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Thursday, 02 October 2014

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Upfront

Oliver Samwer, CEO of Rocket Internet

Don't get cornered

IFR 2052 27 September to 3 October 2014

Cornerstone investor tranches appear to finally be taking hold in European ECM, years after the process of anchoring IPOs around a clutch of major investors became the dominant model in Asia.

Top News

E.ON

All positive for negative-yield bond

IFR 2052 27 September to 3 October 2014 By

E.ON is being paid to issue debt after securing a negative yield on bonds exchangeable into Swiss energy company BKW.

Larsen & Toubro manufacturing unit in Mumbai

L&T pushes too hard with CB

26 September 2014 By

A US$200m convertible bond from engineering conglomerate Larsen & Toubro reopened the Indian equity-linked market last Monday, only to promptly close it again after the deal failed to clear.

Rocket

Cornerstones Rocket into Europe

IFR 2052 27 September to 3 October 2014 By

Close to half of German incubator Rocket Internet’s Entry Standard IPO in Frankfurt could go to cornerstone investors. A group of six investors will inject €582.5m into the all-primary float, which is set to raise €1.169bn–€1.4bn.

RBS

Citizens' forced sale drops short

IFR 2052 27 September to 3 October 2014 By

The IPO of Citizens Financial Group brought in just US$3bn for the Royal Bank of Scotland last week – at least US$500m less than envisaged when the deal to sell a 25% stake launched.

Citi

Citigroup fights for its life in Argentina

IFR 2052 27 September to 3 October 2014 By Philip Scipio, Paul Kilby

Citigroup came out fighting last week as it prepared to meet US District Court Judge Thomas Griesa again on Friday in what might have been its last chance to keep its Argentina franchise intact ahead of a September 30 coupon payment on US dollar-denominated local-law bonds.

Merck

Jumbo M&A deals keep on coming

IFR 2052 27 September to 3 October 2014 By Chris Mangham, Tessa Walsh

The European market was gifted another jumbo acquisition loan last week with German drugs and chemicals maker Merck’s US$15.6bn financing, bringing the total amount of M&A lending agreed since the beginning of September to US$48bn.

Frankfurt

Ultrasonic chief denies taking cash

IFR 2052 27 September to 3 October 2014 By John Ruwitch, Adam Jourdan

The missing CEO of embattled German-listed PRC shoemaker Ultrasonic has resurfaced in China to deny absconding with millions of dollars of company money, telling local media he had been travelling and lost his mobile phone.

IFR Magazine Top News in Full (subscription required)

People & Markets

Compliance hiring to continue

Compliance hiring set to continue

IFR 2052 27 September to 3 October 2014

Despite hiring hundreds of compliance and regulatory managers in recent years, banks are finding that even more staff are needed, according to a report from financial consulting firm Promontory.

Yann Gerardin

All change at BNP Paribas

IFR 2052 27 September to 3 October 2014

BNP Paribas has promoted its global head of equities and commodity derivatives Yann Gerardin to head the corporate and investment bank, after Alain Papiasse relinquished day-to-day control to focus on group-level activities – including implementing sweeping changes to its North American franchise.

Logo of French bank Societe Generale

SG plans financing and advisory boost

IFR 2052 27 September to 3 October 2014

Societe Generale plans to boost the balance sheet allocated to its financing and advisory franchise in an effort to grow the business, with bosses earmarking a €12bn increase in risk-weighted assets over coming years.

Burger King logo

US tax clampdown unlikely to dampen M&A

IFR 2052 27 September to 3 October 2014

The pace of M&A – and the fees it generates – will likely continue unabated despite the unveiling of rules aimed at limiting so-called tax inversion deals by the US Treasury Department last week, according to bankers and attorneys that are advising companies on transactions.

​Pensions battle to secure infrastructure deals

IFR 2052 27 September to 3 October 2014

Pension funds are being squeezed into an ever trickier corner as interest rates remain persistently low, pushing down yields on the bonds that make up the bulk of the industry’s portfolios, hurting returns and making their targets even harder to achieve.

    More from People & Markets

    Bonds

    A Lindt & Spruengli Maitre Chocolatier

    Sweet smell of success for Lindt’s chocolate bonds

    IFR 2052 27 September to 3 October 2014

    Swiss chocolate maker Lindt’s acquisition finance-led bumper triple-trancher last Wednesday was the standout deal of the week, if not one of the top deals of the year.

