(Updates with context, reaction)
By Robert Smith
LONDON, March 10 (IFR) - LeasePlan has set price talk on its 1.55bn-equivalent LBO bond tighter than whispers, aided by the rally across credit after the European Central Bank's freshly announced stimulus measures.
The Dutch vehicle-leasing company took advantage of a more stable market backdrop to revive the three-tranche holding company bond on Wednesday, relaunching it just one month after a sharp sell-off forced underwriters to pull the deal.
Leads set price talk on an up to 1.25bn five-year non-call two-year tranche at 7% yield area on Thursday afternoon, while talk on a minimum US$400m five-year non-call two-year tranche is at 7.50% yield area.
LeasePlan has dropped a planned euro seven-year non-call three-year in favour of a larger euro five-year non-call two-year.
Books close at 4.15pm for pricing thereafter. The deal was originally scheduled to price on Friday.
Two investors told IFR on Wednesday that price whispers on the deal were at 7.25%-7.50% on the euro 5NC2 and at 7.75%-8.00% on both the euro 7NC3 and dollar 5NC2.
But the announcement by the ECB on Thursday that it would expand its asset purchase programme to include investment-grade corporate bonds sent the iTraxx Crossover more than 40bp tighter.
One investor said shortly after the ECB decision that he expected leads to cut pricing by 37.5bp-50bp, broadly in line with where price talk ended up emerging.
LeasePlan's bold move to revive the trade on Wednesday ahead of the ECB meeting appears to have paid off and it will price the deal tighter than where it was covered last time around.
The euro 5NC2, euro 7NC3 and dollar 5NC2 were talked at 7.50%-7.75%, 8.00%-8.25% and 8.25% area before the trade was previously pulled.
Some market sources were surprised after LeasePlan's Wednesday announcement, given the potential for the ECB to underwhelm and the risks of a sharp sell-off.
Thursday's ECB announcement led to the opposite outcome, however.
"It was a good call," said a banker away from the deal. "It was a bit of a gamble, but it paid off."
He added that he was not surprised LeasePlan dropped the longer dated euro tranche, as it struggled to generate demand last time around.
Bookrunners are JP Morgan, Goldman Sachs, Credit Suisse and ING. The debt is backing the acquisition of the Dutch firm by a consortium of investors including TDR Capital, ADIA and GIC. (Reporting by Robert Smith, Editing by Helene Durand)