sections

Thursday, 18 September 2014

Capital City Capital City logo    
CLICK HERE TO ACCESS THE DIGITAL EDITION OF IFR MAGAZINE

Upfront

Alibaba's logo is seen at its headquarters on the outskirts of Hangzhou, Zhejiang province

For the money

IFR 2050 13 September to 19 September 2014

The scrap for Alibaba IPO allocations is the product of a carefully constructed impression that the company and its founders aren’t just in it for the money. Co-founder Joe Tsai told IFR, shortly after negotiating loan financing for a Yahoo share buyback in 2011–2012, that Alibaba wasn’t interested in squeezing the last basis point out of a deal and had no problem in paying bankers to do a decent job.

Top News

HSBC

US$5.6bn HSBC CoCo thrills market

IFR 2050 13 September to 19 September 2014 By ,

A more than US$30bn order book for a debut CoCo transaction from HSBC restored confidence in Additional Tier 1 deals from European banks last week as the UK lender easily managed to find a home for a colossal US$5.6bn-equivalent triple-tranche deal denominated in US dollars and euros.

Alibaba IPO

Investors storm Alibaba's IPO

IFR 2050 13 September to 19 September 2014 By

Expectations are already running high that Chinese e-commerce giant Alibaba Group may increase the pricing range on its landmark US$21.1bn NYSE IPO, though some big investors are warning that the company and its underwriters shouldn’t sacrifice book quality for a higher valuation.

Alibaba

Asian investors fear Alibaba allocation snub

12 September 2014 By

Asian investors are resorting to desperate measures in the hope of securing an allocation in the record-setting float of Alibaba Group.

PDVSA

Venezuela rout turns into opportunity

IFR 2050 13 September to 19 September 2014 By , Paul Kilby

Venezuelan bonds came under pressure last week, as talk of a potential default spooked the markets, causing the sovereign’s curve to plunge several points before buying interest returned.

Brazil

Brazil sets stage for covered bond market

IFR 2050 13 September to 19 September 2014 By Joan Magee

A new legal framework for covered bonds making its way through Brazil’s Congress could lead to the creation of a multi-billion dollar market open to both foreign and local investors alike. The move is being cheered by investors and bankers seeking ways to deepen a domestic market that still lacks alternative investment options.

citi jpm HY lev loan

US banks turn to other markets for funding

IFR 2050 13 September to 19 September 2014 By

The onslaught of financial issuance in the US dollar market in the past fortnight and the spread widening it caused has sent a sharp wake-up call to US banks that they need to start diversifying their sources of funding. The past two weeks have seen US$60bn of FIG issuance, with US$46.8bn of that purely from banks, according to IFR data.

RBS

Citizens launches US$3.5bn IPO

IFR 2050 13 September to 19 September 2014 By

Royal Bank of Scotland last week launched its previously flagged plans to sell 25% of US regional bank Citizens Financial Group via a US$3.5bn NYSE IPO, even as the arm continues to show subpar operating performance.

China

Asian bond sales smash 2013 record

IFR 2050 13 September to 19 September 2014 By Lianting Tu

With more than a quarter of 2014 remaining, Asian issuers have already sold more bonds in US dollars, euros and yen this year than ever before, taking advantage of easy monetary policies to lock in financing at low fixed rates.

IFR Magazine Top News in Full (subscription required)

People & Markets

The US Federal Reserve building in Washington

Federal Reserve targets repo market

IFR 2050 13 September to 19 September 2014

The US Federal Reserve is putting the finishing touches to new surcharges that will directly link capital requirements to the use of short-term funding markets for larger firms, as part of efforts to make the system safer and reduce firms’ reliance on potentially volatile funding.

Barclays bank logo

​Barclays appointments signal cautious growth

IFR 2050 13 September to 19 September 2014

Despite outlining a plan in May to drastically reduce the size of its investment bank from half of its overall business to less than a third, Barclays last week showed that it was still selectively expanding in certain areas of the investment bank.

Neil Passmore

Strand rebrands under Hannam's name

IFR 2050 13 September to 19 September 2014

The Hannam name has returned to the forefront of investment banking after Strand Partners, the advisory firm part-acquired by Ian Hannam two years ago, rebranded itself as Hannam & Partners after the former JP Morgan dealmaker.

A Moody's sign on the 7 World Trade Center tower is photographed in New York

Ratings agencies overhaul bank methodologies

IFR 2050 13 September to 19 September 2014

Moody’s is planning major changes to the way it assigns credit ratings to banks worldwide to better reflect the way that creditors would be impacted by the failure of such institutions under new resolution rules brought in after the financial crisis.

The United Nations headquarters building

​UN urges sovereign restructuring treaty

IFR 2050 13 September to 19 September 2014

Hopes of standardising future sovereign debt restructurings have been raised after the United Nations general assembly voted overwhelmingly to back a proposal to formalise such a mechanism in an international treaty.

