• As corporate issuers emerge from ‘blackouts’, a ‘front-loaded’ week ahead is expected.
  • Corporates who stepped back this week may come next, depending on conditions
  • Talk of an even busier week the week after
• European IG Supply Survey is forecasting €18.83bn & £1.13bn for next week (details below) .
  • €25.42bn WTD - 99.6% of our ‘Supply Survey’ forecast from last Friday of €25.5bn.
  • While today's € IG number is smaller than last week, that number did factor in the EU trade.
• Moody’s scheduled to review France's sovereign credit rating next Friday (23rd Oct)
  • Currently Aa3 & been on negative watch since Oct last year.
  • S&P & Fitch both ‘stable’ A+ 
  • French credits with any flexibility likely to front-load next week.
• Meta is once again the ‘hot topic’ having brought its earnings forward to Wednesday (the 21st). Currently expected to issue thereafter -  a debut € had been rumoured since early September.
• Persistent concerns regarding a deepening AI rout & the impact this could have on broader sentiment.
  • Look up: Sharp sell-off in ‘Coreweave’ unsecured $ bonds, dropped below 80 cents on the $ & its 5yr CDS spiked at 1,194bps. 
  • Massive debt burden (c.$40bn) & refinancing risks spooked the market.
• M&A related deals are possible.
  • Likely too soon; but as an example, Schnider Electric brought forward their Q3 results to today, with c.€16bn of new debt required for its PTC acquisition (Morgan Stanley on point).
• UK CPI data on Wednesday may impact £ supply. Probability of hike on Nov 5th currently at 93.3%.
• Half term school holidays in France & Belgium next week & the week after; UK week after next too.
• European Govie yields were marginally higher.
  • Bund, OAT’s & Gilt curves steepened
  • Bund, OAT’s & Gilt yields c.1 to 3bps wider 5yrs & out
• Both € & £ swap curves steepened slightly
  • € swap spreads largely unchanged to 0.5bp wider at the long end
  • £ swap spreads tighter at short-end by 1 to 1.5bps & c.0.5bp tighter further out
• € IG priced €1bn from 1 deal (1 x FIG) via 1 tranche.
  • A zero print day was on the cards, until Rabobank took the stage for a €1bn SNP print.
  • Only 3 corporate deals this week, the largest being AustNet’s €620m on Monday.
• No supply today in Sterling (£), Swiss Franc or US$ Reg S markets.
• Today’s “Talking Point” (below) looks at iTraxx 5yr Europe & the iTraxx Senior & Sub financial indices since the 1st of July.
• iTraxx 5yr Europe & the iTraxx Senior & Sub financial indices are all slightly tighter today, currently at 63.043 (-1.79%), 70.323 (-1.96%) & 117.741 (-2.4%) respectively (as we print & % △ on the day).
• Vix Index remains high for the month but off the week’s high of 16.87, now at 15.89 (16.46 this morning).
  • YTD avg. 18.06, 6mth avg. 16.71
  • High of 17.84 since the end of July.
• Brent Crude prices remain elevated, & middle of the week’s range, currently at c.$105.83 (c.$105.23 this morning).
  • Week high of $107.08 on Wednesday & a week low of $102.95 on Monday.
• European equity bourses are currently all in the green with the FTSE, Dax & CAC 40 up by +0.14%, +1.04% & +0.35% respectively.
  • YTD: FTSE ↑9.3%, Dax ↑4.72% & CAC 40 ↓2.29%
• A breakdown of today’s primary € IG supply is as follows.

• Corporate
  • Total IG: €0
  • Avg. tranche size €0
  • Avg. IPT to Pricing
  • Avg. cover
• FIG
  • Total IG: €1bn
  • Avg. tranche size €1bn
  • Avg. IPT to Pricing (covered) €0
  • Avg. IPT to Pricing -27.5 (unsecured) €1bn
  • Avg. cover 2.1 X
• SSA
  • Total IG: €0
  • Avg. tranche size €0
  • Avg. IPT to Pricing
  • Avg. cover

• Pipeline:  The European IG pipeline is as follows. 
  • 1 x € SSA (1 x Inaugural Green)

Contact Stuart Aylward with questions or comments on Bloomberg or via stuart@creditflowresearch.com

Supply Survey Results for Next Week

• Thank you to all who participated in our ‘Weekly Supply Survey’. Forecasts indicate €18.83bn of primary IG supply, broken down as follows.

