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European Sub Triple-A Issuance To Pick Up By Month End

Europe's primary bond markets should reopen to corporate issuers rated less than triple-A in the second half of this month, predict analysts. Since the Sept. 11 tragedy, the markets have been quiet with only a few issues from the likes of GMAC (E1.75 billion). "Rates are low, and the market is not necessarily too bad. People are looking for yield and issuers will take advantage of that," said Géraud Charpin, senior credit analyst at BNP Paribas in London. Graham Neilson, a credit analyst at Bear Stearns, also in London, added there is decent demand for non-cyclical, defensive names in the auto and utility sectors, which should lead to a growing level of activity in the second half of the month.

Charpin said he is seeing clients come back to the market after a general flight to quality and cash last month. "There is a lot of demand for defensive names and cash out there to be invested," he added, saying he estimates there is E15-20 billion waiting to be reinvested. Names such as Marks & Spencer, Ford Motors, Unilever and France Telecom are all scheduled to tap the bond market soon.

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