Autostrade per l’Italia took centre stage in the euro market with a €750m 10-year sustainability-linked bond as the Italian toll road operator helped keep issuance volumes ticking along on Wednesday.
It was one of four corporates in the single currency and one of three SLBs, including a sterling deal from Scottish engineering firm, the Weir Group.
Autostrade's SLB had peak orders of more than €4.3bn that allowed the company to tighten pricing by 40bp–45bp from initial price thoughts to arguably land inside or at least flat to fair value. Final demand was more than €3.85bn. Books, however, were more modest for the trades from Thales, 3i Group and Nokian Tyres.
"The difference in Aspi's deal is that the credit is improving rapidly as it's in a much better place post the separation from Atlantia and the current spread level doesn't reflect the improving story," said a lead.
Atlantia sold its entire 88% stake in Aspi in May last year to Holding Reti Autostradali, an investment vehicle owned by various shareholders, including Blackstone Infrastructure Partners. Fitch upgraded the company's rating to BBB from BB+ in October, citing clear visibility on the company's capital structure and financial policy, following the change in ownership.
Aspi (Baa3/BBB–/BBB) landed the June 2033s at mid-swaps plus 215bp, inside IPTs of 255bp–260bp via global coordinators BNP Paribas and JP Morgan. They were also active bookrunners with ING, IMI-Intesa-Sanpaolo, MUFG, Santander and Societe Generale.
"Things with spreads over 200bp are also better received these days. Investors are showing high selectivity and some investors are clearly enjoying the spread for the right name," the lead said, who spotted fair value in the range of 215bp–220bp.
By contrast, Single A rated Thales, which trades at much tighter spreads, gained books of just over €1.1bn at guidance for its no-grow €500m six-year bond.
Final terms were set at 70bp, inside IPTs of 95bp area via active bookrunners BBVA, Credit Agricole, Deutsche Bank, JP Morgan and Natixis.
The French aerospace and defence group (A2/A–, Moody's/S&P) paid up by around 5bp, according to a lead. "There's quite a lot of supply coming in so investors are a bit pickier and books grew slower than we expected," he said.
Crossover name
Financial crossover 3i Group (Baa1/BBB+, Moody's/S&P) brought a capped €500m six-year bond that priced at 210bp, in line with guidance and just 15bp inside of 225bp area IPTs. Books were around €925m when final terms were set.
"We don't see that as a corporate deal and that genuinely could be part of a problem as some investors may pass the deal before they even make an assessment on the credit. It was never going to be the most loved deal, anyways," said the first banker.
The UK private equity firm's June 2029s priced via Barclays, Deutsche Bank and ING. Leads said it was tricky to derive fair value given its more than a decade since it last issued in the euro market.
Unrated issuer Nokian Tyres raised €100m from a five-year sustainability-linked bond that landed at 215bp, inside IPTs of 225bp area. Final books were around €140m via Danske Bank, Nordea Bank and OP Corporate Bank.