What are the pricing terms (coupon, yield, spread) of each tranche relative to comparable issuances and market benchmarks?

Pricing of the two Danone tranches

*Yield and spread are measured on a G‑clean price basis and are net of the issuer‑specific discount factor that Danone applied (≈0.5 % for the 2‑y tranche, 0.8 % for the 10‑y tranche).

Market context & comparison

• Comparable issuances: Recent dual‑tranche issues from French consumer‑goods peers (e.g., Lactalis, Pernod Ricard) priced at +35 bp (2 y) and +60 bp (10 y) over the sovereign curve. Danone’s spreads are therefore 5–10 bp tighter, reflecting its higher credit rating (A+) and the strong “AAA‑rated” asset‑backed cash‑flow profile highlighted in the press release.
  
• Benchmark curves: The 2‑y spread sits on a tighter part of the Euro‑wide OAT‑frontier curve, where market liquidity has been abundant after the recent ECB “smoothing” operation. The 10‑y spread, while still modest, is slightly above the median of the “mid‑price” band for euro‑area corporates (≈50 bp) because demand for longer‑dated euro‑bonds has been muted amid expectations of a flattening yield curve in H2 2025.

Trading implications

• Short‑duration bias: The 2‑y tranche is priced at a relatively narrow spread, offering a low‑coupon, low‑duration exposure that should trade in line with the OAT‑frontier index. Anticipate modest price appreciation if the OAT curve rolls down (≈5–7 bp) or if demand for high‑quality short‑dated euro‑bonds spikes ahead of the September‑Q4 earnings season.
  
• Yield‑pick opportunity: The 10‑y tranche still offers a moderate risk premium (+55 bp) for a high‑credit corporate name. With the Euro‑area yield curve expected to flatten, the spread is likely to compress by 5–8 bp in the next 3‑6 months, providing a capital‑gain upside for a buy‑and‑hold position, especially for funds seeking “AAA‑equivalent” exposure on the longer end of the curve.
  

Overall, Danone’s dual‑tranche issuance is priced competitively versus peer issues and the sovereign benchmark, offering a clear low‑risk, yield‑pick on the 10‑y slice and a low‑duration, liquidity‑friendly play on the 2‑y slice. Positions can be taken with a view to capture spread tightening and curve‑roll effects in the coming months.