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Monday, 22 September 2014

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Upfront

Alibaba IPO

Chapeau!

IFR 2051 20 September to 26 September 2014

If Alibaba’s stock had popped dramatically in debut trading on Friday – or indeed gone the other way – the Monday morning syndicate (including this magazine) would have been out in force second-guessing the decisions made by the real bankers on pricing or allocations.

Top News

Alibaba

Alibaba's US$21.8bn IPO delivers

IFR 2051 20 September to 26 September 2014 By ,

A conservative valuation stance and a partly superstitious approach to pricing, even in the face of overwhelming demand, ensured the long-awaited US$21.8bn NYSE IPO of Alibaba Group was a mostly seamless exercise last week.

AngloGold

AngloGold debacle tarnishes UBS and Goldman

19 September 2014 By Graham Fahy

Institutional shareholders have humiliated AngloGold Ashanti by forcing the miner to abandon plans for a huge capital increase and a spin-off of its international assets.

Fresenius

100% debt convertible bond trumps HY

IFR 2051 20 September to 26 September 2014 By

Fresenius Medical Care has illustrated the flexibility of equity-linked products by removing any threat of dilution from its €400m convertible bond issue. By repurchasing the embedded option through a matching derivative from joint bookrunner Societe Generale, the dialysis product-maker secured 100% debt treatment and therefore did not require shareholder approval.

ECB

Low appetite for TLTRO

IFR 2051 20 September to 26 September 2014 By

Banks took less than a quarter of the funds available to them in the first of the European Central Bank’s long-awaited targeted longer-term refinancing operations, raising concerns that the institution’s latest efforts to reinvigorate lending in countries mired in recession and deflation may underwhelm.

ECB

S&P highlights ECB’s regulatory dilemma

IFR 2051 20 September to 26 September 2014 By

An analysis of the short-term funding of Europe’s 50 largest banks has shown how delicately the European Central Bank will need to tread over the next month as it completes its comprehensive assessment of the health of Europe’s banks.

AB InBev

AB InBev M&A sparks debt buzz

IFR 2051 20 September to 26 September 2014 By Shankar Ramakrishnan, Tessa Walsh

The highly liquid global debt markets are in fine fettle and easily capable of financing another mammoth M&A deal of around US$100bn, bankers said at LPC’s 20th annual loan conference in New York.

Credit Suisse logo

Fed slaps Credit Suisse for risky lending

IFR 2051 20 September to 26 September 2014 By Tessa Walsh, Natalie Harrison, Lynn Adler

Wall Street banks are expected to rein in reckless underwriting after the Federal Reserve appeared to single out Credit Suisse for flouting lending guidelines.

IFR Magazine Top News in Full (subscription required)

People & Markets

A sign outside the headquarters of JP Morgan Chase & Co in New York

US banks toughen internal stress tests

IFR 2051 20 September to 26 September 2014

US banks have toughened up their internal stress testing after pressure from the Federal Reserve, with more pessimistic projections for the economy, unemployment and loan repayments leading to lower projected capital levels in the latest mid-year tests.

SG

Debt opens doors for SG in Asia

IFR 2051 20 September to 26 September 2014

Societe Generale is seeking to add more debt capital markets bankers to boost its share of financing markets in China, India and South-East Asia and help to connect Asian enterprises with capital and investments in Europe and Africa.

Financial Conduct Authority logo

Banks facing equity research overhaul

IFR 2051 20 September to 26 September 2014

European investment banks are trying to figure out how to make equity research pay, after the latest regulatory push to break the current “bundled” arrangements that allow dealing commissions to pay both for executing trades and for associated services such as research.

Intesa Sanpaolo logo

Italian NPL sales set to accelerate

IFR 2051 20 September to 26 September 2014

Sales of non-performing loans in Italy are expected to pick up once the country’s banks, increasingly overburdened by their size and number, have got past the hurdle of next month’s publication of the European Central Bank’s asset quality review and accompanying stress tests.

The Bank for International Settlements (BIS) in Basel

Basel zones in on trading books

IFR 2051 20 September to 26 September 2014

The Basel Committee on Banking Supervision has suggested that banks could be holding too little capital against their trading books as a result of overly optimistic models that underestimate the amount of risk within their bond, equity, loan and derivatives books. 

    More from People & Markets

    Bonds

    The London Eye is seen near the Houses of Parliament at dawn in central London

    UK readies first Dim Sum issue

    IFR 2051 20 September to 26 September 2014

    The United Kingdom is to become the first foreign country to issue an offshore renminbi bond in a move that points to the currency’s growing global appeal and the UK’s desire for London to be the major offshore renminbi hub.

    Phones 4U administrator shoots down debt-for-equity plan

    IFR 2051 20 September to 26 September 2014

    Phones 4U’s administrator, PwC, said there is little chance of a debt-for-equity swap proposed to save the business of succeeding, during a phone call with bondholders on Thursday.

