BASF, the German chemicals company, will on Thursday sell at least €1bn of new bonds in order to refinance a €1.25bn issue that matures in July.

The new bonds will have a maturity of seven years. The order book had exceeded €2bn on Wednesday, according to bankers.

Despite recent turbulence on the corporate bond market, the company said it would “take advantage of the currently favourable market conditions”.

Bond prices staged a modest rebound on Wednesday, but risk aversion among investors remained on the rise. However, this could benefit BASF, which is one of the highest-rated corporate borrowers in Europe.

The company is rated Aa3 by Moody’s Investors Service and AA- by Standard & Poor’s. The bond will be priced 25 basis points to 29bp above the mid-swap rate. ABN Amro, Citigroup and Deutsche Bank are lead-managing the sale.

The flight to quality also helped Sanofi-Aventis, the French pharmaceutical company, to sell €1bn of two-year bonds that pay a floating rate of interest. The paper was priced to yield 8bp above three-month Euribor, and investors placed orders worth €1.7bn, said SG CIB, the sole lead manager. Sanofi is rated AA- by S&P and one notch lower at A1 by Moody’s.

Cades, the French social security debt agency, will today price a 15-year bond for the second time. The top-rated group is expected to sell €4bn of bonds and the sale follows the first 30-year bond issue by the European Investment Bank earlier this month, the first by a supranational agency in the euro market.

A group of nine Spanish mortgage lenders sold €1.5bn of bonds with a 20-year maturity in a deal that gave most of the smaller savings banks access to the long-dated public debt market for the first time. “The average maturities of mortgages in Spain are increasing and access to long-dated matched funding is going to help these regional savings banks to compete with the big boys,” said Richard Kemmish at Dresdner Kleinwort Wasserstein, which managed the sale with ABN Amro, Ixic and Caja Madrid.

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