Banks from across Europe and further afield rushed into the euro senior unsecured and Tier 2 markets on Tuesday, hoping to capitalise on investor optimism after news of a US debt ceiling deal emerged over the long weekend, while also wary of turbulence ahead should the deal fail. The FIG market made up for lost time after the public holidays kept issuers sidelined on Monday, with seven tranches of unsecured debt offered in the single currency on Tuesday. Bankers said some issuers had accelerated their plans to come to the market, seeking to take advantage of a window that had opened up after hopes were raised that the US government will avert a potential default. US president Joe Biden and Republican house speaker Kevin McCarthy signed off on an agreement to temporarily suspend the US debt ceiling on Sunday. However, market participants were still wary of potential volatility ahead if the deal should fail to pass votes by the House of Representatives and the Senate. That uncertainty came to the fore as the day went on, causing European stock markets to slip. "It is not a surprise to see issuers utilise the decent backdrop we have now," said a banker. "There is still a risk that the debt ceiling discussions can go south... so why not take the opportunity when the market is pricing in that it will be fine?" "All the issuers that came to the market in the FIG space will be pleased they did so, given the outcomes today." Market participants said the success of Tuesday's deals, in spite of the depth of the competition, owed much not just to the constructive backdrop but also to the fact that supply was spread across different tenors and formats. Deals came from the short-end to the 10-year point, and were also differentiated by the use of various asset classes and ESG labels, as well as the mix of core European, peripheral European and Asian jurisdictions. Societe Generale notably opted for a relatively rare senior unsecured and subordinated two-part deal. The French bank's transaction comprised a four-year senior preferred and a 10-year Tier 2. Sole bookrunner Societe Generale marketed the 10-year bullet Tier 2 with IPTs of mid-swaps plus 300bp area. The issuer went on to raise €1bn at a final spread of 270bp, with demand surpassing €3.2bn (pre-rec, excluding JLMs). The €1.25bn four-year senior preferred tranche, meanwhile, was launched at a final spread of 95bp, inside IPTs of 120bp/125bp. Demand came in above €2.1bn (pre-rec, excluding JLMs). Double helping Belgian lender KBC also took a two-pronged approach with a holdco senior offering comprising a conventional three-year non-call two tranche and an 8.5-year social tranche, led by ABN, BNP Paribas, Bank of America, Citigroup, Credit Agricole, Deutsche Bank and KBC. The €1.25bn three-year non-call two was launched at 95bp, inside IPTs of 115bp area, with final demand standing above €1.75bn. The 8.5-year social tranche landed at 145bp, down from IPTs of 165bp area, with final demand surpassing €1.5bn. Bankers said the two-tranche strategy had paid off for both issuers, helping them to take larger sizes while generating price tension. Elsewhere, Banco de Sabadell impressed with a six-year non-call five green senior preferred after the leads were able to tighten the price of the deal by some 30bp. The deal was marketed with IPTs of mid-swaps plus 230bp area, via Banco Sabadell, Bank of America, Credit Agricole, Deutsche Bank, HSBC and ING. With demand surpassing €1.9bn, the leads set the spread at 200bp and the size at €750m. Bankers said the final spread incorporated a new issue concession of around 15bp, which they said was at the smaller end of the concessions on offer across the market on Tuesday. "Obviously the green label has helped them with that quite a bit, but still, for a six-year non-call five senior preferred from Sabadell to be able to tighten that much just shows how strong investor demand is there," said a second ba
Bellwether