By Carol Dean
Financials are spearheading bond issuance in the European
primary market Monday from banks ranging from the emerging markets
to fiscally stressed economies to core euro-zone countries as an
array of deals surge into the market.
Among the non-financial deal flow, France's Electricite de
France SA (EDF.FR) is bringing the third hybrid bond seen so far
this year and Ireland-based packaging company Ardagh Group is out
with a dual currency high-yield bond to finance its $1.69 billion
acquisition of U.S.-based company Verallia.
Also of note, Italy is in the market with a new syndicated bond
deal.
But investors are eager to invest post end of year with risk
appetite back with a vigor, said analysts at Bank of America
Merrill Lynch.
"All major asset classes in Europe reported notable inflows over
the last week, the first time this has happened since October
2010," the analysts said.
Here is a rundown of how the credit default swap market stands,
who is selling bonds Monday and what to expect in the coming
days:
CDS:
iTraxx Europe: 0.50 basis point wider at 102.5 basis points
iTraxx Crossover: flat at 422 basis points
NEW ISSUES:
Italy has hired banks for a new 15-year government bond, or BTP,
which matures Sept. 1, 2028, the country's treasury said. Italy's
scheduled mid-month bond auction Friday didn't include an
ultra-long-dated bond or any with a maturity of more than 10 years.
That was taken as a sign by some analysts that Italy may soon
launch a new longer-dated bond, possibly a 15-year BTP.
Ukraine's joint stock company The State Export-Import Bank of
Ukraine (EXIM.PFT), or Ukreximbank, plans a benchmark-sized
bond.
Turkish bank Yapi ve Kredi Bankasi (YKBNK.IS), or Yapi Kredi,
has planned a $500 million, seven-year senior unsecured bond.
Initial price recommendations are in the area of 290 basis points
over the reference midswaps rate.
Standard Chartered PLC (STAN.LN) has planned a
sterling-denominated, benchmark-size 25-year bond. Initial price
recommendations are in the range of 130 to 135 basis points over
the reference gilt.
Spain's Banco Popular Espanol SA (POP.MC) plans a euro
benchmark, six-year covered bond. Initial price recommendations are
in the area of 280 basis points over the reference midswaps
rate.
French lender Societe Generale SA (GLE.FR) Monday is planning to
sell a seven-year, euro-denominated bond.
Norway's SpareBank 1 SR-Bank ASA (SRBANK.OS) Monday is planning
to sell a euro-denominated bond maturing Feb. 3, 2020. Price
guidance was set at 90-95 basis points over midswaps.
The Development Bank of Japan Inc. has planned a
dollar-denominated, five-year bond.
Aareal Bank AG (AAALY) has priced a 625 million euro ($833.9
million) five-year bond at 99.521 with a spread of one basis point
over midswaps.
UP AND COMING
Electricite de France SA (EDF.FR) is planning to meet
fixed-income investors about selling a hybrid bond. EDF will host
the roadshows in Europe and the U.S.
Ireland-based packaging company Ardagh Group plans a euro- and
dollar-denominated high-yield bond to fund its offer for U.S.-based
company Verallia, The bond will be $750 million in total size and
will mature in November 2022. The company is meeting investors for
the bond this week in Europe and in the U.S.
Czech Republic-based coal producer New World Resources PLC
(NWR.LN), plans a EUR275 million euro high-yield bond. The bond
will be maturing in eight years. Pricing of the bond is expected
Wednesday after meetings with investors.
Credit Bank of Moscow has planned a series of investor meetings
ahead of a potential dollar-denominated senior unsecured bond.
-Sarka Halas, Emese Bartha, Art Patnaude and Serena Ruffoni
contributed to this article.
Write to Carol Dean at carol.dean@dowjones.com
