Euro

Funding for leveraged buyouts in the European primary high yield market gained further share of overall issuance this week, as specialty car parts maker LKQ of Chicago sold a €1bn bond for its acquisition of German peer Stahlgruber.

The Council of Europe Development Bank’s long awaited social inclusion bond will come to market on Tuesday, following a two week roadshow.

Two new SRI corporate bonds were priced on Monday, but with very different results. Iberdrola’s green hybrid bond failed to tighten from initial price thoughts, while Danone’s debut social bond had to pay just 2bp of premium.

The auto finance arm of General Motors opted for shorter maturities to try to ensure the success of its first bond sale of 2018 on Monday. But the €1bn dual-tranche deal only received orders of €1.7bn and the lead managers were only able to tighten one of the tranches from initial price thoughts.

This week's funding scorecard looks at the process French agencies have made in their funding so far in 2018.

It was no surprise to many market participants that Friday saw no new issuance in the corporate bond market after the busiest week of 2018. The conundrum to be solved now though is how the jumbo issuance will affect conditions in potentially the final full week before Easter.

Guarantor: Federal Republic of Germany

Corporate bond issuers who sold their deals earlier the week found execution much easier than those who came later in the week. Strong order books and single digit new issue premiums gave way to premiums of as much as 20bp and one deal having to be downsized.

Dutch supermarket operator Ahold Delhaize is becoming a frequent issuer, as it sold a dual tranche deal this week, six months after its return to the market from a five year absence.

UK media company WPP sold a dual tranche bond this week, following its own recent trend for issuing shorter tenors with its most recent euro issues.

Sanofi, the French pharmaceutical company, this week priced the largest European corporate bond deal of 2018 — an €8bn six-tranche deal. The company used only European banks as global co-ordinators for the sale, as the euro market proved that it is a viable market for jumbo financings.

The potential end of eurozone quantitative easing may be leading to sleepless nights for some, but top tier SSAs are welcoming the slow return to historically normal rates. KfW this week sold its first five year euro benchmark with a positive yield in nearly three years, welcoming back investors that had gone elsewhere in search of return — and auguring well for future euro issuance from the sector.