Euro
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The socially responsible investment market in SSAs is picking up pace in 2019, with a supranational bringing a deal in a debut format and other issuers preparing inaugural trades. -
Wider euro spreads versus swaps and Bunds had already led to some superstrong trades in the currency this year, but Spain outdid them all this week with the largest ever book for a public sector euro benchmark. Every other euro deal also attracted heavy oversubscription with minimal concession, paving the way for expected supply next week from a “large German agency in the short end” and a “central European sovereign in 10 years”, according to one head of SSA syndicate.
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The Republic of Turkey on Thursday returned to the capital markets for the second time this month, launching a €1.25bn six year bond and taking advantage of a recent buying spree in the country’s bonds.
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French hotel company Accor launched new hybrid and senior bond issues on Thursday after announcing the deals at the end of last week. The new deals finance tender offers for some of the company’s existing hybrid and senior notes.
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Germany’s largest residential property company Vonovia attracted €4.5bn of demand for its latest deal on Thursday, as the property sector continues to be one of the more popular in the corporate bond market.
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IBM returned to the euro corporate bond market for the first time since 2017 on Thursday, to sell its largest ever deal in the euro market and to push into a maturity not seen from a corporate issuer so far in 2019.
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French supermarket chain Auchan attracted plenty of demand for its third consecutive January new issue but it had to pay a hefty new issue premium to ensure the deal got done. The supermarket sector is one of several retail sectors priming investors for poor annual results.
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Volkswagen Bank started its funding for 2019 with a hefty four tranche deal on Thursday that will contribute to its minimum requirement of own funds and eligible liabilities (MREL) when the German regulator decides what that should be.
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The Republic of Turkey has returned for a bond in euros after the $2bn note it sold earlier this month rocketed in value.
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Following the success of Engie’s green hybrid bond the previous week, the French energy company’s Portuguese peer, EDP, launched its own version on Wednesday. While EDP’s deal did not achieve quite the same demand or tight pricing, the result was still a good one.
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Corporate bond spreads widened in the fourth quarter of 2018, adding to the overall negative returns the asset class provided investors with over the year. However, with spreads now back at levels not seen since 2016, investors are considering increasing their allocations to the sector once more.
