JP Morgan

The euro market got off to a fine start this week as a supranational rarely seen in euros appeared at five years and a mainstay of the market pulled off another successful trade. But later in the week, cracks began to show.

US pharmaceuticals company Mylan made its third visit to the euro corporate bond market in three years on Wednesday when it sold a €500m seven year deal with a €1.3bn order book.

A pair of euro borrowers hit screens at the short end of the euro curve on Thursday, but both failed to reach full subscription.

South Africa raised $2bn in a difficult market on Tuesday, after US Treasuries widened unexpectedly at just the moment that the sovereign began marketing its new deal. The resulting sell-off in both South Africa’s curve and the rand meant that the issuer was not able to tighten pricing as much as had been anticipated, and the deal was smaller.

Market sources said rising political uncertainty in the eurozone was to blame for the second deal pulled from the European high yield bond market so far in May, as Greek issuer Pangaea cancelled its high yield roadshow on Thursday.

German media company Bertelsmann pulled a €500m seven year corporate bond issue on Thursday, just hours after launching the deal alongside two other seven year deals.

The African Development Bank sold its second social bond on Wednesday, more than doubling the size of its debut effort and pushing out its maturity curve. The Basque Government will follow the supranational with an inaugural sustainable bond.

Kommuninvest printed a $1bn three year dollar bond on Wednesday, following the example set by Swedish Export Credit Corporation (SEK) but shaving an extra few basis points from its spread.

Speculative grade investors are being tempted by higher total returns in the leveraged loan market, but lack of supply and growing demand is favoring a loosening of default protection covenants.

US pharmaceuticals company Mylan made its third visit to the euro corporate bond market in three years on Wednesday when it sold a €500m seven year deal with a €1.3bn order book.

South Africa had to contend with an unexpected widening in US Treasuries when marketing its new deal on Tuesday. The resulting sell-off in both South Africa’s curve and the rand meant that the issuer was not able to tighten pricing as much as had been anticipated, and the deal was smaller overall.

Italian energy company Enel received €3n of orders for €1.25bn of new hybrid bonds on Tuesday. This showed the insatiable appetite of investors for the product with the enhanced yield it offers and ratings agency Scope expects 2018 to record much more supply that the previous two years.