Ireland’s Electricity Supply Board also
STUCKûTOûAûDIGESTIBLEûõMûSIZEûFORûITSû
INAUGURALû'REENûBOND ûLAUNCHINGûTHEû
year with an implied 3bp premium at
mid-swaps plus 83bp.
"OOKSûWEREûAROUNDûõBNûATûTHEûTIGHTû
end of guidance.
“The market is stable today, and deals
have gone well with sensible premiums, but
not extravagant books generally,” a third
lead banker said.
Still, the market has seen better days this
year.
h7EAKERûCREDITûSPREADSûACROSSûTHEûBOARDû
over the past few weeks with new issue
performance also seeing little in the way of
joy would indicate that the outperformance
against other asset classes is a thing of the
PAST vû).'ûRESEARCHûANALYSTSûSAIDûINûAûREPORTû
published on Tuesday.
The analysts cited trade-induced growth
concerns, Brexit challenges and Italian
DElCITûWORRIES
NIPs COME DOWN AS CORPORATES SEE
BID ACROSS THE BOARD
After a cautious start to last week, new issue
premiums were eroded in the investment-
GRADEûCORPORATEûMARKETûONû7EDNESDAY û
after a stable open to the session allowed
both safe and riskier structures to see good
demand from investors.
“The way we closed yesterday gave a lot of
comfort to issuers to pull ahead,” said a
banker away from the day’s deals.
h7HETHERûITSûSENIORSûORûHYBRIDS ûTHERESûAû
strong bid across the board.”
&EDûCHAIRûEROMEû0OWELLûSAIDûLASTû4UESDAYû
that the central bank will act “as
appropriate” to the risks posed by a global
trade war and other recent macro
developments, which gave comfort as
futures markets are pricing in up to three
rate cuts this year.
4HEûI"OXXû%UROPEû#$3ûINDEX ûMEANWHILE û
has tightened by 5bp to 66bp since by
7EDNESDAYûAFTERNOON ûACCORDINGûTOû
Tradeweb.
/FûTHEûDAYSûDEALS û0UBLICIS û"-7ûANDûAû
hybrid from Arkema, were priced around
FAIRûVALUE ûSAIDûBANKERSûINVOLVEDûOHNû$EEREû
was also in the market with a rare structure
SEEû4OPû.EWS
&RENCHûADVERTISINGûCOMPANYûPUBLICIS
"AA""" ûCAMEûTOûMARKETûAFTERûAûTWO
DAYû
roadshow, to help fund its US$3.95bn
purchase of Epsilon, its largest acquisition
yet, through a €2.25bn triple-trancher.
4HEûPURCHASEûISûMEANTûTOûBOOSTû0UBLICISû
CASHmOWSûANDûALLOWûFORûEVENTUALû
DELEVERAGING ûBUTûBOTHû-OODYSûANDû30û
recently placed its ratings on negative
outlooks, citing the increase in leverage
following the acquisition and execution risks.
But this did not stop orders from piling in,
with the deal attracting €8.8bn of demand.
The company priced a six-year at 80bp
over mid-swaps, a nine-year at 110bp and a
YEARûATûBPû!LLûTRANCHESûRAISEDõM
BNP Paribas, Bank of America Merrill Lynch,
Citigroup, HSBC and JP Morgan were global
coordinators.
Chemicals group ARKEMAû"AA""" û
ISSUER û"A"""nûINSTRUMENT ûANOTHERû
&RENCHûBORROWER ûTESTEDûAPPETITEûFORûTHEû
riskiest type of corporate debt, with its
õMûNO
GROWûPERPETUALûNON
CALLû
YEARû
trade, in conjunction with a tender offer on
its €700m resettable notes callable in
October 2020. The deal was priced with a
yield-to-call of 2.75%.
(YBRIDûSUPPLYûHADûSLOWEDûINû-AYûWITHûJUSTû
ONEûDEALûBEINGûPRICED ûACCORDINGûTOû)&2ûDATA
However, the second banker said that the
market has been very strong for this type of
issuance through most of the year, and the
slowdown is due more to the lack of issuers
requiring hybrid debt.
BNP Paribas, Citigroup and Natixis were
bookrunners.
In senior, BMWû!! ûPRICEDûAûõBNûTHREE
YEAR
ONE
MONTHûDEALûATûBPûOVER ûANDûAû
€750m seven-year-one-month tranche at
77bp over on combined order books of
õBNûPRE
RECONCILIATION ûVIAûDeutsche Bank,
Goldman Sachs, HSBC, ING and UniCredit.
