EMEA Leveraged Finance Weekly: Paprec Prints Tight at 6% on Upsized €525M SSNs; ContiTech Faces Skepticism for Minimum €400M SSNs; Circet Pulls SSNs on Market Conditions

Activity ramped up in European primary markets this week, with four bond deals in the market and six loans. On the high-yield front, recycling and waste management company Paprec led the charge with a €425 million senior secured note offering, liked by investors for its attractive pricing. By contrast, rubber producer ContiTech faced skepticism from the market, while Circet faltered, with the deal ultimately being pulled.

On the loan side, German large engine and turbomachinery firm Everllence priced a jumbo €4.7 billion-equivalent debt package, while ZPG, Aroma-Zone and Grant Thornton all launched offerings.

During a panel on the European primary markets at Octus’ London Credit Forum this week, participants said that while headline spreads look fine, the dispersion is wide, with investors increasingly showing more discipline compared to earlier in the year. They also noted that spreads backed up sharply last week, and suggested issuers remain flexible but launch while the window is open.

On a macroeconomic level, headline consumer price inflation from the United States met economists’ expectations, rising 0.6% in September after climbing 0.4% in August, according to the Labor Department’s Bureau of Labor Statistics. In the 12 months through September, the consumer price index, or CPI, advanced 3.7% after rising 3.4% ⁠in August.

Excluding energy and food components, the CPI rose 0.3% in September, matching August and coming in slightly hotter than expectations of a 0.2% rise. Financial markets are now reevaluating the likelihood of another interest rate hike at the Federal Reserve’s next meeting, due to take place Oct. 27-28.

This data came a day after the International Monetary Fund published its latest World Economic Outlook, projecting that global growth would slow to 3.1% in 2026 and rebound to 3.4% in 2027, on the back of high energy prices tied to conflict in the Middle East. Eurozone growth is expected at 1.1% in 2026.

Paprec Prices Upsized €525M Green SSNs Due 2031 At 6%

France-headquartered recycling and waste management company Paprec priced €525 million SSNs due 2031 at 6%, upsized from €425 million and tightened slightly from initial price talk, or IPT, of low-to-mid 6%. Investors looking at the deal before it priced perceived the issuance to be good value for the rating, despite high leverage and France-related risks.

Investors liked the business, which they thought had a good track record of performance, noting that although Paprec had pretty high net leverage for a BB name, it was a stable business which made sensible acquisitions.

Paprec had always been able to execute on its acquisitions, but there were some questions about its €700 million bridge facility with a two-year maturity which is being used to fund its Marius Pedersen acquisition.

Further Octus analysis is available HERE.

ContiTech Launches Min. €400M 7Y SSNs to Fund Lone Star Acquisition

Germany-headquartered rubber and plastics manufacturer ContiTech launched a minimum €400 million SSN due 2033, as part of a €2.35 billion-equivalent debt package backing Lone Star’s carve-out of the business from Continental. The notes are accompanied by a minimum €500 million euro term loan B, a minimum $750 million dollar TLB and a €1.37 billion equity contribution.

Investors pushed back ahead of price talk, calling it a tough underwrite that would have to widen to get done, citing too much leverage, a business that does not grow, doc-lite terms including no J-Crew blocker and structuring EBITDA well above reported EBITDA. Octus analysts see fair value of the notes at roughly 7.5-8%.

Further Octus analysis is available HERE.

Ineos Energy Prices $700M Senior Notes Due 2031 At 9.125%

Ineos Energy Finance, a standalone oil and gas company within the Ineos family, priced $700 million senior notes due 2031 at 9.125%, tightened slightly from price talk in the 9.25% area.

Investors looking at the notes thought the business was performing reasonably well, with low leverage as a standalone entity. However, they were wary that the company could be used to help prop up other parts of Jim Ratcliffe’s Ineos chemicals conglomerate, which includes Ineos Group and Ineos Quattro.

One buy-sider said it made sense to do the deal now, when oil prices are elevated due to the Iran war.

Proceeds will repay $468.8 million of term loan A debt, fund a shareholder distribution, add $116.2 million of cash to the balance sheet and cover $15 million of fees and expenses. But the bigger question for investors rested on whether or not the owners may look to use money from this business to help pay down debt in other parts of the business.

While this could prove negative for Ineos Energy holders, it could be a net positive for investors who hold debt across Ineos companies, according to a second buy-sider. However, while dividend upstreaming would be a net negative for Ineos Energy as an entity, it would be unlikely to move the needle much when it comes to Ineos Group’s large €14.476 billion net debt pile, they added.

Further Octus analysis is available HERE.

