The European high yield bond market enters last quarter of the year in buoyant form having priced €68bn of new deals, according to JP Morgan data. The figure for the same period in 2016 was €47bn.
The 10 weeks before Christmas may be equally busy, said most market participants GlobalCapital spoke to. After a week featuring just one deal, a €250m bond from crossover credit Telecom Italia, three issuers announced new bond offerings on Monday, confident about the strength of high yield demand.
One of them is Empark Aparcamientos y Servicios, the Spanish car park operator with Ba3/BB ratings from Moody’s and S&P. It is selling €475m of senior secured notes with a dual tranche deal of fixed and floating rate bonds at seven and six years, and with non-call periods of three and one year, respectively.
JP Morgan is global co-ordinator. Bookrunners are BNP Paribas, Macquarie Capital, NatWest Markets and Santander.
Empark would use proceeds to fund its acquisition by Macquarie European Infrastructure Fund 5, which is managed by Macquarie Infrastructure and Real Assets. It will also repay in full its €235m bond and its 150m FRN, both senior secured issues and due 2019.
On Monday in a note to clients, NN Investment Partner’s Peter Jansen, who is the firm's multi-asset senior strategist, pointed out that corporate high yield bonds are attracting more attention as investors look for a hedge against a potential rises in short-term interest rates.
A leveraged finance banker in London said there were more US investors in the European market since last week: “They are now trying to invest more in Europe, more permanently,” he said.
The other two bond offerings that began investor meetings on Monday are refinancing deals.
Swiss travel retailer Dufry wants to sell a €500m seven year non-call three senior unsecured bond to repay its 2022 notes. Expected ratings are Ba2/BB.
BBVA, BNP Paribas, Deutsche Bank (billing and delivering), ING, Santander and UniCredit are global co-ordinators. Other bookrunners are BLKB, Bank of America Merrill Lynch, Crédit Agricole, Credit Suisse, Goldman Sachs, HSBC, LBBW, NatWest Markets, RBI, Raiffeisen Switzerland and UBS.
Vallourec, the tubular solutions provider for industrial environment, is offering €300m of five year non-call three senior unsecured notes to repay portions of its revolving credit facilities. Corporate family ratings are B, by S&P Global.
Morgan Stanley is sole global co-ordinator. Société Générale and Natixis are bookrunners.