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Tuesday, 21 February 2017

Top News

Snapchat

Snap faces sceptics as roadshow begins

IFR 2171 18 February to 24 February 2017 By

Snap is hoping its raw growth, monetisation potential and the vision of founder Evan Spiegel will overcome a long list of investor concerns as it seeks to price one of the most aggressively positioned high-profile IPOs in recent memory.

Virgin Media

Virgin Media exchange hits dollars

IFR 2171 18 February to 24 February 2017 By Robert Smith

Virgin Media is looking to exploit weak covenants in its legacy bonds to carry out an exchange on sterling notes that will also impose covenant changes on US dollar bondholders.

EFSF

High stakes for EFSF bond sale

IFR 2171 18 February to 24 February 2017 By

The European Financial Stability Facility will this week have to grapple with widening spreads and a volatile backdrop for its third – and potentially most difficult – bond sale of the year.

Golar LNG tanker

Golar charts course for FLNG future

IFR 2171 18 February to 24 February 2017 By

Despite a cost of US$1.4bn-plus a pop, floating liquefied natural gas vessels hold the potential to further commoditise the transport of natural gas globally. The vessels – essentially ships that produce, liquefy and transfer LNG – are cheaper than land-based facilities and carry less environmental and political baggage.

Banca Popolare di Vicenza logo

Vicenza senior leans on state guarantee

IFR 2171 18 February to 24 February 2017 By

Banca Popolare di Vicenza, crippled by a gaping capital hole and with a state rescue in sight, will discover this week whether a government guarantee will entice investors into buying its debt.

Daniel Tarullo

Tarullo exit fuels reg rollback optimism

IFR 2171 18 February to 24 February 2017 By Philip Scipio, Steve Slater

US Federal Reserve Governor Daniel Tarullo’s early exit from the central bank is the clearest signal yet that large global banks may see an easing of some of the strictest capital and reporting requirements imposed in the past five years.

French flag

French CDS diverges on redenomination risk

IFR 2171 18 February to 24 February 2017 By

Some credit default swaps referencing the French sovereign may be more valuable than others in the event that National Front candidate Marine Le Pen wins the presidential election and leads the country out of the euro.

US Foods delivery truck

Lev loan issuers dump covenants at record pace

IFR 2171 18 February to 24 February 2017 By Jonathan Schwarzberg

Investors’ appetite for leveraged loans is allowing companies to line up debt with few safeguards on an unprecedented scale.

The Alcoa Aluminium plant in Alcoa, Tennessee

Arconic chops Alcoa stake via jumbo block

IFR 2171 18 February to 24 February 2017 By

Arconic sold a US$893.1m stake in aluminium producer Alcoa via one of the largest unregistered block trades of recent years, capitalising on the latter’s share price surge since last year’s separation of the two companies.

REIT rivals gain on Singapore

REIT rivals gain on Singapore

IFR 2171 18 February to 24 February 2017 By , S Anuradha

Hong Kong and Indonesia are set to welcome their first real estate investment trusts for years, in a sign that Singapore’s hold on the regional REIT market may be under threat.

IFR Magazine Top News in Full (subscription required)

People & Markets

Banker by day, stand-up comic by night

IFR 2171 18 February to 24 February 2017

What do you call a dozen bankers at the bottom of the ocean with their feet in cement blocks? A good start.

UBS hires equities trio in Hong Kong

IFR 2171 18 February to 24 February 2017

UBS has hired three senior bankers in its equities division in Hong Kong, following a number of high-level departures in the past few months.

Oil stress hits Singapore bank profits

IFR 2171 18 February to 24 February 2017

Singapore’s major three banks last week all posted declines in quarterly profits as the downturn in the oil and gas sector and sluggish trading volumes continued to weigh heavily on their results.

An office worker walks past a logo of the Singapore Stock Exchange (SGX) outside its premises in Singapore.

Singapore warms to dual-class shares

IFR 2171 18 February to 24 February 2017

Singapore Exchange took a new step towards the introduction of dual-class shares last week with the launch of a public consultation on its plans to end a drought of new listings.

StanChart reshuffles in financial markets

IFR 2171 18 February to 24 February 2017

Standard Chartered’s newly appointed head of financial markets Roberto Hoornweg has announced a number of changes to his management team, a person familiar with the matter told IFR.

    More from People & Markets

    Bonds

    NTTC seals 2016–17 borrowing

    IFR 2171 18 February to 24 February 2017

    Northern Territory Treasury Corp, rated Aa2 (Moody’s), completed its 2016–17 borrowing programme with last Wednesday’s A$200m tap of its 2.75% October 21 2024 bonds. The reopening increased the issue size to A$500m.

