American Airlines is in the US high-yield market on Wednesday with a new bond offering secured by its South American take-off slots, airport gates and routes to help refinance a loan maturing in 2025. Price talk on the US$750m five-year non-call two first lien senior secured note is 7.25%-7.5%. It is expected to price today. Barclays is lead left. Proceeds from the Ba3/B-/B rated bond will be used to refinance part of a US$1.752bn term loan B that is backed by the same collateral. The airline is also in the market with an amendment for the remaining portion of the loan that would extend the maturity by 2.5 years. Fitch, which assigned the notes a B rating, cautioned that intangible slots, gates and routes assets are "inherently difficult to value." However, the rating agency said that the South American portfolio is an important one for the company. In any bankruptcy restructuring scenario, Fitch said on Wednesday, American Airlines was not likely to "give up this pool of slots gates and routes given its strong competitive position in the region." American Airlines and its competitors have had to be creative with collateral packages over the past few years to raise capital during and after the pandemic, which sidelined much of the travel industry. The airline operator last issued a high-yield bond in March 2021, pricing a US$6.5bn two-part note secured against its AAdvantage loyalty program. Later that same year, American Airlines issued an investment-grade rated US$757.8m equipment trust certificate backed by a collateral package of new narrowbody passenger planes. S&P on Wednesday said that it views the proposed notes as a positive development for American Airlines and a "proactive step to addressing its significant and most onerous debt repayment obligations in 2025." In its most recent earnings presentation, American Airlines said it will continue to target US$15bn in total debt reduction by the end of 2025. Goldman Sachs, Bank of America and Citigroup are among other joint bookrunners on the deal.
Ally Financial jumped into the subordinated bond market for the first time in over seven years, following in the footsteps of a similar deal from fellow consumer-focused bank Synchrony Financial. Leads Bank of America, Goldman Sachs, JP Morgan and Morgan Stanley priced on Wednesday the US$500m subordinated transaction at Treasuries plus 335bp, tightening around 30bp from where the deal started marketing. The deal is rated Baa3/BB+/BB+. The new-issue pricing translated to around a 60bp-65bp spread over Ally's comparable senior bonds, according to CreditSights. That compared favorably with recent subordinated issuance, which had an average spread of about 100bp, according to a banker away from the deal. Ally's only other subordinated issuance – a 5.75% 2025 instrument printed in 2015 – changed hands at 123bp over Treasuries on Wednesday, according to MarketAxess. The lender is under pressure to replace those notes as they are well within their amortization window and only 40% of the notes would qualify as Tier 2 capital. Subordinated notes lose 20% of their capital treatment annually in the last five years of their life. In terms of comps, Synchrony Bank's recent US$750m 10-year subordinated transaction on January 30 offered a reference point. S&P and Fitch had also assigned a BB+ credit rating to those bonds. Unlike Ally's offering, Synchrony's issuance did not tighten from price thoughts, but rather came in line with initial expectations at Treasuries plus 375bp. The notes have continued to linger around those levels in the secondary market.