Talking Point

• Today we look at the iTraxx 5yr Europe & the iTraxx Senior & Sub financial indices performance since the 1st of July.
• Given that credit markets have been sending increasingly loud signals of stress building up beneath the surface, today it is fitting to review the recent widening translated into these core indices.
• All 3 have widened steadily over the period with Europe +23%, Senior +30%, Sub +34%, a persistent H2 deterioration, which accelerated sharply from mid-September.
• The ‘main’ Europe index breaching 55 was a significant psychological blow for investors.
• Financials are underperforming, with the Senior/Europe ratio widened from 1.06x to 1.12x, while the Sub/Europe ratio has shifted from 1.73x to 1.87x.
• The Sub-Senior gap has blown out ~38%, from ~34.5bps to ~47.8bps.
• The move off summer lows has been profound & swift. From early-August troughs, Senior is +17.7bps & Sub +33.4bps.

Euro IG (today)

• Coöperatieve Rabobank U.A. (exp. Issue ratings of A3 / A- / A+ by Moody’s, S&P & Fitch) brought a € benchmark, EuGB, Senior Non-Preferred 5yr offering. IPTs on the trade were MS+90 to 95. Books were first called above €2bn, rising to over €2.7bn (exc. JLMs & pre-rec). The deal launched & priced for €1bn at MS+65, offering investors a NIC of 5bps. Final books were €2.1bn good at re-offer.
  • Rabo’s most recent € trade was a €250m 3.25yr private FRN trade, which also happened to be a Senior Non-Preferred offering. That trade priced at 3mth€+53 on the 25th of August. Prior to that its last real public € offering was on the 29th of April with a €750m 10yr Senior Non-Preferred Green bond, which priced at MS+87 (28bps tighter than IPTs from a €1.4bn book, & a NIC of 2bps). Today’s trade is an inaugural EuGB print for Rabo. For context they have also printed a £ Tier 2 last month, a Green Snr Non-Pref £ in June & a € Perp NC7 AT1 in April.

Week-to-date volumes:

Year-to-date volumes:

Sterling IG (today)

• No issues.

Week-to-date volumes:

Year-to-date volumes:

Swiss Franc IG (today)

• No issues.

Week-to-date volumes:

US$ Reg S (today)

• No issues.

Pending Deals & Mandates

• 16th October: The Free and Hanseatic City of Hamburg (rated AAA / AAA by Fitch & Scope) mandated DZ Bank as ESG Structuring Coordinator & Crédit Agricole CIB, Danske Bank, DekaBank, Deutsche Bank & DZ Bank as Joint Lead Managers for its upcoming inaugural €500m (wng) 10yr Green senior unsecured offering in LSA format. The transaction will be launched in the near future, subject to market conditions.

Transaction Details

PRICED: Rabobank €1bn 5yr EuGB SNP; MS+65bp

IGC European Market: Deal Flow - General

Reoffer: 5yr: MS+65bp / 100 / 4.091%
Benchmark: 5yr: OBL 2.9% 10-Aug-31 @ 99.513 / B+86.7bp

5yr EuGB SNP: Final Books €2.1bn (good at reoffer). Peak book above €2.7bn ex JLM (pre-rec)

Launched: 5yr: €1bn @ MS+65bp - Books above €2.7bn ex JLM (pre-rec)
IPTs: 5yr: MS+90/95bp area

