BMW’s bold €1.75bn opens new phase of minuscule coupons

By Jon Hay
28 Aug 2014

BMW reopened the European benchmark investment grade corporate bond new issue market on Tuesday with a punchy €1.75bn deal that sent a strong signal: spreads — and especially yields — for corporate issuers are set for a very tight autumn. BMW paid a coupon of just 0.5% on its €1bn four year tranche. But despite these pitifully thin yields, investors are eager to buy.

BMW’s strong sale made it very clear that the market was fully open for business, but to the surprise of many syndicate bankers in London, no other issuer followed suit with a deal on Wednesday or Thursday – except Volvo, the only ...

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