• Fed & ECB next week
  • FOMC - Rate announcement @ 6:00pm GMT on Wednesday 28th 
    • ‘Hold’ with Hawkish tone (10.5% probability of rate hike)
  • European Central Bank - Rate announcement @ 1:15pm GMT on Thursday 29th 
    • ‘Hold’ with Hawkish tone (3.1% probability of rate hike)
• Moody’s rating review of France post close (@ 8:00pm GMT)
  • Currently Aa3 negative outlook
  • Downgrade expected & largely priced in
  • Key ‘risk’ if downgrade accompanied by a ‘negative outlook’
    • S&P & Fitch both ‘stable’
• European IG Primary is not an opportunistic market, with borrowers scheduled or needing to come having to offer value
• Any supply will be front loaded next week given Central Bank announcements
• Investors more receptive to shorter tenors
• Multiple borrowers reviewing the market with a view to issuing
  • Several stepped back this week after negative tone
• Syndicates finding it harder to determine who will move forward 
• Half term school holidays in UK & Belgium next week

CORP:

• Forecast for week €8.66bn (avg.)
  • Gek Terna S.A. € bmk, 7yr
• Investors demanding NIC’s of 10 to 25bp+ (more depending on geo-political news over the weekend) 
• Meta, having reported Q3 results, is once again a hot topic with a potential multi-tranche debut € (potentially alongside a US$) early in the week
  • Likelihood of issue divides opinion
  • Meta stated issuing debt had the ‘potential to negatively affect their ratings’
  • If they do come a €5 to €10bn seems likely & they will have to ‘pay up’
    • Doing so could negatively affect spreads in general
  • Argument ‘for’ issuing are that AI infrastructure spend requires it, & issuing environment could deteriorate further with an escalation in military action in the Middle East increasingly likely post mid-terms

FIG

• Forecast for week €4.47bn (un secured avg.) & €1.67bn (covered avg.)
  • Sumitomo Life € bmk, 30NC10 Subordinated
• Investors demanding NIC’s of c.5 to 10bps (unsecured) & NIC’s of c.5bps (for Covered issues)

SSA

• Forecast for week €4.58bn (avg.)
  • Hamburg €500m, 10yr Green
  • ESM could be c.€1.5 to 2bn (annual target of c.€7bn & priced €4.5bn YTD)
• Investors seeking NIC’s of c.2bp+
• Issuance likely to remain short (up to 5yrs)
  • Hessen’s 2.5yr this week fared far better than Berlin's 5yr
    • Both LSA trades but respective books of 7.3 X vs 1.3 X (night & day)
    • Hessen (KfW+10) drew a strong international bid - 70% Central Banks
    • Berlin offered defensive pricing (KfW+14) & there was political noise regarding far-left momentum in state election
    • 2.5y is a very defensive tenor & quite rare for a German Länder, but was prudent & responsive to market

• Bunds & OAT’s little changed today ahead of the Moody’s announcement
  • 10yr OAT holding above 5.0% at 5.051%
  • OAT / Bunds spread at 10yrs c.171
  • All eyes on demonstrations over the weekend
• Bunds rallied with a flattening curve
• Gilts yields were higher by c.3bps across the curve
• € swap curve flattened by 1bp
  • € swap spreads c.1 to 1.5bp wider
•  £ swap curve largely unchanged
  • £ swap spreads c.1bp tighter
• Zero print day in € IG
  • €19.95bn WTD or 105.9% of our ‘Supply Survey’ forecast of €18.83bn
• Sterling (£) delivered £250m from 1 deal (1 x FIG) via 1 tranche
  • £1.75bn WTD or 155.6% of our ‘Supply Survey’ forecast of £1.13bn
• Zero issuance in the Swiss Franc & US$ Reg S markets
• Today’s “Talking Point” (below) looks at € IG issuance on Friday’s YTD, including volumes, deal counts & ‘zero-supply’ Fridays, compared with the other days of the week.
• iTraxx 5yr Europe & the iTraxx Senior & Sub financial indices are wider yet again today at 68.113 (+1.81%), 78.131 (+2.09%) & 134.661 (+2.89%) respectively (as we print & % △ on the day).
  • Sub last traded over 134 on the 31st of March
• Vix Index rose slightly today, currently at 20.11 (19.03 this morning)
• Brent Crude crept higher throughout the session, currently at c.$116.12 (c.$114.03 this morning)
• European equity bourses were all lower today with the FTSE, Dax & CAC 40 all down by -0.61%, -1.03% & -0.86% respectively
  • YTD: FTSE ↑7.33%, Dax ↑2.53% & CAC 40 ↓4.98%
• A breakdown of today’s primary € IG supply is as follows

• Corporate
  • Total IG: €0
  • Avg. tranche size €0
  • Avg. IPT to Pricing NA 
  • Avg. cover NA
• FIG
  • Total IG: €0
  • Avg. tranche size €0
  • Avg. IPT to Pricing (covered) €0
  • Avg. IPT to Pricing (unsecured) €0
  • Avg. cover NA
• SSA
  • Total IG: €0
  • Avg. tranche size €0
  • Avg. IPT to Pricing NA
  • Avg. cover NA

• Pipeline:  The European IG pipeline is as follows. 
  • 1 x € Corp
  • 1 x € FIG (1 x Subordinated)
  • 2 x € SSA (1 x Inaugural Green & 1 x Inaugural DNN)

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 €19.38bn of primary IG supply, broken down as follows.