    NAB sets retail T2 margin

    IFR 2171 18 February to 24 February 2017

    National Australia Bank has increased the size of its ASX-listed NAB Subordinated Notes 2 issue to at least A$800m (US$613m) after the bookbuild, from an indicative A$750m.

    AOFM readies short 12-year

    IFR 2171 18 February to 24 February 2017

    The Australian Office of Financial Management is readying a fresh syndicated sale of Treasury bonds just weeks after its record-breaking A$9.3bn print on January 18 of 2.00% December 21 2021s. 

    Junk bond issuance brakes after busy spree

    IFR 2171 18 February to 24 February 2017

    After hectic issuance activity in the first six weeks of the year, the US junk bond market saw very modest supply last week as many companies entered earnings blackout periods.

    Rabo joins list of contenders for SNP, fleshes out covered plans

    IFR 2171 18 February to 24 February 2017

    Rabobank could opt to issue senior non-preferred debt as a way of tackling requirements for banks to hold layers of loss-absorbing debt, putting it on an equal footing with other European lenders but at odds with country peer ING.

      More from Bonds

      Loans

      Borrowers to profit from further repricings

      IFR 2171 18 February to 24 February 2017 By Hannah Brenton

      European leveraged borrowers have saved millions of euros by cutting the margin on their debt over the past year, and falling pricing means many are now expected to return to the market to do so for a second time.

      Bankers ready €2.6bn deal for potential Stada sale

      IFR 2171 18 February to 24 February 2017 By

      Bankers are preparing a debt financing of around €2.6bn to back a potential private equity buyout of publicly listed German generic drugs and consumer care group Stada.

      Retail in crosshairs of restructuring advisers

      IFR 2171 18 February to 24 February 2017 By Sandrine Bradley

      Restructuring advisers are closely monitoring the European fashion and clothing retail sector as inflation, weaker consumer demand and expiring currency hedges are expected to erode profit margins over the coming months.

      Secondary volatile for firms hit by tech disruption

      IFR 2171 18 February to 24 February 2017 By

      US investors are assessing the volatile secondary loan prices of companies that are being hit by technological disruption as textbook publishers join retailers and oil and gas companies on a growing list of sectors facing “secular” change.

      Institutional demand for yield benefits middle market

      IFR 2171 18 February to 24 February 2017 By Leela Parker Deo

      Institutional leveraged loan buyers are looking to higher priced middle-market loans as an offset to the repricing blitz pushing yields in the large corporate market to lows not seen since 2004.

      US Foods delivery truck

      Lev loan issuers dump covenants at record pace

      IFR 2171 18 February to 24 February 2017 By Jonathan Schwarzberg

      Investors’ appetite for leveraged loans is allowing companies to line up debt with few safeguards on an unprecedented scale.

      Esprinet nets loan after covenant breach

      IFR 2171 18 February to 24 February 2017

      Wholesale distributor of IT and consumer electronics Esprinet has agreed terms on a €210m syndicated loan after breaching covenants on its existing financing in December 2016.

      Parques Reunidos cuts margin

      IFR 2171 18 February to 24 February 2017

      Theme park operator Parques Reunidos has amended the €775m syndicated loan arranged in April 2016 as part of the company’s IPO, cutting interest margins on the loan by 40bp.

      More from Loans

      Equities

      Bintraco set for US$50m float

      IFR 2171 18 February to 24 February 2017

      Distributor of Toyota cars Bintraco Dharma plans to embark on an IPO of US$50m in March for a listing on the Indonesia Stock Exchange.

      Garuda plans IPO of unit

      IFR 2171 18 February to 24 February 2017

      Garuda Indonesia plans to sell 20% of its stake in unit Garuda Maintenance Facility this year, according to a local media report.

      Two candidates file IPO drafts

      IFR 2171 18 February to 24 February 2017

      Eris Lifesciences and Tejas Networks have filed the draft prospectuses for their respective IPOs of up to Rs20bn and Rs8bn (US$298m and US$119m), likely to come later this year.

      CSRC approves a dozen floats

      IFR 2171 18 February to 24 February 2017

      The China Securities Regulatory Commission has approved the listing applications of 12 companies intending to raise a combined Rmb7bn (US$1.02bn).

      New Century exercises greenshoe

      IFR 2171 18 February to 24 February 2017

      New Century Healthcare has partly exercised the greenshoe option on its Hong Kong IPO to raise an additional HK$73.8m (US$9.5m).

      Dianchi Water refiles application

      IFR 2171 18 February to 24 February 2017

      Kunming Dianchi Water Treatment has refiled a listing application to the Stock Exchange of Hong Kong with updated financial statistics.

