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Friday, 29 July 2016

Barclays H1 profits fall but investment bank holds steady

29 July 2016 By Steve Slater, Lawrence White

Barclays reported a 21% drop in first-half pretax profits despite improved returns in its core business, as the costs of selling and shrinking the bank’s unwanted assets in a harsh economic environment took its toll on earnings.

P&M: Veteran loan banker Kwan leaves JP Morgan

29 July 2016

Loan market veteran Kate Kwan is leaving JP Morgan after five years with the US bank, which is closing its secondary loan sales operation in Asia. 

UBS sees tough markets ahead after Q2 earnings beat

29 July 2016 By Joshua Franklin

Switzerland’s biggest bank UBS on Friday cautioned that tough market conditions would likely continue for the foreseeable future as it posted a 14.5% year-on-year drop in second-quarter net profit.

Talend prices IPO at US$18, above range

28 July 2016 By

Data software provider Talend extended the run of strong outcomes on recent tech new issues by securing above-range pricing on its US$94.5m Nasdaq IPO.

Jefferies logo

Jefferies tightens price talk on Lending Club trade

28 July 2016 By

Jefferies has narrowed price talk on its revived bond deal of Lending Club loans, which was shelved for two months after trouble erupted at Lending Club, two investors said.

Federal Deposit Insurance Corp (FDIC) logo

US regulators ask banks for contingency plans on riskiest loans

28 July 2016 By

US regulators have been asking investment banks to come up with contingency plans for the riskiest loans on their books, according to people involved in the discussions.

BNPP

Visa Europe sale helps BNP Paribas

28 July 2016 By

BNP Paribas booked an exceptional gain of €597m from the sale of its stake in Visa Europe, preventing the French bank from reporting a drop in revenues in the second quarter.

Uniper logo

LOANS: Uniper closes reduced €4.5bn loan

28 July 2016

July 28, 2016 (LPC) – E.ON’s conventional generation and energy trading business Uniper has closed syndication of a €4.5bn syndicated loan that will be used to provide the company with stand-alone financing after its spin off in the second half of 2016.

Domino's Pizza restaurant

LOANS: Domino’s Pizza agrees £175m loan

28 July 2016

July 28, 2016 (LPC) – UK pizza delivery company Domino’s Pizza Group Plc has agreed a £175m, five-year multicurrency revolving credit facility, the company said on Thursday.

LOANS: Sixt places €375m Schuldschein

28 July 2016

July 28, 2016 (LPC) – German non-bank vehicle leasing firm Sixt SE has placed a €375m Schuldschein to refinance an existing €250m corporate bond which was due in October 2016.

Lazard sign

Lazard's profit beats on higher restructuring advisory revenue

28 July 2016

(Reuters) - Lazard Ltd’s quarterly profit beat analysts’ estimates as lower costs and higher revenue from advising on restructuring more than made up for a slump in M&A fees.

Banca Monte dei Paschi Siena

Monte dei Paschi bondholders await their fate

28 July 2016 By

The fate of Monte dei Paschi di Siena’s subordinated bondholders hangs in the balance with the market waiting to see whether the beleaguered Italian lender can be recapitalised without imposing losses on creditors.

Apple store

Apple launches US$7bn five-part trade – lead

28 July 2016 By , Michael Gambale, Hillary Flynn

Apple launched a US$7bn five-part deal on Thursday after leads tightened pricing between 17bp–20bp across the curve, lead banks told IFR.

Credit Suisse logo

Credit Suisse cuts 1,000 London jobs as turnaround gains traction

28 July 2016 By Steve Garton, Steve Slater

Credit Suisse has cut more than 1,000 jobs in London this year as part of chief executive Tidjane Thiam’s turnaround plan, which showed signs of progress last quarter as he cut costs, risks and the size of the investment bank.

European Union flags

EC lifts concentration burden in delayed swap margin rules

28 July 2016 By

The European Commission intends to endorse Regulatory Technical Standards for new rules requiring swaps counterparties to post initial and variation margin on their non-cleared exposures, subject to a series of clarifications including a delay of up to one year for initial margin requirements and the removal of collateral concentration limits for pension schemes.