Talking Point

• With today another no-print session in € IG, we look at Friday issuance YTD, following our look at zero-issuance Mondays on the 28th of September.
• Fridays are by far the quietest day of the week. Only €35.5bn has priced across 42 Fridays YTD, just 2.4% of total € IG volume (€1.47trn). That averages c.€845m a session vs. c.€13.2bn on Tuesdays & €11.1bn on Wednesdays.
• A blank Friday is the norm, not the exception. Today marks the 25th zero-supply Friday YTD (c.60%). By comparison there have been 10 blank Mondays, 8 Thursdays & only 2 each on Tuesdays & Wednesdays.
• When Fridays do print, they are modest. The 17 active Fridays produced 35 deals, averaging c.€2.1bn a session. 9th Jan was the clear high (€6.85bn, 5 deals), as SSA borrowers (€4.5bn) used the January rush. It was followed by 18th Sep (€3.45bn) & 10th Apr (€3.2bn).
• Corporates are the most active Friday borrowers. They printed €11.55bn (32.5%), ahead of Covered (€9.85bn) & FIG ex-Covered (€9.1bn). SSA (€5bn) has been largely absent outside January.
• Recent Fridays mirror the broader slowdown. 7 of the last 10 Fridays (since 28th Aug) have been blank, with only 18th Sep (€3.45bn) & the 9th & 16th of Oct (€1bn each) breaking the run.
• Today’s zero is in line with the YTD pattern. Still, with spreads near multi-month wides, Q3 earnings blackouts & Moody’s review of France post close tonight, issuers had little reason to price ahead of the weekend.

Euro IG (today)

• No issues.

Week-to-date volumes:

Year-to-date volumes:

Sterling IG (today)

• 20th October: BTG Pactual Europe SA (rated Baa3 by Moody’s) brought their anticipated £250m (wng) 3yr Senior transaction. Guidance on the trade was in the area of UKT+250 (~7.33% S/A). Books first came in at over £350m (inc. £5m JLMs).
  • BTG engaged with over 60 investors on their roadshow & marketing process with IOI's in excess of £300m. BTG Pactual Europe is the European banking arm of BTG Pactual, Latin America's largest investment bank. The Brazilian firm offers asset management, wealth management, & private banking services in Luxembourg, the UK, Spain, & Portugal. This is an EM trade & their funding team is based in Brazil. This is their inaugural Sterling offering.

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

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.

PRICED: BTG Pactual Europe S.A. £250m 3yr Senior; UKT+240bp

IGC European Market: Deal Flow - GeneralEM LATM: Deal Flow - General

Reoffer: 3yr: UKT+240bp / 98.979
Benchmark: 3yr: UKT 0.875 22-Oct-29 @ 89.037 mid / 89.017 bid (HR 103%) / B+240bp

Tranche 1 (3yr): Peak book in excess of £500m (incl £20m JLM)

Launched: 3yr: £250m @ UKT+240bp - Orderbooks in excess of £500m (incl £20m JLM)
Book Update: Orderbooks > £350m (incl £5m JLM)
Guidance: 3yr: UKT+250a

• Issuer: BTG Pactual Europe S.A.
• Ticker: BTGPEU
• Format: Regulation S, Registered Notes
• Status: Senior
• Expected Issue Ratings: Baa3 (Moody's) (expected)
• Size: £250m
• Tenor: 3yr
• Settlement: 02-Nov-26 (T+6)
• Maturity: 02-Nov-29
• Reoffer: UKT+240bp / 98.979
• Benchmark: UKT 0.875 22-Oct-29 @ 89.037 mid / 89.017 bid (HR 103%)
• Coupon / Day-Count Fraction: 6.875% Fixed, Semi-annual, Actual / Actual (ICMA)
• Target Market: MiFID II professionals/ECPs-only/No PRIIPs or UK PRIIPs KID or CCI Product Summary – Manufacturer target market (MiFID II product governance) is eligible counterparties and professional clients only (all distribution channels). No PRIIPs or UK PRIIPs key information document (KID)/CCI Product Summary has been prepared as not available to retail in EEA or the UK.
• Denomination: £100,000
• Governing Law: English Law
• Listing: Luxembourg Stock Exchange (Euro MTF)
• Clearing System: Euroclear and Clearstream, Luxembourg
• Business Days & Convention: London, T2, Following, Unadjusted
• Global Coordinator: BMO Capital Markets (B&D)
• Joint Lead Managers: BMO Capital Markets, Natixis, Banco BTG Pactual S.A. – Cayman Branch
• Early Redemption: The Notes may be redeemed at the option of the Issuer, in whole but not in part, for taxation reasons (Condition 6(c)), on giving not less than 30 nor more than 60 days notice. The Notes may also become immediately due and payable following an Event of Default (Condition 9).
• Redemption Price: 100%
• Documentation: This document must be read in conjunction with the Issuers US$2,000,000,000 Global Medium-Term Note Programme dated 13-Jan-26, as supplemented
• ISIN / Common Code: XS3550651544 / 355065154
• Timing: Priced, ToE 16.13 Ldn, FTT 16.30 Ldn
• Selling Restrictions: Regulation S Category 2, TEFRA not applicable, as set out in the Base Prospectus. Prohibition of sales to EEA and UK Retail Investors applicable. No sales into Italy. See section titled Subscription and Sale and Transfer and Selling Restrictions of the Base Prospectus and the final terms for the issue of the Notes for further information.
• Stabilization: FCA/ICMA
• Advertisement: The Base Prospectus, as supplemented on 21-Oct-26, and applicable Final Terms (when published) will be available on: https://www.luxse.com/programme/Programme-BTGPactualEuro/25028
• Note: Please Note That £ Pricing Is Vs Mid Gilts As Per ICMA Guidelines, But Hedges Will Be Executed Vs The DM Traders Bid Side

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

Details correct at time of posting