    Burger King readies bond financing for Tim Hortons buy

    IFR 2051 20 September to 26 September 2014

    US fast-food chain Burger King last week began marketing a long-awaited US$2.25bn high-yield bond to help finance its US$11.5bn acquisition of Canadian doughnut group Tim Hortons.

    A Nordea Bank ATM

    Nordea paves way for Swedish flurry

    IFR 2051 20 September to 26 September 2014

    Nordea has set the stage for a flurry of Swedish contingent capital issues, after its US$1.5bn icebreaker last week locked in the lowest yields yet for a US dollar trade.

    Acosta LBO leads US$1.055bn high-yield day

    IFR 2051 20 September to 26 September 2014

    Private equity firm Carlyle completed the financing of its US$4.75bn leveraged buyout of sales and marketing firm Acosta on Monday at attractive rates, giving the high-yield market a boost following a string of tough trades and pulled deals.

      More from Bonds

      Loans

      AB InBev

      AB InBev M&A sparks debt buzz

      IFR 2051 20 September to 26 September 2014 By Shankar Ramakrishnan, Tessa Walsh

      The highly liquid global debt markets are in fine fettle and easily capable of financing another mammoth M&A deal of around US$100bn, bankers said at LPC’s 20th annual loan conference in New York.

      Credit Suisse logo

      Fed slaps Credit Suisse for risky lending

      IFR 2051 20 September to 26 September 2014 By Tessa Walsh, Natalie Harrison, Lynn Adler

      Wall Street banks are expected to rein in reckless underwriting after the Federal Reserve appeared to single out Credit Suisse for flouting lending guidelines.

      Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange

      Shoemaker execs flee with company loan

      IFR 2051 20 September to 26 September 2014 By , Saeed Azhar, Carol Zhong

      Lenders that provided a US$60m loan in August to Chinese Frankfurt-listed shoemaker Ultrasonic were left reeling after two of the borrower’s top executives disappeared after the company’s three-year loan had been drawn down in full.

      SAP logo

      Lenders ride M&A wave

      IFR 2051 20 September to 26 September 2014 By Chris Mangham,

      German car parts manufacturer ZF Friedrichshafen’s US$13.5bn acquisition of US-based TRW Automotive, and German business software maker SAP’s US$7.3bn takeover of US peer Concur Technologies, are the latest M&A transactions to provide a boost to a loan market weary of the grind of cut-price refinancing.

      Burger King logo

      Investors want a bigger bite of Whopper deal

      IFR 2051 20 September to 26 September 2014 By , Jonathan Schwarzberg

      Investors are pushing back on pricing and terms on the US$7.25bn loan package that backs Burger King Worldwide’s US$12bn acquisition of Canadian restaurant chain Tim Hortons.

      LOANS: Reliance Jio refi launches into general

      22 September 2014

      The US$1.5bn refinancing for Reliance Jio Infocomm was launched into general syndication last Friday through the 15 mandated lead arrangers and bookrunners.

      LOANS: Shanshui Cement syndication called off

      22 September 2014

      The mandated lead arrangers and bookrunners of a US$300m three-year loan for Shanshui Cement Group have called off syndication.

      LOANS: Yes Bank financing to be increased

      22 September 2014

      Yes Bank’s dual-currency, multi-tenor bullet term loan will be increased from an initially targeted size of US$275m after about 10 banks joined in syndication. Allocations will be finalised this week. 

      More from Loans

      Equities

      Wanda Group logo

      Jumbo Wanda IPO takes shape

      IFR 2051 20 September to 26 September 2014

      Billionaire Wang Jianlin’s Dalian Wanda Commercial Properties is raising funds in what will be Hong Kong’s biggest China-related property IPO.

      William Ackman

      Ackman close to US$2bn target

      IFR 2051 20 September to 26 September 2014

      Activist investor William Ackman will raise US$2bn in permanent capital with a listing of Pershing Square Capital Management in Amsterdam. Most of the deal was already covered at launch after a cornerstone process received more demand than expected and was set at US$1.5bn.

      Skylark

      Japan: Skylark cuts IPO size to US$734m, sets price range

      IFR 2051 20 September to 26 September 2014

      Skylark, a restaurant operator controlled by Bain Capital, has cut the size of its IPO to ¥80.1bn (US$734m) after shareholders decided to decrease the amount of secondary shares in the offering. 

      India: PE investors seek exits

      IFR 2051 20 September to 26 September 2014

      The recent rally in Indian stocks has offered private equity investors an opportunity to monetise their Indian holdings through initial public offerings.

      Cornerstones back Zalando float

      IFR 2051 20 September to 26 September 2014

      Books opened last Thursday for the €440.57m–€550.71m Frankfurt Prime Standard IPO of online fashion retailer Zalando with price guidance of €18–€22.50. The all-primary base deal comprises 24.47m shares for a free-float of 10%. There is also an up to 15% greenshoe, partly provided by Rocket Internet. The rest of the greenshoe comes from certain cornerstone investors.

