Attention in the European corporate bond market turned to new issuance on Monday with several new deals expected in coming days, while secondary market trade was thin at best.
The FTSE Euro Corporate Bond Index showed investment-grade corporate bonds in euros yielding an average 44.4 basis points more than similarly dated government bonds at 1455 GMT, 0.3 basis points less on the day.
"The market is very quiet and although we started stronger this morning, we've lost ground this afternoon on the back of equity weakness," said one trader. "But really everyone is looking at the primary market at the moment."
Retail giant Wal-Mart Stores Inc is set to sell a 31-year sterling bond of between 500 million and 750 million pounds, a banker familiar with the sale said.
The bond is expected to yield 80 to 82 basis points over the UK Gilt due 2036, he said, and pricing is expected on Wednesday.
Barclays Capital, Deutsche Bank and Royal Bank of Scotland are managing the sale.
French finance company Socram's debut euro-denominated bond, a 5-year senior floating rate note, is expected to offer a yield in the high 30s basis points over three-month Euribor, a banking source said.
Socram, which specialises in auto lending, ended a roadshow for the bond on Thursday and is expected to launch the deal this week.
BNP Paribas and Natexis BP are managing the sale for Socram, rated BBB+ with a stable outlook by Standard & Poor's.
Meanwhile, price guidance for US oil and grain trader Cargill Inc's debut euro-denominated bond is expected to be released on Tuesday, with the deal being priced later in the week, a banking source said.
In the secondary market prices were little changed. Ciba Specialty Chemicals' 4.875 percent euro bonds due 2018 were around one basis points weaker in very thin volumes after the company said it would delay its results, a trader in London said.
The Swiss company said on its website it would announce nine-month results on October 27 instead of October 21, but did not specify the reason for the delay.
In the high-yield market, bonds issued by German chemicals company Celanese AG edged lower after market sources said a unit of the company planned to raise $513 million via a sale of senior discount notes to pay a dividend to its shareholders.
The 2014 notes, which will be issued via Crystal US Holdings 3 LLC, will be split into a series A raising proceeds of $100 million and a series B which will raise $413 million, the sources said.
Banc of America Securities is leading the deal, which will be priced later on Monday or on Tuesday.
Celanese sold $1.24 billion worth of high-yield bonds in June through BCP Caylux Holdings Luxembourg SCA to help fund its leveraged buyout by the Blackstone Group.
Celanese's euro-denominated bonds were quoted around 109 percent of face value, around a point lower, traders said.
Steelmaker Corus began roadshows on Monday for its revived 500 million euro seven-year bond, while German auto repair chain ATU began marketing a 150 million euro 10-year floating-rate note.
Culligan Finance Corp is expected to price a 185 million euro bond to yield around 8.25 percent on Tuesday.
Illinois-based Culligan is a leading supplier of water filters and bottled water.
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