Pound Bond Market Gets Longest Deal in Months as BOE Hits Pause

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(Bloomberg) -- Days after the Bank of England called time on nearly two years of rate hikes, Suez SA is selling the longest-dated sterling corporate bond in six months. Most Read from BloombergChina Puts Evergrande’s Billionaire Founder Under Police ControlElon Musk Wins US Space Force Contract for StarshieldPeloton Soars After Deal With Lululemon to Share Fitness ContentCitadel Is Ready to Fight With SEC Over WhatsApp ProbeOil Touches $95 With Shrinking Inventories Fanning Fresh RallyThe French

The French waste-treatment group is marketing pound-denominated green bonds due in 20 years on Thursday, according to a person with knowledge of the sale, who asked not to be identified as the information is private. It’s one of just four senior offerings in the currency from a non-financial company this year bearing a tenor of 20 years or more and the longest in the currency since March, according to data compiled by Bloomberg.

The sale was announced on Tuesday and just days after the BoE opted to skip hiking interest rates further at its Sept. 21 meeting amid economic data pointing to a slowdown in inflation. It leaves its key rate at 5.25%, although the central bank has signaled that it’s prepared to act again if inflation — which remains more than three times above a 2% target — fails to ease.

“If I were a corporate I would certainly be looking at the long end of the GBP market as a good place to issue with decent demand at the moment,” said Luke Hickmore, investment director at Abrdn Plc. “If we do see Suez do well I would expect that to be taken as an indication that we are in an episode of demand and we will see more issuers print.”

Suez’s sale comes after a drop in sterling bond spreads to about 162 basis points from a year-to-date high of more than 200 basis points back in March, when a banking crisis roiled global markets. Issuance of debt in the currency from high-grade, non-financial companies has reached just £17.9 billion this year.Engie SA raised £650 million of 30-year green bonds in late March, Bloomberg data show.

Suez is marketing its 2043 maturity notes at 190 to 200 basis points above gilts. HSBC Holdings Plc, NatWest Markets Plc, RBC Capital Markets and Banco Santander SA are active bookrunners on the sale, which is expected to price later on Thursday.

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