France

Issuers and syndicates in the corporate bond market are lining deals up for a four day week this week. The Columbus Day holiday in the US shouldn’t necessarily mean no deals in the European market, but a mixed tone to the secondary market means participants are erring on the side of caution.

This week's scorecard looks that the funding progress of French agencies as we move into the fourth quarter.

The leveraged loan market is showing no sign of slowing after a September filled with jumbo deals as French telecoms companies Altice and its subsidiary SFR join the fray with transactions of more than €1bn.

On Thursday, the European corporate bond markets had two new telecoms deals to consider. Iliad, and unrated French issuer, priced a seven year deal, while Telecom Italia opted for longer.

On Wednesday, French toll road operator Cofiroute paid a low single digit new issue premium for its first corporate bond deal in over a year. The 10 year deal found favour with its faithful French investor base.

French optician Alain Afflelou is considering a yield of about 4.5% for its first bond since suspending plans to float on the Paris bourse. Investors branded the figure “punchy”.

On Thursday the European corporate bond markets had two new telecoms deals to consider. In the investment grade sector, unrated French issuer, Iliad, equalled its largest and longest transaction to date. The seven year trade was the shorter deal on offer, with sub-investment grade Telecom Italia opting for a 10 year tenor.

Investors piled into a 10 year covered bond from Société Générale this week, even though it was the fifth from a French issuer in the same tenor in the last month. But with issuers incentivised to pre-fund ahead of 2018, some market participants say that investor resistance will be seen before year-end.

After three days without a deal, the euro corporate bond market reopened with nearly €2bn of new issuance from three different issuers. The auto finance lender, FCA Bank, issued a three year deal, French electrical equipment manufacturer, Legrand, sold six year bonds, while French toll road operator, Cofiroute offered a 10 year transaction.

Eurazeo, the private equity group, is selling a 4.56% stake in Elis Services, the French bed linen and laundry company, through a block trade of about €220m.

The covered bond market has not looked this strong all year, and with the European Central Bank (ECB) widely expected to announce a tapering of asset purchases this month, borrowers are highly motivated to issue in size and duration — a message that BPCE understood loud and clear when it issued a long 10 year on Wednesday.

Elis, the French laundry services company, issued a €400m convertible bond on Tuesday to refinance its £2.2bn acquisition of Berendsen in the UK, which closed in September.