Two Bond Sales Pulled in Europe as Appetite Reaches Limits

  • Transurban, L-Bank delay sales amid rush on ECB stimulus boost
  • ThyssenKrupp scales back offering of euro-denominated notes

Toll-road operator Transurban Group and German lender L-Bank pulled bond sales in Europe.

L-Bank postponed an offering due to “competing supply today,” Royal Bank of Canada, one of the deal managers, said in a statement. Transurban delayed its sale because of market volatility, and ThyssenKrupp AG reduced the size of an offering, according to separate people familiar with the plans, who asked not to be identified because they aren’t authorized to discuss them.

The withdrawals show that the European Central Bank’s stepped-up stimulus isn’t a cure-all for companies trying to sell debt in the region. The ECB’s decision to expand quantitative easing last week spurred a rebound in credit markets and a flurry of sales from companies including Deutsche Telekom AG, Fluor Corp. and UBS Group AG.

“There could be fatigue from the strong rally we’ve witnessed in the past couple of days,” said Philipp Buff, a Geneva-based senior credit analyst at Pictet Asset Management, which oversees about 139 billion euros ($154 billion) of assets. “Still, I wouldn’t say it’s abnormally volatile. A lot of deals are being priced today with good book coverage.”

The cost of insuring investment-grade corporate debt against default tumbled following the ECB decision, with the Markit iTraxx Europe Index of credit-default swaps reaching the lowest since August. The gauge climbed four basis points on Tuesday to 75 basis points.

ThyssenKrupp Bonds

ThyssenKrupp pared its sale to 100 million euros from 250 million euros, according to the person familiar. The notes expanded a 750 million-euro offering carried out earlier this month. Calls to the steelmaker’s press department weren’t answered.

Australian shopping-mall operator Scentre Group and information-services provider Relx Group were both in the market on Tuesday. A number of banks including Deutsche Bank AG, Banco Santander SA and ING Bank NV also offered bonds.

L-Bank, or Landeskreditbank Baden-Wuerttemberg Foerderbank, will wait for better conditions, said Peter Kiessling, from its funding management unit. The bank planned five-year bonds in dollars.

Transurban was offering 500 million euros of eight-year bonds through Transurban Queensland Finance Pty, according to a person familiar with the matter. Calls to the company’s head office in Melbourne outside of business hours weren’t answered.

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