European corporate bonds off in thin volume

European corporate bonds fell in value on Wednesday albeit in thin volume, and the new deal pipeline is building with investment grade issuers.
The FTSE Euro Corporate Bond Index showed investment-grade corporate bonds in euros yielding an average 57.5 basis points more than similarly dated government bonds at 1502 GMT, 0.3 basis point more on the day.
"Both Ford and GM have come out as much as four basis points wider today. We are not seeing a normal day's flow, and all the US auto sales and oil price concerns remain," said a bond trader in London.
General Motors' 8.375 percent bond due in June 2033 was bid at 276 basis points over government bonds, and Ford's 5.75 percent bond due in January 2009 traded at 168 basis points over government bonds.
In the primary market, French property company Gecina SA will start a roadshow on Thursday to market a euro-denominated bond, a banker close to the deal said on Wednesday.
The lead managers have said previously the deal would be benchmark size, which usually means an issue worth 500 million euros or more. But the exact size of the upcoming deal is still unknown.
Gecina will meet investors mainly in France, but also in Britain, said the banker. The roadshow is due to end on Monday, and the bond is expected to be launched later next week, the banker said.
Gecina has mandated BNP Paribas, Deutsche Bank and SG CIB to lead manage the issue. It is rated BBB+ by Standard & Poor's.
Investment grade rated Danish electric utility Elsam A/S has built a strong order book for its debut euro-denominated bond and the two tranches of the issue could be priced at the tight end of guidance, a banker close to the deal said on Wednesday.
The deal is expected to price on Thursday.
The fixed-rate tranche of the bond, worth 500 million euros and maturing in seven years, was expected to price at the tight end of the range of 50 to 55 basis points over mid-swaps, the banker said, thanks to strong demand.
The 300 million euro floating rate note, maturing in three years, was oversubscribed and could be priced below initial guidance of 30 basis points over the three-month Euribor, he said.