But it shouldn’t remain the case for too long as syndicate desks are busy working on pipeline for next year.

A sellsider said: “Christmas will be busier for banks, as we’re going to committees and getting approvals, but not necessarily busy for the market with new deals. I’m glad it will be busy for the right reasons, not de-risking like we were last year.”

As well as looking ahead to 2024, another sellsider suggested that a few more deals would filter through before the primary market hits its yearly standstill. 

“There’s a couple more things we’re working on so we’re still decently busy with one or two deals. It might be somewhat busy for the next two to three weeks,” they said. “Then I’m praying we get some rest over Christmas.”

The market outlook for rates continues to teeter between dovish and hawkish on a weekly, if not daily basis. Tuesday’s FOMC minutes again stressed the importance of “proceeding carefully” and that “data arriving in coming months would help clarify the extent to which the disinflation process was continuing.”

Closer to home, we also got some more hawkish headlines — including ECB officials pushing back on rate cuts and the release of a stronger than expected Euro Area November composite PMI report (rose to 47.1 vs. 46.8 expected).

Last week we saw market pricing of an ECB cut by April at a intraday peak of 93% — it’s now down to 59% at the time of writing. We’ve seen a similar story for the Fed cutting by May (fallen from intraday peak of 94% last week to 56% at time of writing). 

So while the market is still clearly expecting a cut from the ECB and Fed by Q2, this week’s rate volatility suggests it won’t be a completely smooth process getting there. 

High yield

Building on top of momentum from previous weeks, the seven-day period from last Thursday to this Wednesday saw another week of healthy inflows into EHY funds (83rd percentile). As Barclays notes, this is the third successive large inflow — cumulatively worth more than 2% of AUM (primarily weighted toward ETFs).

Zooming into EHY markets, the Altice complex was in focus as it has been for much of 2023 following news of Altice France selling a 70% stake in its data centre business for €535m to Morgan Stanley Infrastructure Partners — leading to a broad rally across Altice’s bonds and loans over the week (but still didn’t stop Altice France’s loan dropping as per our screeners below). 

You can find a full-write up on Altice France’s data centre sales from us here.

Despite news of asset sales being encouraging to some, one buysider still wasn’t impressed: “Altice France just have to pray that Lagarde is going to cut rates — what else can they do? And I’m perfectly serious about that. If they continue selling good assets like data centres, what will they be left with?”

It has been frequently discussed in the market (by us too!) whether Altice International could be used to bolster Altice France and Tuesday’s call with management intensified those discussions — after it was confirmed that the Portugal and Dominican Republic telco units as well as AdTech business Teads, are under strategic review.

“Altice International supporting Altice France is a big hope for investors but nothing more in my opinion,” the first buysider said. “Why would Drahi throw good money after bad — that’s not how he became a billionaire, is it?”

A second buysider was also doubtful: “It’s much easier said than done but Altice France need to improve performance and put in more equity. I’m not sure efforts to help Altice France from Altice International would be enough.”

For more company news during a busy earnings season, be sure to check out the latest Earnings Digest including more details on the Altice complex if you haven’t had enough, plus Thyssenkrupp and Victoria Plc (in-depth earnings review on the name here).

Looking at primary, we had a small number of deals come to market including crossover Swedish telecommunications giant Ericsson issuing its first ever green bond (proceeds will be exclusively allocated to investments in energy efficiency) — €500m of 2028 SUNs which priced at MS+235bps (tighter than IPTs of MS+265bps).

On the theme of green, check out 9fin’s new ESG column: The Olive Tranche where we delve into definitions and distractions in ESG for our first edition. 

Weekly high yield movers

Leveraged loans

Global Blue finalised its €610m 2030 TLB, pricing slightly tighter at E+500bps and OID of 97.5 (versus IPTs of E+500bps and 97 OID). You can find our loan preview here.

As reported by 9fin, the company lowered its initial margin ratchet of two 25bps step-downs at 3.6x and 3.1x leverage to two 25bps step-downs at 3.3x and 2.8x with a six month holiday.

This partly reflect Tencent’s mid-syndication €100m investment, half of which was used to deleverage and cut the deal size, cutting the opening leverage of the company by 0.2x.

On Monday, IVC Evidensia also finished allocations and admin on its triple tranche TLB, syndicated the previous week. The €2.3bn euro leg came in at the tight end of talk at E+500bps and 98 (versus E+500-525bps and 98) as did the £900m sterling leg at S+575bps and 97.5 (versus S+575bps and 97-97.5). 

Meanwhile, the $1.1bn dollar leg came in at the wide end of talk at S+550bps and 98 (versus S+525-550bps and 98).

Lenders were mostly positive on the name as we reported early last week, despite concerns over leverage and FCF.

New deals in loan land this week include French food retailer Euro Ethnic Foods and German portable toilet leasing company TOI TOI & DIXI — both coming to market with €100m fungible add-ons. The size might not offer much excitement, but both deals fund dividends to PAI Partners and Apax respectively, giving a nice cash pop to their 2023 fund performance.

The former has price talk at E+350bps and 96-96.5 whilst the latter is guiding towards E+500bps and 99-99.5.

Weekly leveraged loan movers

Forward pipeline