The corporate bond market is kicking off the last week before August with a couple of Triple B rated trades, courtesy of TIGF and Urenco.
Transport et Infrastructures Gaz France (TIGF) is set to price a €550m 10-year trade no-grow, having met bond investors across Europe last week. Initial price thoughts on the Baa2 rated deal were set at 130bp to 135bp over mid-swaps, before tightening to a final spread of 120bp on the back of a roughly €1.5bn book.
The French gas transmission operator is an infrequent issuer and only has one bond outstanding, a €500m 4.339% 2021 note bid at 75bp over swaps prior to announcement of the new deal.
A banker away from the trade estimated a 25bp new issue premium on the 10-year deal, using comps such as Eurogrid and Snam as a guide.
The deal is TIGF’s first since it was taken over by a consortium of Snam, GIC and EDF, which bought the business from oil major Total in 2013. Credit Agricole Assurances agreed to buy a 10% stake in the business earlier this year and following the deal Snam will hold 40.5%, GIC will have 31.5%, and EDF 18%.
The French gas transmission operator is using the proceeds of the new bond to refinance its bank facilities and had indicated to Moody’s last week that it could issue up to €900m of new paper.
Global coordinators are Natixis and UniCredit, with active bookrunners Credit Argicole and HSBC. Passive books are Barclays, Citi, Mediobanca and RBS.
Also in the market with a modest-sized no-grow trade is Urenco, which opened books on a €500m seven-year bond at initial price thoughts of 175bp area over mid-swaps.
Guidance was then tightened to 170bp area before the spread was set at 168bp on the back of a €1.2bn book.
The nuclear fuel company’s €750m 2.5% 2021 and €500m 2.375% 2024 notes were bid at 124bp and 158bp over mid-swaps respectively, pegging fair value on the new seven-year at around 140bp.
Urenco is also buying back a portion of its €500m 4% 2017s alongside the new deal. The Dutch firm is offering to purchase up to €150m of the bonds at zero basis points over mid-swaps, with the cash tender offer expiring on August 3.
Urenco is the world’s second-largest nuclear fuel vendor after Russia’s Tenex, and ownership is split equally three ways between the UK government, the Dutch government and a JV between E.ON Kernkraft and RWE Power.
The three owners are gauging interest in a sale of the business, but Reuters reported earlier this year that while it could fetch up €10bn, the complex ownership structure makes a sale or initial public offering difficult.
In a presentation to investors this month the company said that “Shareholder sale considerations continue.”
The new deal has a change of control clause in the event that a sale does go ahead.
Bookrunners on the deal were BNP Paribas, HSBC and Societe Generale.
Turning to the secondary market, Apple’s inaugural sterling bonds issued on Friday are still bid around reoffer while Sainsbury’s £250m 6.5% perpetual non-call five deal has climbed from par to a 101 bid, according to Tradeweb prices.
