Natixis

Europe’s top rated corporate bond issuers on Wednesday pushed investors further still, despite the spate of recent deals, with Capgemini bringing the second two year fixed rate bond in as many days and National Grid bringing the longest sterling deal since the coronavirus crisis took hold in the West.

European corporates found a strong bond market on Monday after raising a record amount of bond funding last week, as the European Central Bank pours money into high grade debt.

The power of central bank buying and fund redemptions are evident this week in the European investment grade corporate bond market, where issuers have been squeezed into a narrow range of maturities as they search for cash.

Airbus, the European aircraft manufacturer, opened books for a three tranche bond issue on Tuesday, just over a week after raising €15bn from banks, on the assumption, its CFO said then, that there would be "no issuance in capital markets, such as commercial paper".

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Bank of America reopened the market for financial institution bonds in euros this week and was followed by a slew of other deals as investors welcomed wider spreads and new issue concessions.

New issue concessions have tumbled in the high grade corporate bond market today. French industrial gases company Air Liquide has rewritten this week's rules by pricing a bond through its own curve on Thursday.

Corporate borrowers are pumping out new bonds this week and on Thursday it was the turn of some of those worst hit by the Covid-19 pandemic, as investors have felt emboldened enough to look further down the credit curve each day this week. Aeroports de Paris is on screens, as investors credited central bank intervention with bolstering the market.

Riskier high grade corporate names saw more than €45bn of combined demand for new bonds on Wednesday. Danaher, Carrefour, Bertelsmann, Philips and Heineken were all in the market following a batch of deals from higher rated names a day earlier encourages borrowers to pile in.

Air France-KLM has taken a series of exceptional measures including drawing down on €1.765bn of bank debt, as some lenders say that the industries worst affected by the coronavirus pandemic will lean heavily on their lending banks.

Once again, corporate bond markets have staged a recovery after a shutdown of several days as asset prices plummeted in response to the growing coronavirus outbreak. Three industrial companies plus JP Morgan issued bonds in the US on Tuesday, which “all went exceptionally well” according to a head of syndicate in London. Danone launched on Wednesday the first euro corporate issue of the week, paying a high spread but small new issue premium.

Europe's high grade corporate bond issuers are being pushed into tight issuing windows by volatility caused by the Covid-19 coronavirus. But investors are prepared for this and so far deals have found strong backing.