Euro

A trio of euro borrowers picked up a combined €8.5bn on Tuesday, seemingly without testing the limits of demand in the market.

Hong Kong conglomerate CK Hutchison Holdings tested the appetite of the euro corporate bond market with a dual tranche deal, which included the first tranche longer than 10 years to be issued in nearly four weeks.

The two borrowers that closed out the first quarter with benchmarks have now been examined by the BondMarker voters.

The euro market is back in gear after a few weeks of slow issuance. Three borrowers have mandated deals for Tuesday’s session but one opted for a one day execution, coming on Monday to get ahead of the rush.

Peking University Founder Group Co, BOC Aviation and Yuexiu Property Co are meeting investors for their upcoming bond plans, while China National Chemical Corp’s Swiss subsidiary Syngenta is also gearing up for a mega deal.

As negotiations over the future of Italy’s government begin in earnest, investors appear to be betting that political risk for the country has been overestimated.

US health products and services company PerkinElmer priced a €300m corporate bond this week, nearly two years after its debut in the currency. The deal saw good demand as the company paid a spread of 60bp over mid-swaps for the three year notes.

The European bond market this week finally showed its first acknowledgement that the end of European Central Bank (ECB) quantitative easing (QE) is nigh. Opinions are still split as to whether the bond buying will end in September or be extended to December, but new issue pricing has stepped wider regardless, write Nigel Owen and Bill Thornhill.

Volkswagen Financial Services had been conspicuous by its absence in the euro corporate bond market in the first quarter of 2018. Having been the largest corporate issuer by volume in 2017, the company had used other markets so far this year before selling a new triple tranche deal.

Volkswagen Financial Services had been conspicuous by its absence in the euro corporate bond market in the first quarter of 2018. Having been the largest corporate issuer by volume in 2017, the company had used other markets so far this year before selling a new triple tranche deal.

Swiss telecoms provider Swisscomm found strong demand for its new corporate bond deal. However, investors were very clear on where they saw the value in the deal and the issuer had to pay significant spreads to ensure the deal’s success.

Several factors contributed to the standstill in issuance from investment grade issuers in the corporate bond market before Easter, but one that investors focussed on was the performance of new issues after they had priced.