BBVA

On Wednesday, German chemicals supplier Lanxess found a surprising lack of demand for its first corporate bond issue since September 2016. Onlookers suggested this is was not a good sign with a heavy pipeline building for future weeks.

BBVA said it paid no new issue concession for a €1bn green bond it issued on Thursday, the largest in the format so far from a European bank.

BBVA tightened in pricing by 15bp for its first offering from a bond framework aligned to the UN’s Sustainable Development Goals. It was able to take €1bn of funding for green assets, the largest such deal in the format by a European bank.

Despite expectations of a slowdown in the pace of issuance in the European high yield market, two borrowers brought €2.9bn of new bonds this week. Both issuers, Spanish construction firm Aldesa and Italian banking payments group Nexi, marketed refinancing deals.

BBVA told GlobalCapital it saw room for social bonds, and a mixed social and green bond, as well as more established green offerings as it revealed its new issuance framework this week. While it expects the senior non-preferred format is most likely to be used, it sees tier two as possible as well.

Iberdrola’s Mexican subsidiary became the first company to close a green loan in the country this week, with BBVA continuing its determined push into sustainable finance by leading the deal.

BBVA has announced a framework for three different types of sustainable bonds, amid a wave of interest in green bond issuance by European banks. A transaction would be the first unsecured sustainable bond from a Spanish bank.

Adecco, the Swiss temporary staffing company, has become the latest blue chip to use a sustainability-linked loan structure for its main corporate revolving credit facility.

Spanish civil engineering group ACS sold the first senior green bond by a corporate issuer for more than a month on Thursday, following a European roadshow earlier in the week. Green bonds are often said to offer a pricing benefit to issuers, but the company found it still had to pay a significant new issue premium.

Volkswagen Financial Services had been conspicuous by its absence in the euro corporate bond market in the first quarter of 2018. Having been the largest corporate issuer by volume in 2017, the company had used other markets so far this year before selling a new triple tranche deal.

Funding for leveraged buyouts in the European primary high yield market gained further share of overall issuance this week, as specialty car parts maker LKQ of Chicago sold a €1bn bond for its acquisition of German peer Stahlgruber.

Corporate bond issuers who sold their deals earlier the week found execution much easier than those who came later in the week. Strong order books and single digit new issue premiums gave way to premiums of as much as 20bp and one deal having to be downsized.