France

The sterling SSA market snapped back into life with a flurry of new deals after a quiet few weeks — although bankers lamented that the issuance door may have closed just as quickly as it opened.

The widening of the dollar Libor/Overnight Indexed Swap (OIS) spread may be one of the biggest talking points in bond markets but it is wrenching open funding opportunities for public sector borrowers. The accompanying widening in dollar swap spreads led two issuers to break new issue records, writes Craig McGlashan.

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.

A clean-up trade in shares of Veolia Environnement, the French environmental services company, by Qatari Diar, an arm of Qatar’s sovereign wealth fund, failed to clear on Monday night, leaving Société Générale long the stock.

Sanofi, the French pharmaceutical company, priced on Wednesday the largest corporate bond deal so far in 2018, an €8bn six-tranche deal. The company regularly uses a multi-tranche approach to the market, but this was its largest deal so far in any currency.

Public sector borrowers found buckets of dollar demand on Tuesday, as a French agency sold its largest ever benchmark in the currency and a supranational printed a trade at the upper end of its historical size range. Another supra is lined up to test whether that demand will hold on Wednesday.

Bankers and investors said that a new deal from Paprec Group, the French waste recycler, showed that the supply of refinancing deals still had legs and could boost overall issuance volumes in the high yield market. Paprec's deal was also green, but did anyone care?

After a reasonable wait, investors are starting to see the more frequent investment grade corporate bond issuers return to the market. On Tuesday, French materials company Saint-Gobain and French telecoms operator Orange sold benchmark deals and UK media company WPP sold a dual-tranche issue.

A pair of public sector borrowers are bringing short end dollar benchmarks as ever widening swap spreads support trades at that part of the curve.

Three French banks were among six financial institutions selling unsecured bonds in the euro market on Monday morning, with BNP Paribas, BPCE and HSBC France raising €3.5bn between them.

French car manufacturer Peugeot has been on a ratings rollercoaster in the last 10 years. On Friday, now back to the highest sub-investment grade ratings, the company sold its third seven year deal in three years.

Gas supplier Air Liquide raised Rmb2.2bn ($347m) from its first Panda bond on March 6, becoming the first European issuer sell a bond with a maturity of longer than three years in the asset class.