Corporate bond market focuses new issues

Europe's corporate bond market was once again focussed on new issues on Thursday as further borrowers announced plans to raise debt before the summer lull.
In the secondary market spreads once again trod water as a lack of corporate news combined with the wait for the Federal Reserve meeting meant there was little impetus to trade.
The FTSE Euro Corporate Bond Index showed investment-grade corporate bonds in euros yielding an average 54.1 basis points more than similarly dated government bonds at 1501 GMT, 0.6 basis points less on the day.
But in new issues, British water supplier Three Valleys Water Plc sold its debut bond of 200 million pounds, while French defence electronics firm Thales signed up banks for a benchmark euro-denominated bond. Meanwhile, the market is awaiting a 300 million euro deal from Poland's TPSA.
"There's a heavy redemption schedule," said Stuart Trow, head of European credit research at National Australia Bank. "That money would tend to be reinvested in the corporate bond market, and these issues fit the bill."
Three Valleys, a wholly-owned subsidiary of Veolia Environnement sold a 200 million pound 22-year bond at a spread of 95 basis points over Gilts, in line with earlier guidance. Barclays Capital and Dresdner Kleinwort Wasserstein managed the deal.
TPSA is expected by the end of the week with a 300 million euro seven-year bond, to be priced to give a spread of 65 to 70 basis points over mid-swaps. BNP Paribas and Deutsche Bank are managing the sale.
Meanwhile, Thales enlisted a quartet of banks for a benchmark euro bond with an intermediate maturity that will be marketed to investors on July 1 and 2. ABN AMRO, Barclays Capital, BNP Paribas and Natexis BP will manage the sale.
In the high-yield market, top German cable firm Kabel Deutschland sold a larger-than-expected two part bond worth some 750 million euros, offering lower yields than expected, both signs of good demand.
Sovereigns were also active in the primary market on Thursday, led by Germany which announced plans to sell debt owed to it by Russia to private investors via a new bond issue.