(Corrects name of issuing unit in first paragraph.)
TMCC priced 1 billion euros ($1.3 billion) of seven-year notes to yield 40 basis points more than the benchmark mid-swap rate, according to data compiled by Bloomberg. The average yield investors demand to hold investment-grade company bonds in euros rose 1.7 basis points to 2.11 percent yesterday, up from the lowest level since June 19, Bank of America Merrill Lynch index data show.
Investors worldwide are awaiting Federal Reserve Chairman Ben S. Bernanke’s testimony to Congress tomorrow when he’s expected to give more clarity on the central bank’s stimulus plans. The cost of insuring corporate bonds in Europe rose, with the Markit iTraxx Europe Index of contracts on 125 investment-grade companies increasing 1 basis point to 106 basis points today.
“The market is still holding its breath,” said Geraud Charpin, a fund manager at Bluebay Asset Management Ltd. in London which oversees $44 billion. “A lot has happened and every time the market wants to settle back, you get another headline.”
Bernanke eased a rout last week in bond markets triggered after he outlined last month an eventual end of its asset-purchase program. Yields on European corporate debt surged as much as 34 basis points after he said the central bank plans to begin scaling back stimulus measures later this year. They pared those increases after Bernanke said on July 10 monetary policy will remain “highly accommodative” for the “foreseeable future.”
The Toyota City, Japan-based company last issued euro-denominated bonds in January, according to data compiled by Bloomberg. The carmaker has 500 million euros of securities maturing in September, Bloomberg data show.
Alain Taverriti, a spokesman for Toyota Motor Europe, didn’t immediately respond to an e-mail seeking comment on the bond sale.
Also in European credit markets today, Deutsche Bahn AG, the German state rail company, priced 300 million pounds ($453 million) of 13-year bonds to yield 65 basis points more than benchmark government bonds, a person familiar with that deal said. It’s the Frankfurt-based company’s first sale in the currency since November, according to Bloomberg data.
Germany’s State of Lower Saxony sold 500 million euros of eight-year notes priced to yield 3 basis points more than the swap rate, a person with knowledge of that transaction said.
Maisons du Monde SAS will meet investors in Europe for a possible sale of high-yield bonds starting tomorrow until July 22, according to a person familiar with the matter. The home furnishings retailer, based in Nantes, France, plans to sell 325 million euros of seven-year notes to finance its acquisition by its managers and Bain Capital LLC, said the person. The securities are expected to be rated B3, or six levels below investment grade, by Moody’s Investors Service.