Chinese high-yield US dollar bonds from the property sector have traded up in the secondary market since November as China exited its zero-Covid isolation and the government rolled out more supportive economic measures. But some investors, who forecast an uneven recovery path, think the bonds have become overvalued even though many still offer double-digit yields. Dalian Wanda Commercial Management Group on Tuesday benefited from the strong sentiment to print its second dollar bond deal in less than a month. Both transactions, rated Ba3/BB (Moody's/Fitch), attracted global high-quality funds, with US$830m of orders for the most recent US$300m trade and US$1.4bn for the first US$400m bond, sources said. Both issues paid a reoffer yield of 12.375%. Wanda is not representative of the whole sector as it focuses on shopping mall management and not residential property construction, so that its success may be hard to replicate in the near term. But the bonds of other high-yield developers have seen benefited from better investor sentiment in the past three months. The ICE BofA Asian Dollar High Yield Corporate China Issuer index climbed 89% to 216.74 on Wednesday from 114.54 on November 3. Some of Country Garden Holdings’ longer-dated dollar bonds are up from seven cents in the dollar in November to between 50 and 60 this week, while Agile Group Holdings’ dollar bonds are up from below 20 to around 60. “Since the beginning of the year, buyers are coming in. There is long-only money that has been underweight since last year, and needs to chase performance when the market rallies," said Gordon Ip, co-chief investment officer for fixed income at Value Partners. "Fast money also takes advantage of momentum trading. There should be new money from Europe and the US that thinks the market has bottomed out and Chinese credits provide a relatively good value as the world decouples.” Hedge funds were among the first to take action, but some long-only funds and private banks which had said last year they were no longer buying China high yield are also returning, said a Singapore-based analyst. Funds all want the opportunity to book gains, but their risk appetites differ. The analyst said some of the lower-rated names are mainly supported by Chinese asset management companies specialising in distressed assets, while other Chinese investors are more conservative and only favour the high-grade investment property names with government links. Ip said many bonds still pay a premium over other credits and are worth holding, but investors should evaluate name by name, as some state-owned and "safer" names have become expensive. For example, bonds of Triple B rated China Vanke and Longfor Properties, seen as the top two privately owned developers, are trading around 90 and 80 cents in the dollar respectively and yielding around 6% to 7%. Outside of property, high-yield industrial names like aluminium producer China Hongqiao Group, China Grand Automotive and Fosun International still offer juicy returns compared to tightly traded investment-grade names, while allowing investors to diversify away from the real estate sector. But secondary market activity in industrials seems to be muted, apart from some existing bondholders who are willing to increase exposure, said a Hong Kong-based fund manager. Too late to buy Some investors are asking whether even high-yield property bonds have become too expensive to buy now, given the continuing risks in the sector. The upward trend was boosted by China’s fourth "arrow" measure, which allows banks to provide offshore refinancing loans to developers, and the country's reopening, but the uncertainty over China's economic recovery has marred the outlook for property bonds. There was already some selling of Double B rated Country Garden early this week, as the company's 2030s dropped up to six points between Monday and Tuesday, sending the yield up 40bp to 13.7%. Other names like Seazen G
Chinese high-yield US dollar bonds from the property sector have traded up in the secondary market since November as China exited its zero-Covid isolation and the government rolled out more supportive economic measures. But some investors, who forecast an uneven recovery path, think the bonds have become overvalued even though many still offer double-digit yields. Dalian Wanda Commercial Management Group on Tuesday benefited from the strong sentiment to print its second dollar bond deal in less than a month. Both transactions, rated Ba3/BB (Moody's/Fitch), attracted global high-quality funds, with US$830m of orders for the most recent US$300m trade and US$1.4bn for the first US$400m bond, sources said. Both issues paid a reoffer yield of 12.375%. Wanda is not representative of the whole sector as it focuses on shopping mall management and not residential property construction, so that its success may be hard to replicate in the near term. But the bonds of other high-yield developers have seen benefited from better investor sentiment in the past three months. The ICE BofA Asian Dollar High Yield Corporate China Issuer index climbed 89% to 216.74 on Wednesday from 114.54 on November 3. Some of Country Garden Holdings’ longer-dated dollar bonds are up from seven cents in the dollar in November to between 50 and 60 this week, while Agile Group Holdings’ dollar bonds are up from below 20 to around 60. “Since the beginning of the year, buyers are coming in. There is long-only money that has been underweight since last year, and needs to chase performance when the market rallies," said Gordon Ip, co-chief