• Issuer: Coöperatieve Rabobank U.A. (Ticker: RABOBK)
• LEI: DG3RU1DBUFHT4ZF9WN62
• Issuer Ratings: Aa3 (Stable) / A+ (Positive) / AA- (Stable) by Moody's/S&P/Fitch
• Exp. Issue Ratings: A3/A-/A+ by Moody's/S&P/Fitch
• Instrument: European Green Bond ("EuGB") Non-Preferred Senior Reg S Bearer Notes
• Status of the Notes and Ranking: The Non-Preferred Senior Notes and the Coupons relating to them shall qualify as, and comprise part of the class of, Statutory Non-Preferred Senior Obligations and shall constitute unsubordinated and unsecured obligations of the Issuer and such Non-Preferred Senior Notes and Coupons shall rank pari passu and without any preference among themselves (save for certain mandatory exceptions provided by law). The claims of Holders in respect of the payment obligations of the Issuer under the Non-Preferred Senior Notes and the Coupons relating to them shall, save for such exceptions as may be provided by applicable law rank: (i) in the event of bankruptcy (faillissement) of the Issuer only, junior to any unsubordinated and unsecured obligations of the Issuer which do not qualify as Statutory Non-Preferred Senior Obligations (including, for the avoidance of doubt, any Senior Preferred MREL Notes and excluded liabilities of the Issuer pursuant to Article 72a(2) of the CRR); (ii) in the event of a Winding-Up of the Issuer, pari passu with any other Statutory Non-Preferred Senior Obligations; and (iii) in the event of a Winding-Up of the Issuer, senior to any Junior Obligations. The Notes are intended to be MREL Eligible Liabilities
• Maturity Date: 23-Oct-31 (5y)
• Settlement Date: 23-Oct-26 (T+5)
• Issue Size: €1bn
• Reoffer: MS+65bp / 100 / 4.091%
• Benchmark: OBL 2.9% 10-Aug-31 @ 99.513 / B+86.7bp
• Interest Rate: 4.091% per annum, Fixed, accruing from and including the Settlement Date to and excluding the Maturity Date
• Interest Payment Dates: 23 October in each year, commencing on 23-Oct-27 up to and including the Maturity Date
• Early Redemption Event: The Notes may be redeemed (all but not some only), at par (plus accrued and unpaid interest) in case of: MREL Disqualification Event: the exclusion or the likely exclusion, in whole or in part, of the instruments from the Issuer's and/or the Group's MREL Eligible Liabilities as a result of any amendment to, or change in, any Applicable MREL Regulations or any change in the application or official interpretation of any Applicable MREL Regulations (which the Issuer demonstrates to the satisfaction of the Relevant Regulator was not reasonably foreseeable at the Issue Date), except that MREL Disqualification Event shall not apply if such exclusion from the Issuer's and/or the Group's MREL Eligible Liabilities is due to the remaining maturity of the Notes being less than any period prescribed by Applicable MREL Regulations or any applicable limitation on the amount of the Issuer's and/or the Group's MREL Eligible Liabilities. Tax Law Change: obligation for the Issuer to pay Additional Amounts
• Substitution & Variation: Applicable. Ability to substitute or vary the terms (all but not some only) of the Notes in case of an Alignment Event or MREL Disqualification Event, without any requirement for the consent or approval of the Noteholders, so that the substituted notes are, or that the Notes remain, MREL Compliant Notes
• Alignment Event: Applicable. Occurs if as a result of any amendment to the Applicable MREL Regulations, the requisite features for Statutory Non-Preferred Senior Obligations are different in any respect from the terms and conditions of the Notes
• Denominations: €100k + €100k
• Listing: Luxembourg Stock Exchange Regulated Market
• Clearing: Euroclear / Clearstream Luxembourg
• Use of Proceeds: An amount equal to the proceeds of the European Green Bond will be used to finance and/or refinance, in part or in whole, a portfolio of eligible green assets in accordance with the Issuer's European Green Bond Factsheet prepared by the Issuer in accordance with Annex 1 of Regulation (EU) 2023/2631 of the European Parliament and of the Council of 22-Nov-23 (the "European Green Bond Regulation")
• Governing Law: Dutch Law
• Form: Bearer, New Global Note
• ISIN: XS3547622855
• Documentation: Rabobank's Global Medium Term Note ("GMTN") Program consisting of the Registration Document dated 19-May-26, as supplemented; and the Securities Note dated 19-May-26, as supplemented; and supporting documentation as incorporated by reference
• Selling Restrictions: UK, EEA and US and as further set out in the Base Prospectus. Restrictions apply to offers, sales or transfers of the Notes in various jurisdictions. In all jurisdictions, offers, sales or transfers may only be affected to the extent lawful in the relevant jurisdiction, please refer to the relevant section of the Base Prospectus. US: Reg S, TEFRA D: Not 144A eligible. Not suitable for U.S. persons (as such term is defined under Regulation S of the U.S. Securities Act of 1933, as amended (the "Securities Act")) or a person within the United States (as such term is defined under Regulation S of the Securities Act. The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended, (the Securities Act) and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons except to certain persons in offshore transactions in reliance on Regulation S under the Securities Act.
• Green Structurer: Rabobank
• Joint Bookrunners: BNP Paribas, Crédit Agricole CIB, Deutsche Bank, Goldman Sachs Bank Europe SE, Rabobank (B&D) and UBS
• Target Market: MiFID II / UK MiFIR professionals/ECPs-only – Manufacturer target market (MIFID II / UK MiFIR product governance) is eligible counterparties and professional clients only (all distribution channels). No EU PRIIPs key information document (KID) or UK CCI product summary has been prepared as not available to retail in EEA or in the UK
• Advertisement: The Base Prospectus and supplements thereto are available at https://www.rabobank.com/about-us/investor-relations/funding-and-capital/issuance-programs/gmtn-program and https://www.bourse.lu/programme/Programme-CoopRabo/12077 The Final Terms relating to the securities, when published, will be available at www.luxse.com The EU Green Bond Factsheet available on the Issuer's website at https://www.rabobank.com/about-us/investor-relations/funding-and-capital/sustainable-instruments
• Fees: The Joint Lead Managers will be paid a fee in connection to the transaction. Details of the fee may be available to investors upon request from your usual contact sales.
• Timing: TOE: 14:18 UKT / FTT: 14.30 UKT

EuGB Senior Non-Preferred
5yr (Oct 2031) @ MS+90/95
Implied Spread for fresh 5yr @ MS+60
Priced at MS+65
NIC of +5

To view the LIVE / REAL TIME European IG pipeline please click here.

Details correct at time of posting