ThyssenKrupp AG (TKA), Germany’s largest steelmaker, and security company Securitas AB (SECUB) are selling their first bonds in Europe in almost three years as Greece won a second rescue package to stave off bankruptcy.
ThyssenKrupp is raising 1.25 billion euros from five-year notes in its first euro offering since June 2009, while Stockholm-based Securitas is selling 350 million euros of bonds in its first euro deal since April that year. The companies led 2.1 billion euros of corporate debt sales today, the most in a week, data compiled by Bloomberg show.
“The Greece deal gives European corporates and banks a broader scope to tap primary debt markets, ramping up funding activities with rates still very low and credit spreads at tight levels,” said Norval Loftus, the chief investment officer at Allegra Investment Management Ltd. in London. “The European new-issue corporate bond calendar should accelerate anew.”
Yields on investment-grade company bonds relative to the benchmark swap rate have tumbled 52 basis points this year to 203, near the smallest gap in six months, Bank of America Merrill Lynch index data show. Absolute yields have dropped to 3.66 percent from 4.4 percent at the start of the year.
ThyssenKrupp’s sale of five-year bonds will be priced to yield 280 basis point more than the swap rate, according to a banker involved in the transaction for the Essen, Germany-based steelmaker. A basis point is 0.01 percentage point.
Securitas’s five-year securities will yield 125 basis points more than the swap rate, said a banker with knowledge of the deal who declined to be identified because the information is private.
A ThyssenKrupp spokesman, who declined to be identified citing company policy, confirmed the steelmaker was selling bonds. Securitas spokeswoman Gisela Lindstrand said the company was selling bonds without providing details.
Abbey National Treasury Services Plc, a U.K. unit of Banco Santander SA, is offering investors 18-month floating-rate notes in euros, according to a banker involved in the deal said. FGA Capital SpA, a car-financing venture between Fiat SpA and Credit Agricole SA, raised 500 million euros from two-year bonds.
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