investment officer for fixed income at Value Partners. "Fast money also takes advantage of momentum trading. There should be new money from Europe and the US that thinks the market has bottomed out and Chinese credits provide a relatively good value as the world decouples.” Hedge funds were among the first to take action, but some long-only funds and private banks which had said last year they were no longer buying China high yield are also returning, said a Singapore-based analyst. Funds all want the opportunity to book gains, but their risk appetites differ. The analyst said some of the lower-rated names are mainly supported by Chinese asset management companies specialising in distressed assets, while other Chinese investors are more conservative and only favour the high-grade investment property names with government links. Ip said many bonds still pay a premium over other credits and are worth holding, but investors should evaluate name by name, as some state-owned and "safer" names have become expensive. For example, bonds of Triple B rated China Vanke and Longfor Properties, seen as the top two privately owned developers, are trading around 90 and 80 cents in the dollar respectively and yielding around 6% to 7%. Outside of property, high-yield industrial names like aluminium producer China Hongqiao Group, China Grand Automotive and Fosun International still offer juicy returns compared to tightly traded investment-grade names, while allowing investors to diversify away from the real estate sector. But secondary market activity in industrials seems to be muted, apart from some existing bondholders who are willing to increase exposure, said a Hong Kong-based fund manager. Too late to buy Some investors are asking whether even high-yield property bonds have become too expensive to buy now, given the continuing risks in the sector. The upward trend was boosted by China’s fourth "arrow" measure, which allows banks to provide offshore refinancing loans to developers, and the country's reopening, but the uncertainty over China's economic recovery has marred the outlook for property bonds. There was already some selling of Double B rated Country Garden early this week, as the company's 2030s dropped up to six points between Monday and Tuesday, sending the yield up 40bp to 13.7%. Other names like Seazen G
Ineos, the chemicals company built by billionaire Jim Ratcliffe, will seek to maximise pricing tension for its US dollar and euro 5.25-year non-call two senior secured bonds, for which books are expected to open on Thursday. Price talk for the notes, to be issued by Ineos Group, was set at 7%–7.25% area for the euro portion, according to an official update, and low 7% area for the dollar portion on Wednesday, according to a source familiar with the deal. The company is seeking the equivalent of €2bn of debt, evenly split across loans and bonds, to refinance the remaining €2.1bn-equivalent of its US dollar and euro-denominated term loan B that matures in 2024. The bond mandate this week followed an announcement last week of a €2bn-equivalent dual-currency fundraising in the loan market, which will now be downsized. The company’s exposure across the world means it can tap investors on both sides of the Atlantic, said the source. “By having optionality, we can grow or shrink the tranches based on demand,” he said. “We are seeing all four markets competing against each other on each tranche.” While sizing on each tranche is still being finalised, the source familiar said each portion will have a minimum of US$400m/€400m. A banker said that Ineos was a well-known, well-liked company with strong cash generation – it had cash balances of about €2.6bn at the end of 2022, according to Moody's – which meant that the size of the deal wouldn't be an issue for the market to take up. Ineos’ new high-yield bond offering has already received strong interest from existing investors in both the US and European markets, the source familiar said. CreditSights analysts estimated fair value for the new euro notes in the low to mid-7% area and in the high 6% area for the dollar portion. One euro high-yield investor said the offering was hardly a surprise. "Larger borrowers don't mind coming to market to term out debt, as the interest cost will only increase marginally," he said. The new notes are expected to be rated at Ba2/BB/BBB–. The corporate rating is Ba2/BB/BB+. Alongside the bond offering, the company intends to raise the equivalent of €1bn across a fungible add-on tap on the euro TLB due November 2027 as well as a new US dollar TLB due February 2030. The company released a trading update for the fourth quarter on February 3. Ineos reported a sharp drop in Ebitda to €392m compared to the same period the year before, which it attributed to losses from non-cash inventory holdings because of the large decline in crude oil and product prices in the three-month period. Pro forma the transaction, net total leverage will remain stable at 1.7x based on Ebitda before exceptionals of €3.263bn in the last 12 months to September 2022, according to a company presentation. Goldman Sachs and ING are joint global coordinators and joint physical bookrunners for the euro portion, alongside HSBC, which is also B&D. Goldman Sachs is B&D and joint global coordinator and sole physical bookrunner for the US dollar portion, while Barclays, BNP Paribas and Citigroup are joint global coordinators. A global investor call was held on Tuesday, with small group sessions scheduled through to Thursday, and pricing expected thereafter.