      BBVA trims Citic Bank stake

      IFR 2171 18 February to 24 February 2017

      Spanish bank BBVA has taken advantage of the recent strong rally in PRC banking stocks to sell China Citic Bank shares to raise HK$4.56bn (US$588m).

      Yuhua Education launches IPO

      IFR 2171 18 February to 24 February 2017

      China Yuhua Education started bookbuilding last week for a Hong Kong IPO of up to HK$1.91bn (US$246m).

      More from Equities

      Derivatives

      French flag

      French CDS diverges on redenomination risk

      IFR 2171 18 February to 24 February 2017 By

      Some credit default swaps referencing the French sovereign may be more valuable than others in the event that National Front candidate Marine Le Pen wins the presidential election and leads the country out of the euro.

      Repo dislocations may be new normal - ICMA

      IFR 2171 18 February to 24 February 2017 By

      Europe’s repo market may be entering a “new normal” as a scarcity of high-quality liquid assets and leverage ratio constraints drive extreme volatility in year-end short-term funding rates, the International Capital Market Association has warned.

      Commodity desks prepare for E&P funding bonanza

      IFR 2171 18 February to 24 February 2017 By

      Bank commodity desks are gearing up for a new phase of investment by oil exploration companies as prices stabilise around US$55 - a level that brings drilling projects back into profitability.

      Listed equity swaps gain traction

      IFR 2171 18 February to 24 February 2017 By

      Total Return Futures referencing the EuroStoxx 50 have traded over €1bn notional since their launch in December, putting the instruments on track to become a viable alternative to over-the-counter equity swaps.

      CFTC logo

      CFTC gives relief on swaps margin deadline

      IFR 2171 18 February to 24 February 2017 By

      Preparations for the March 1 “big bang”, which requires derivatives participants to exchange variation margin on their uncleared swaps, continue unabated despite the CFTC bowing to industry pressure with six months’ grace for compliance.

      More from IFR Derivatives

      Taking liberties

      IFR 2171 18 February to 24 February 2017

      It’s one of the most fundamental rules of the bond market: if you want to make significant changes to documents, you have to get permission from the bondholders and pay them a fee.

      MOVES-Deutsche's Cain switches to BlackRock

      20 February 2017 By

      Suzanne Cain, head of debt sales in Europe at Deutsche Bank, is understood to be moving to BlackRock, one of the largest fund managers in the world with US$5.1trn in assets under management.

      MOVES-Nomura hires Giudici as head of Italy IB

      20 February 2017 By Steve Slater

      Nomura has hired Stefano Giudici from HSBC to head its investment banking for Italy, and appointed Guillaume Paillard to its coverage team for financial institutions in Europe.

      Logo of the European Financial Stability Facility (EFSF)

      EFSF springs surprise with long bond mandate

      20 February 2017 By Robert Hogg

      The European Financial Stability Facility has mandated banks for a dual-tranche transaction and shocked bankers who thought that recent struggles at the long end had curbed the issuer’s appetite for duration. 

      Kerr to step down from GSO Capital

      20 February 2017 By Hannah Brenton

      Alan Kerr is stepping down from his role as senior managing director at Blackstone’s credit arm GSO Capital Partners.

      Man using a mobile phone walks past an advertisement board of Softbank Corp in Tokyo

      SoftBank bonds firmer on Sprint merger news

      20 February 2017 By Robert Smith

      SoftBank’s euro bonds traded up on Monday on news that a merger between its US telecoms company Sprint and T-Mobile US could be back on the cards.

      DNB Bank and Svenska HB shake up covered bond monopoly

      20 February 2017 By

      The euro Tier 2 and senior unsecured markets were back in action on Monday after a week strongly skewed towards covered bond issuance, offering a fresh gauge of interest for paper in riskier formats.

      Piquemal to head Deutsche in France after Hallak leaves

      20 February 2017 By

      EDF’s former finance director Thomas Piquemal, who joined Deutsche Bank as global head of M&A last May after abruptly leaving France’s state-controlled electricity company, has been appointed as the bank’s chief country officer for France.

      BNY Mellon hires Turner for structured finance

      20 February 2017

      BNY Mellon has hired Declan Turner as a business development manager for its corporate trust team in Europe, the Middle East and Africa.

      Citigroup cuts CEO Corbat's pay after missing financial targets

      20 February 2017 By David Henry

      Citigroup’s board of directors cut Chief Executive Officer Michael Corbat’s compensation by 6% last year after the bank missed financial targets and one-third of its voting shareholders disapproved of his prior pay package.

      Ausgrid logo

      Unmet demand in primary for AusGrid to drive secondary sales

      20 February 2017

      The mega A$12.777bn (US$9.85bn) loan for the acquisition of New South Wales’ energy distributor AusGrid has been allocated pointing to strong demand that promises to spur secondary market activity for the asset.

