Goldman Sachs

A buoyant January in equities markets has been followed by a difficult start to February, with the first IPOs out of a full pipeline seeing some issues in marketing just as stock markets tumble across the globe.

A pair of dollar deals on Wednesday showcased what bankers felt was a theme during a week with a volatile market backdrop, as a top tier name tightened pricing and was comfortably oversubscribed, while a second tier issuer was able to get a deal away but could not move in from price thoughts.

A group of five banks has agreed to underwrite UK garages company EG Group’s $2.15bn purchase of US firm Kroger’s convenience store business, after the equity market wobbles this week failed to put a dent in the year’s M&A extravaganza.

United Utilities became the third corporate issuer to sell a sterling bond in 2018, when it printed a seven year deal 24 hours later than initially planned. The company held an investor call on Monday, but then paused for a day due to global markets' volatility, before launching the deal on Wednesday.

The plunge in global stock prices has only caused the European investment grade corporate bond market to close for one day. On Wednesday, two pharmaceutical companies from different ends of the the ratings spectrum brought multi-tranche deals which attracted more than €9.5bn of combined demand.

Public sector borrowers are reaping the benefits of investors looking to “weather the storm” of wider market volatility, said bankers, as investors poured cash into short dated dollar issues this week. Bank Nederlandse Gemeenten and Sweden are set to be the next issuers to benefit, after mandating for three year trades on Tuesday.

Ocado, the UK online grocer, raised £143m of fresh equity on Tuesday morning in an early day accelerated bookbuild led by Goldman Sachs and Numis Securities that finished “a few times covered”, according to a banker involved.

Global stock markets have been hit with volatility in recent trading sessions, but European primary leveraged finance markets had already slowed down as investor pressure grew around Algeco’s €1.4bn deal and UK retailer New Look’s performance.

A pair of euro borrowers braved a tricky market on Tuesday, raising a combined €4bn despite heavy weather in government spreads. One opted for a defensive pricing strategy, while the other attempted to squeeze investors.

Three dollar borrowers have hit screens in a market buoyed by a pronounced Treasury sell-off.

Algeco Scotsman, the US storage group owned by TDR Capital, is talking to investors about sweetening the terms of its new high yield bond issue, due to be priced on Monday afternoon.

Aster DM Healthcare is set to launch its Rp9.8bn ($152.7m) IPO in India next week, after only its latest attempt to scale back the deal size and change the syndicate group.