DAILY CLOSE: Week starts on front foot, EU firms up plans for latest offering
** Coming into the new week market participants in our issuance poll were forecasting an average EUR24bn (ex-HY) of euro paper to cross the tape – knowing that the European Union was on the way with another jumbo. That will be coming Tuesday, ahead of which it was another corp-centric session for the European bond market with the asset class accounting for EUR4.2bn (7 lines) of the day’s final EUR5.9bn (11 tranches) single currency total – full details in IGM’s DAILY EUR NICS & BOOKS. Much more supply from the corp sector is on the way too with five more mandates announced on Monday (more below)
** Backing up the sector’s third biggest volume week of the year we had another three IG corporates live on Monday, printing seven tranches worth EUR4.2bn. Opportunistic US names Booking Holdings Inc (EUR600m 8yr / EUR500m 13yr/ EUR700m long 20yr three-part; no books due to SEC-reg nature) and National Grid North America Inc (EUR600m 5yr / EUR600m 10yr two-part; jt-books EUR2.7bn) were two of those out with the former pricing with 5-10bps NICs and the latter pricing flat to fair value. Joining them was previously pipelined debut French name Roquette Freres SA with a EUR600m 7yr senior / EUR600m PNC5.25 hybrid two-part, with the deals covered 4.33x and 3.0x respectively as per the last update. On top of Monday’s live trio we saw a further five corporates announce trades for later in the week, namely Abertis Infraestructuras S.A (EUR PNC5.25 hybrid), SNAM S.p.A (EUR 7yr &/or 12yr SLB), Goodman European Logistics Fund (exp EUR300m 7yr green), WORLDLINE (EUR 5yr) and Prysmian S.p.A (EUR 4/7yr two-part). Given that activity, the average supply estimate of EUR9bn for euro corporate (ex-HY) supply this week already looks on the low side. See IGM's CORP SNAPSHOT for more details
** In non-covered FIG, two issuers hit the euro market with pre-sized deals worth EUR1.15bn although both encountered varying degrees of order book attrition. Encountering the greatest resistance, and having stood down a previous AT1 sale in March, Raiffeisen Bank International ‘s AT1 comeback saw final orders on its EUR650m sized PNC5.6 drop to EUR870m from a peak of EUR1.6bn after leads set the reoffer 37.5bps inside 7.75% area IPTs. In contrast, last week’s AT1s from Deutsche Bank (EUR1.5bn PNC 3/32) and BPER Banca (EUR50m PNC 3/30) scooped EUR13.5bn in demand between them. Elsewhere, Banco de Sabadell, S.A’s EUR500m no grow 6.5NC5.5 green SNP drew a EUR2.25bn (4.5x) peak order book and landed with a low single digit NIC at the reoffer spread of m/s +125, although final orders fell away to EUR1.55bn. See IGM’s FIG SNAPSHOT
** The latest mandate from the EU was released Monday for what could be the issuer's last outing of the year. The output followed a now familiar pattern with the expectation of a dual-tranche transaction this time around to include the 2.5% Dec 2031 and the 1.25% Feb 2043 green lines respectively. The market was expecting around EUR10bn (on average) to surface across the course of the week with between EUR3-4bn from issuers other than the EU. On that front another dual tap, or more precisely duo of taps, have already made their way onto screens with the Region of Wallonne (Dec 2030 Social) and the Free and Hanseatic City of Hamburg (Oct 2029 LSA) combining to add EUR550m of total issuance into the weekly mix. 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
SSA:
** European Union (Aaa/AA+/AAA/AAA) mandated BofA Securities, Credit Agricole CIB, Deutsche Bank, HSBC and Nomura as Joint Lead Managers for its upcoming EUR dual tranche transaction comprising an increase of the EU 2.5% benchmark due Dec 2031 (EU000A3L1DJ0) and an increase of the green EU 1.25% benchmark due Feb 2043
Corp:
