Alternative asset manager Intermediate Capital Group priced a €500m eight-year sustainability-linked note issue at mid-swaps plus 230bp, failing to tighten from initial price thoughts.
"These days, there is not a lot of momentum to move the price," said a DCM banker away from the deal. "It looked like a solid deal to me, coming from not a very well-known name."
Books came in at over €600m via HSBC, JP Morgan and Societe Generale.
“It’s a modest subscription for a benchmark size, which is interesting given the pick-up people are getting paid,” said a lead. He put the concession in the context of 30bp, citing ICG’s February 2027s that were seen at around 133bp, although the premium depends on how people work out the curve.
The issuer was planning an eight or 10-year maturity but eventually went with the shorter tenor, as the rates environment is prompting investors to become more price-sensitive at the long end of the curve.
“The issuer would have preferred a 10-year, if it was on, but the feedback we received was quite heavily skewed to towards the eight-year," said the lead.
The bond issue extends the company's debt maturity profile and locks in cheaper financing, as ICG (BBB–/BBB) plans to use the proceeds to refinance maturing debt and increase cash reserves, according to S&P.
There is a 30bp coupon step-up if the company fails to meet its sustainability targets.