New issues: France Telecom: too many banks spoil the deal

France Telecom suffered from a disappointing new-issue expedition in October, paying more spread and obtaining less cash than it wanted. Six banks were announced as mandated for a two-tranche deal with an expected size of €2 billion to €2.5 billion. The prospects were excellent since investors are crying out for bonds – year-to-date corporate supply amounts to a paltry €72.1 billion, down 17%

on the first nine months of 2004. Things are not getting better, HSBC forecasts total issuance from the corporate sector this year to amount to €85 billion to €90 billion, well below last year’s €106 billion.