Fiat, Severstal Tap Busy European Primary Bond Market

By Sarka Halas

The European primary bond market was buzzing with activity Tuesday, with Russia's largest steel producer tapping the market, banks selling covered and subordinated bonds, and Fiat SpA (F.MI) the first Italian company to test the water following the Italian elections.

Borrowing conditions remain favorable and the rest of the week may look as busy as Tuesday with a few issuers in the pipeline mulling potential bonds in the near future.

Credit markets opened slightly wider in early Tuesday, and have remain unchanged from the open throughout the morning.

Here is a rundown of how the credit default swap market stands, what hit the market today, and what is coming up soon.

CDS:

iTraxx Europe index: 1 basis point wider at 105/106 bps

iTraxx Crossover index: 2 bps wider at 406/407 bps

NEW ISSUES

Russia's largest steel producer OAO Severstal (CHMF.RS) is planning a dollar-denominated five-year bond.

Italian car maker Fiat is planning a benchmark-size, euro-denominated, five-year bond. Suggested pricing is for the bond to yield in the area of 7%.

Luxembourg is pressing ahead with plans to sell a benchmark-size, euro-denominated, 15-year bond. Suggested pricing is in the mid-to-high single-digit area over midswaps.

Spanish lender CaixaBank SA (CABK.MC) is planning a benchmark-size, euro-denominated, five-year covered bond. Suggested pricing is in the area of 220 basis points over midswaps.

Swedish lender Stadshypotek AB has planned a euro-denominated, benchmark-size 2018 covered bond. Suggested pricing on the bond is in the high single digits over the reference midswaps rate.

U.K.-based Nationwide Building Society (NANW.LN) is pressing ahead with its euro-denominated callable subordinated bond. Suggested pricing is in the range of 340 to 350 basis points over the reference midswaps rate. The bond will be callable in five years.

French lender Banque Federative du Credit Mutuel plans a euro-denominated senior unsecured bond maturing in 6.5 years.

An initial price indication is between 90 and 95 basis points over the midswaps reference rate.

COMING UP:

The Republic of Finland is mulling a potential euro-denominated, 10-year bond, a person familiar with the matter said Tuesday. The bond may be launched in the near future subject to market conditions.

French defense electronics company Thales SA (HO.FR) has planned an investor call ahead of a potential euro-denominated bond.

Elia System Operator SA/NV (ELI.BT) has planned a series of investor meetings ahead of a potential senior, unsecured euro-denominated benchmark bond.

-Ben Edwards and Serena Ruffoni contributed to this report.

Write to Sarka Halas at [e-mail]