Euro

KfW took advantage of the stable market backdrop to issue a new €4bn seven year euro benchmark on Tuesday, but some bankers not on the mandate questioned the degree of interest in the trade.

While Brexit negotiations continued and banks juggled their contingency plans for various outcomes, two UK corporate issuers successfully accessed the euro corporate bond market this week.

The corporate bond market started at a frantic pace on Tuesday with five deals pricing. But on Wednesday French tyre manufacturer Michelin found its patience was rewarded with a chance to dominate investors’ attention and it was able to build the largest order book for a 20 year euro tranche in 2018.

Syndicate bankers on Tuesday’s triple tranche deal from German machinery maker Siemens claimed to be the winners on a day of very competitive supply.

There was little in the way of emerging market bond issuance this week to set the tone for the usually busy month of September. Although mBank raised €500m of four year money, CEE-focused Atrium European Real Estate had yet to appear with a deal that had been planned for Thursday.

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The European corporate bond markets got straight on with business after the summer break as nearly €9bn equivalent of new paper was priced in two days this week. A healthy pipeline is ready to follow this week’s issuance as borrowers try to preempt market hazards throughout the remainder of 2018, writes Nigel Owen.

Aerospace and control systems group Honeywell is poised to tap investors in both Europe and the US as levfin markets return to action next week. The firm will look to high yield buyers to help fund the separation of subsidiary Garrett Motion, but a portion of investment grade debt will also be on the table.

On Wednesday, UK contract catering company Compass Group joined the euro corporate bond market rush with a new 10 year tranche as well as selling a seven year sterling tranche.

The corporate bond market started at a frantic pace on Tuesday with five deals pricing. But on Wednesday French tyre manufacturer Michelin found its patience was rewarded with a chance to dominate investors’ attention.

mBank, a Polish financial institution, has hit the market with what will be the first euro benchmark from a CEEMEA borrower in over a month, taking what some investors believe is a cautious approach to reopening the market.

European corporate bond investors were pleasantly surprised to be offered two new deals last week before the traditional return of the market following the August bank holiday in the UK. Those bonds did nothing, however, to curb their appetite for a full-throated autumn of issuance