UK oil and gas company Melrose Resources is set to test the fragile appetite for high-yield debt in Europe after mandating Merrill Lynch as sole bookrunner to sell €250m ($357m) worth of junk bonds – the first euro denominated transaction of its kind in over 80 days.

A four-day investor roadshow across Europe is to start on Monday for the eight-year subordinated transaction with launch and pricing of the bonds expected either by the end of next week or in the first few days of the week after, Merrill Lynch said.