The iBoxx euro non-financials
subordinated index closed at 2.95% last
Monday, close to this year’s high of 3.09%
touched in early July. The index reached an
all-time low yield of 1.91% on January 8.VIER GAS ON THE ROADVIER GAS TRANSPORT is holding investor
meetings this week for a no-grow €500m 10-
year Reg S senior unsecured transaction via
BNP Paribas, Commerzbank, ING and UniCredit.
The roadshow runs September 12-14.
Vier Gas, the holding company of German
transmission system operator OGE, is rated
A- (stable) by S&P.STERLING
AT&T DIALS STERLINGAT&T was back in the bond market last Thursday,
this time bringing a £750m long eight-year - the
largest non-domestic sterling deal this year -
having printed a jumbo US$3.75bn June 2024
senior floater just three weeks ago.
Leads started marketing the trade at Gilts
plus 180bp area, a level which an investor
said looked like decent value.
He expected the deal would go well and
said it would help its existing sterling curve,
which has been quite steep.
Pre-announcement, AT&T had £600m
March 2027s at 150bp, £342m November
2033s at 195bp and £1.25bn June 2044s at
215bp, according to Tradeweb prices. They
later softened to 166bp, 199bp and 218bp,
respectively, slightly flattening the curve.
A lead saw IPTs starting 20bp back of fair
value and said the choice of an eight-year
maturity was in reaction to investor appetite
in that part of the curve. The deal eventually
landed at Gilts plus 170bp.
AT&T has been diversifying its investor
base away from the US as some buyers have
started to hit concentration limits given its
huge US$180bn debt load.
In late July, it sold €2.25bn two-year floating-
rate notes in a private placement through sole
lead Deutsche Bank. Shortly after, it visited the
Canadian dollar market for US$1.5bn-
equivalent seven and 30-year Maple bonds.
AT&T is expected to return to the market
with an US$18bn bond deal to fund its
acquisition of Time Warner.
Bookrunners on the sterling deal were
Barclays (B&D), Credit Suisse and RBC.PEABODY OUT WITH REFI DEALUK housing association PEABODY CAPITAL was
the only European corporate in the market
last Friday, finding £800m of demand for its
30-year secured note.Proceeds from the £350m issue, of which
£100m is retained, will be used partly to
refinance existing debt.
Peabody has £200m March 2043s and
£350m December 2053s, which were quoted
at Gilts plus 145bp and 148bp, respectively,
pre-mandate on August 30.
They were trading at 154bp and 155bp on
Friday.
The new September 2048s, A3 (stable) by
Moody’s, priced at Gilts plus 155bp, 10bp
inside the tight end of the IPT range, via
Barclays (B&D), HSBC and Santander.
Housing associations have printed far less
so far this year compared to last - £2.7bn
versus £4.8bn - but one name is already in
the pipeline.
BLEND FUNDING is holding investor meetings
from September 10 for a £250m long-dated
debut from its £2bn secured EMTN
programme.
The company is a debt aggregator for UK
housing associations, established this year
as a THFC Group subsidiary.
Assigning the programme a provisional
A2 rating, Moody’s cited the strong credit
quality of the three underlying participants,
among other things.
But the rating is on review for downgrade,
based on the expected merger of two of the
associations in October.
HSBC and RBC are arranging the roadshow.SWISS FRANCS
ROCHE REFIROCHE refinanced an upcoming maturity
with SFr900m (US$930m) through a dual-
tranche deal on Tuesday.
Roche Kapitalmarkt, guaranteed by Roche
Holding and rated Aa3/AA (both stable),
mandated Credit Suisse, Deutsche Bank and UBS
as lead managers for a senior unsecured
transaction with seven-year and 12-year
maturities.
Initial guidance was released on the
sevens at mid-swaps plus 13bp–15bp and
18bp–20bp on the 12s.
The deal was expected to gross around
SFr1bn to match upcoming maturities but
came just short of that, although tighter
than guidance, with a SFr500m seven-year
pricing at plus 12bp and a SFr400m 12-year
at 17bp.
An all-Swiss order book comprising
around 100 accounts for each tranche saw
asset managers, bank treasuries and pension
funds take more than 80% of the paper.RARE LONG TRIPLE B FROM ADECCOInfrequent issuer ADECCO GROUP, rated Baa1/
BBB+, opened the week with a no-growSFr100m (US$103m) eight-year domestic
senior unsecured bond issue, one of only a
few Triple B rated credits to venture into
tenors away from the short end this year.
Books opened at mid-swaps plus 65bp–
75bp. Shortly after, the spread was set at
65bp and the bonds were priced with the
expected 0.875% coupon.
At that level, it came in line with similarly
rated Swiss corporates and around 10bp
back of Adecco’s own euro-denominated
paper, adjusted for the cross-currency basis
swap. Adecco has only one outstanding
Swiss franc bond offering, a SFr125m 2.625%
December 2020, originally issued in 2012.
Unlike many Swiss domestic bonds, these
have a three-month par call. Commerzbank
and Credit Suisse were joint leads.HOSPITAL DEBUT, BOBST ON THE ROADUNIVERSITAETSSPITAL ZURICH debuted on
Thursday with an upsized 10-year senior
unsecured bond.
Books opened for a minimum SFr100m
(US$103m) at mid-swaps plus 13bp-16bp, the
deal coming in at SFr120m with a 0.55%
coupon at the tight end of guidance.
A SFr120m book with 29 accounts taking
part made for an average ticket of just over
SFr4m. An all-Swiss tally of investors was
broadly spread across the classes, with asset
managers and insurers taking nearly 70%
between them, the rest going to pension
funds and banks.
As a debut, the new issue premium was a
bit harder to pinpoint. Slightly lower rated
Kantonsspital Luzern sold a 10-year at mid-
swaps plus 19bp on August 21 that is still
trading at that level. That put the new bond
in line with fair value, according to a lead
official.
UniversitaetsSpital Zurich is rated AA by
ZKB and Aa+ by fedafin. ZKB was sole lead.
Unrated BOBST GROUP, the Swiss industrial
machinery and equipment holding
company, has mandated UBS for an investor
roadshow to be held in Zurich on Tuesday,
September 11.NON-CORE CURRENCIES
PORT OF MELBOURNE READIES DEBUTLonsdale Finance, the issuing entity of the
PORT OF MELBOURNE, rated Baa2/BBB (Moody’s/
Fitch), has mandated ANZ and NAB to
arrange investor meetings in Australia and
Asia from September 17 for a potential
debut Australian dollar senior secured issue.
The Lonsdale consortium of investors was
awarded a 50-year lease for the container
port, one of the largest in Australia, for
A$9.7bn in 2016.34 International Financing Review September 8 20186 Bonds 2250 p25-55.indd 34 07/09/2018 19:29:59