Italy's largest bank UniCredit is pictured in downtown Milan

P&M: UniCredit names new head of UK, other senior roles

28 July 2016

UniCredit has appointed a new head of its UK business and filled several other senior positions, which the Italian bank said confirmed its commitment to London after Britain’s decision to quit the European Union.

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Pro-government demonstrators take part in a march

Troubled times

IFR 2143 23 July to 29 July 2016

In a year dominated by political events, none was more dramatic than the attempted coup in Turkey just over a week ago. Even seasoned Turkey-watchers were taken aback.

Top News

Yapi Kredi branch

Coup attempt derails Yapi bond

IFR 2143 23 July to 29 July 2016 By , Robert Hogg

Yapi Kredi’s decision to cancel a bond issue last week following the attempted coup in Turkey has divided bankers, with some questioning the advice the lender was given, and others arguing that canning the deal was a sensible call.

Teva plant

Investors scrap for Teva bonds

IFR 2143 23 July to 29 July 2016 By , Hillary Flynn

Teva Pharmaceutical raised more than US$20bn across three currencies last week via an acquisition-driven bond that took advantage of pent-up demand for corporate paper in a yield-starved market.

A dentist poses with a teeth model

Open wide: Mydentist revives sterling junk appetite

IFR 2143 23 July to 29 July 2016 By Robert Smith

Mydentist on Friday priced the first sterling junk bond issue since the UK voted to leave the European Union, accelerating pricing after receiving a flood of orders that one fund manager described as “a total blowout”.

Turk Eximbank logo

Eximbank increases offering despite coup fallout

IFR 2143 23 July to 29 July 2016 By Sandrine Bradley

The signing of Turk Eximbank’s increased €400m-equivalent syndicated loan last Thursday shows that the loan market remains open for Turkish borrowers in the aftermath of the thwarted coup attempt, but lenders expect the size of future deals to decrease – and pricing to increase.

JR Kyushu operated train

JR Kyushu hopes to follow Line's success

IFR 2143 23 July to 29 July 2016 By Robert Hartley

Japanese railway operator JR Kyushu is set to bring a US$3bn–$5bn Tokyo Stock Exchange listing later this year, hoping it will be able to emulate the popularity of the Tokyo-US listing of Japanese messenger app Line.

ENAV control tower

Enav prices IPO with ease

IFR 2143 23 July to 29 July 2016 By

For an IPO market that is supposed to be dead in the wake of the UK’s decision to leave the European Union and the end of school term that triggers an evacuation of the City, the success of Enav’s privatisation IPO is all the more remarkable.

Canadian Imperial Bank of Commerce sign

CIBC adds to negative-yield universe

IFR 2143 23 July to 29 July 2016 By

Canadian Imperial Bank of Commerce last Monday became the first non-eurozone issuer to price a euro deal at a negative yield in any sector.

European Central Bank (ECB) headquarters

Indiscriminate ECB bond buying is ‘QE for the world’

IFR 2143 23 July to 29 July 2016 By

The European Central Bank has hoovered up bonds with apparently indiscriminate abandon since it implemented its corporate sector purchase plan in June, despite expectations that it would take a more strategic approach.

A "welcome to Amsterdam" sign

Amsterdam eyes London spoils

IFR 2143 23 July to 29 July 2016 By Steve Slater

The Netherlands is facing pressure to ease the toughest rules on bankers’ bonuses in the world, as financial centres seek to grab banking business from London after Britain’s EU exit.

A SoftBank shop

SoftBank loan prompts debt fears

IFR 2143 23 July to 29 July 2016 By Robert Smith, Carol Zhong

Telecommunications and technology company SoftBank Group has obtained a ¥1trn (US$9.5bn) bridge loan to back its £24.3bn acquisition of UK chip designer ARM Holdings, increasing investors’ concerns about the company’s ability to manage its US$112bn debt pile.

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People & Markets

Jonathan Rogers

1MDB: The end is in sight

IFR 2143 23 July to 29 July 2016

A RESOLUTION TO the scandal at Malaysian state investment company 1MDB came a step closer last week thanks to an intervention by the US authorities.

Morgan Stanley

FICC angst lingers despite Q2 rebound

IFR 2143 23 July to 29 July 2016

Fixed income trading desks at US banks reported their strongest second-quarter performance in three years, but it was not enough to make up for the grim first quarter and herald a change in mood over longer-term prospects.

