Here’s What to Watch in European High-Yield Bonds This Week
By Laura Benitez and Sarah Husband
(Bloomberg) — At least eight high-yield borrowers are
marketing new bonds to capitalize on still favorable market
conditions ahead of any further volatility sparked by the U.S.
Federal Reserve’s more hawkish tone on inflation risks.
Firms lining up new deals this week include InPost SA,
Guala Closures SpA, Paprec Holding SA, Mobilux Finance SAS and
Nobian Finance BV. Some issuers even took the rare step of
launching deals on Friday, typically a quiet day for market
activity, to catch the attention of investors amid the rush of
sale activity.
The latest set of transactions include financing leveraged
buyouts and repaying state loan debt. On Friday, U.K pub chain
Punch Taverns slashed pricing on its 600 million-pound ($833
million) 5NC2 secured notes to 6.125%, rounding out a winning
week for borrowers, which were all able to priced their deals
sales below initial price talk, according to analysts at Spread
“Last week, U.S. policy makers made it clear that they
expect to make two interest rates rises in
2023 from near zero now in order to fight inflation; we view
this as the clear driver for the new
issue wave investors will have to deal with this week,” analysts
at the firm said in a note to clients on Monday.
Junk Bond Euro Sales Stoked by Stimulus Notch First-Half
French recycler Paprec is marketing a 450 million-euro
($535.3 million) NC3 secured green note to support bolt-on
acquisitions and partly repay a French government loan.
Commodity chemical company Nobian is holding investor calls for
a 425 million-euro 5NC2 sustainability-linked secured note to
support the firm’sspin-off from Nouryon. That deal also comes
with loan financing.

Bustling Activity

Europe’s leveraged loan market is also bustling with
activity. M&A buyout deals are fueling the supply as private
equity sponsors tap the market for loan deals of around 1
billion euros in size for food can maker Titan, French flooring
maker Tarkett SA and Valeo Foods Group Ltd.
Leveraged loans and bonds worth roughly 130 billion euros
have come to market so far this year, according to data compiled
by Bloomberg. […]