Issuer: ITT Promedia
Amount: Dm575 million
Launched: September 19 1997
Lead manager: Goldman Sachs
If ever evidence was needed that Europe is finally catching up with the US's more sophisticated approach to the capital markets, the emergence of the non-dollar-denominated high-yield market should provide it. A predilection for equity finance in the UK and bank finance in the rest of Europe had until recently stifled the will to issue as or invest in anything below a single A credit.
All that has changed this year. Between April and August there were seven high-yield issues in European currencies: three in Deutschmarks, two in sterling and one each in French francs and Italian lire - the last two being floating-rate, the rest fixed-rate. But size had been kept low, with Castle Transmission's £125 million ($201 million) deal being the largest.
ITT Promedia, the Belgium-based telephone-directory subsidiary of US company ITT Corp, has overtaken that level, having raised Dm575 million ($327 million) of 10-year paper in mid-September, the same day that a Ffr500 million ($84 million) high-yield floating-rate note was issued by Financière Néopost. With a coupon of 9.125%, ITT Promedia's deal was launched at a spread of 375 basis points over Bunds and is non-callable for five years.