For a few years in US PP it has been all quiet on the continental front, as the strength of the euro bond market and Schuldschein grabbed borrowers' attentions. According to Private Placement Monitor research, France, German and the Netherlands made up less than 3% of market share in 2018.
But there are signs this is changing, with Umicore following a few other continental Europeans in marketing US private placements. It has issued US private placements once before. In April 2017 it sold €160m of debt at 1.84% maturing in December 2027 and €200m at 2.05% maturing in December 2029, via JP Morgan and MUFG.
French pharmaceuticals firm Ipsen held a roadshow for possible US private placement notes last week, according to market sources. Bank of America and Crédit Agricole are arranging the prospective transaction, which will most likely have tranches ranging from seven to 12 years. European and North American institutional investors are invited.
A few weeks ago, Brussels Airport issued a €500m US private placement in three tenors in a “blowout transaction”, according to market sources. Crédit Agricole, MUFG and SMBC arranged that deal, which they began marketing with a €300m target. The tenors were 15, 20 and 30 years.
“Everyone had a look,” said a source familiar with the transaction at the time. But he said that in the end, those that bought the notes were North American investors. “European institutions I think were invited but my gut is it was priced too tight for them.”
There was a delayed drawdown till next year, said another market source. "It was a very easy sell for the market I think, but you've got to think, this would have been the perfect candidate for Euro PPs."
Electrocomponents, an industrial and electronics distributor headquartered in London, has entered the US private placement market to refinance existing notes, according to sources in the market.
“We’re definitely having a look,” said one investor, familiar with the transaction. “It’s FTSE 250, with what looks like a good business profile.”
The borrower sold $100m seven year PP notes in 2015. Barclays priced the notes with a 2.97% coupon.