** Spanish toll road management company Abertis Infraestructuras S.A (BBB-/BBB) has mandated BNP Paribas and J.P Morgan as Global Coordinators to arrange a series of fixed-income investor calls on 18-Nov. A EUR PNC5.25 benchmark deeply subordinated hybrid issue with an expected rating of BB and BB+ by S&P and Fitch is expected to follow. New issue proceeds will be used for general corporate purposes, including the refinancing of existing debt within the group. Concurrently, Abertis is conducting a tender offer for its outstanding EUR1.25bn undated 5.25yr non-call deeply subordinated guaranteed fixed rate reset securities with the first call date on 24-Nov-2025
** Italian utility SNAM S.p.A (Baa2/BBB+/BBB+) has mandated BNP Paribas, Citi, Goldman Sachs International to arrange a series of fixed income investor calls on 18-Nov. A senior unsecured benchmark sustainability-linked offering across EUR 7yr and/or GBP 12yr tenors is expected to follow. The Joint Lead Managers on the notes will be Banca Akros, BNP Paribas, Credit Agricole CIB, Citi, Goldman Sachs International, IMI – Intesa Sanpaolo, ING, J.P Morgan, Mediobanca, Mizuho, Morgan Stanley, SMBC and UniCredit. The net proceeds will be used for general corporate purposes. The company recently presented its Transition Plan defining its decarbonization roadmap to Net Zero, that is available here. The SLB framework and SPO are also available here
HY:
** Iliad Holding S.A.S (B2/B+/BB-) mandated as BNP PARIBAS (EUR B&D), CACIB, JPM (USD B&D), SG as Joint Active Glo Cos and Bookrunners and BOFA, CIC, CITI, GS, HELABA, MIZ, NTX, RBI, SMBC, UCI as Joint Bookrunners for a EUR1.400bn (Total Deal Size) min EUR500m 5.5NC2 and a min USD500m 7.5NC3 senior secured dual-tranche. EUR IPTs are 5.5-5.75%
** Tui Cruises GMBH (Baa3/BB-/BB-) has mandated BNP Paribas (b&d), JPM as Joint physical bookrunners and CITI, COBA, CACIB, DZ, LBBW, UCI as Joint bookrunners and Helaba and SMBC as Co-managers for a EUR375m 5.5NC2 senior unsecured bond. IPTs are 5.25-5.5%
** 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
** With the dust finally settling after the result of the US election the week opened with a relatively quieter session on the data and events front. European stocks traded on the back foot with limited earnings releases to spark any positive (or otherwise) momentum. The key focal point this week more generally is the announcement of Trump's choice for Treasury Secretary whilst from a pure headline perspective Nvidia earnings due Wednesday will likely also capture attention. Data flow picks up from here and is headlined by Eurozone and UK inflation (Tues and Wed) with Mfg & Services PMIs (for UK, EZ and US) due Friday
** Stoxx600: Traded in a lethargic manner with some relief before lunch once again fading as the session extended. Real estate (-1.62%) and Utilities (-0.89%) exhibiting the largest moves and outweighing moderate gains from energy (+0.29%) and consumer staples (+0.22%)
** Govvies: Yields higher and curves flatter almost across the board. EGB’s leading that charge with GER 2yr +5.7bp (30yr +1.3bp) and with moves for Italy slightly more exaggerated. Similar trend in gilts (absolute moves smaller) but USTs going the other way and seeing curve steeper with 2yr +0.9bp and 10yr +1.8bp (and 30yr +3bp)
** Data:
- UK Nov Rightmove House Prices MoM came in at -1.4% (prev 0.3%) (YoY increased to 1.2% from 1.0% prev)
- EC Sep Trade Balance ahead of f/c at 13.6bn (exp 7.7bn, prev 10.8bn)
- US Nov NAHB Housing Market Index came ahead of f/c at 46 (exp 42, prev 43)
What to watch Tuesday
** Key Data: EC Oct F CPI (10:00) and US Oct Housing Starts/Business Permits (13:30)
** Key Events: ECB’s Elderson (08:45) & Muller (09:00), BoE’s Bailey, Lombardelli, Mann & Taylor (all 10:00) and Fed’s Schmid (18:10) speak
** Auctions: UK to sell GBP3.25bn 2038 Gilts (10:00)
** Earnings: 3 Stoxx600 & 5 S&P500 companies report
All times GMT
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