A surge in interest for covered bonds allowed issuers to generate historically high demand and pricing leverage for deals on Wednesday, as ING Bank stood out with the largest trade with a tenor of 10 years or longer in over three years, in spite of the European Central Bank's gradual withdrawal from the primary market. The ECB announced last week that it would phase out its primary market purchases of covered bonds and other private sector bonds by March, focusing on secondary market purchases thereafter. That process has already begun, with the ECB this week placing orders for only around 10% of the deal size of eligible new issues, according to multiple sources, down from its previous typical bid of 20%. However, the market has so far taken the news in its stride, with bankers describing the execution dynamics in the euro covered bond sector as being the strongest for some time. They said a shift in sentiment in recent days has driven previously circumspect investors to pile in to the market, encouraged by strong secondary market performance. "A lot of the more opportunistic buyers entered into 2023 more cautiously and were not looking to build any inventory or go long bonds, in anticipation of big spread widening on the back of the big primary supply we get in January," said a banker. "But, despite the massive supply we had in January, the secondary market has performed remarkably well – almost every bond has performed – and that has helped with sentiment and now all these investors are looking to make up for the lost four weeks." Bankers also cited recent rates moves as having boosted the attractiveness of short and long-dated bonds, amid an inversion of the curve, while in some segments of the market, the repricing seen year-to-date means covereds now look attractive versus the senior preferred bonds of tighter-trading issuers. These shifting dynamics have meant the ECB's withdrawal has so far been of little consequence, said bankers. "So far, so good," said a second banker. "Real money demand has been there to replace [ECB demand], even over-replace it, because the books we're seeing are massive." The most dramatic example on Wednesday was the success of a dual-tranche deal from ING, which included the first euro benchmark covered bond with a tenor of 10 years or longer since January 23. The Dutch bank offered a three-year tranche with initial guidance of mid-swaps plus 4bp area and a 10-year tranche at 23bp area, via BayernLB, Danske Bank, DZ Bank, Erste Group, ING, Natixis, Santander and Scotiabank. Demand in excess of €4.8bn (excluding JLMs) for the three-year allowed ING to price €2bn at minus 2bp, flat to fair value. Orders came in above €3.2bn (excluding JLMs) for the 10-year, the size of which was also set at €2bn as the spread was fixed at 19bp, incorporating around 4bp of new issue concession. The tranche is the largest euro covered bond with a tenor of 10 years or longer since ABN AMRO printed a €2bn 15-year in January 2020 and boasts the largest book for such a transaction since Caffil pulled in €3.25bn-plus demand for a €1.5bn 10-year in January 2021.All the rage Germany's Aareal Bank also provided a stark demonstration of how conditions have improved as it priced a €750m three-year mortgage Pfandbrief at 3bp, flat to fair value, off more than €2.35bn of demand (including €125m JLM interest). Just five weeks ago, on January 4, Aareal priced a €750m long four-year (October 2027) Pfandbrief at 14bp, paying around 6bp of new issue concession, pulling in more than €1bn of orders (including €165m JLM interest). "Aareal in the past has had some struggles and it is quite a frequent issuer, so one could have argued it would not benefit from this rage for bonds, but it did," said the first banker. "No one saw a €2bn-plus book coming." It is not just the scale of demand that has caught the eye but also the pricing leverage issuer
