France
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Guarantor: Kingdom of Belgium (51.41%), Republic of France (45.59%) and Grand Duchy of Luxembourg (3.00%)
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Crédit Agricole SFH and Caffil issued eight year covered bonds this week and managed to attract strong demand from bank investors buying for their liquidity portfolios.
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A trio of 10 year covered bond deals issued this week showed that interest in this tenor is less uncertain than initially feared. But, in a rising yield environment, investors are likely to become more defensive and this demand risks being short-lived.
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French toll road operator Autoroutes du Sud de la France on Wednesday followed the path its compatriot Orange had taken on Tuesday by issuing a €1bn 12 year bond, while Deutsche Bahn and Ren Finance on Thursday opted for the 10 year area of the curve. Investors appear keen to put their money to work at the longer end of the corporate bond curve. -
Multi-tranche and green bond issuance returned to the investment grade corporate bond market on Tuesday, leaving just the hybrid asset class untouched in 2018. That didn’t last long, as Engie and Aroundtown launched new hybrid deals on Wednesday morning, one of which set new lows for coupons and spreads.
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Euro private placement issuance has dwindled in the past few years as larger companies have found cheaper funding elsewhere. But a flurry of chunky transactions late in 2017, including two from prestigious family holding companies, has led some to dream big for the year ahead.
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On Tuesday multi-tranche and green bond issuance returned to the investment grade corporate bond market, leaving just the hybrid asset class untouched in 2018. That didn’t last long, as Engie and Aroundtown launched new hybrid deals on Wednesday morning, one of which set new lows for the product's coupon and spread levels.
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Société Générale issued a tightly priced 10 year French covered bond on Wednesday with the €750m deal size, ensuring a solid level of excess demand and good potential for a stable performance.
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On Wednesday French toll road operator Autoroutes du Sud de la France followed the path its compatriot Orange had taken on Tuesday by issuing a €1bn 12 year new issue. Meanwhile Italian auto finance bank FCA Bank was also in the market with its first benchmark floating rate note.
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Banque Fédérative du Crédit Mutuel (BFCM) has sold £450m of new senior notes in the sterling market, which is enjoying its fastest ever start to a year.
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The euro market is providing borrowers with superb execution — KfW gathered its largest ever book for a 10 year on Tuesday — but investors are requiring healthy new issue concessions in order to commit.
