European corporate bonds made a steady start to the trading week on Monday, as Wall Street's higher opening and easing oil prices stabilised the average value of bonds.
The FTSE Euro Corporate Bond Index showed investment-grade corporate bonds in euros yielding an average 56.8 basis points more than similarly dated government bonds at 1505 GMT, 0.1 basis points less on the day.
"We are looking firm," said one trader. "The oil price is coming down and equities are doing well so we are seeing some short covering."
General Motors 8.375 bond due in June 2033 was trading about four basis points tighter at 263 basis points over Bunds, the trader said.
The Dow Jones industrial average opened more than four points higher on Monday, and oil futures for US light crude traded at $37.98 a barrel in electronic trading.
Crude prices finished lower last Friday, below $40 for the third straight day, after last Thursday's decision by the Organisation of Petroleum Exporting Countries to raise production quotas.
Britain's Cadbury Schweppes Plc, the world's biggest confectionery maker, plans to sell benchmark euro-denominated bonds following roadshows in coming days, according to sources with close knowledge of the deal.
The issue may comprise a three-year floating rate tranche and a 5- or 7-year fixed rate tranche, the source said. The bond will be sold following roadshows on June 15 and 16.
Cadbury has mandated ABN Amro, BNP Paribas, Dresdner Kleinwort Wasserstein and HSBC to lead manage the sale, said banks involved in the sale.
Elsewhere, Italy's financial markets regulator Consob is working on fines for Italian banks which sold now defaulted bonds issued by food group Cirio and Argentina among others, the chairman of Consob Lamberto Cardia said on Monday.
Cardia said Consob believed the banks did not provide enough information to investors about the risks involved in buying bonds and failed to declare their own conflicts of interest as creditor banks of companies for whom they sold debt.
Italy's financial system has been rocked by a series of scandals including the collapse of Cirio in 2002 and the plunge into insolvency of dairy multinational Parmalat late last year.
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