Europe’s Debt Markets Boom With Deals Across Risk Spectrum Range – Bloomberg2021-03-19
Europe’s Debt Markets Boom With Deals Across Risk Spectrum Range
By Laura Benitez
(Bloomberg) — Europe’s primary credit markets boomed this
week as conditions aligned to fuel issuance from gold-plated
borrowers such as France to the junk-rated French oil services
firm CGG SA.
A slew of investment-grade issuers opted to sell debt
before the Federal Reserve met on Wednesday, getting sales done
as debate raged on the U.S. central bank’s take on inflation
risk. High-grade issuance topped 50 billion euros ($59.5
billion), with France helping set the bullish tone with a 7
billion-euros green bond sale that amassed more than 34.5
billion euros in orders.
Bond issuance by financial institutions in Europe also
jumped this week, with offerings from banks including Goldman
Sachs Group Inc. and Barclays Plc pulling the market out of a
prolonged slump. At the opposite end of the spectrum, high-yield
issuers have also been active with French real-estate firm
Foncia Holding SAS’s 650 million euros sale on Friday set to
lift weekly volume from the riskiest borrowers beyond 3 billion
CGG SA’s 585 million euros sale of CCC-rated debt on
Thursday takes sales of triple C-rated debt this year to around
3.5 billion euros and more than double the amount for the same
period last year. That tally is set to move higher still, as
German beauty retailer Douglas GmbH markets a 1.3 billion bond
sale that includes a CCC-rated esoteric payment-in kind note
with a chunky price tag.
Despite overwhelming demand for new transactions as
investors clamor for yield, CGG’s deal also showed how investors
were able to maintain discipline on pricing, according to
analysts at Spread Research.
“The deal demonstrated that investors have maintained
pricing power in pricing a troubled oil and gas company, as the
yield offered was much higher than market indexes for comparable
ratings,” the analysts said.