EMEA Leveraged Finance Weekly: CoreWeave Investors Get Caught in Swell of ‘Blue Wave’ as AI Data Center Concerns Mount; Paprec Prices Upsized €300M Tap of Green SSNs at 6%, 101.25

European primary market activity was incredibly quiet this week, with only a couple of small bond and loan deals from companies including Paprec and ADB Safegate, as debt and equity investors grappled with the results of the Democratic “blue wave” in the U.S. midterm elections and the ensuing tech selloff. Against this backdrop, investor attention was focused on topical names in the secondary market, including Virgin Media O2, which posted third-quarter earnings earlier in the week.

The spread on the iTraxx Europe Crossover fell by about 13 bps this morning, London time, to 314.20 bps from 325.77 bps at the close a week earlier.

U.S. equity markets first rose slightly on the results of the midterm elections, before tanking on Nov. 5 – dragged down by names linked to the AI data center buildout – on bets that the Democrats may look to slow down or pause data center construction in many states, including Texas.

Tranches of AI-adjacent euro-denominated debt followed suit, with CoreWeave’s €2 billion 8.5% senior unsecured notes, or SUNs, due 2032, dropping around three points on Nov. 5, according to sources. SoftBank’s €500 million SUNs due 2030 have also fallen more than two points since the election, according to Solve data.

One buy-sider said that he thought the underlying momentum behind the AI trade was unlikely to dissipate because of the midterm results, adding that Europe’s leveraged finance markets would likely be relatively unaffected because there were so few data center names, in contrast to the United States. The bigger concern for Europe in the coming months is inflation, with price increases in food in particular likely to hit home for consumers in the months ahead.

Brent crude futures, which traded above $100 per barrel as recently as last week, plunged on the results to about $90 per barrel today, with buy-siders, politicians and pundits all predicting that the U.S.’ willingness to continue the Iran war would likely diminish following the midterms, paving the way for a deal to reopen the Strait of Hormuz. However, this was not a unanimous view among buy-siders, with one expecting the stand-off in the Gulf to continue in the months ahead.

Paprec Prices €300M Tap of Green 2031 SSNs at 6%, 101.25

France-based recycling and waste treatment services firm Paprec priced a €300 million tap of its existing €525 million 6% green senior secured notes, or SSNs, due 2031, at 101.25, giving a yield-to-maturity of 5.705%. The deal was well-received, enabling the leads to upsize it twice, first from €150 million to €250 million and a second time by another €50 million ahead of pricing.

The tap will fund Paprec’s acquisition of Danish waste management company Marius Pedersen’s operations in the Czech Republic and Slovakia.

VMED O2 Bonds See Brief Bump From Q3 Results, £800M Savings Plan

Virgin Media O2’s, or VMED O2’s, bonds rallied by as much as three points on Nov. 3, before giving up the gains after the company reported third-quarter results and made a strategic announcement to pledge approximately £800 million of annualized cost savings by 2029, halt its fiber upgrade program and review shareholder distributions, Octus reported.

The announced cost savings – which were higher than figures cited in press reports in September – and the group’s announcement that it is reviewing its previous plan for £200 million in shareholder distributions, were well received by investors.

Buy-siders listening to the company’s earnings call raised several concerns, with one noting the company had been given several opportunities to counter investor fears by talking down the prospect of a restructuring, but declined to do so. Management also refrained from commenting on whether shareholders would inject equity if needed, they added. A second buy-sider took a more positive view, suggesting that if VMED O2 starts to show the results of its cost-cutting program, then there would be no need for the sponsors to put additional cash into the business.

VMED O2’s full earnings analysis of Q3’26 is HERE. Octus has also published an analysis of VMED O2’s vendor financing notes HERE, a recovery analysis HERE and a liability management risk in brief HERE.

Meta Prices Debut Euro Bonds Wide Enough to Draw Interest From HY Investors

Several high-yield investors invested in U.S. tech giant Meta’s €9 billion investment grade-rated euro bond debut, which priced at spreads wide enough to be appealing despite the company’s Aa3/AA- (Moody’s/S&P) rating.

The deal was offered in six tranches, with maturities ranging from four to 38 years. One investor said the 38s had priced like a low BB rated credit, which made it compelling. Another noted that the bonds had continued to trade well despite the huge tech selloff in equities on Nov. 5, noting that they had priced widely enough to still be appealing.

Primary Market Could See Pick-Up in Activity If Current Market Turbulence Subsides

Looking ahead, investors suggested that activity could pick up again in the remaining weeks before the Christmas break, but only if the current wave of market turbulence subsides. One suggested that some of the leveraged buyout-related new-money deals penciled in for Q1 2027 could even be brought forward to this year.