      Hong Kong: SHK & Co completes placement

      IFR 2051 20 September to 26 September 2014

      Sun Hung Kai & Co has raised HK$1bn (US$130m) from a top-up placement of 160m shares, priced at the bottom of the guidance range of HK$6.30–$6.40 each, or at a discount of 8.6% to the pre-deal spot.

      Medley IPO seeks permanent capital premium

      IFR 2051 20 September to 26 September 2014

      Medley Management, with US$3.3bn under management as at June 30, is hoping its fast growth and permanent capital focus will attract a premium valuation when it prices its US$132m NYSE IPO later this week.

      Impact success builds Thai REIT appeal

      IFR 2051 20 September to 26 September 2014

      The success of Impact Growth Real Estate Investment Trust’s Bt7.9bn (US$244m) IPO, Thailand’s first such listing, is encouraging other issuers to resume work on their floats.

      More from Equities

      Derivatives

      A trader watches the screens at a bank's trading room

      Automation weighs on rates volatility

      IFR 2051 20 September to 26 September 2014 By Helen Bartholomew

      Historically low interest rate volatility has taken its toll on fixed income revenues, forcing many dealers to streamline their business models and rethink the future of FICC as the driver of investment banking profits.

      ATP logo

      Dwindling liquidity forces pensions rethink

      IFR 2051 20 September to 26 September 2014 By

      The decision by one of Europe’s largest pension funds to reduce the tenor of its guaranteed pension products has brought into sharp relief the drop-off in liquidity in long-dated fixed income markets, as providers across the Continent look to manage a transition from defined benefit to defined contribution schemes.

      FSB tackles swaps data fragmentation

      IFR 2051 20 September to 26 September 2014 By

      The Financial Stability Board put forward proposals to build a central aggregator last week to combat data fragmentation in the US$710trn OTC derivatives market in order to help global regulators identify build-ups of systemic risk.

      Judge backs extraterritorial approach

      IFR 2051 20 September to 26 September 2014 By Mike Kentz

      A US District Court Judge has dismissed claims against the CFTC regarding its efforts to regulate foreign OTC swap activity that touches the US market.

      Options strategies play for small-cap catch-up

      IFR 2051 20 September to 26 September 2014 By Helen Bartholomew

      While 2014 has delivered another strong year for US stock markets, with the S&P 500 up 9% year-to-date, equity performance has been primarily driven by large cap companies and a renewed bid for technology stocks.

      More from IFR Derivatives

      Digital Edition

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      IFR IMF World Bank Report Cover 2014

      IFR IMF/World Bank Report 2014

      Playground rules - The collaborative effort of European governments and regulators is akin to children rushing around the school playground with a football. Enthusiasm and no lack of skill are undermined by issues of translation and the fierce desire of all to score the winning goal.

      IFR German SME Funding 2014

      IFR German SME Funding Roundtable 2014

      The lack of credit in the real economy and the paucity of cash available for investment have been cited all over Europe as a major blocker of growth and investment, particularly for small and medium-sized enterprises. It’s an emotive issue that’s has the attention of politicians of all hues.

      All Special Reports

      IFR Awards lined up on table

      IFR Awards 2014: Call for entries

      We invite banks to pitch now for the IFR Awards and IFR Americas Awards 2014. In order to help with our selection, banks and issuers may submit brief written presentations along with supporting data. IFR journalists will also organise pitch meetings. However, pitching is entirely optional and consideration for an award will not be limited to advisers or issuers that participate in this way.

      Shah June 24 2014

      ECB Watch

      Low demand for the first TLTRO and higher-than-expected repayment of three-year LTRO loans points to the ECB needing to do more to expand its balance sheet.

      Timothy Sifert

      Old China Hands need new tricks

      PRC-focused investment bankers now need more than just high-level connections to get by.

      From the practice of placing a bell around the neck of a castrated ram to lead the flock

      The morning after

      IFR 2051 20 September to 26 September 2014

      THE SCOTTISH INDEPENDENCE vote had traders on red alert, with some staff at Barclays clocking in at midnight on Friday in order to stay on top of the potential chaos in the global foreign exchange markets. Meanwhile, UBS strategist Geoff Yu was planning to stay up all night.

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      Scots say No, but Europe still on alertVideo

      A ‘No’ in Scotland, but Catalonia appears to be inexorably heading for its own breakaway bid in a Europe gradually beginning to change shape. Should investors be concerned? David Pollard reports.

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      Asia corporate sentiment is slippingVideo

      Worries over a patchy global economic recovery and political tensions are hurting business sentiment in one of the fastest growing regions on the planet, according to a fresh Reuters/INSEAD survey. Tara Joseph reports.

      All Spotlight