By Robert Hogg
LONDON, May 15 (IFR) - France has mandated banks for a 30-year syndicated bond that will be the first test of investor appetite since centrist Emmanuel Macron was elected President in early May.
The sovereign has mandated BNP Paribas, Citigroup, HSBC, JP Morgan and Societe Generale for the May 25 2048 transaction, and will follow French public sector and bank borrowers which poured into the market last week, taking advantage of tighter spreads on offer.
Bpifrance printed its largest ever deal, while Compagnie de Financement Foncier was able to issue through its outstanding curve. Other credits joined in as international investors rushed back to the jurisdiction.
“They had a deep think about the best timing,” said a lead. “Waiting for the election to pass made a lot of sense because of the volatility...clearly market conditions are good. Also we saw a flurry of issuance last week and everything went quite well.”
The spread between France and Germany blew out from 21.5bp in September 2016 to 79bp in February 2017 as concerns about a potential win by far right candidate Marine Le Pen escalated. It has since recovered to 39.5bp.
France’s transaction will be launched by syndication in the near future. All other primary dealers in the Republic of France government bond market will be invited into the syndicate.
The issuer is rated Aa2/AA/AA/AAA, all with stable outlooks. (Reporting by Robert Hogg, Editing by Helene Durand and Sudip Roy)