Amadeus Capital Markets (Baa2/BBB (positive)) and German multinational manufacturer and supplier Lanxess (Baa3/BBB-) found a surfeit of demand for senior unsecured trades.
Lanxess’s dual tranche bond, proceeds of which “may” go to financing its €2.4bn acquisition of chemical manufacturer Chemtura, was advertised to investors on Wednesday during an investor call. On Thursday, leads Barclays, Citi, Commerzbank, JP Morgan and UniCredit issued initial thoughts for a five year bond at 70bp area over mid-swaps, and 105bp area over for a 10 year bond.
But leads would shave 20bp off of both of those levels before setting the final terms, indicating big demand for the name.
Guidance was later revised down to 55bp-60bp for the five year before final terms were set at 50bp. For the 10 year, guidance was issued at 90bp-95bp over, and final terms were then set at 85bp. Both bonds were came in the shape of €500m each.
Investors have broadly welcomed Lanxess's planned acquisition. On the day the deal was announced, Lanxess shares jumped more than 11% initially.
Spain-headquartered Amadeus IT Group, via its entity Amadeus Capital Markets, saw similarly searing demand. Active joint bookrunners Crédit Agricole, Commerzbank, HSBC, ING, JP Morgan and Royal Bank of Scotland issued initial thoughts on Thursday morning of 55bp-60bp over mid-swaps for a four year bond before revising guidance down to 40bp area, plus or minus 2bp.
At that point, the size was set at €500m and books were already more than €2.6bn. Final terms were set in late morning London time at mid-swaps plus 38bp with a book of more than €3.3bn.
“I think today shows that this is often a day-by-day market. Today everyone is in risk on mode. Yesterday was a bit softer in terms of oversubscriptions,” said a banker on the deal.