France

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.

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.

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.

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.

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.

Chief executive of the International Swaps and Derivatives Association (ISDA) Scott O’Malia on Monday said that the trade body was preparing French and Irish law governed ISDA master agreements to be “ready for all eventualities” in the wake of Brexit.

Caffil managed to attract a strong order book for its eight and 15 year covered bonds issued on Tuesday, largely because it paid careful attention to size, starting spread and tenor.

French telecoms operator Orange sold a new 12 year trade on Tuesday and paid a low new issue premium for the €1bn deal. The deal was one of three that priced on Tuesday, but only seven new issues for the year so far, meaning investors are keen to put their money to work.

KfW and Dexia Crédit Local are first out the blocks in what looks set to be a busy euro market for public sector borrowers this week.

Crédit Agricole SFH took advantage of curve steepness to issue a €1.25bn eight year which, unlike recent 10 year deals, managed to attract strong demand from bank investors buying for their liquidity portfolios.

Michelin, the French tyre maker, crowned an interesting first week of the year for Europe's equity-linked bond market on Friday with a $600m equity-neutral convertible bond due in 2023.

A thinly oversubscribed €1bn 10 year covered bond issued this week by Compagnie de Financement Foncier could mark the beginning of the end of the bull run in covered bonds. Bill Thornhill reports.