Assemblin Caverion prints €1.5B floating-rate note in bumper day for European high yield

Assemblin Caverion successfully issued a €1.53 billion floating-rate note (FRN) on September 16, marking the second-largest euro-denominated FRN sold by a European high yield borrower, following a record-breaking €2.25 billion deal by Wind Tre in 2017. This offering is the largest FRN tranche since 2017 and surpasses a €1.375 billion bond from 2018 and a €1.25 billion trade from TeamSystem.

The market day saw a total of €4.53 billion in high yield transactions, making it the busiest day of the year so far and the sixth-busiest on record. The large size of the Assemblin Caverion FRN reflects the company's strategy of merging a higher-cost €780 million E+350 FRN into the new tranche, a common practice for high yield borrowers with callable existing debt.

The deal, originally planned at €750 million, demonstrates strong demand for floating-rate paper from an issuer already holding both fixed- and floating-rate debt. High yield bond fund managers have increased their allocation to floating-rate debt from 15% to about 20% in recent weeks, with plans to double this allocation to around a quarter of the portfolio.

New European Collateralized Loan Obligations (CLOs) have remained robust, with issuance running in line with 2025's record volumes. As of September's European Structured Finance Conference, there are estimated to be 200 open CLO warehouses. Assemblin Caverion, formed in 2024 after a merger between Triton's technical installations company Assemblin and Finnish construction systems group Caverion, plans to use the bond proceeds to support a dividend to Triton.