Germany
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German chemicals company BASF found substantial demand for its second visit to the corporate bond market to fund its acquisition of Bayer’s seed business. -
Deutsche Pfandbriefbank (PBB) priced an Aa1 rated six year Pfandbrief on Tuesday at the same spread as Deutsche Bank’s Aaa rated five year issued last week, showing the market has improved. But, with tighter monetary policy recently signalled and more supply due, the advantageous funding window may prove short lived.
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BMW Finance had to negotiate its way through a busy corporate bond market on Monday as it sold a €1.75bn 4.5 and eight year dual tranche offering. It had to pay new issue premiums of around 8bp-10bp but saw strong demand.
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The Pfandbrief market may at last be stabilising after almost 18 years of contraction. And with the share of mortgage Pfandbriefe growing and peripheral exposure shrinking, collateral quality has improved. The market is set to evolve as new names emerge, others merge and some disappear.
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Vodafone's agreed takeover of Liberty Global's Unitymedia business in Germany and assets in the Czech Republic, Hungary and Romania for an enterprise value of €18.2bn could set off a wave of other deals in Europe's telecoms market, especially in the UK.
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Pfandbrief borrowers rarely issue sterling deals of more than £250m, so when LBBW priced a £750m transaction with demand of £1.4bn this week, alarm bells were ringing. The astounding wall of money chasing the safest of safe assets may say as much about the state of the market as it does about the value of the deal itself.
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A supranational dollar deal ran away with April’s top spot in BondMarker, outstripping the rest of the table by a good margin and clocking in as the third most highly rated deal of the year.
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Daimler, the German car manufacturer, has raised more than €7bn equivalent from three different corporate bond markets within two weeks of announcing its quarterly results on April 27. The sterling market was its focus on Wednesday and it received as strong a response as it did in the other two sectors.
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Kartesia, the European direct lender based in London, has provided unitranche funding to Latvian glass coatings company GroGlass. As larger direct lenders are not active in the region, Kartesia and other smaller institutions see an opportunity in their absence.
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On Wednesday, German chemicals supplier Lanxess found a surprising lack of demand for its first corporate bond issue since September 2016. Onlookers suggested this is was not a good sign with a heavy pipeline building for future weeks.
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At £750m, the debut sterling covered bond issued by LBBW on Wednesday was by far the largest ever of its kind sold by a European bank, with the trade attracting demand that was off the scale compared with anything that had previously been issued in the currency.
