Ithaca Energy issuing first € bond as cheaper that issuing $ and swapping to euro. My basic maths has € at 5.75%, a $ deal likely at 7%, which swaps to 5.75% in euro + cost of swap line. Reverse yankee not for everyone though as ZF and Forvia both issuing $ to refi €
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ELFA appoint Ed Eyerman as CEO, replacing Sabrina Fox who announced her resignation last year. A good hire for ELFA.
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HY primary still px tight but there's teensy bit of px discipline. Iliad, TUI Cruises, and B&M all came with little-to-no NIP. Some px on top of shorter dated debt. All then sluggish/inert in 2ndry. BUT investors did draw a line with 2 not pricing at tight-end of final guidance
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Barings becomes the first manager to issue a European mid-market CLO, via BNPP. Static deal with a 1Y NC period. €380mn deal. Rated by Fitch and S&P.
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Luke M retweeted
“So it’s not about you, it’s not about your farm and the fact you bought a farm to avoid inheritance tax?”
@vicderbyshire speaks to Jeremy Clarkson at the farmers’ protest in Westminster where thousands of farmers are protesting the government’s inheritance tax plans.
5 companies launched/priced new HY this month & all €2.85bn is new-money. Not bad for a market that has been shrinking. 3 of the 5 are debutantes, while 4 are refinancing bank debt/TLs/dollar HY with €HY. Innmotics set to be another debutante next wk, after launching TL this AM
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MasOrange with a privately placed bond is unusual given strength of public market. 5.75% seems generous for Double B too, as does the dollar term loan margin of 350. European telco paper, unsurprisingly, needs a premium it seems.
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Largest weekly volume for £HY primary in nearly 3yrs. Good depth & attractive pricing enthused bankers. Paves way for more & there are ~£7.5bn of 2025 maturities. B3/B-/B AM bonds have popped over 1.5pts too so good risk appetite. Bodes well for tricky £ refis. Stonegate anyone?
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EMEA Insight: Sterling high-yield primary on hot streak, paving the way for more to follow - v2.creditsights.com/articles…
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Avis new issue shines light on euro HY 2ndry inertia. New 2029 bonds likely price 7%. 2030s were 6.6% pre-announce = 40bps pick-up for 1Y less tenor. Big for a BB. But then its euro bonds barely moved after Q4 earnings while 5Y CDS shot up, equity tumbled, dollar bonds fell 3pts
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As for HY companies waiting for cheaper market, I have all-in yields obviously still much higher than 2020/21 but average spread over govvies came down sharply in Jan to near the lows of last 5yrs. Implies any fall in cost of debt will come pretty much from rates alone. Risky
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Good start for HY primary. Jan biggest mth since Nov 2021. Pricing getting tighter but bonds still perform. Clear shift to FRNs thanks to falling CLO liabs & desire for maximum future refi ability. But many also holding off refi as feel market will get tighter. Game of chicken.
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Expect more FRNs, more bond-to-loan, more refis with sub-par takeouts, more liability mgmt, some more divvys, and in-time, a little more M&A.
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Iliad new Feb 29s guided 5.5% area. Convexity vs higher cpn. Feb 28s yield 4.5% so ~100bps pick-up for 1Y extension seems v attractive. But 28s trade at ~90 so a new par bond will need more yield to counter convexity. Feb 2030s at 100.7/5.5% so no convexity. Is FV then really ~5%
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Luke M retweeted
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The 4/6-year deal from Paprec an interesting structure. Allows company to spread out maturities and keep NC2 flexibility. 4Y appeals to strong short-duration bid. 6Y gives accts yield pick-up without taking on much more rates risk. Downside is a single 5Y would be more liquid
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