• Orderbooks once again under pressure yesterday.
  • Book multiples yesterday for FIG avg. only 1.44 X & Corp avg. only 2.28 X
• OAT’s were the big news, as the heavy sell-off (6 to 9.5bps) pushed the 10yr OAT through 5.0%
  • 5.0% not seen in over 24yrs (June 2002)
• Sentiment still ‘risk-off’ this morning, though the right deals can get done if managed correctly.
• Primary supply has persisted, with borrowers & syndicates having to be nimble around deal size management, pricing & NIC’s.
  • Asian equities posting heavy losses
  • Weak European equity futures & higher oil
• Moderate pipeline today, though ‘non-mandated’ issuers are closely monitoring the market looking for windows.
• Secondaries will be watched closely to determine viability & support.
• Meta Q3 results were solid & beat expectations yesterday, potential multi-tranche € & US$ mandate.
• € IG delivered €6.4bn from 9 deals (4 x Corp, 4 x FIG & 1 x SSA) via 10 tranches.
  • €19.35bn WTD or 102.7% of our ‘Supply Survey’ forecast of €18.83bn.
  • 2 x French Corporates were the highlight (79.4% of Corp supply).
  • Covered issuance dominated FIG supply (66.7% of FIG supply)
  • Book multiples were weak again with FIG the worst affected
    • Hypo Noe 1.04 X
    • Achmea Bank 1.28 X
    • Sparkasse Hannover 1.56 X
  • NIC’s for Covered’s were 4 to 5bps; Unsec FIG 9bps; & Corps 10 to 27bps
• Swiss Franc priced Chf175m from 1 deal (1 x FIG) via 1 tranche.
  • 1st financial in over a week (VP Bank’s Chf110m SNP on the 13th of Oct)
• Zero prints in either the Sterling (£) or US$ Reg S markets.
• Brent Crude has crept higher again with few positives to draw on, currently trading at c.$111.15 (c.$110.52 this time yesterday).
• The VIX continued to ease yesterday, currently set to open at 16.68 (17.68 this time yesterday).
• iTraxx 5yr Europe & iTraxx Senior & Sub financial indices ended tighter & are set to open at 64.496 (-1.11%), 72.801 (-0.65%) & 122.75 (-0.37%) respectively (% △ to this point yesterday).
• Pipeline: The European IG pipeline is as follows. 
  • 1 x € Corp
  • 1 x € FIG (1 x Subordinated)
  • 2 x € SSA (1 x Inaugural Green Oct 23rd earliest & 1 x Inaugural DNN)
  • 1 x £ FIG

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

Key € IG Supply Stats for Yesterday

• Corporate
  • Total IG: €3.15bn
  • Avg. tranche size €525m
  • Avg. IPT to Pricing -27.08 
  • Avg. cover 2.28 X
• FIG
  • Total IG: €2.25bn
  • Avg. tranche size €563m
  • Avg. IPT to Pricing -2.67 (covered) €1.5bn
  • Avg. IPT to Pricing -25.5 (unsecured) €750m
  • Avg. cover 1.44 X
• SSA
  • Total IG: €1bn
  • Avg. tranche size €1bn
  • Avg. IPT to Pricing 0
  • Avg. cover 1.3 X

