42 International Financing Review April 4 2020see this much demand, especially at these
levels,” said a lead.
The issuer began marketing a seven-year
ATûSWAPSûPLUSûBPnBPûANDûAû
YEARûATû
plus 235bp–240bp.
That equated to premiums on offer at IPTs
of around 70bp, according to a banker away
from the deal.
Total was able to move pricing by 40bp
from the tight end of those ranges, landing
THEûTWOûõBNûNOTESûATûBPûANDûBP û
respectively.
A second banker away from the
transaction called the deal a blowout.
"ALANCEDûAGAINSTûTHEûBROADERûDIFlCULTIESû
facing the oil industry, Total’s strengths
stand out, said Christian Hantel, senior
portfolio manager, global corporate bonds,
at Vontobel.
“The company has one of the best balance
sheets in the sector to deal with the current
price volatility,” said Hantel.
h3UCHûNAMESûAREûCURRENTLYûATTRACTIVEû
within their sector and hence order books
are oversubscribed.”
3TILL û-OODYSûPUTû4OTALû!A!n ûALONGû
WITHû3HELL û"0ûANDû%QUINOR ûONûNEGATIVEûoutlook on Wednesday, due to what it called
unprecedented credit shocks.
The ratings agency wrote that Total
EXPECTSûTHATûWITHûOILûAROUNDû53ûPERû
barrel, the company faces a shortfall of
ABOUTû53BNûINûOPERATINGûCASHmOWûINûû
compared with its original budget set for
53ûPERûBARREL
In response to the price drop, Total is
cutting organic investments, discontinuing
its share buyback programme and
accelerating operating expenses reductions.BETTER BACKDROP
The other three issuers came the following
day, crowding into the same maturities,
TARGETINGûFOUR ûEIGHTûANDû
YEARûTRANCHES
The backdrop was slightly better, with
CRUDEûOILûFUTURESûJUMPINGûûAFTERû53û
President Donald Trump said he expected
3AUDIû!RABIAûANDû2USSIAûTOûREACHûAûDEALûSOONû
to end their oil price war, with the WTI
CRUDEûFUTUREûRISINGûTOûOVERû53ûPERûBARREL
Ismael Lecanu, senior credit portfolio
manager at AXA Investment Managers, said
that the length of the oil price crisis will be a
crucial factor to follow.“Having said that, those companies,
MOSTLYûRATEDûINûTHEû3INGLEû!ûTOû$OUBLEû!û
rating area, should attract a large amount
of cash from investors, as they are printing
their debt at a very wide level not seen
SINCEûTHEûlNANCIALûCRISIS vûSAIDû,ECANU
3HELLûHASû53BNûINûLIQUIDITYûITûCANûTAPû
INTO ûINCLUDINGû53BNûINûCASHûONûHAND û
BUTûSOLDûAû53BNûTHREE
PARTERûONû
Wednesday before turning to euros on
4HURSDAYû"0ûWASûALSOûINûTHEû53ûDOLLARû
market, as well as euro last week, raising
53BNûTHROUGHûAûFOUR
PARTûDEALûONû
Thursday.
3HELLû!A!!n ûOFFEREDûTHEûTIGHTESTû
levels of the new euro issues and also
gained the most price traction, setting the
spreads at 45bp inside IPTs, with the four-
YEARûLANDINGûATûBPûOVERûSWAPS ûTHEû
EIGHT
YEARûATûBPûANDûTHEû
YEARûATû
BP
/-6Sû!!n ûõBNûTRADEûSAWûPRICINGû
LANDûBPûINSIDEû)04S ûATûBPûANDûBP û
respectively, for each of the €500m four
and eight-year bonds, and 240bp for the
õMû
YEAR
Interest for all of the new issues showed
most orders were placed at the long end.
“For the longer tenors and better yield
there has been a bigger bid,” said Atul
3ODHI ûGLOBALûHEADûOFûDEBTûCAPITALûMARKETSû
at Credit Agricole.
/Fû4HURSDAYSûDEALS û3HELLSûõBNû
offering attracted the most interest, with
INVESTORSûPUTTINGûINûõBNûOFûORDERS û
INCLUDINGûõBNûFORûTHEû
YEARû)NTERESTû
for OMV was €3.4bn and the book for BP
was €6.85bn.
Lecanu said that the backstop offered by
ECB buying is a plus for investors looking
to participate but is not the key element
for accounts, who are instead monitoring
how earnings can recover once the crisis
passes.
