Euro

Investors in green corporate bonds had two very different deals offered to them on Tuesday. Spanish utility Iberdrola sold a green hybrid bond, while Toyota Motor Credit Corp, Toyota’s auto finance subsidiary, offered a long 3.5 year green tranche alongside a seven year non-green tranche.

Bank of China has mandated firms to sell a multi-currency green bond through its Paris branch.

UK based drinks manufacturer Diageo returned to corporate bond markets on Wednesday with a three year and long six year dual tranche offering, while German housing association Vonovia continued the recent trend for two year floating rate notes.

BayernLabo will on Tuesday enter the socially responsible investment market for the first time, selling a social bond — the first of three expected in the near future.

It would have been difficult to match last week’s start to the week, but Monday did see three new corporate bond issuers offering four tranches totalling €2.275bn to investors, despite the weak performance of bonds in secondary trading on Thursday and Friday.

European property company SEGRO European Logistics Partnership (SELP) sold its second ever corporate bond on Monday, doubling its total issuance and extending its maturity profile, while paying very little premium.

20 deals priced in European corporate bond markets this week, but the secondary market widened as equities fell on Thursday. Some of Thursday’s deals felt the effects of this in their bookbuild processes, and no deals were launched on Friday. So is this a temporary blip, or a more permanent widening?

China Development Bank Corp priced its maiden international green bond on Thursday, raising close to $1.7bn from a dual-currency transaction that will fund Belt and Road related projects. The deal offered diversification not only to the issuer but also to investors.

Rating: Baa1/—/A-

Typically, sub-benchmark size deals have to pay a premium to compensate investors for a lack of liquidity. However, with levels of demand meaning all deals are multiple times oversubscribed, these smaller deals are pricing in line with their larger peers.

European investors are becoming accustomed to US corporate issuers visiting the euro bond market. The hot market this week drew three such companies to issue.

Following French food company Danone’s recent hugely successful hybrid corporate debut, investors have been waiting for the next hybrid trade. This week they had two to consider.