France’s biggest drugmaker sold 1 billion euros ($1.3 billion) of 10-year securities while the world’s largest luxury goods maker is marketing 600 million euros of seven-year notes, according to people familiar with the deals.
Bond issuance from non-financial companies is poised to reach at least 8.3 billion euros this week, the most since the period ended Sept. 15, according to data compiled by Bloomberg. Borrowers are anticipating the European Central Bank will leave its main refinancing rate at 0.5 percent when it meets tomorrow while U.S. data this week is forecast to show a lack of strength in the economy, supporting the case for maintaining stimulus put forward by two top Federal Reserve officials.
“Perceptions of risk have declined,” said Joseph Faith, a credit strategist at Citigroup Inc. in London. “Draghi is unlikely to surprise us tomorrow and most people aren’t expecting the Fed to begin tapering until next year.”
Paris-based Sanofi’s notes yield 53 basis points more than the swap rate, according to the person familiar with the transaction. LVMH, also based in Paris, is offering securities at a spread of 30 basis points.
The average spread on investment-grade debt is 83 basis points more than the benchmark mid-swap rate, up from a six-week low of 80 basis points reached Oct. 30, Bloomberg bond index data show. The cost of insuring the debt held near a 3 1/2-year low, with the Markit iTraxx Europe Index of credit-default swaps on 125 companies with investment-grade ratings little changed at 84 basis points at 13:31 p.m. in London.
Also in the market today, BSH Bosch und Siemens Hausgeraete GmbH, the joint venture of Siemens AG (SIE) and Robert Bosch GmbH, sold 500 million euros of bonds maturing November 2020 yielding 42 basis points more than the mid-swap rate, according to a person familiar with the deal.
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