ECONOMY

Peripheral bond issuances soar

Junk-rated bond issuance from peripheral European companies has soared in recent weeks and bankers are battling for the next wave of mandates as investors get increasingly comfortable at pricing risk for these credits.

In the past two weeks alone, 1.6 billion euros of peripheral issuance has printed, dominated by Greek and Italian debut issuers in the Single B ratings category, accounting for around half of total supply during this period.

“It’s not surprising that we’ve seen all these peripheral issuers, and it will become even more pronounced going forward,” said Tanneguy de Carne, global head of high yield capital markets at Societe Generale.

The two Greek companies that tapped the market last week, S&B Industrial Minerals and Intralot, offered investors 9.25 percent and 10 percent yields respectively.

One investor put fair value on S&B at 8.5 percent, and the healthy premium translated into strong secondary performance with the bonds trading up more than three points in just two days.

S&B’s 275-million-euro deal had a 70-million-euro dividend element. [IFR]