Eurobonds: DFS To Roadshow, Inaer Sets Guidance, IG Supply Low

16th Jul 2010 15:12

By Mark Brown Of DOW JONES NEWSWIRES LONDON (Dow Jones)--High-yield issuers continue to look to the bond market for funding, with another new deal announced Friday. U.K. furniture retailer DFS Furniture Holdings PLC announced plans for a GBP240 million, senior, secured 2017-dated high-yield bond via Goldman Sachs Group Inc. and JP Morgan Chase & Co., to follow an investor roadshow next week. Private equity group Advent International bought DFS in April. And Spain-based helicopter services company Inaer Aviation Group also set yield guidance on its planned EUR470 million, seven-year bond at 9.5% to 9.75%. Care U.K. priced a GBP250 million, 9,75%, seven-year bond, non-callable for four years, at par Thursday. The borrower is a health and social care services provider that was bought by private equity firm Bridgepoint this year, and the deal was seen as a test of the high-yield bond market's willingness to finance leveraged buyouts. DFS, Inaer, and Care U.K. are all rated single-B. Investment grade supply, meanwhile, may have started to tail off for the summer break. Data from Societe Generale SA showed that no new euro-denominated, non-financial corporate bonds priced this week, although the sterling market has seen more supply. Euro-denominated bank bond supply, which was heavy last week as issuers took their chance to tap the markets, has also dropped this week, with just one benchmark senior bond and UniCredit SpA's EUR500 million, hybrid tier-1 deal. There were also euro-denominated covered bond taps, but no new benchmark transactions. "The new issue market is slowing down," said one syndicate banker. "I'm not expecting big deals next week, but maybe a few more taps." Interestingly, supply in the dollar-denominated covered-bond market is currently outstripping euro supply. Bank of Nova Scotia priced a $2.5 billion, three-year deal overnight, taking dollar supply for the week to a record $4.3 billion. The euro bank deals sold last week have mostly performed well in the secondary market, with only Royal Bank of Scotland Group PLC's 4.875% 2015 bond trading wide to its re-offer spread, according to one trader. This week's new high-yield deals were also trading above their re-offer prices Friday. Emerging-market banks aren't afraid of tapping the international bond markets. Turkey's Yapi ve Kredi Bankasi AS Friday announced plans for an international roadshow, which could be followed by its debut dollar deal. Another Turkish lender, Akbank TAS, sold $1 billion of five-year senior unsecured bonds Thursday at 350 basis points over Treasurys, in its debut international deal. -By Mark Brown, Dow Jones Newswires; + 44 (0)207 842 9485, [email protected] (Ainsley Thomson and Michael Wilson in London, and Riva Froymovich and Prabha Natarajan in New York, contributed to this item.) (END) Dow Jones Newswires July 16, 2010 10:12 ET (14:12 GMT)