Market sentiment also seems to be getting warmer. One sellsider said: “Primary markets feel pretty good, restarting over the next few weeks.”

Key to this has been an uptick in M&A optimism (see 9fin coverage here) with activity improving even over the summer months (sustained month-on-month increases from financial sponsors according to the sellsider).

People also seem to be gaining more comfort around the macro backdrop — a number of speakers pointed to dovish policy on the horizon.

“Cutting rates in the second half of next year,” the second sellsider said, “should paint a positive deal picture for everyone. More sponsor exits are expected over the next 12 months too.”

Technicals should also be supportive for the market — the first sellsider pointed to the fact that the EHY market is experiencing negative new issuance (more bonds leaving the market than entering) — something that should continue even if “2024 pipeline supply is expected to outpace 2023.”

High yield

Dutch equipment leasing company Boels Rental kicked things off as it issued €400m of 5NC2s. Pricing came in on the tighter end — ultimately landing at 6.25% from initial price talk of mid to high 6s.

A buysider who passed on the deal was put off by pricing, saying that “even at 6.5%, it was pretty tight.” They were also concerned about the cyclicality of the business (despite ~54% of Boels’ LTM Q2 23 sales coming from non-construction customers as per 9fin’s Credit QuickTake).

A second buysider agreed, saying that pricing wasn’t attractive enough to get their attention during an already busy week.

“It’s nothing to get out of bed for. They’re not giving me enough price-wise to make me want to take the time. I’d rather go to the conferences.”

For a refresher on the European equipment rental market, check out our recent explainer — covering Boels Rental as well as competitors: Kiloutou, Loxam, Modulaire Group, Renta Group and Sarens. 

Providing support to the idea that issuers are becoming more comfortable with bonds again, a third sellsider suggested that the market was now offering Boels Rental an opportunity to partially hedge its existing floating rate liabilities — namely its €1.45bn TLB due in 2027.

Moving onto Rexel, the French electrical product distributor came to market with €400m of sustainability-linked 7NC3s.

The first buysider said: “It’s a really good company; really acquisitive. But that can also be a concern — the execution risk of one of the acquisitions going wrong.”

The deal settled at 5.25% from initial price talk of 5.5-5.75% — the final yield was as low as the first buysider would go, suggesting that the deal had strong demand behind it.

The third sellsider expected the name to do well given its strong following and history in the market.

“It’s a pricing exercise more than anything — people are comfortable with it from a credit perspective.”

German automotive supplier, ZF Europe Finance, upsized from €500m to land at €650m of 2029 Senior Notes. Following the trend of bond deals tightening this week, pricing finalised at 6.25% (”too tight despite the stable end market” according to the first buysider) from IPTs in the 6.5% area.

The third sellsider noted that the deal priced 100bps wider than Rexel despite being a shorter tenor — pointing to a healthier market which is increasingly differentiating between credits.

“That’s the benefit of having more deals — investors aren’t just treating every BB+ the same anymore.”

Finally, French television content creation group Banijay launched a €910m-equivalent dual tranche deal due 2029. The euro tranche (€350m minimum) has price talk of mid to high 7s whilst the dollar tranche ($350m minimum) is guiding towards low to mid 8s.

The third sellsider said it made sense for Banijay to come to market given its maturities and good performance — also noting that the euro tranche looks like it has “a healthy amount of premium so it should come in tighter.”

Moody’s assigned B1 ratings to the senior notes — citing factors such as its strategic focus on non-scripted content in highly profitable time slots, established and proven formats with high and recurring revenue and earnings visibility and strong free cash flow generation.

Leveraged loans

Platinum Equity-backed Awaze hit the primary market this week with a new loan to extend existing debt and put more cash on its balance sheet. 

The British hotel management company issued a €350m TLB A&E maturing in May 2028 (May 2025/+3 year extension), at an initial price of E+475-500bps (vs E+400bps in the existing €444m TLB) and an OID of 98. 

The deal has been reinforced with an equity injection of €190m with an optional prepayment up to €94m to extending lenders at par. 

At first glance, pricing may not sound that attractive for a 8x plus leveraged company, but the third sellsider told 9finthat the equity injection is “sizeable” — with pricing “more or less in line with what we’d expect.”

Loan deals continued with Immofinanz, a listed commercial real-estate company based in Vienna. The Austrian company priced a €170m TL with a June 2028 maturity to refinance two office buildings. 

Other major deals are standing in line, as highlighted in our pipeline piece. Spain-based medical equipment distributor Palex’s €350m TLB is backing its buyout by Apax Partners and Fremman Capital. 

The deal will be brought to market by Jefferies, Goldman Sachs, KKR Capital Markets and UniCredit, alongside Banco Sabadell, Mizuho and SMBC. Pre-sounding should begin in the coming weeks.

British frozen food company Nomad Foods is next in the queue — it announced that it is launching a repricing of its existing $700m TLB due 2029. Margin is guiding towards S+300bps (from S+375bps currently) and OID is aiming towards 99.5.

Looking ahead, Infra Group has started pre-marketing its €600m TLB — with the intention to launch either next week or the following week according to buyside sources.

The deadline for pre-marketing feedback is Wednesday 13th September. Citi is leading the deal, joined by Goldman Sachs, Natixis and Bank of Ireland.

“If it comes at B3, then it will be difficult for us to get involved,” said a third buysider, “but the technicals are in its favour.”

Forward pipeline