Geo-Political News

• Kremlin Signals Conditional Readiness For Ukraine Negotiations Moscow declared its willingness to enter direct diplomatic discussions regarding Ukraine following renewed pressure from diplomatic Washington envoys to resume formal dialogue. However, Russian forces maintain significant territorial leverage across eastern frontline sectors while American sanctions relief measures take effect. Donald Trump continues urging Kyiv toward territorial concessions & capitulation to expedite a settlement, creating acute strategic pressure on Ukrainian leadership. Despite the peace rhetoric broadcast from Moscow, Russian strategic bomber units launched major overnight missile attacks targeting critical energy infrastructure in Kyiv. Moscow is leveraging tactical operational gains to secure favourable terms prior to formal meetings. European allies fear a premature settlement could permanently compromise Ukrainian sovereignty & weaken regional defence postures. Trumps motives appear to be self-serving, ahead of the midterms.
• AI Diagnostics Uncover Critical Software Vulnerabilities Cybersecurity researchers confirmed a major security flaw within the globally utilized PHP scripting framework has been identified & patched. The vulnerability, which exposed global enterprise servers to hackers, was successfully detected by advanced AI models configured for automated code auditing. Enterprise technology sectors rely heavily on PHP infrastructure, making the rapid deployment of this fix vital for maintaining cross-border data integrity. Industry executives note that AI systems are fundamentally altering threat landscape dynamics by locating systemic coding weaknesses far faster than traditional manual reviews. Security agencies in Washington & European capitals urged immediate server remediation to prevent criminals from exploiting exposed systems.
• US Orders Diplomats From Saudi Arabia Washington instructed non-essential government personnel & diplomatic families to evacuate across Saudi Arabia following acute regional security escalations. The order follows recent kinetic strikes by Yemen-based Houthi forces targeting infrastructure near Riyadh & key oil facilities in Yanbu. American defence officials cited intelligence indicating heightened risks of further retaliatory cross-border missile & drone attacks targeting Western assets. The military departure ordering underscores deteriorating stability across the Arabian Peninsula as global energy markets react to potential supply disruptions in the Persian Gulf. Regional trade corridors face elevated insurance premiums, while naval forces bolster maritime escorts through critical shipping straits.
• Penta-Defence Security Pact Formed In Islamabad Defence ministers representing Turkey, Qatar, Pakistan, Indonesia, & Azerbaijan formally executed a landmark mutual defence agreement during high-level security summits in Islamabad. The pact expands intelligence sharing, joint military exercises, & synchronized defence technology procurement across member states. Analysts view this alliance as a structural realignment intended to construct an independent security architecture balancing Western & Eastern military blocs. Regional powers are increasingly pooling resources to secure trade corridors & deter external maritime interventions. The strategic agreement includes commitments for co-developing unmanned aerial vehicles & naval defence systems, significantly augmenting middle-power military capabilities.
• Caspian Sea Logistics Supply Lines Expand Naval intelligence reports confirm heightened maritime transport activity across the Caspian Sea, facilitating strategic material transfers between Moscow & Tehran. Western blockades in the Persian Gulf have forced regional players to reroute vital logistics northward into sovereign inland waters beyond the reach of Western naval patrols. This unmonitored corridor enables uninterrupted industrial resupply, directly insulating defence production pipelines from international maritime sanctions. European security agencies warn that this deepening logistical integration strengthens long-term military endurance across active conflict zones. Sovereign states surrounding the Caspian basin face growing geopolitical diplomatic friction as Western capitals weigh secondary economic sanctions.  
• Emergency Strategic Heating Oil Reserves Released Washington authorized the emergency deployment of one-third of the national heating oil reserve to curb surging domestic energy costs ahead of winter demand. Elevated global crude prices have exerted severe upward pressure on refined distillate products. The White House aims to stabilize consumer energy expenses & mitigate inflationary pressures that threaten broader economic growth targets. European energy officials are evaluating similar coordinated stockpile interventions to protect industrial users from acute price volatility.
• Italy Convenes Emergency Haulier & Logistics Support Italian Prime Minister Giorgia Meloni summoned an extraordinary cabinet session in Rome to pass emergency support packages for the national haulage & agricultural sectors. Surging fuel costs & trade logistics bottlenecks across Mediterranean routes have severely strained supply chains, triggering widespread transport union protests. The Italian government unveiled targeted tax credits & energy subsidies to prevent freight gridlock & protect food distribution networks. Broad European agricultural sectors face mounting operational cost pressures, prompting calls for coordinated economic relief from Brussels.

