Royal KPN NV, the Dutch phone company that scrapped its dividend to buy faster wireless networks frequencies, led declines in corporate bonds after it was cut by Fitch Ratings and as issuance stalled in the run-up to the holiday break.
The relative yield on the company’s 700 million euros ($920 million) of 5.625 percent notes due 2024 increased seven basis points to 237 basis points, the most since Nov. 20, according to Bloomberg generic prices, after it bought 1.35 billion euros of frequencies. The last European non-financial company to sell benchmark bonds in the single currency was Telecom Italia SpA (TIT), which priced a 1 billion-euro deal on Dec. 14.
“It’s the end of the year and a lot of investors have shut their books for the year,” said Simon Ballard, a credit strategist at National Australia Bank in London. “Secondary market volumes are very muted, which makes pricing very sensitive to headline risk.”
Read more: KPN Leads Corporate Bond Declines in Europe as Issuance Stymied - Bloomberg
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