“Ultimately, we can argue that with this
KINDûOFûPROlLEûTHESEûCOMPANIESûWILLû
receive support from their states as they
are strategic,” said Lecanu.
“This is something that we are also
looking at, particularly in the airlines
industry.”
"0û!!n ûOFFEREDûTHEûWIDESTûSPREADSûOFû
the three new transactions, printing its
NOTESûATûBP ûBPûANDûBPû4HEû
õBNûFOURûANDûõBNûEIGHT
YEARûCAMEûBPû
INSIDEû)04SûANDûTHEûõBNû
YEARûBPû
inside.
#REDIT3IGHTSûANALYSTSûSAIDû"0ûTRADESûWIDEû
to its integrated peers as it is the only
3INGLEû!ûNAMEûWITHûGROSSûLEVERAGEûOFûXû
and gearing, including leases, of 35%,
COMPAREDûWITHûPEERûGROUPûAVERAGESûOFûXû
and 24%, respectively.
"UTûAû53BNûDIVESTMENTûPROGRAMMEû
is expected to drive gearing down, and theALL CORPORATE BONDS IN EUROS
BOOKRUNNERS: 1/1/2020–31/3/2020
Managing No of Total Share
bank or group issues €(m) (%)Excluding equity-related debt. FIGs, ABS/MBS.
Source: Refinitiv SDC code: N81 BNP Paribas 49 9,796.93 8.5
2 Deutsche Bank 35 7,886.02 6.8
3 Barclays 27 7,554.66 6.5
4 HSBC 35 7,503.35 6.5
5 BofA Securities 31 7,319.84 6.3
6 JP Morgan 34 6,788.78 5.9
7 Citigroup 29 5,650.19 4.9
8 SG 30 5,474.45 4.7
9 Credit Agricole 25 4,562.30 3.9
10 ING 22 3,913.12 3.4
Total 127 115,754.57ALL US INVESTMENT GRADE CORPORATE DEBT
BOOKRUNNERS: 1/1/2020–31/3/2020
Managing No of Total Share
bank or group issues US$(m) (%)Source: Refinitiv SDC code: F91 JP Morgan 161 59,402.91 13.6
2 BofA Securities 156 55,051.24 12.6
3 Citigroup 126 41,947.05 9.6
4 Goldman Sachs 91 40,388.81 9.3
5 Morgan Stanley 87 33,598.41 7.7
6 Wells Fargo 90 28,962.29 6.6
7 Barclays 63 18,431.07 4.2
8 RBC 56 13,568.73 3.1
9 Deutsche Bank 40 11,987.98 2.8
10 US Bancorp 49 10,961.44 2.5
Total 310 435,725.46ALL INTERNATIONAL STERLING BONDS
EXCLUDING SECURITISATIONS
BOOKRUNNERS: 1/1/2020–31/3/2020
Managing No of Total Share
bank or group issues £(m) (%)Including preferreds. Excluding equity-related debt.Source: Refinitiv SDC code: K05a1 Barclays 32 6,039.84 14.6
2 HSBC 26 4,405.40 10.7
3 NatWest Markets 23 4,133.20 10.0
4 RBC 19 4,064.52 9.8
5 JP Morgan 10 2,452.10 5.9
6 Lloyds Bank 12 2,363.48 5.7
7 Deutsche Bank 12 2,334.09 5.6
8 TD Securities 10 2,281.40 5.5
9 Citigroup 11 2,162.89 5.2
10 Goldman Sachs 8 1,587.61 3.8
Total 65 41,355.18ALL SWISS FRANC BONDS INCLUDING
SECURITISATIONS
BOOKRUNNERS: 1/1/2020–31/3/2020
Managing No of Total Share
bank or group issues SFr(m) (%)Including preferreds. Excluding equity-related debt.
Source: Refinitiv1 Credit Suisse 45 6,350.0 38.2
2 Verband Schweiz 10 3,117.3 18.7
3 UBS 28 3,010.2 18.1
4 Raiffeisen Schweiz 15 1,393.0 8.4
5 ZKB 16 1,356.1 8.2
6 Deutsche Bank 6 802.6 4.8
7 BNP Paribas 2 217.1 1.3
8 Basler KB 1 140.4 0.8
9 Commerzbank 1 92.5 0.6
10 VTB Capital 1 83.3 0.5
=10 JP Morgan 1 83.3 0.5
Total 72 16,6466 IFR Bonds 2327 p 25 - 65 .indd 42 03 / 04 / 2020 20 : 28 : 59