Ineos, the chemicals company built by billionaire Jim Ratcliffe, will seek to maximise pricing tension for its US dollar and euro 5.25-year non-call two senior secured bonds, for which books are expected to open on Thursday. Price talk for the notes, to be issued by Ineos Group, was set at 7%–7.25% area for the euro portion, according to an official update, and low 7% area for the dollar portion on Wednesday, according to a source familiar with the deal. The company is seeking the equivalent of €2bn of debt, evenly split across loans and bonds, to refinance the remaining €2.1bn-equivalent of its US dollar and euro-denominated term loan B that matures in 2024. The bond mandate this week followed an announcement last week of a €2bn-equivalent dual-currency fundraising in the loan market, which will now be downsized. The company’s exposure across the world means it can tap investors on both sides of the Atlantic, said the source. “By having optionality, we can grow or shrink the tranches based on demand,” he said. “We are seeing all four markets competing against each other on each tranche.” While sizing on each tranche is still being finalised, the source familiar said each portion will have a minimum of US$400m/€400m. A banker said that Ineos was a well-known, well-liked company with strong cash generation – it had cash balances of about €2.6bn at the end of 2022, according to Moody's – which meant that the size of the deal wouldn't be an issue for the market to take up. Ineos’ new high-yield bond offering has already received strong interest from existing investors in both the US and European markets, the source familiar said. CreditSights analysts estimated fair value for the new euro notes in the low to mid-7% area and in the high 6% area for the dollar portion. One euro high-yield investor said the offering was hardly a surprise. "Larger borrowers don't mind coming to market to term out debt, as the interest cost will only increase marginally," he said. The new notes are expected to be rated at Ba2/BB/BBB–. The corporate rating is Ba2/BB/BB+. Alongside the bond offering, the company intends to raise the equivalent of €1bn across a fungible add-on tap on the euro TLB due November 2027 as well as a new US dollar TLB due February 2030. The company released a trading update for the fourth quarter on February 3. Ineos reported a sharp drop in Ebitda to €392m compared to the same period the year before, which it attributed to losses from non-cash inventory holdings because of the large decline in crude oil and product prices in the three-month period. Pro forma the transaction, net total leverage will remain stable at 1.7x based on Ebitda before exceptionals of €3.263bn in the last 12 months to September 2022, according to a company presentation. Goldman Sachs and ING are joint global coordinators and joint physical bookrunners for the euro portion, alongside HSBC, which is also B&D. Goldman Sachs is B&D and joint global coordinator and sole physical bookrunner for the US dollar portion, while Barclays, BNP Paribas and Citigroup are joint global coordinators. A global investor call was held on Tuesday, with small group sessions scheduled through to Thursday, and pricing expected thereafter.
Fresh off a successful long-end dollar trade the day before, the European Investment Bank re-emphasised the sunny conditions in the euro market with a €30bn-plus book, as SSA prints in both the single currency and dollars across the curve find traction. The supranational raised €5bn from a long five-year climate awareness bond led by Commerzbank, Morgan Stanley, NatWest Markets and UniCredit. The book closed at more than €30.5bn. The paper tightened 2bp from the 7bp area below mid-swaps guidance, offering 2bp of new issue concession, a lead on the deal said. The previous day, it lured books in excess of US$19.6bn for its US$5bn 10-year CAB – the highest-ever volume for an EIB Global benchmark as well as for any dollar supra transaction. “There were some concerns at the open this morning given the ECB [news that it was looking to inject more cash into the market via reduced remunerations],” the lead said. “But €30.5bn is up there in terms of the overall size of order books we’ve seen [recently from bigger SSAs]. It’s in line with KfW yesterday." The central bank said on Tuesday that it would cut the maximum rate it pays on deposits held by governments to give them an incentive to redeploy that cash into the financial system, Reuters reported. “Obviously there was a big, immediate reaction yesterday in short-end swap spreads," the lead said. "But it’s settled down a bit here.” Those headlines did little to knock confidence in the euro market. “I’m very bullish with regards to the market, despite the ups and downs in spreads affected, for example, by yesterday’s ECB announcement,” said a banker away from Wednesday’s primary flows. “The remuneration of the money that official institutions have at the ECB is not ESTER anymore, but ESTER minus 20bp, which affected swaps spreads and in turn affected the spreads of SSAs also.” But he said the clarity around the terminal rate was helpful. "The path is clear and going forward we will see more of a stable environment, at least for the short term, over the next