The quest for Emu market share
High-yield bonds are set to be an important feature of the run-up to European economic and monetary union (Emu). Credit Suisse First Boston has a mandate for one of up to £120 million ($192 million) which will make it the largest high-yield sterling deal yet and is bidding on another. Salomon Brothers is working on a second deal for up to Dm200 million ($120 million), to finance buyout firm Doughty Hanson's purchase of a controlling stake in Impress Metal Packaging, a new joint-venture company resulting from the merger of the metal packaging divisions of Germany's Schmalbach-Lubeca and France's Pechiney. Merrill Lynch is marketing yet another financing for a Doughty Hanson buyout: a roughly Dm155 million bond to support its Sfr1.8 billion investment in Geberit, Europe's leading producer of sanitary systems.
To date, the largest completed deal has been for just £80 million, arranged last September by Bankers Trust for Fitzwilton, owner of Northern Ireland supermarket chain Wellworth. There have only ever been two others, both in sterling, both also arranged by Bankers Trust.
The market for public high-yield European corporate bonds in European currencies is about to burst into life.