NatWest Markets
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Five new high yield offerings, including the biggest floating rate note seen in Europe so far this year, entered the market this week. The FRN is a sign that frontiers are becoming blurred between different leveraged finance markets for debt buyers, said bankers. -
Private equity firm CVC has taken to the leveraged loan market to fund the acquisition of IT systems company QA Group, encouraged by the lower borrowing costs on loans than high yield bonds.
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The engines of sterling high yield issuance sound louder every week, with luxury carmaker McLaren and RAC Insurance adding supply to the already burgeoning sterling high yield bond market.
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Two public transport operators offered deals to the sterling market this week, with varying success. Demand was strong for both deals, which had similar tenors, but one enjoyed a smoother pricing ride than the other.
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ABN Amro is returning to the supranational and agency DCM sector, marking what the bank says is a “formal re-entry” to the market with a hire from a rival house.
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Euro conditions are excellent for public sector borrowers, with Spain pulling in a nearly €30bn book for an €8bn 10 year — which bankers away from the trade said indicated a high presence of quality investors — and KfW raising €5bn after picking a seven year deal over a shorter tenor. Another pair of issuers are now looking to take advantage.
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On Tuesday, Deutsche Bahn returned to the sterling bond market for the first time in nearly four years. The state-owned German railway company printed a £300m eight year deal, achieving tighter pricing than it would have in euros.
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The euro market for public sector borrowers looks set to kick back into action after a quiet last week, with a pair of big borrowers mandating for trades to come on Tuesday.
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The final fortnight of June has been seen as the last busy window for new issuance before the summer. This week lived up to its billing with over €11bn-equivalent of new deals priced and syndicate desks see no reason for conditions to change next week.
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International schools operator Nord Anglia has tightened pricing and accelerated the deadline on its $1.22bn-equivalent euro term loan, while up to six leveraged loans are due to close syndication at the end of the week.
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