Germany

A pair of issuers reopened the 10 year part of the dollar curve for sovereigns, supranationals and agencies this week, but despite both trades gaining plaudits there is still scepticism over whether a $2bn-plus sized deal is possible.

Bayer and Monsanto are circling each other as they both seek acceptable terms for a merger that would create a world leader in crop science. For the equity capital markets, the deal holds out the possibility of one of the world’s largest ever rights issues.

Agro-chemical giant Monsanto this week rejected a first, $62bn takeover approach from Bayer but with both companies open to a deal, banks, led by Bank of America Merrill Lynch and Credit Suisse, are preparing for the huge financing package expected.

McCarthy & Stone — OHB — Artsana — Eir

Rentenbank joined the rush for dollars on Wednesday as Inter-American Development Bank and British Columbia set pricing on deals announced the previous day.

Germany’s HeidelbergCement on Wednesday issued a benchmark high yield bond that was rapidly increased to €750m while its final terms tightened 20bp from initial price talk.

Monsanto has rejected Bayer’s all-cash bid of a $62bn enterprise value as “incomplete and financially inadequate”, but left the door open to an improved offer.

Monday night’s three equity block trades in Europe all led to decent trading in the stocks on Tuesday. They included CVC’s exit from Evonik Industries – scooped on a sole basis by JP Morgan, though Bank of America Merrill Lynch has worked on most of these deals.

Moody’s cut Deutsche Bank’s debt rating to two notches above junk on Monday, as the German bank continues to fall foul of negative sentiment around its costly restructuring.

Bank of America Merrill Lynch and Credit Suisse are supporting Bayer’s $62bn bid for American agribusiness giant Monsanto and more banks are working on a loan for the deal, according to two bankers.

Bayer could be preparing to issue one of the five biggest rights issues ever, and the largest by a non-bank company, as part of the financing for its $62bn bid for Monsanto, the US agricultural chemicals and bio-engineering business.

There was a steady stream of sterling deals in the supranational and agency market this week, amid confidence that volumes will keep up until the UK’s referendum on European Union membership is imminent.