Commentary & Deal Flow

• Although the session opened up very much ‘risk on’, supply was light, in keeping with the pipeline from the day before.
• European IG supply delivered €2.5bn from 2 issuers / 3 tranches (1 x Corp, 1 x FIG).
• The only previously unannounced new issue of the day came via a dual-tranche covered bond from Westpac. While the transaction generated a decent book, the tightening from IPTs was only 5bps, smaller than the typical 6 or 7bps that we have seen on covered bonds in recent weeks. The price sensitivity was also reflected in the NIC (c.+3 for the 3.7 year & +6 for the 10 year).
• Both the Fed & the Bank of England are making their own announcements next week, so we would expect supply to be heavily front loaded to Monday’s session, though much will of course depend on whether or not Trump's optimistic claims & comments come to fruition.
• A breakdown of today’s primary supply is as follows.
• • Corporate
  • • Total IG: €650m
    • Avg. tranche size €650m
    • Avg. IPT to Pricing -35bps
    • Avg. cover  NA
  • FIG
  • • Total IG: €1.85bn
    • Avg. tranche size €925m
    • Avg. IPT to Pricing -5bps (covered)
    • Avg. cover 1.57 X

Euro IG (today)

Corporate

• Having announced the mandate on Wednesday, American global pharmaceutical & healthcare company Viatris Inc. (exp. Issue ratings of Baa3 / BBB by Moody’s & Fitch), brought a benchmark, 7 year, senior unsecured, SEC registered issue. IPTs were in the area of MS+170. Size was set early at €650m when spread was set at MS+135. No books were made available (SEC Registered). The trade priced at MS+135.

FIG

• Westpac Banking Corporation (exp. Issue ratings Aaa / AAA by Moody’s & Fitch) came out first in this ‘risk-on’ session. They announced a dual tranche € benchmark covered issue, with a 3.7 year & 10 year tranche. Guidance on the bullet offerings were in the area of MS+25 & MS+47 respectively. Combined books were first cited as being over €2.75bn (inc. €540m JLMs). The split being >€1.5bn (inc. €275m JLMs) for the 3.7yr & >€1.25bn (inc. €265m JLMs) for the 10yr. Combined books rose to over €3bn, split €1.75bn & €1.25bn (inc. €540m JLMs). The shorter tranche attracted the most interest & this was reflected in the size, with the 3.7 year sizing at €1.25bn with books >€1.75 (inc. €275m JLMs); the 10 year sized at €600m with books >€1.15bn (inc. €265m JLMs). The 3.7 year priced 3.5bps tighter than IPTs offering a NIC of 3bps. The smaller 10 year also priced 5 tighter than IPTs but offered up a larger NIC of 6bps. 

Week-to-date volumes:

Year-to-date volumes:

Sterling IG (today)

No Supply

Week-to-date volumes:

Year-to-date volumes:

Swiss Franc IG (today)

No Supply

Week-to-date volumes:

US$ Reg S (today)

No Supply

Pending Deals & Mandates 

Euro (€)

• Thursday, 11th June: Fiserv, Inc. (rated Baa2 / BBB by Moody’s & S&P), mandated Citigroup, JP Morgan, TD Securities & Wells Fargo Securities to arrange a series of fixed income investor calls to take place on Thursday, June 11th & Friday, June 12th. An electronic presentation with voiceover has been made available. An SEC-registered, € benchmark senior unsecured transaction across Long 4yr & 8yr fixed-rate notes may follow, subject to market conditions. JP Morgan is coordinating logistics.

• Thursday, 28th May: The German State of Saxony-Anhalt (Aa1 / AAA / AAA), mandated (27th May) DekaBank as the sole lead manager for its inaugural 2-year blockchain-based digital bond issuance (crypto security under German eWpG). On Friday the 12th of June, an update was provided, with the issuer targeting an expected €100m. The lead manager made itself available for meetings/calls on request. The issuer is targeting the week of 29th June, subject to market conditions.

Transaction Details 

PRICED: Viatris €650m 7yr Sr Unsec; MS+135bp

IGC European Market: Deal Flow - General

Reoffer: 7yr: MS+135bp / 99.739 / 4.294%
Benchmark: 7yr: 145.3bp vs DBR 2.3 15-Feb-33 @ 96.750 / 2.841% (HR: 101%)

Launched: 7yr: €650m @ MS+135bp
IPTs: 7yr: MS+170a

• Issuer: Viatris Inc. (Ticker: VTRS / Country: US)
• Guarantor: Mylan Inc., Mylan II B.V., and Utah Acquisition Sub Inc.
• Issuer LEI: 254900ZZTSW7NL773X71
• Issuer Ratings & Outlooks (M/S/F): Baa3 / BB+ / BBB (Stable / Stable / Stable)
• Expected Issue Ratings (M/S/F): Baa3 / BB+ (unsolicited) / BBB
• Format/Docs: SEC Registered, Senior Unsecured
• Total Size: €650m
• Tenor: 7yr
• Maturity Date: 17-Jun-33
• Re-offer: MS+135bp / 99.739 / 4.294%
• Benchmark: 145.3bp vs DBR 2.3 15-Feb-33 @ 96.750 / 2.841% (HR: 101%)
• ISIN: XS3325429580
• Common Code: 332542958
• Change of Control Offer: at 101% after Change of Control Repurchase Event
• Optional Redemption: 2 month par call / MWC (B+25bp) / Tax Call
• Coupon: 4.25%, Fixed; Annual; ACT/ACT (ICMA)
• Denominations: €100,000 x €1,000
• Settlement: 17-Jun-26 (T+3)
• Use of Proceeds: To (i) fund the repayment of any amounts borrowed under the Revolving Credit Facility in June 2026 in connection with the repayment of the Company’s senior notes due 2026 (the “2026 Senior Notes”) and (ii) the remainder, if any, to replenish cash that will be utilized in connection with the repayment of the 2026 Senior Notes, with such cash to be used for general corporate purposes
• Governing Law: State of New York
• Listing: Euronext Dublin (Global Exchange Market)
• Clearing: Clearstream, Euroclear
• Active Bookrunners: BNP Paribas, Citigroup, Goldman Sachs & Co. LLC (B&D)
• Selling restrictions: As per the Issuer’s Prospectus Supplement dated 12-Jun-26
• Stabilization: Relevant stabilization regulations including ICMA/FMA apply
• Target Market and PRIIPs: Manufacturer target market (MiFID II and UK MiFIR product governance) is eligible counterparties and professional clients only (all distribution channels). No EEA PRIIPs key information document (KID) or UK disclosure document required by DISC have been prepared as not available to retail in EEA or UK.
• Timing: TOE: 14:48 UKT / FTT TBD - subject to final TS