Citi sign

Sluggish capital markets sink underwriting revenues

IFR 2143 23 July to 29 July 2016

Investment banking revenue fell again in the second quarter, dragged down by a 45% decline in revenue from equity underwriting as IPO activity remained sluggish.

Logo of the European Banking Authority

MREL targets still a big unknown

IFR 2143 23 July to 29 July 2016

European banks might need to raise between €130bn and €790bn to meet new loss-absorbing capital rules, the European Banking Authority said last week, highlighting just how much of the final calibration remains up in the air.

Men walk past a 1Malaysia Development Berhad (1MDB) billboard at the fund's flagship Tun Razak Exchange development in Kuala Lumpur.

US outlines case against Malaysia fund

IFR 2143 23 July to 29 July 2016

US prosecutors last week moved to seize over US$1bn of assets they claimed were stolen from 1Malaysia Development, casting fresh scrutiny over the role banks played in raising and transferring money for the controversial state investment fund.

    More from People & Markets

    Bonds

    Crunching yields

    Spain and Cyprus squeeze yields

    IFR 2143 23 July to 29 July 2016

    Peripheral eurozone countries Spain and Cyprus made triumphant returns to the bond market last week, with the yields on offer trumping any concerns over political uncertainties, particularly with further monetary policy easing on the horizon.

    Senior supply slips in June, July

    US banks appease European investors with slew of senior

    IFR 2143 23 July to 29 July 2016

    Three US banks attracted around €20bn of orders as they issued a combined €8.75bn of euro senior unsecured debt last week, underlining the clamour for paper among European investors.

    Germany suffers another technical failure

    IFR 2143 23 July to 29 July 2016

    While the headline-grabbing events in the sovereign market were Spain’s and Cyprus’s syndicated deals (see section lead), the auction market also threw up some newsworthy fare, albeit not so positive.

    Covenant Review warns on Mydentist's ‘new and aggressive’ clause

    IFR 2143 23 July to 29 July 2016

    A sterling junk bond Mydentist sold to investors last week contained a new type of portability clause that could be “exceedingly easy to manipulate” in the company’s favour, said credit research firm Covenant Review in a report published on Thursday. 

    Diamond Resorts financing pulled forward

    IFR 2143 23 July to 29 July 2016

    Bankers have pulled forward the leveraged loan and high-yield bond financing backing the buyout of timeshare company Diamond Resorts International by private equity group Apollo, one of the bankers on the deal said on Thursday.

      More from Bonds

      Loans

      Douglas Holding logo

      Vast liquidity lures borrowers

      IFR 2143 23 July to 29 July 2016 By Hannah Brenton

      The European leveraged loan market is braced for a flurry of opportunistic deals, as bankers and borrowers pounce on favourable conditions ahead of the summer slowdown.

      Hofer sign

      Schuldschein market continues to grow

      IFR 2143 23 July to 29 July 2016 By

      The corporate Schuldschein market totalled €14bn in the first half of the year, the highest half-yearly volume on record, according to Thomson Reuters LPC data, as borrowers continue to take advantage of competitive market conditions to secure long-term funding on attractive terms.

      Trafigura logo

      Trafigura launches US$1.4bn loan refinancing

      IFR 2143 23 July to 29 July 2016 By Carol Zhong, Chien Mi Wong

      Commodity trading firm Trafigura Beheer has launched syndication of US$1.4bn-equivalent revolving credit and term loan facilities that will be used to refinance the company’s existing Asian credit facilities. The borrower is Singapore-based Trafigura Pte Ltd.

      Turk Eximbank logo

      Eximbank increases offering despite coup fallout

      IFR 2143 23 July to 29 July 2016 By Sandrine Bradley

      The signing of Turk Eximbank’s increased €400m-equivalent syndicated loan last Thursday shows that the loan market remains open for Turkish borrowers in the aftermath of the thwarted coup attempt, but lenders expect the size of future deals to decrease – and pricing to increase.

      Bharat Petroleum refinery is seen in Mumbai

      Consortium seeks funds for Russian oilfield

      IFR 2143 23 July to 29 July 2016 By Chien Mi Wong

      State-owned Bharat Petroleum Corp, Indian Oil Corp and Oil India have sent a request for proposals for bridge loans of up to US$1.9bn to back their purchase of a stake in Russia’s second-largest producing oilfield.

