Wells Fargo Securities

Two more borrowers added on Tuesday to the almost €3bn of new high yield bonds already being marketed in Europe this week. But just as the market is set to surpass last year's volumes, investors have started to voice concern over low coupon levels.

The European high yield bond market returned from its summer break to €2.8bn of new bond offerings this week, including a sub-benchmark sized note from Delaware’s Kronos International on Monday.

BDO Unibank set a new record on Wednesday with a $700m bond, the largest dollar deal ever from a bank in the Philippines and a rare transaction from the island nation this year. Although few expect a rush of Philippine credits in the dollar market as a result, there is some hope next year will set a new pace. Morgan Davis reports.

The Philippines’ BDO Unibank is back in the dollar debt market less than a year after its last transaction, marking just the second offshore deal from the island nation this year.

BDO Unibank has mandated firms for a proposed dollar bond, marking a rare international debt offering from the Philippines this year.

Amazon dominated US corporate bond issuance this week, but aside from the online retailer’s $16bn jumbo deal, there was over $8bn of paper from five other issuers. However, bankers believe this will be the last week of material supply before the annual two week break in the US market.

Global systemically important banks (G-SIBs) in the US will still have to issue billions of dollars of new bonds in 2017 to meet their regulatory requirements for long-term and loss-absorbing debt, potentially leading to a busy four months for primary market activity.

The US investment grade corporate bond enjoyed a huge week of issuance as nine borrowers printed deals on Monday before British American Tobacco delivered $17.25bn on its own on Tuesday and plenty more came on Wednesday and Thursday. Bankers predict another heavy week to follow before supply slows for the traditional summer break.

The dollar market got off to a busy start in August with US telecoms heavyweights Verizon and Comcast taking home a combined $5.5bn on the back of strong demand.

AT&T racked up a monster order book on Thursday, as the US telecoms giant hit the market with a $22.5bn M&A financing.

Kroger and Alimentation Couche-Tard led a flurry of issuance by dollar borrowers to exploit red hot demand for high grade paper. With the bulk of corporate America in earnings blackout, the retailers demonstrated the strength of investor sentiment.

Midstream energy company Oneok made a convincing return to the dollar market on Thursday with its first investment grade deal in two years.