Circet Pulls €500M SSNs Due 2033 Due to Adverse Market Conditions

France-headquartered telecom and energy network infrastructure services group Circet pulled its new €500 million SSNs due 2033, citing adverse market conditions, according to an email. The joint global coordinators said the company would continue to monitor the market in an opportunistic manner.

Earlier in the week, investors had raised concerns about the extent of releveraging under this transaction and the company’s transition from building out the fiber network in Europe toward maintenance and energy infrastructure.

One buy-sider contemplating the deal said it seemed appealing at IPT in the mid-high 7%, noting that the Dutch-headquartered telecoms conglomerate United Group – an imperfect comparable company due to its rating and sponsor risk – had bonds trading at a similar price point.

However, investors noted the deal releverages Circet’s capital structure, and like potential term loan B investors – as previously reported – they questioned how Circet’s slow transition toward energy infrastructure and the move from fiber build-out to maintenance would work. They also questioned why the group had returned to the loan market so soon after the June 2026 amend-and-extend transaction.

Margin talk on the up to €2.1 billion TLB tranche was Euribor+325 bps-350 bps with 99.5 OID; the minimum $500 million loan portion was being offered at SOFR+325 bps-350 bps with 99 OID.

Further Octus analysis is available HERE.

VodafoneZiggo SUNs Fall by Over 17 Pts in Secondary Market on VMED O2 Contagion

Dutch operator VodafoneZiggo’s bonds suffered in a bruising week for European telcos thanks to a sharp selloff at fellow Liberty Global sister company Virgin Media O2, or VMED O2.

Investors speaking to Octus were in agreement that the selloff in VodafoneZiggo’s bonds, which started earlier this week, is “contagion” from Virgin Media. On Oct. 13, VodafoneZiggo’s €700 million vendor financing notes due 2029 and €650 million senior secured notes, or SSNs, due 2033 were down 2.4 points and 2 points at midday, indicated at mid-83.4 and mid-79.1, respectively. The company’s €575 million senior unsecured notes, or SUNs, due 2032 dropped by about 17 points between Monday and Wednesday.

On Oct. 2, the U.K. Competition & Markets Authority provided an interim decision blocking Nexfibre’s proposed acquisition of Netomnia’s parent Substantial Group. The decision, if upheld, places roughly £950 million of upfront cash payable to Virgin Media O2 at risk. This caused a sharp selloff across the entire VMED O2 debt stack last week, with VMED O2 3.75% 2030 SUNs dropping by about 30 points into the mid-30s and the 3.25% 2031 SSNs falling by about 15 points into the low 70s.

Investors were more positive about VodafoneZiggo as a business in comparison to VMED O2, highlighting improving KPIs and said they thought the Netherlands was a slightly better environment for telecom operators than the U.K. Another investor pointed out that VodafoneZiggo was a better business, with healthier cash flow and a reasonable maturity runway.

However, investors have mixed opinions about Liberty Global as a sponsor and the bearing this could have on the performance of VodafoneZiggo’s bonds. Market participants were also split on whether to play Ziggo in the secondary, after the recent price falls. One investor who liked the business thought this could be a good time to buy into Ziggo at a cheaper price. Another investor who already has a holding in the bonds said they would consider putting some more cash to work if they go into the 70s.

Further Octus analysis is available HERE.

Everllence Prices €4.7B-Equivalent Package; Grant Thornton Launches Triple-Currency TLB

German large engine and turbomachinery manufacturer Everllence led the loan market this week, pricing a €4.7 billion-equivalent dual-currency package on Oct. 14. The €2.35 billion euro tranche came at E+350 bps and the $2.71 billion dollar tranche at S+325 bps, both at an OID of 99.75. Proceeds fund Bain Capital’s acquisition of a majority stake from Volkswagen Group.

Grant Thornton launched a $1.25 billion-equivalent triple-currency TLB, comprising a $500 million dollar tranche at S+475-500 bps, a $500 million-equivalent euro tranche at E+475-500 bps and a $250 million-equivalent Australian dollar tranche at BBSY+525-550 bps, all at an OID of 97. The financing supports the acquisition of CBIZ.

French natural beauty brand Aroma-Zone launched a €550 million debut euro TLB at E+425 bps and an OID of 98.50-99.00, backing Partners Group and Eurazeo’s acquisition of the business.

KPS-owned resins manufacturer ALTA Performance Materials upsized a fungible add-on to $165 million-equivalent from $140 million, split between €60 million at E+375 bps and $95 million at S+350 bps, to fund a shareholder distribution. Dollar lenders were asked to re-commit by Oct. 16.

UK property platform ZPG launched an amend-and-extend existing €484 million TLB due July 2028 by 3 years to July 2031. One investor called the business highly cash generative but exposed to UK housing through Zoopla at a challenging time, and said documentation needed tightening before they could participate.