      REC launches US$230m bullet into general

      20 February 2017

      The three banks that signed a US$230m five-year loan last month for state-owned Rural Electrification Corp have launched the facility into general syndication. 

      Wong resurfaces in Cathay United

      20 February 2017

      Former DBS Bank veteran Benjamin Wong has resurfaced at Cathay United Bank.

      Kraft Heinz bonds widen on Unilever bid

      17 February 2017 By

      Bonds of Kraft Heinz widened on Friday after the company made a US$143bn takeover bid for Unilever, raising concerns that it may raise billions of debt to fund the purchase.

      After busy week, TGI Friday's and Santander take ABS baton

      17 February 2017 By

      Deals from all-American restaurant chain TGI Friday’s and auto issuer Santander are expected to price in a holiday-shortened week and add more oomph to what has been a red-hot primary market so far this year.

      Stonebriar Commercial Finance logo

      Stonebriar CEO has plans for more deals after ABS success

      17 February 2017 By

      Equipment finance company Stonebriar Commercial Finance plans to become a regular fixture in the US structured finance market and may even look to sell investment-grade corporate bonds to fund its growing business, its President and CEO Dave Fate told IFR.

      Bankers expect US bond sales to slow in holiday week

      17 February 2017 By

      Syndicate bankers expect supply in the US high-grade corporate bond market to slow to US$15bn–$20bn next week, even as market conditions remain favourable for issuers.

      All Latest news

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      Special Reports

      IFR Review of the Year 2016
      It’s normally fair to say that bankers grumbling about the state of the markets deserve the same sympathy as farmers moaning about the weather. It goes with the territory. And it is up to them to simply get on with it.

      IFR Americas Review of the Year 2016
      Markets are more agnostic about elections than the public at large. Even as half (or more) of America was gnashing its teeth over the election of the country’s first non-politician president since Eisenhower, the “Trump Rally” was in full flight.

      IFR German Corporate Funding Roundtable 2016
      IFR convened its fifth annual German Corporate Funding Roundtable in Frankfurt in mid-November just as bond markets, led by US Treasuries, were starting their sharp re-pricing off the back of higher inflation expectations and tighter US money.

      IFR India's Path to Sustainable Growth Roundtable 2016
      IFR recently convened a highly insightful roundtable discussion in Washington DC, entitled “India’s Path to Sustainable Growth: Challenges and Opportunities”. State Bank of India chair Arundhati Bhattacharya delivered some affirmative opening comments that eloquently framed the discussion that followed./p>

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

      Valentine’s Day massacre

      IFR 2171 18 February to 24 February 2017

      When Aston Villa were thrashed 6-0 at home by Liverpool on Valentine’s Day last year, the club’s then-manager Remi Garde apologised unreservedly for the loss.

      Opinion

      Anthony Peters columnist format

      Economics 1, politics 0

      Although politics and economics are clearly still at war with each other, it looks as though economics might have gained the upper hand, at least for a brief period. 

      Dull and duller

      Wednesday’s FOMC meeting sort of came and went. Not much had been expected and once the fog of war cleared and one had cut through the white noise from analysts desperate to fill their media slots, Madame Yellen told us what we should have expected, that there are too many moving parts for the Fed to contemplate saying anything meaningful or doing anything drastic. 

      Trapped in a political vortex

      The recent optimism, whether expressed in equities by the Trump Jump or in bonds by the Trump Dump seem to have somehow rather run out of steam. Sceptics might suggest that the new president himself has wiped the lipstick off the pig. 

      Firing from the hip

      If markets hate uncertainty, how do they deal with the there being absolute certainty that the uncertainty is going to continue, with the predictability of unpredictability? 

      Busy doing nothing

      I wonder how many parts of Wall Street will be feeling in light of the executive order calling for travel restrictions into the US.

      Holy guacamole!

      Despite Chinese New Year I will refrain from trying to call the markets based on Chinese horoscopes. 

      The Dow at 20,000

      I had seriously thought of making this a 20,000 point-free zone but I suppose that would have been just as childish as making the Dow’s breaching of this benchmark level the sole focus of the day. 

      A tale of two cities

      Having descended from my mountain lair in the Oxfordshire Cotswolds to London, the “Big Smoke”, in order to attend the IFR Awards dinner, I can happily report that all the manifold awards were duly received by their proud recipients.

      Deckchairs on the Titanic

      Tonight the annual IFR Awards dinner takes place at the Grosvenor House hotel in London where the best of breed are applauded by their peers for having, during the past year, done a jolly good job. 

      Speechless in Seattle

      Let’s get one thing straight: Donald John Trump was not elected to the White House simply by a bunch of racist, illiterate, out-of-work has-beens wrapped in the Stars and Stripes.