Deutsche Bank
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The European Investment Bank won a huge reception from investors for its debut €STR-linked floating rate note (FRN) this week, ignoring concerns about a lack of demand amid negative rates in the euro market. While there is a lack of clarity about calculating €STR bonds’ fair value and on Euribor’s future, public sector borrowers are expected to embrace the risk-free euro rate. -
The fourth quarter began on a rocky note for global equities but the US high grade bond market has shrugged off concerns about stalling growth and issuance conditions remain strong.
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Investor sentiment is turning against primary emerging market bonds. Investors’ newfound discipline, a host of new issues in the market, and a volatile backdrop has meant that several trades this week were letdowns. Now, investors are vowing to be more cautious in the coming weeks. Even if US rates are cut further, yield no longer trumps all other concerns, writes Francesca Young.
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Adani Green Energy was out with a 20 year bond on Thursday, giving investors the option to buy a dollar deal from Asia in an otherwise quiet primary market.
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There were no fireworks as the World Bank issued its longest ever euro benchmark on Wednesday, with the last book update showing a lower volume of orders than the deal size.
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Investors warmly welcomed the first benchmark €STR-linked floating rate note on Wednesday, brushing aside previous concerns about a lack of demand for euro FRNs as a result of deeply negative rates in the currency.
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A brutal market for auto suppliers and a string of dividend deals have left Lumileds, a maker of LED lighting and an Apollo portfolio company, staring at a leverage level which could top 14 times by year-end, according to Moody’s. The company’s loan saw the largest price fall in Europe over the last quarter, according to IHS Markit, and is now bid around 47, compared with 70 in June.
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Dar Al-Arkan Real Estate Development Company has mandated eight banks to arrange a long five year Reg S benchmark sukuk and is starting the roadshow for the deal on Thursday.
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Cathay Pacific cruised to a Hong Kong dollar deal at the end of September, just days after it began a roadshow for a new dollar transaction.
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After mandating banks last week to explore a three year benchmark €STR-linked floating rate note, the European Investment Bank is moving forward with the deal, with initial price thoughts released ahead of an expected launch on Wednesday — the day the rate starts being published by the European Central Bank. However, some market participants have questioned the extent of investor demand for euro FRNs with negative rates commonplace in the currency.