    More from People & Markets

    Bonds

    Nyrstar pays up in spooked HY market

    IFR 2050 13 September to 19 September 2014

    Nyrstar took a brave step into the unknown last week as the first company to bring a debut euro high-yield deal after the summer break, but was forced to pay up and rewrite terms in an increasingly skittish market.

    Vodafone finds competition hot for euro return

    IFR 2050 13 September to 19 September 2014

    Vodafone, rated Baa1/A–/BBB+, pounced unexpectedly at 7:30am on Monday morning to announce a six and 11-year dual-tranche offer.

    High-yield borrowers pressed to announce new deals

    IFR 2050 13 September to 19 September 2014

    “Now or never” is the message from debt capital market bankers to junk-rated corporates, which are being pressured to bring bond deals now – even as the US high-yield market grapples with US$22bn in new issues since Labor Day.

    JC Penney shops first bond in four years

    IFR 2050 13 September to 19 September 2014

    US department store giant JC Penney took a major step on the road to recovery last week, pricing a bigger-than-expected US$400m unsecured bond that showed it has ample access to the debt capital markets.

    CreditAg's fifth CoCo gets solid reception

    IFR 2050 13 September to 19 September 2014

    Credit Agricole proved it is not just banks such as HSBC that can get good execution on CoCo deals in the dollar market. Last Thursday it issued a US$1.25bn perpetual non-call five-year Tier 1 offering at 6.625%, at the tight end of its 6.75% area guidance and compared with IPTs of 6.75%–7.00%.

      More from Bonds

      Loans

      Standard Bank

      Filling the void

      IFR 2050 13 September to 19 September 2014 By Sandrine Bradley

      Loan markets in Africa and the Middle East have been thrown into focus as Russian lending grinds to a halt, forcing emerging markets bankers to cast their nets further afield in the desperate hunt for deal flow.

      Gazprom Neft logo

      Russian sanctions stepped up, but no EU loan ban

      IFR 2050 13 September to 19 September 2014 By Chris Mangham, Sandrine Bradley

      The EU and US have announced more sanctions against Russia, affecting the big oil firms and further limiting the access of major Russian banks to debt and equity markets. However, the EU stopped short of an outright ban of syndicated loans to Russian government-owned banks and institutions, which had been proposed during talks at the beginning of September.

      Burger King logo

      Burger King markets US$7.25bn package for Hortons buy

      IFR 2050 13 September to 19 September 2014 By Jonathan Schwarzberg

      Burger King Worldwide is lining up a US$7.25bn loan package to finance its US$11.5bn acquisition of Tim Hortons in what is expected to be a complex and ultimately timely deal.

      A Dollar General store in Colorado

      Dollar General nets US$12.25bn for Family Dollar bid

      IFR 2050 13 September to 19 September 2014 By Jonathan Schwarzberg

      Dollar General has lined up US$12.25bn of loan commitments from Goldman Sachs and Citigroup to back its now hostile US$9.1bn bid for rival Family Dollar.

      LOANS: Lenders to take legal action against China Ultrasonic

      18 September 2014

      The lenders on a US$60m syndicated loan for Frankfurt-listed Ultrasonic are considering taking legal action against the company following the disappearance of its top executives. 

      LOANS: 21Vianet facility on hold following short-seller allegations

      18 September 2014

      A 2.5-year offshore loan of up to US$175m for 21Vianet Group has been put on hold after a short-selling research firm accused the Chinese data centre operator of alleged questionable business practices.

      LOANS: Sime Darby seeks M&A facility of up to US$1bn

      18 September 2014

      Sime Darby is in the market for a multi-tranche financing of up to US$1bn to back its proposed acquisition of London-listed New Britain Palm Oil.

      LOANS: Labixiaoxin repays part of offshore facility

      18 September 2014

      Privately owned Labixiaoxin Snacks Group has repaid more an offshore loan signed in February 2013 following approvals from Chinese authorities to remit funds overseas.

      More from Loans

      Equities

      Rocket Internet

      Rocket to spark congested pipeline

      IFR 2050 13 September to 19 September 2014

      German start-up incubator Rocket Internet is targeting €750m from a Frankfurt Entry Standard IPO, the largest flotation ever by deal size or implied market capitalisation on the junior platform.

      Dave & Buster’s

      Dave & Buster's revisits IPO process

      IFR 2050 13 September to 19 September 2014

      In what might be considered a bullish sign for the US IPO market, arcade-themed restaurant chain Dave & Buster’s Entertainment is back in the IPO pipeline yet again. The company submitted preliminary documents last week detailing a US$100m offering, the third time it has sought to go public since its original buyout in 2006.

      Japan

      Japan: Recruit announces US$1.7bn IPO

      IFR 2050 13 September to 19 September 2014

      Recruit, Japan’s largest employment agency, is planning an IPO worth around ¥178bn (US$1.7bn) that will consist of both new and existing common stock.

      Japan: Nippon Prologis prices follow-on

      IFR 2050 13 September to 19 September 2014

      Nippon Prologis REIT, which invests in logistics properties, has raised ¥39.7bn (US$377m).

