Euro

With the return of stability to the euro public sector market, a new wave of borrowing hit this week. Four core European names brought syndications, some of which were able to access unusual or difficult tenors because of the higher rates on offer.

Italy could retrieve half of the basis points it has lost to Spain in the run-up its general election next weekend — if the vote returns the most market-friendly result, according to a portfolio manager at a leading investment house. Spain, meanwhile, printed a 30 year benchmark with the second largest book ever for a euro sovereign deal in the tenor — another sign that the country is marching towards or already at semi-core status, said bankers.

French property companies were in vogue this week as Icade sold its fourth corporate bond in two years, further extending its redemption profile, while Mercialys, the firm spun off from supermarkets group Casino, saw its sub-benchmark deal 2.5 times oversubscribed.

French car leasing company ALD printed its largest ever bond deal when it issued an €800m three year floating rate note this week, just three months after it had printed a similar but smaller deal. Chief financial officer Gilles Momper said the success of the deal was helped by the company’s IPO in 2017.

Grand City Properties, the German residential property firm, printed eight and a half year Swiss franc bonds on Wednesday, and also sold a new nine year in euros on Monday alongside a tender for some outstanding bonds and convertibles.

The public sector bond market in euros is in rude health thanks to the return of stability at higher yields. Two borrowers took advantage of the conditions to pull off smooth executions with skinny new issue premiums on Thursday.

Italy could retrieve half of the basis points it has lost to Spain in the run-up its general election next weekend — if the vote returns the most market friendly result, according to a portfolio manager at a leading investment house.

Corporate bond syndicate managers have been surprised and disappointed that the pace of issuance evident at the start of the week has not continued, but the existence of a material pipeline for the first time this year is giving them some cause for optimism.

The euro SSA market is returning to a more aggressive pace of issuance after a slackening in tempo last week. Two borrowers raised a combined €3bn on Wednesday and another pair are set to print on Thursday.

Spain’s first trip to the long end of the curve in almost two years met with an overwhelming response, as the sovereign received one of the largest books ever for a 30 year bond.

French issuers ALD and Mercialys continued the triple-B theme of the week in the investment grade corporate bond market when the pair announced new deals on Tuesday. These followed three BBB+ rated credits on Monday.

Spain has picked banks for its second deal of the year, looking towards the long end of the curve for the first time since May 2016.