month or at least until the next ECB meeting," the banker away said. "It’s a very good environment to continue from where we were, as from the first day we had quite a strong primary market and it’s still going well.”Returning clout for ESG? The ESG deals on Wednesday bore the marks of bubbly conditions. One of them delivered record interest: the Basque Government had books of over €5bn for a €700m long 10-year sustainable issue, a new high for the name. BBVA, CaixaBank, Citigroup, HSBC, Nomura, Norbolsa and Santander led the trade, tightening it 6bp from the 27bp area above SPGBs guidance. That guidance equated to 75bp above mid-swaps. The regional issuer surpassed its previous order book record by some margin. It had stood at €3.3bn, the interest the Basque Government built via a €500m 0.85% 10-year sustainability bond it issued in March 2020. A strong showing from ESG bonds in the past couple of weeks has suggested a possible return of greeniums, two bankers have told IFR, on top of the help the status provides to leads gathering interest for the paper. “Yesterday, KfW’s 10-year was clearly showing that there is a huge demand for green investments,” said a banker away from the week’s euro SSA ESG issuance. "Also Berlin on Monday, and today the same with EIB." A lead on the KfW deal said the day it priced: “We need to see a bit more evidence, maybe a couple more deals to draw a proper conclusion, but both European Investment Bank [out in the dollar market with a ‘climate awareness bond’ the day before its new euro deal] and KfW have absolutely flown and it’s difficult to ignore the green label there.” The EIB lead was more sceptical about the help ESG labels are offering SSA issuers: “I think it helps on the margin.&rd
A surge in interest for covered bonds allowed issuers to generate historically high demand and pricing leverage for deals on Wednesday, as ING Bank stood out with the largest trade with a tenor of 10 years or longer in over three years, in spite of the European Central Bank's gradual withdrawal from the primary market. The ECB announced last week that it would phase out its primary market purchases of covered bonds and other private sector bonds by March, focusing on secondary market purchases thereafter. That process has already begun, with the ECB this week placing orders for only around 10% of the deal size of eligible new issues, according to multiple sources, down from its previous typical bid of 20%. However, the market has so far taken the news in its stride, with bankers describing the execution dynamics in the euro covered bond sector as being the strongest for some time. They said a shift in sentiment in recent days has driven previously circumspect investors to pile in to the market, encouraged by strong secondary market performance. "A lot of the more opportunistic buyers entered into 2023 more cautiously and were not looking to build any inventory or go long bonds, in anticipation of big spread widening on the back of the big primary supply we get in January," said a banker. "But, despite the massive supply we had in January, the secondary market has performed remarkably well – almost every bond has performed – and that has helped with sentiment and now all these investors are looking to make up for the lost four weeks." Bankers also cited recent rates moves as having boosted the attractiveness of short and long-dated bonds, amid an inversion of the curve, while in some segments of the market, the repricing seen year-to-date means covereds now look attractive versus the senior preferred bonds of tighter-trading issuers. These shifting dynamics have meant the ECB's withdrawal has so far been of little consequence, said bankers. "So far, so good," said a second banker. "Real money demand has been there to replace [ECB demand], even over-replace it, because the books we're seeing are massive." The most dramatic example on Wednesday was the success of a dual-tranche deal from ING, which included the first euro benchmark covered bond with a tenor of 10 years or longer since January 23. The Dutch bank offered a three-year tranche with initial guidance of mid-swaps plus 4bp area and a 10-year tranche at 23bp area, via BayernLB, Danske Bank, DZ Bank, Erste Group, ING, Natixis, Santander and Scotiabank. Demand in excess of €4.8bn (excluding JLMs) for the three-year allowed ING to price €2bn at minus 2bp, flat to fair value. Orders came in above €3.2bn (excluding JLMs) for the 10-year, the size of which was also set at €2bn as the spread was fixed at 19bp, incorporating around 4bp of new issue