The European credit market continued to move more or less sideways. Over the week. iTraxx Main was unchanged at 60bp. iTraxx Crossover widened some 4bp to 269bp.
•In the Nordic region, we saw issuance from DONG Energy coming to the market, with a new corporate hybrid (NC 5.5 years) issuance size of EUR600m and printing at MS 281.9bp. The proceeds are set to be used to repay the DONG Energy 5.5% 3005 with first call date at the end of June 2015.
•The issuance of the new DONG Energy corporate hybrid comes on the back of strong issuance activity of corporate hybrid bonds. Thus, Bertelsmann (Germany), RWE (Germany), Centrica (LONDON:CNA) (UK), Bayer (Germany) and Air France-KLMhave issued corporate hybrid bonds within the past month.
•According to Bloomberg, non-financial borrowers have already issued more than EUR19bn. of subordinated debt compared with total issuance of EUR28 bn. in 2014.
Consensus among market participants is that total issue size of corporate hybrid bonds in 2015 will significantly exceed the 2014 issuance of EUR28bn.
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