Markets

• US Equity markets posted solid gains in the prior trading session, driven by strong quarterly earnings & robust institutional demand across major tech firms. The Dow advanced +0.69% to 52,856, while the broad S&P climbed +0.58% to close at 7,757. Tech shares led market momentum, propelling the Nasdaq up +1.05% to 26,702. Investor sentiment remained buoyant despite elevated global oil prices, as strong corporate balance sheets & solid economic fundamentals offset broader geopolitical headwinds across international markets.
• Asian Equity bourses are trading sharply lower today as regional sentiment suffers from rising geopolitical tensions & elevated energy import costs. The Nikkei is down -2.10% at 63,264, while the Hang Seng is off -2.87% to stand at 22,972. Meanwhile, the Kospi is experiencing severe selling pressure, dropping -3.28% to 5,547. Broad risk-off sentiment dominates trading floors, with semiconductor & export-oriented manufacturing sectors leading regional market declines across Asian equity exchanges.
• European & UK Equity futures point to a mixed opening session, reflecting cautious investor sentiment amid heightened regional geopolitical risks & volatile energy pricing. FTSE futures are down -0.41% ahead of the open, while DAX futures are down by -0.62%. Conversely, CAC 40 futures trade higher, up +1.07%. Market participants are closely monitoring commodity movements & cross-border supply chain developments, balancing corporate earnings updates against broader macroeconomic uncertainties across key European financial centres.
• UK & Eurozone Bond Markets Fixed income markets face ongoing yield adjustment as sovereign benchmark rates track global energy inflation expectations. 10yr Bund yields stand at 3.42%, moderating from yesterday’s 3.454% & 3.465% last week. The big news yesterday was the 10yr OAT yields trading through 5.0% for the first time in over 24yrs, now sitting at 5.012%, higher from 4.88% a week ago, reflecting a multitude of fiscal & political pressures in France. 10yr Gilt yields stand at 5.376%, easing from 5.437% on the day & 5.42% on the week. Curve postures remain firmly attentive to underlying inflationary dynamics.
• Currency Snapshot:
  • Sterling trades at 1.340 against the US dollar, showing slight daily firming from 1.339 & strengthening compared to last week from 1.333 as interest rate differentials support the currency. Against the euro, Sterling stands at 0.839 compared to 0.839 daily & 0.843 to last week, maintaining a firmer multi-day trend.
  • Euro trades at 1.124 against the US dollar, ticking up from 1.123 daily & holding steady compared to a week ago at 1.124. Against the Swiss franc, the euro trades at 0.925, virtually unchanged from 0.926 daily & 0.926 to last week, exhibiting range-bound price action across European currency crosses.
  • Swiss Franc trades at 0.823 against the US dollar, strengthening from 0.824 daily & 0.824 compared to last week as safe-haven demand provides persistent underlying support across global foreign exchange markets.

Economic Data (Western European Today)

Govt Bond Auctions (Western European Today)

Holidays

• There are no public or national holidays scheduled across the UK, & the Eurozone for the remainder of this week. The next holidays scheduled are as follows.
  • Eurozone - Next: 1st November (All Saints Day) - Sunday
  • UK - Next: Christmas Day (25 December) & Boxing Day (26 December).
  • USA - Next: 11th November (Veterans Day) & 26th November (Thanksgiving)

Pending Deals & Mandates

Euros (€)

• 19th October: Gek Terna S.A. (rated Baa3 / BBB- by Moody’s & S&P), the vertically integrated leading infrastructure group in Greece, owning & operating critical concessions in the country, mandated BNP Paribas S.A., JP Morgan S.E. & Mediobanca – Banca di Credito Finanziario S.p.A as Joint Global Coordinators & Joint Bookrunners along with AXIA, Deutsche Bank, Eurobank S.A., Goldman Sachs Bank Europe SE, HSBC, Morgan Stanley, National Bank of Greece, Piraeus Bank S.A. & Optima bank S.A. as Joint Bookrunners to arrange a series of fixed income investor calls starting on Monday the 19th October.

• 19th October: Sumitomo Life Insurance Company (exp. Issue ratings of A- / A- by S&P & Fitch) mandated JP Morgan, BofA Securities, Goldman Sachs, SMBC Nikko & BNP Paribas to arrange a series of fixed income investor conference calls commencing Monday the 19th October. JP Morgan will be coordinating logistics. A potential € benchmark, Reg S, Fixed to fixed, step-up 30NC10 callable subordinated bond offering will follow, subject to market conditions.

• 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 & after extensive investor calls taking place between Monday the 19th of October & Thursday the 22nd of October.
• 21st October: European Stability Mechanism (ESM) (rated Aaa / AAA / AAA / AAA by Moody’s, S&P, Fitch & Scope) appointed DZ Bank & Société Generale as Digital Advisory Banks & mandated DZ Bank, HSBC, Santander & Société Generale to joint lead manage an inaugural Digitally Native Note transaction maturing in April 2030. No further group. The Digitally Native Notes will be issued on a distributed ledger technology (DLT) platform operated by Clearstream Europe AG (D7 DLT Platform) & in the context of the Eurosystem's Pontes initiative. The Digitally Native Notes are eligible for clearance & settlement through all traditional Clearstream Banking & Euroclear Bank SA/NV rails. A € benchmark transaction will follow subject to market conditions.

Sterling (£)

• 20th October: BTG Pactual Europe SA (rated Baa3 by Moody’s) mandated BMO Capital Markets as Sole Global Coordinator & Joint Lead Manager, alongside Natixis & Banco BTG Pactual S.A. – Cayman Branch as Joint Lead Managers, for its upcoming inaugural £250m (wng) 3yr Senior transaction. The Issuer is available for one-on-one calls upon request on the 20th & 21st of October. The transaction is expected to launch in the near future, subject to market conditions.

Recent Supply Data

Key Market Data