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Morning Commentary: Algeco Global to price €125 million add-on; domestic primary quiet
By Abigail W. Adams
Portland, Me., Nov. 27 – While the domestic primary market remained dormant on Tuesday, one add-on surfaced in the European primary market.
Algeco Global Finance plc plans to price a €125 million tap of its fixed- and floating-rate notes due 2023 in a Tuesday drive-by, according to a market source.
The Rule 144A and Regulation S offering consist of a €100 million tap of its 6½% senior secured fixed rate notes due 2023 and a €25 million tap of its senior secured floating-rate notes due 2023.
Algeco initially priced a €600 million issue of the 6½% senior notes on Feb. 6, 2018 at 97.921 to yield 7%.
The company priced a €150 million issue of the floating-rate notes at 98 with a coupon of Euribor plus 625 basis points.
The small deal is “better than nothing,” a market source said. It is the only reported deal in the market.
Few deals are expected to surface in the European primary market through the end of the year, a London-based source said.
With Brexit, Italy and a host of other factors, “it’s a very choppy backdrop” for new deal activity, the source said.
The domestic primary market remained quiet on Tuesday with the forward calendar vacant.
Sources were pessimistic about the prospects for new deal activity over the coming week.
Credit spreads continued to widen, especially with Treasuries tightening on Tuesday, a source said.
Between the outflows and widening credit spreads, market conditions are still not conducive to new deal activity, the source said.
Meanwhile, the secondary space opened Tuesday on soft footing with the market down about 1/8 point, according to a market source.
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