Euro

Debt investors are looking at the leveraged bid for German retailer Metro AG by two private investors with uncertainty. Many questions remain about the outcome of the proposed deal, including the fate of Metro’s existing debt.

The European Investment Bank (EIB) has been at the forefront of developing the methodology for issuing floating rate notes (FRNs) linked to Sonia and Sofr. As it prepares for issuance in the new risk-free rates in euros, Canadian and Australian dollars, the supranational said it wants to use the same structure for all.

The Republic of Tunisia printed a tight €700m 6.375% 2026 bond on Wednesday from a book of nearly €2bn. A syndicate manager away from the deal said it was a good demonstration of the enthusiasm for emerging market credit.

Naftogaz had been expected to hit the market for euros on Thursday, but leads said a busy schedule of investor calls led leads to move the deal to Friday and to consider adding a tranche of dollar funding.

A new name hit screens on Tuesday announcing a roadshow. Air Baltic, an airline owned by the Latvian government, will meet with investors to promote a euro deal.

The initial guidance for the Reg S/144A deal was put out at 6.875% area on Wednesday morning in London.

Romania entered a crowded euro bond market on Tuesday, with 12 and 30 year papers. The deals may be among the last euro issues from the emerging markets before the summer lull.

China’s Wolong Electric Group is tapping the offshore market for the first time, seeking a €150m loan through sole lead bank Standard Chartered.

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Yields across asset classes plumbed ever lower depths this week but investors were still forced to participate in deals as cash floods into fixed income funds. Now market participants have questioned whether the coming round of likely rate cuts will reveal the limits of investor tolerance. Lewis McLellan, Burhan Khadbai and Bill Thornhill report.

The autonomous region of Azores mandated two banks on Thursday for its first visit to the debt capital markets since 2016 and what could be its largest ever bond.

The Republic of Tunisia does not finish its roadshow until Tuesday, but after a 100bp rally in its euro 2024s since the start of June and strong attendance at the roadshow meetings so far, a seven year — the longer end of the planned tenor for the benchmark bond — looks to be on the cards.