Britain’s Rare Outing Dominates Busy Day For European Bond Sales

(Bloomberg) — Britain met booming demand as it made a rare visit to the syndicated bond market on Tuesday, with its government helping lift sentiment with tentative first steps toward easing a pandemic lockdown.

The country got a record 82 billion pounds ($101 billion) of investor bids for a 12 billion-pound offering of notes due October 2030. The deal dominated a busy day on Europe’s bond market, coming alongside euro sales from corporate borrowers including Reckitt Benckiser Group Plc. and U.S. firms Verizon Communications Inc. and Harley-Davidson Inc.

The U.K. transaction, from a nation that usually relies on auctions to raise debt, highlights how the pandemic’s strain on public finances is transforming credit markets. It also named banks for an October 2061 sale next week.

Read more: U.K. Breaks With Bond Sale Tradition and Racks Up Record Orders

“New supply is coming thick and fast, but the market is absorbing it well,” said Charles Diebel, head of fixed income at Mediolanum SpA. “I think also the reality of how much and how long this downturn will be is stopping a full blown recovery in credit.”

Europe

The region’s syndicated bond market saw 13 deals on Tuesday, including so-called reverse yankees from U.S. borrowers Verizon Communications and Harley-Davidson

Syndicated bond sales are on track to exceed 21.78 billion euros equivalent, according to data compiled by BloombergDefault swaps insuring the debt of Europe’s high-grade companies are little-changed this month, while the Crossover index is near its lowest since April 30

Asia

At least three borrowers tapped Asia’s primary dollar bond market Tuesday including the investment firm of Abu Dhabi’s government, which is marketing a multi-tranche note offering

Toyota Motor Corp. warned profit will tumble 80% to a nine-year low and predicted it could take another year before global car sales return to pre-virus levels, the latest sign that expectations for a quick economic rebound are fadingSpreads on Asia’s investment-grade bonds tightened by 1-2bp in the morning, while prices of high yield bonds rose by 0.25-1 cent on the dollar on average, according to traders

U.S.

The Federal Reserve said a facility designed to purchase eligible corporate debt from investors, dubbed Secondary Market Corporate Credit Facility, will launch on May 12, bringing a key part of the U.S. central bank’s emergency coronavirus lending program online following weeks of anticipation

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