Bonds of Britain's largest clothing retailer Marks & Spencer fell in value on Monday on take-over speculation, while in the primary market high-yield issuers dominated the pipeline for another day.
The broad European corporate bond market was little changed. The FTSE Euro Corporate Bond Index showed investment-grade corporate bonds in euros yielding an average 55.7 basis points more than similarly dated government bonds at 1619 GMT, 0.6 basis points less on the day.
"People are looking at corporate earnings coming out of the US later this week, it's been an extremely quiet day," said a trader in London.
General Motors Corp is due to report results on Tuesday, followed by Ford Motor Co on Wednesday.
Marks & Spencer bonds provided a focal point and at 1320 GMT were trading around 10 basis points wider, a trader said, after earlier widening as much as 20 basis points on reports of a possible private equity bid from parties including a US buy-out specialist and UK retail entrepreneur Philip Green.
"The bid would be funded through a loan that would then be paid back by asset-stripping," said Irina Dimitrova, a credit strategist at Dresdner Kleinowrt Wasserstein.
"Up to now M&S has had a relatively conservative risk profile and is seen as quite stable. Should you have an LBO (leveraged buy-out) that is bound to change," she said.
Widely held eurobonds of US car makers rose in value ahead of major earnings announcements later this week.
"We're a little bit tighter in autos," said one trader. "GM has been outperforming the other two big names (Ford and DaimlerChrysler)," he said.
"People have been covering some small shorts in GM ahead of the results," the trader said.
Around 1410 GMT, GM's 8.375 percent euro bond due in 2033 was bid at 239 basis points over government bonds, some four basis points less than on Friday.
German chemicals company Cognis will start road-shows on Thursday for a 745 million euro two-part sale of high-yield debt.
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