Europe

On Thursday, the sterling corporate bond market reminded participants it was still going strong after the euro market had dominated the first half of the week. Petroleos Mexicanos, also known as Pemex, and Western Power Distribution followed the success of Wednesday’s deal from Manchester Airport.

After a three day blitz of new issues in the investment grade euro corporate market, the sterling and Eurodollar markets stepped up on Thursday as euro issuance eased off from the pace of previous days. Investors had four benchmark and two sub-benchmark deals to consider.

A chequered history of debt restructurings and shareholder rebellions meant that a bond for B- rated Petropavlovsk was always going to be a tough sell. But a chunky 8.125% yield helped the gold mining company scrape together $500m to pay back more expensive bank loans, according to lead managers, despite the year end fast approaching.

Leveraged loan issuance is set to outpace sales of new high yield bonds with a surge this year, pushed by a varied array of borrowers seeking not just tighter margins on old debt, such as US chemical group Angus this week, but also funding for acquisitions, as with Nordic travel operator Etraveli.

Vivat on Thursday became the latest insurer to issue tier two debt with a $575m bond, which will be used to pay off debt to Anbang Insurance Group.

Chinese issuers are starting to look beyond US dollars for new fundraising opportunities, with attractive cross-currency swap rates — and the potential for diversification — making Singapore dollars and euro issuance the flavour of the month. Morgan Davis reports.

Amid all of the hand-wringing about the advent of the Markets in Financial Instruments Directive on January 3, there are some firms which are set to be clear winners, and welcome the start of the controversial regulation.

If the only benchmark euro deal on Thursday had been true to its roots, it would have built a waiting list rather than an order book. But demand still far outstripped supply when Italian luxury sports car manufacturer Ferrari sold its second corporate bond issue.

DNB Boligkreditt enjoyed great execution for its €1.5bn seven year covered bond on Thursday, but real money accounts switched out of more expensive deals in good size for the first time in months, suggesting investors have far less inclination to add to positions at prevailing spread levels than was previously the case.

In recent months Swiss food group Nestlé has extended its euro corporate bond curve with some of its largest ever deals after it started a Sfr20bn share buy-back in July. But the issuer has not forgotten its eurodollar investors and on Thursday printed its third deal of 2017 in the format.

Komplett Bank, the Norwegian consumer lender, priced a Nkr896m sale of shares on Oslo Bors at the top of the initial range, bucking the trend of many recent flotations.

BNP Paribas followed Société Générale into the senior non-preferred market on Thursday, fresh from issuing a blowout $750m additional tier one (AT1) earlier in the week.