A wide range of tenors from four borrowers kept the European high-grade corporate market busy on Tuesday even at this late stage of the year, with bankers expecting more supply to come until mid-December. Combined demand for all deals in both euros and sterling at the peak of their books came in at €13.62bn-equivalent for a total issue amount of €3.36bn-equivalent across six tranches, suggesting that investors are still willing to put money to work given the stable interest rate and spread backdrop. "November has seen wider spreads on average since the start of the euro credit markets but has seen a very flat performance since 2014. This flat average hides some very sharp swings in the past few years but this time the credit markets have fared well, and barring an unexpected accident, the iBoxx Corporates index look set to end November with a healthy performance," wrote Societe Generale's credit strategists. The average asset swap spread for euro non-financial senior debt, for example, was spotted at 93.7bp on Monday, around 3bp tighter than the start of the month, according to iBoxx. Bankers say there is still a good pipeline as long as market conditions hold up, with one of them saying his bank has up to three deals between this week and early next week that include a potential dual-trancher. Another banker said a borrower is looking at the issuance window in the week when the ECB is holding its meeting on December 14. Strong demand The most eye-catching deal was Electricite de France's €1bn 3.5-year green bond, proceeds from which will be used for EU Taxonomy-aligned nuclear energy capital expenditures in existing French nuclear reactors. "From our knowledge, it's the first time in euros that there is a use of proceeds that is financing nuclear capex," said a lead, calling it an innovative feature. The controversial idea of using green bonds to finance nuclear power was first teed up nearly 18 months ago as the French state-owned utility was looking to support nearly €8bn of its annual nuclear spending. The June 2027s landed at 73bp, inside 105bp–110bp IPTs, via active bookrunners Credit Agricole, ING, Mizuho, Santander and UniCredit. Comparables pointed to a fair value of around 65bp–70bp. EDF, which is rated Baa1/BBB/BBB+, got €3.3bn of orders, just marginally down on the peak of €3.5bn-plus, as the size was increased from an expected €750m. JDE Peet's stood out among the day's four offerings in terms of final demand, with combined books of over €4.05bn for an evenly split €1bn dual-trancher, consisting of long six and long 10-year bonds. They landed at mid-swaps plus 125bp and 155bp, respectively, on final orders that exceeded €1.75bn for the shorter tranche and €2.3bn for the longer one. "[The sentiment] is less exuberant than the start of November but it's still strong because investors were so hungry for new deals as supply dried up in October," said a syndicate banker. Though there were double-digit concessions left on the table, the coffee and tea specialist (Baa3/BBB–/BBB) managed to tighten pricing by 30bp–40bp from initial price thoughts of 155bp–160bp and 190bp–195bp for the January 2030s and January 2034s, respectively. CreditSights analysts said they would be buyers down to 135bp and 160bp. "We hold an outperform recommendation on JDE Peet's, but given that the company is a fairly infrequent issuer and does not report on 3Q trading, meaning reduced operational visibility, we would still want some new issue concession," the analysts wrote. "Although 1H23 results were on the weaker side, we remain comfortable with the company's fundamentals, including strong market/brand positioning, robust free cashflow and like the spread pick-up available versus Triple B rated consumer peers." BNP Paribas, Bank of America, Deutsche Bank and MUFG were joint bookrunners. Real estate activity The real estate sector saw a rare surge in sup
Bellwether