      UAE: Emaar sets date for malls float

      IFR 2050 13 September to 19 September 2014

      Emaar Malls has set the date for its listing on the Dubai Financial Market. The Emaar Properties unit will begin bookbuilding on September 14 and will debut on the DFM on October 2. Details of pricing will be announced in the prospectus and in at least two local newspapers on September 14.

      Nigeria: Transcorp books room on NSE

      IFR 2050 13 September to 19 September 2014

      Transcorp Hotels, a subsidiary of listed group Transnational Corporation of Nigeria, has filed for an IPO on the Nigerian Stock Exchange. The unit is targeting N8bn (US$50m) from an offering of 800m shares at N10 per share.

      Sponsors turn to blocks

      IFR 2050 13 September to 19 September 2014

      Sponsors behind HD Supply have wasted little time reverting to the block format to sell down their stake in the wake of the industrial distributor’s 2013 IPO.

      Big IPOs dominate market attention

      IFR 2050 13 September to 19 September 2014

      Follow-on activity took a back seat to the launch of the two biggest IPOs so far this year and investors’ focus is likely to remain on the new issuance calendar for the time being.

      More from Equities

      Derivatives

      Alpha versus beta

      Return to alpha

      IFR 2050 13 September to 19 September 2014 By Helen Bartholomew

      Once touted as a revolution in investment strategy by bridging the gap between active and passive approaches, smart beta indices that weight holdings according to factors other than market cap have struggled to live up to their back-test hype. While the sluggish performance highlights the need for a more active approach to passive investing, for some it is a sign that investment trends may be tilting back towards alternative alpha.

      US Fed tapering QE

      Industry warns on uncleared margin timeline

      IFR 2050 13 September to 19 September 2014 By Mike Kentz

      Proposed margin requirements for uncleared swaps have been set out with an untenable compliance timeline that will lead to a proliferation of market disputes due to a lack of consistency on margin calculations, warn industry participants. 

      CBOE 10-year US Treasury Note VIX versus S&P 500 VIX performance (rebased)

      CBOE adds Treasury VIX futures

      IFR 2050 13 September to 19 September 2014 By Helen Bartholomew

      The CBOE futures exchange is set to launch new contracts tracking its VIX-style index of Treasury note volatility. The November 13 launch presents an exchange traded solution for investors looking to hedge against large swings in the US rates market as the Federal Reserve steps up the tapering of its asset purchase scheme and moves ever closer to a first rate rise in over eight years.

      Tera launches regulated Bitcoin swap platform

      IFR 2050 13 September to 19 September 2014 By Helen Bartholomew

      TeraExchange has launched the first regulated platform to trade Bitcoin derivatives, marking a significant step forward in efforts to develop a liquid swap market for hedging against price moves in the highly volatile electronic currency.

      Swaps fragmentation begins to subside

      IFR 2050 13 September to 19 September 2014 By Mike Kentz

      The fragmentation of liquidity in certain OTC swaps contracts across national borders may finally be subsiding, a year after Dodd-Frank regulations first pushed European market participants away from their US counterparts.

      More from IFR Derivatives

      Digital Edition

      Access a digital edition of the latest print magazine here.

      To read the IFR Magazine Digital Edition you will need to enter your details in the login section.

      If you have forgotten your password or would like to find out more about IFR subscriptions, please email rm.clientsupport@thomsonreuters.com.

      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.

      IFR Mexico Roundtable 2014

      IFR Mexico Roundtable 2014

      The Mexican economy is on the cusp of dramatic changes, if prognostications about the impact of the country’s sweeping reform process hold true. In July, IFR hosted a roundtable in Mexico City where bankers, public credit officials and treasurers at some of the country’s largest corporates discussed what these changes might mean for the country’s capital markets – and some of the challenges that lie ahead.

      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

      BoE Watch

      Shah:  Doves are cognisant of premature tightening.

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

      RByeS

      IFR 2050 13 September to 19 September 2014

      IN A SUDDEN attack of prescience and foresight lacking from its management team during the credit boom and purchase of ABN AMRO, RBS has published full details of its contingency plan in the event the Scots vote “yes” to independence.

      If this video player is not displaying you may need to enable javascript or install the latest version of Adobe Flash Player

      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.

      If this video player is not displaying you may need to enable javascript or install the latest version of Adobe Flash Player

      Like father, like daughter at SantanderVideo

      Santander’s new chairwoman has promised to defend her father’s legacy. As Sonia Legg reports, Ana Botin also told shareholders at the eurozone’s biggest bank her priorities include maintaining a prudent strategy and dividend policy.

      All Spotlight

      GW4

      IFR Fantasy Football League - GameWeek 5 update

      16 September 2014 By IFR Fantasy Football League Secretary General

      A Diego Costa hat trick kept scores lofty in GW4 of the IFR FFL, as the gap at the top of the table tightened.

      All IFR FFL