European corporate bonds ended Monday in a mixed mood as financials performed better amid thin issuance volumes and auto-makers' bonds were steady or slightly wider ahead of sales figures due to be released on Tuesday. The high-yield market provided some primary market headlines with packaging company Mauser meeting solid demand for its new 185 million euro 8-year bond.
In the investment-grade market, euro-denominated bonds of US auto-makers turned in a relatively stable performance in light flows ahead of US auto sales on Tuesday and as a dispute between General Motors Corp and Fiat rumbled on.
GM's 8.375 percent euro bond due 2033 was four basis points wider on the day, bid at 402 basis points over Bunds, a trader said, while Ford's 4.875 percent euro bond due 2010 was little changed on the day at 203 basis points over.
Analysts at Barclays Capital said the sales data was likely to have little impact. "While we are not expecting a strong sales result, we do not think it will serve to negatively impact spreads significantly," they wrote in a note to clients.
That leaves attention on the continuing talks between GM and Fiat over a disputed option under which the Italian group says it can sell its loss-making auto unit to the US giant.
GM, now facing the prospect of buying the unit while it tries to turn around its own European units, says the put was invalidated by restructuring at Fiat Auto.
The option kicked in on January 24, and Fiat has said it might exercise it as soon as February 2 if a last-ditch mediation process fails to resolve the dispute. Fiat shares, up 2.2 percent on the day, have risen 5.4 percent from the end of 2004 on hopes that GM will offer cash to settle the issue.
In the wider market, the FTSE Euro Corporate Bond Index showed investment-grade corporate bonds in euros yielding an average 45.4 basis points more than similarly dated government bonds at 1540 GMT, 0.1 basis points more on the day.
Financial bonds ground tighter, and in Europe the sector was unmoved by news that Marsh & McLennan Cos., the world's largest insurance broker, agreed to pay $850 million to settle charges it conspired with insurers to rig bids.