By Ben Edwards
Volkswagen AG (VOW.XE) is seeking to sell bonds Monday, the first non-financial company to issue debt in the European primary bond market this year.
Banks were also busy following last week's trickle of financial deals, with Italian lender UniCredit SpA (UCG.MI) offering a 1 billion euro ($1.32 billion) covered bond. Last year, investors had to wait until August for the first covered bond from an Italian bank, also issued by UniCredit.
Akin to that deal in August, UniCredit's borrowing costs are likely to be almost a full percentage point lower than where Italian government bonds of a similar maturity are trading.
Order books for Monday's deal clipped EUR6 billion, suggesting appetite for so-called peripheral debt is still robust.
Credit markets remain relatively upbeat, with the average cost of insuring the debt of European investment-grade companies closing in on its lowest level since mid-May 2011.
Here is a run of how the credit default market stands, who is issuing bonds Monday and what is coming up:
iTraxx Europe: 2 basis points tighter at 102/103 basis points
iTraxx Crossover: 2 basis points tighter at 427/430 basis points
Volkswagen will price its EUR1 billion, seven-year bond at 78 basis points over midswaps. It is the German automaker's first euro debt sale since August last year.
Abbey National Treasury Services PLC, guaranteed by Santander UK PLC, will price its EUR1 billion, five-year, senior unsecured bond at 97 basis points over midswaps.
UniCredit SpA (UCG.MI) will price its EUR1 billion, seven-year covered bond at 150 basis points over midswaps.
Deutsche Bank AG (DB) sold a EUR1.75 billion 10-year bond with a coupon of 2.375%, equivalent to 78 basis points over midswaps.
Insurance and financial company MetLife Inc. (MET) is planning a two-part bond denominated in euros and sterling, both maturing in 10 years. Suggested pricing on the euro deal was in the area of 80 basis points over midswaps, and 110 basis points over gilts for the sterling tranche.
Dutch public-sector agency Bank Nederlandse Gemeenten, or BNG, is planning a seven-year euro bond. Suggested pricing was in the high 20 basis-point area over midswaps.
German lender Commerzbank AG (CBK.XE) is planning to meet investors ahead of its debut covered bond backed by loans made to small and medium-sized companies, or SMEs. The meetings will commence Jan. 14.
-Sarka Halas, Art Patnaude and Serena Ruffoni contributed to this article.
Write to Ben Edwards at [email protected]