PRICED: Westpac Banking €1.85bn 3.7yr & 10yr CB; MS+20 & MS+42

IGC European Market: Deal Flow - General

Reoffer: 3.7yr: MS+20 / 99.999 / 3.041% 10yr: MS+42 / 100 / 3.477%
Benchmark: 3.7yr: OBL 2.4 30 #191 @ 98.991 / B+36.2 / HR 96% 10yr: DBR 2.9 15-Feb-36 @ 99.042 / B+46.3 / HR 101%

Tranche 1 (3.7yr): Final Books €1.75bn+ (incl. €275m JLM). Peak book €1.75bn+
Tranche 2 (10yr): Final Books €1.15bn+ (incl. €265m JLM). Peak book €1.25bn+

Launched:
3.7yr: €1.25bn @ MS+20bp - Books above €1.75bn+ (incl. €275m JLM)
10yr: €600m @ MS+42bp - Books above €1.2bn+ (incl. €265m JLM)
Spread set at: 3.7yr: MS+20bp - Books above €1.75bn+ (incl. €275m JLM) 10yr: MS+42bp - Books above €1.25bn+ (incl. €265m JLM)
Book Update: Combined books: €2.75bn+ (incl €540m JLM)
Guidance: 3.7yr: MS+25a 10yr: MS+47a

• Issuer: Westpac Banking Corporation (ABN 33 007 457 141)
• LEI: EN5TNI6CI43VEPAMHL14
• Covered Bond Guarantor: BNY Trust Company of Australia Limited, in its capacity as Trustee of the Westpac Covered Bond Trust
• Type: Australian legislative Covered Bond, backed 100% by prime Australian residential mortgages
• Issuer Rating: Aa2 (Stable) / AA- (Stable) / AA- (Stable) (Moody's/Fitch/S&P)
• Expected Issue Rating: Aaa / AAA (Moody's/Fitch)
• Format: Bearer Form, Classic Global Covered Bonds, Reg S (TEFRA D rules apply – no communications with or into the US)
• Size:
• • 3.7yr: €1.25bn
  • 10yr: €600m
• Settlement Date: 23-Jun-26 (T+7)
• Maturity Date:
• • 3.7yr: 01-Mar-30, soft bullet maturity
  • 10yr: 23-Jun-36, soft bullet maturity
• Coupon:
• • 3.7yr: 3.038% Fixed, Annual, Act/Act (ICMA), Unadjusted. Short first coupon
  • 10yr: 3.477% Fixed, Annual, Act/Act (ICMA), Unadjusted
• Re-offer:
• • 3.7yr: MS+20 / 3.041% yld / 99.999
  • 10yr: MS+42 / 3.477% yld / 100
• Benchmark:
• • 3.7yr: OBL 2.4 30 #191 + 36.2 (Spot:98.991 / HR 96%)
  • 10yr: DBR 2.9 15-Feb-36 + 46.3 (SPOT: 99.042 / HR 101%)
• ISIN:
• • 3.7yr: XS3413338065
  • 10yr: XS3413338149
• Joint Leads:
• • 3.7yr: Barclays, Crédit Agricole CIB, Natixis, Societe Generale, UBS (B&D) and Westpac Banking Corporation
  • 10yr: Barclays, Crédit Agricole CIB, Natixis (B&D), Societe Generale, UBS and Westpac Banking Corporation
• Listing / Denoms: London Stock Exchange’s Main Market / EUR100k + EUR1k
• Target Market: MiFID II / UK MiFIR professionals/ECPs-only/No EEA PRIIPS KID or disclosure document required by the FCA Product Disclosure Sourcebook – Manufacturer target market (MiFID II / UK MiFIR product governance) is eligible counterparties and professional investors only (all distribution channels). No EEA PRIIPs key information document (KID) or disclosure document required by the FCA Product Disclosure Sourcebook has been prepared as not available to retail in EEA or UK)
• Timing: Priced 3.7Y TOE: 15:09 UKT, 10Y TOE: 15:05 UKT FTT: 15:45 UKT
• Advertisement: US$40 billion Global Covered Bond Programme, Prospectus dated 7-Nov-25 and as supplemented from time to time. The base prospectus relating to the Programme, including any supplements thereto are, and any Final Terms, when published, will be available at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

Covered
3.7 year (March 2030) @ MS+25 area

Implied Spread for fresh 3.7 year @ MS+16.5

Priced at MS+20
NIC of +3.5

Covered
10 year (June 2036) @ MS+47 area

Implied Spread for fresh 10 year @ MS+36

Priced at MS+42
NIC of +6

• Details correct at time of posting