Les Mousquetaires : Adopting Buy recommendation on newly issued 2030 notes

Intermarché Entreprises has successfully placed its new 5Y offering of € 500m senior unsecured notes (maturity: January 2030, coupon: 4.125%). While we are Buyers of existing 5.75% 07/2029 notes, we also advised investors to subscribe to the new offering from a spread similar to that of the 2029 notes (ms+170bp mid/160bp ask) given an additional risk that we did not perceive as material on this narrow maturity spread. The IPT was announced at ms+230-235bp, a particularly attractive level that generated strong demand, even after an initial tightening to ms+200bp. The final pricing was ms+190bp for a book that would have exceeded € 3.1bn. We are initiating coverage of the new bonds with a Buy recommendation.