concession. The tranche is the largest euro covered bond with a tenor of 10 years or longer since ABN AMRO printed a €2bn 15-year in January 2020 and boasts the largest book for such a transaction since Caffil pulled in €3.25bn-plus demand for a €1.5bn 10-year in January 2021.All the rage Germany's Aareal Bank also provided a stark demonstration of how conditions have improved as it priced a €750m three-year mortgage Pfandbrief at 3bp, flat to fair value, off more than €2.35bn of demand (including €125m JLM interest). Just five weeks ago, on January 4, Aareal priced a €750m long four-year (October 2027) Pfandbrief at 14bp, paying around 6bp of new issue concession, pulling in more than €1bn of orders (including €165m JLM interest). "Aareal in the past has had some struggles and it is quite a frequent issuer, so one could have argued it would not benefit from this rage for bonds, but it did," said the first banker. "No one saw a €2bn-plus book coming." It is not just the scale of demand that has caught the eye but also the pricing leverage issuer
Sage Group led the way on another issuer-friendly day on Wednesday, with the UK software company's debut offering in euros more than six times subscribed at peak demand. The firm was joined in the market by a pair of automakers, Volvo Treasury and General Motors, with both targeting the short-end to raise funds via their financing entities. All three deals were at least 2.5 times covered, even after paying negative to minimal new issue concessions. "Although there is some background noise in the rates market following [last week's] central bank meetings, the credit space remains extremely strong. With little inventory in the secondary, investors are keep on adding risk in the primary," said a DCM head. Recent new issues have performed well in the secondary even with minimal concessions, said a second DCM head. "When I looked at the performance chart earlier this week, all but one was in the green," he said, referring to 2023's deals. Sage Group, rated BBB+ by S&P, printed a capped €500m five-year bond via Bank of America, HSBC, Lloyds and Standard Chartered as the company sought to diversify its funding. At one stage the deal had books of €3.3bn, before demand fell to €2.85bn by the end. The leads tightened pricing aggressively throughout, with a move from IPTs of 120bp–125bp over swaps to guidance of 95bp area to a final spread of 85bp. "We normally see a move of 1bp–3bp from guidance at launch, so a move of 5bp–10bp just shows how good investor reception is right now and how there is limited investor drop-off despite the tightening," said a lead banker. Fair value was hard to pinpoint given the inaugural nature of the trade, though the lead saw it at 90bp. During the roadshow earlier in the week, investor feedback for pricing came in the range of 90bp–100bp. "The market is a lot more positive for debut issuers compared to last year, and for the tech sector it's probably better to have more liquidity now than later," said the lead. Regular issuer Volvo (A2/A–) also gained a strong response to its €700m November 2025s that paid a negative new issue concession of 3bp after landing at 35bp, according to a lead. Guidance was set at 40bp after 70bp area IPTs via Credit Agricole, Danske Bank and UniCredit. Final books were above €3.6bn, with investors attracted by the 3.524% yield on offer from such a highly-rated corporate. Sterling liquidity General Motors (Baa3/BBB/BBB–; stable/stable/positive) managed to tap the deep liquidity at the short end of the sterling market with a £400m August 2026 note that the issuer placed alongside a €750m February 2029 tranche. The sterling bond was upsized from an expected £350m when guidance was out. "Supply and demand in sterling remain in issuers' favour – plenty of liquidity looking at all these deals, albeit the longer the better from an investor point of view," said a lead. Indeed, orders for the sterling portion saw almost no attrition as final books came in at around £1.5bn after peaking over that amount. Demand for the euro bond was €2bn, a slight drop from €2.3bn at guidance. The February 2029s launched at 140bp over swaps from IPTs of plus 170bp area, while the August 2026s came in at 195bp over Gilts from a starting point of 220bp area. Bankers on and away from the deal spotted fair value at 130bp–133bp and 185bp. Detroit-based General Motors Company is the ultimate parent of the issuer General Motors Financial Company. Barclays, BNP Paribas, ICBC, IMI – Intesa Sanpaolo, Lloyds and UniCredit were the active bookrunners.
Bellwether