteed by the Public Sector Pension Investment Board (PSP Investments), a federal Crown corporation 100% owned by the Government of Canada, has recruited BNP Paribas, Credit Agricole CIB, HSBC, RBC CM and TD Securities as Joint Lead Managers on an inaugural EUR 144A/3(c)(7)/Reg S transaction.


** CapMan Oyj (unrated) has recruited OP Corporate Bank as Sole Sustainability-Linked Bond Framework Adviser and Sole Lead Manager and Bookrunner on a EUR60m exp 5y senior unsecured sustainability-linked transaction

** Bite (Issuer: PLT VII Finance S.a r.l.) (exp B2/B/B) has appointed Citigroup, Deutsche Bank as Joint Global Coordinators and Physical Bookrunners and HSBC, ING, J.P. Morgan, Swedbank, UniCredit as Joint Bookrunners on a EUR920m 144A/Reg S for Life issue across EUR350m min 7NC1 (NC1, par) Floating Rate and EUR350m min 7NC3 (NC3, 50%, 25%, par) Fixed Rate Senior Secured tranches, expected ratings B2/B/B+.

** HTA Group, Ltd (B1/B+/B+) has employed BofA Securities, J.P. Morgan, Standard Bank and Standard Chartered Bank as Joint Global Coordinators, Absa and Rand Merchant Bank as Joint Bookrunners and Jefferies as Co-Manager for a USD 5NC2 Reg S/144A senior guaranteed notes offering.

** 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 - 10yr GER yield hits highest level since November

** EU stocks extended Tuesday's losses, set against a backdrop of rising yields and a higher-for-longer US policy narrative. 10yr GER yield highest since November, June bunds to contract lows. Markets continued to trim Fed rate cut bets with OIS (via BBG) now pricing a Fed Funds rate above 5% in Dec (was <3.75% in early Jan). US stocks were also in retreat a day after the cash Nasdaq closed at a record peak Tuesday

** Stoxx600 -1.17% at worst. Real estate, utilities and materials led losses

** Govvies: 10y GER yield up to 7.6bps higher at 2.669%, topping the prior YTD/25th April peak at 2.648%

** Data:

  • GE Jun GfK Consumer Confidence beat at -20.9 (exp -22.5, prev -24.0)
  • FR May Consumer Confidence missed at 90 (exp 91, prev 90)
  • IT May Consumer/Manufacturing Confidence both beat at 96.4/88.4 (exp 96.0/88.0, prev 95.2/87.7)
  • EC M3 Money Supply matched f/c at 1.3% (prev 0.9%)
  • GE May P CPI YoY matched f/c at 2.4% (prev 2.2%)

What to watch Thursday

** Key Data: SP May P CPI (08:00), IT Apr Unemployment Rate (09:00), EC Economic/Industrial/Services Confidence (10:00), EC Apr Unemployment Rate (10:00), US Q1 S GDP Annualized (13:30), US Q1 S Personal Consumption (13:30), US Q1 S Core PCE Price Index (13:30), US Weekly Continuing/Initial Jobless Claims (13:30), US Apr P Wholesale Inventories (13:30) and US Apr Pending Home Sales (14:00)

** Key Events: Fed's Bostic (00:00), Williams (17:05) & Logan (22:00), and ECB's Makhlouf (19:30) speak

** Auctions: IT to sell up to EUR7.5bn 2029 and 2034 BTPs, as well as EUR2bn 2029 and 2032 FRNs (10:00)

** Earnings: 3 Stoxx600 & 7 S&P500 companies report

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