But while the headline new issue
premium numbers are smaller than on
recent deals, this may be misleading, given
HOWûSECONDARIESûHAVEûWIDENED ûTHEûlRSTû
banker said.
The market has widened some 22bp since
THEûSTARTûOFû-AY ûWITHûTHEûI"OXXûEUROûNON
lNANCIALûINDEXûCLOSINGû4UESDAYûATûBPû
against asset swaps.EUTELSAT STRIKES OUT ALONESatellite operator EUTELSAT was the only
European corporate issuer out in the market
on Thursday, braving the ECB meeting with
a €600m July 2027 offering.
h)ûWASûAûLITTLEûSURPRISEDûBYûTHEûTIMING vû
said a banker away.
A lead said that the issuer had waited for
the majority of the week’s corporate deals to
pass through the primary market on
4UESDAYûANDû7EDNESDAY
“Our feeling was that it was not a bad
TACTICûTOûLETûTHEûSUPPLYûCLEARûlRST vûHEûSAIDû
“The market was in pretty good shape this
morning, and we didn’t expect any
lREWORKSûFROMûTHEû%#"v
4HEûISSUERû"AA"""
""" ûBEGANû
marketing the long eight-year notes at
225bp area over swaps. The banker away
thought fair value was at least plus 195bp,
based on extending from Eutelsat’s 2025s,
which he saw at plus 173bp.“It’s very subjective, though,” he said.
A second banker off the trade put fair
value at 200bp over. Eutelsat tightened by
10bp for a print at plus 215bp.
,EADSûPUTûTHEûlNALûNEWûISSUEûPREMIUMûATû
AROUNDûBPû0RE
RECONCILEDûBOOKSûATûTHEû
lNALûSPREADûWEREûAROUNDûõBN
“It wasn’t a riot, but a fairly smooth
transaction with a lot of participants
involved,” said the lead.
4HEûPROCEEDSûWILLûBEûUSEDûTOûRElNANCEû
debt. Eutelsat has a €930m 2.625% note due
January 2020.
CreditSights analysts wondered whether
the company allowing itself a long lead time
before the next maturity betrayed a possible
LACKûOFûCONlDENCEûINûTHEûNEAR
TERMûOUTLOOKû
for its operating performance.
The analysts thought it could have been
better to wait until autumn, when the
market backdrop might be better and
Eutelsat could have potentially unveiled
improved results.
h7HILEûWEûMAYûBEûREADINGûTOOûMUCHûINTOû
the timing decision, we feel our caution is
worth highlighting,” said the analysts.
-OODYSûANALYSTS ûHOWEVER ûSAIDûTHATûTHEû
new issue will allow the company to extend
ITSûMATURITYûPROlLEûANDûREDUCEûINTERESTûCOSTSû
The transaction should deliver a marginal
POSITIVEûIMPACTûONûFREEûCASHmOW ûANDûAû
positive impact on gross leverage metrics.
The ratings agency anticipates that
Eutelsat’s adjusted gross debt to Ebitda at
June 2019 will remain around 3.9 times and
WILLûDECREASEûTOWARDSû
ûTIMESûINû û
DEPENDINGûONûTHEûlNALûSIZEûOFûTHEûNEWûBOND
The CreditSights team said that they
would be comfortable owning the
company’s near-term maturities given
Eutelsat’s focus on balance sheet
improvement, but questioned the
sustainability of revenue in its core
broadcast video segment.
h4HISûREmECTSûTHEûCHANGEûINûVIEWINGû
habits as consumers increasingly switch
away from linear broadcast viewing,” wrote
the Creditsights analysts.
Eutelsat derives 66% of its revenues from
VIDEO ûACCORDINGûTOûTHEûCOMPANYSûlGURESû
DATEDû-ARCHû
HSBC and SMBC Nikko were global
coordinators. They were joined as bookrunners
by Banca IMI, Credit Agricole and Societe Generale.SWISS FRANCS
ANDERMATT SWISS ALPS NAMES
VONTOBEL FOR ZURICH ROADSHOWANDERMATT SWISS ALPS, the unrated Swiss
property company, has mandated Vontobel as
sole lead manager for a roadshow in Zurich on
June 12, ahead of a potential new bond issue.