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Teva Pharmaceutical's debt is under pressure on Friday after the company was one of a handful of generic drug companies subject to a federal probe into price fixing which could result in charges being brought before the end of the year.

The group's Euro curve was marked around 20-25bps wider earlier today before pulling back slightly off its weakest levels, after its stock price plunged over 9.5% in US trading following the news. At 10:36 GMT the TEVA 1.125% Oct 2014 was ca. 20bps wider at m/s +123bps bid.

Also among those companies to receive a subpoena according to Bloomberg was Mylan NV (Baa3/BBB-/BBB-) whose stock fell by close to 7% on Thursday.

The group does not have any EUR debt outstanding although it did undertake a European investor roadshow in early September with the help of Citi, Deutsche Bank, ING and JP Morgan ahead of a planned inaugural EUR multi-tranche benchmark which never materialised.

Goose egg 3.0

Meanwhile, the primary IG corporate EUR market is devoid of supply on Friday in a week when a flurry of activity which saw nine issuers take a combined EUR6.05bn out of the market via 11 separate deals squeezed into just two sessions on Wednesday and Thursday, which was sandwiched by European holidays in the first two days of the week and Friday's US NFPs.

This of course was some way down on the EUR14.18bn which priced last week via 18 separate deals, although was still not a bad effort in a week when issuers also had to navigate their way through various central bank meetings, a slide in global oil prices and heightened US election inspired volatility.

There is one GBP issue line on Friday though thanks to UK residential property group A2Dominion (exp A+ by Fitch) which is marketing a GBP250m no grow Nov 2028 senior unsecured line. Sole bookrunner Lloyds Bank opened the books at UKT +230/235bps, for pricing later today.

Meanwhile, the prospect for next week's primary activity is theoretically encouraging based on feedback suggesting that many other corporates may be looking to fund before year-end, although this will of course be dictated by the broader reaction to Tuesday's US presidential election result where recent polls have indicated that Trump is making up some late ground.

The pipeline is looking healthy through having been given a boost recently by the likes of Abbvie Inc, Akelius and LyondellBasell Industries.

Turning to the secondary market and Thursday's trio of deals have seen a mixed performance, with Capgemini's Nov 2021 line the stand out performer at 2bps inside reoffer which wiped out the very modest final new issue concession.

That after the EUR500m deal also triggered the highest level of demand at EUR3.3bn which saw the final reoffer level of m/s +52bps ramped in from +70 area IPTs.

Elsewhere, RCI Banque's Nov 2021 is marginally outside reoffer while BASF's 2-part 4/10yr exercise is still holding in ca. reoffer bid.

Issuer Deal Re-offer spread Current spread & change vs previous day Rating
CAPFP 0.500% 11/21 MS+52 MS+50 (-2) BBB (S&P)
RENAUL 0.625% 11/21 MS+60 MS+61 (+1) Baa1/BBB
BASGR 0.750% 11/26 MS+33 MS++33 (unch) A1/A
BASGR 0.000% 11/20 MS+15 MS+15 (unch) A1/A
FCGNZ 0.750% 11/24 MS+55 MS+55 (-1) A-/A
GFSLN 1.500% 01/23 MS+140 MS+130.5 (unch) BBB-
ABESM 1.000% 02/27 MS+75 MS+75 (-1) BBB/BBB+
DOV 1.25% 11/26 MS+85 MS+83 (-1) A3/A-/A-
STLNO 1.625% 11/36 MS+68 MS+69 (unch) Aa3/A+
STLNO 0.750% 11/26 MS+38 MS+40 (+1.5) Aa3/A+
TVOYFH 2.625% 01/23 MS+260 MS+243.5 (-0.5) BB+/BBB
WHR 1.250% 11/26 MS+87 MS+80.5 (-0.5) Baa1/BBB/BBB
PUBFP 0.500% 11/23 MS+50 MS+49 (-1) Baa2/BBB+
PPG 0.875% 11/25 MS+60 MS+55.5 (-0.5) A3/A-/A-
PPG 0.000% 11/19 MS+25 MS+19.5 (-1.5) A3/A-/A-
ORAFP 0.875% 02/27 MS+45 MS+43.5 (-1) Baa1/BBB+/BBB+
MRK 1.375% 11/36 MS+50 MS+40.5 (-0.5) A1/AA
MRK 0.500% 11/24 MS+28 MS+26 (-0.5) A1/AA
VZ 1.375% 11/28 MS+83 MS+79.5 (-0.5) Baa1/BBB+/A-
VZ 0.875% 04/25 MS+65 MS+61 (-1) Baa1/BBB+/A-
VZ 0.500% 06/22 MS+50 MS+44 (-1) Baa1/BBB+/A-
MRLSM 1.875% 11/26 MS+160 MS+158.5 (unch) Baa2/BBB
BNFP 0.167% 11/20 MS+28 MS+23.5 (-0.5) Baa1/BBB+
BNFP 0.424% 11/22 MS+40 MS+35.5 (-1) Baa1/BBB+
BNFP 0.709% 11/24 MS+50 MS+47 (-0.5) Baa1/BBB+
BNFP 1.208% 11/28 MS+65 MS+58.5 (-0.5) Baa1/BBB+
IREIM 0.875% 11/24 MS+80 MS+100 (+1) BBB
COLSM 1.450% 10/24 MS+135 MS+139 (+1) BBB-

andrew.perrin@informagm.com

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