      Brixmor Property Group logo

      Brixmor markets US$2.75bn of loans

      IFR 2143 23 July to 29 July 2016

      Real estate investment trust Brixmor Property Group is in the market with US$2.75bn of loans to refinance debt. The borrower is subsidiary Brixmor Operating Partnership.

      Pirelli tyre

      Pirelli to sign €6.4bn refi

      IFR 2143 23 July to 29 July 2016

      Pirelli is set to sign €6.4bn of loans to replace the €6.8bn 18-month bridge loan that backed ChemChina’s acquisition of the Italian tyre-maker.

      PerkinElmer closes in on RCF

      IFR 2143 23 July to 29 July 2016

      Scientific instruments maker PerkinElmer is increasing its revolver to US$1bn from US$700m and extending the maturity to 2021 from 2019.

      More from Loans

      Equities

      Patheon NV CEO James Mullen

      Patheon IPO finds robust demand

      IFR 2143 23 July to 29 July 2016

      Shares in contract drug maker Patheon opened 19% above their IPO price on Thursday, having earlier priced towards the upper end of the marketing range in another positive step for the recovery of the US IPO market. 

      Buwog logo

      Bemusement at speedy Buwog flip

      IFR 2143 23 July to 29 July 2016

      A €375m accelerated bookbuild in Austrian real estate company Buwog generated a flurry of chatter last week as seller Sapinda Invest had purchased the shares just six weeks earlier.

      Kinsale Insurance logo

      Kinsale IPO goes where others fear to tread

      IFR 2143 23 July to 29 July 2016

      Kinsale Capital, a specialist insurer of hard-to-place small business risks, plans to bolster its capital base and fund its premium growth with the primary proceeds from an up to US$96m IPO scheduled to price on July 27.

      Blackstone Group logo

      Blackstone real estate pipeline bulges

      IFR 2143 23 July to 29 July 2016

      Blackstone Group continues to make efficient use of capital markets through block sell-downs of publicly traded portfolio companies. The alternative asset manager holds so much sway in fact that investors are beginning to go directly through the firm to source product, rather than making requests indirectly.

      ICICI Prudential billboard

      First insurance IPO under way

      IFR 2143 23 July to 29 July 2016

      ICICI Prudential Life Insurance last week started pre-marketing India’s first IPO from the insurance sector, betting that an upbeat outlook for the country’s financial services industry will support the biggest listing in years.

      Earnings, summer depress issuance

      IFR 2143 23 July to 29 July 2016

      US stocks are trading at or near all-time highs but ECM activity remains relatively subdued, in part due to the distraction of second-quarter earnings.

      Hapag-Lloyd logo

      Hapag-Lloyd merges with UASC to counter shipping slowdown

      IFR 2143 23 July to 29 July 2016

      Just eight months after listing in Frankfurt, container shipping giant Hapag-Lloyd is to merge with United Arab Shipping Company in the hope that increased scale and synergies can counter falling freight rates and rising fuel costs.

      Ryerson's steely resolve on equity recap

      IFR 2143 23 July to 29 July 2016

      Ryerson, a steel service centre operator, conducted a series of conference calls in support of a 5m-share all-primary offering and agreed to the requisite discount to entice new investors. Pricing was set at US$15.25, a 6.2% discount to last sale and after a 16.2% sell-off on the one-day marketing, a 21.4% file-to-offer discount.

      More from Equities

      Derivatives

      European Union flags

      EC lifts concentration burden in delayed swap margin rules

      28 July 2016 By

      The European Commission intends to endorse Regulatory Technical Standards for new rules requiring swaps counterparties to post initial and variation margin on their non-cleared exposures, subject to a series of clarifications including a delay of up to one year for initial margin requirements and the removal of collateral concentration limits for pension schemes.

      E*Trade sign

      E*Trade to acquire OptionsHouse for derivatives expansion

      25 July 2016 By

      Online retail brokerage, E*Trade Financial, is set to bolster its derivatives trading capabilities through the US$725m acquisition of OptionsHouse, an online broker specialising in highly active options trading clients.

      New SEC rules fuel concern over swaps reporting ‘tsunami’

      IFR 2143 23 July to 29 July 2016 By

      New Securities Exchange Commission rules requiring dealers to report single name credit default swaps and equity swap transactions to trade repositories has led to concern over a “tsunami” of reporting requirements set to begin early next year.

      London Stock Exchange

      Merger will not stop derivatives battle, says CurveGlobal CEO

      IFR 2143 23 July to 29 July 2016 By

      The proposed US$27bn merger between the London Stock Exchange and Deutsche Boerse will not stop derivatives competition between Europe’s two largest exchanges, according to the CEO of CurveGlobal, the LSE’s soon-to-be-launched derivatives platform.

      Institutions develop a taste for bond ETFs

      21 July 2016 By

      ETFs have become a staple of European institutional equity portfolios over recent years, but fixed income investors have remained relatively oblivious to the merits of passive investing. Now, according to ETF provider BlackRock, attitudes are starting to change.

      More from IFR Derivatives

      Digital Edition

      Access a digital edition of the latest IFR 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, please email ifr.clientsupport@thomsonreuters.com.

      Special Reports

      Asian Debt Capital Markets
      There is a clear driver behind the deals in Asia’s primary markets today, and that is the search for yield. From perpetual bonds in Singapore to subordinated Samurais in Japan and high-yield sovereign debt in Sri Lanka, investors are jumping at the chance to boost returns.

      Asian Bank Capital
      Bank capital has long been a hot topic in Asia, but the asset class has so far failed to ignite the kind of excitement that the Basel reforms once promised – at least outside of Australia. That is all about to change.

      Top 250 Borrowers
      Few would claim that the conditions in the capital markets could currently be described as normal. Even so, the underlying environment is both strong and deep. Includes IFR's Top 250 Borrowers ranking.

      Financing Sustainable Infrastructure
      Climate change has risen towards the top of the global policy agenda as the impact of rising temperatures is felt around the world. This is providing a strong impetus towards transitioning the world towards a low-carbon economy.

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

      The G bomb

      IFR 2143 23 July to 29 July 2016

      JUST WHEN YOU thought the tone of the US presidential election couldn’t get any lower, and Donald Trump supporters go and drop the “G bomb”.

      Opinion

      keith mullin

      Negative energy, nuancing and the race to get fixed

      Editor-at-large Keith Mullin examines the restructuring at Credit Suisse and Deutsche Bank, arguing that people seem far more inclined to buy Tidjane Thiam’s narrative than they do John Cryan’s.

      Anthony Peters columnist format

      The Federal Reserve's reserve

      It might only be Thursday, but it’s the end of the month and it’s summer. How better to celebrate this than by knowing that the Fed is happily on hold for now. 

      James Saft - June 2014

      When politics blinded hedge fund managers

      Call it Obama derangement syndrome or call it principled objection to monetary and fiscal policy, but Republican-leaning equity hedge funds got their heads handed to them in 2008 and 2009.

      Anthony Peters columnist format

      Big in Japan

      I’ve been away for a couple of days and come back to find that absolutely nothing has changed. Well, I suppose bits and bobs have but in the wake of the Brexit bungee jump, most other activity looks a bit minor. Apart from Japan.

      James Saft - June 2014

      Trump, the risk even central banks can’t backstop

      If Brexit didn’t scare financial markets confident in the support of central banks, maybe the prospect of President Donald Trump will.

      Keith Mullin Commentary image

      Time for State Bailouts 2.0?

      A LOT OF people leapt on the launch this past week of the EBA’s public consultation on its interim report on the implementation and design of MREL. It’s hardly beach reading but the deadline for responses is August 30, so stick it in your suitcase as you head off on vacation.

      Top 250 2016

      Top 250 Borrowers 2016

      Strength and depth: Few would claim that conditions in the capital markets could currently be described as normal. Nor that they have they been so for a while now, given the various stimulus programmes that have been enacted around the world in an effort encourage growth in the face of economies flirting with stagnation.

      IFR Financing Sustainable Infrastructure Report 2016

      IFR Financing Sustainable Infrastructure Report 2016

      Sustainable infrastructure agenda moves centre-stage

      IFR Turkey Special Report 2016

      Turkey 2016

      Star turn: In the fluid world of emerging markets, Turkey has this year presented more opportunities than its CEEMEA peers for investors to indulge their views.

      All Latest Special Reports