    Logo of the International Finance Corp. (IFC)

    IFC sets Indian benchmark

    IFR 2052 27 September to 3 October 2014

    The International Finance Corp kicked off its onshore Indian funding programme last week with a Rs6bn (US$100m) bond issue that beat the local government’s yield curve and introduced foreign investors to the domestic rupee market.

    Logo of French mutual insurance company Macif

    Insurers driven into sub market

    IFR 2052 27 September to 3 October 2014

    Europe’s insurers are charging into the subordinated bond markets, keen to boost capital at rock-bottom yields before regulators force them to sell more aggressive structures.

    Green bond market tentacles spread further

    IFR 2052 27 September to 3 October 2014

    The pipeline of issuers looking to sell bonds under the Green bond format grew larger last week after the Development Bank of Japan and the Province of Ontario announced deals.

    Hyundai cancellation shocks high-grade market

    IFR 2052 27 September to 3 October 2014

    Hyundai’s US financing arm was forced to pull a benchmark bond issue from the investment-grade bond market last week, an act so rarely seen in the high-quality corporate sector that it has left the market wondering whether it was a spectacular mis-reading of the markets – or an omen of tougher times ahead for aggressive borrowers.

      More from Bonds

      Loans

      Men walk past the headquarters of Fitch Ratings in New York

      Investment vehicles boost BDC yields

      IFR 2052 27 September to 3 October 2014 By Lynn Adler, Leela Parker Deo

      Business development companies (BDCs) are using off-balance sheet investment vehicles to boost yields as they compete for tightly priced leveraged loans. The use of these senior secured loan programmes (SSLPs) is, however, raising risk by increasing leverage, a report by Fitch Ratings warns.

      The Reserve Bank of India (RBI) seal is pictured on a gate outside the RBI headquarters in Mumbai

      RBI tells credits to stay home

      IFR 2052 27 September to 3 October 2014 By

      The central bank has dealt Indian borrowers a major blow with a change in regulations that shuts out lesser credits and domestic banks from refinancing in foreign currencies.

      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: Yes Bank increases financing to US$423m

      30 September 2014

      The dual-currency multi-tenor bullet term loan for Yes Bank has been increased to US$422.55m from US$275m on commitments from 10 lenders in general syndication. 

      More from Loans

      Equities

      Travelport Worldwide logo

      Travelport takes circuitous route

      IFR 2052 27 September to 3 October 2014

      Travelport Worldwide presents an interesting case study in corporate finance. The travel processor, which was acquired by a Blackstone-led consortium in a leveraged buyout in 2006, traversed into the public markets at its second such attempt and not without a high level of structuring.

      MOL Global logo

      Malaysian IPO rides Alibaba wave

      IFR 2052 27 September to 3 October 2014

      Malaysian e-payment services provider MOL Global is all set to ride on the euphoria surrounding Asian e-commerce companies in the wake of Alibaba Group’s record IPO.

      Civitas Therapeutics logo

      Civitas Therapeutics takes M&A over IPO

      IFR 2052 27 September to 3 October 2014

      So-called dual-track processes typically run the course of shop first, then test the pubic markets if the valuations garnered prove insufficient.

      Debt reduction picks up pace

      IFR 2052 27 September to 3 October 2014

      Agile Property has become the third Chinese developer in four weeks to announce an equity rights issue to address its high leverage ratio.

      Tough sell ahead for OGDC

      IFR 2052 27 September to 3 October 2014

      Political turmoil in Pakistan has not deterred the government from pressing ahead with its privatisation plans, with a US$816m equity offering in state-owned Oil and Gas Development Corp hitting the market last week.

      Marka trading points to frenzied debut for EMG

      IFR 2052 27 September to 3 October 2014

      Emaar Malls Group is set to begin trading next week and the market’s enthusiastic reception for a much smaller debutante, Marka, suggests that EMG’s listing in Dubai could well be a lively event.

      FMSA stacks up comparables on US$1.1bn IPO

      IFR 2052 27 September to 3 October 2014

      A day after one of the largest rallies ever against climate change reportedly attracted nearly 400,000 protesters in New York, frack-sand manufacturer Fairmount Santrol (FMSA Holdings as it files) unveiled details on its US$1.1bn, all-secondary initial public offering.

      Wayfair seeks to furnish US$308m from IPO

      IFR 2052 27 September to 3 October 2014

      Online home furnishings retailer Wayfair’s US$308m IPO, launched last week and expected to price this Wednesday, October 1, is shaping up as the latest hot e-commerce offering, drawing heavy interest after the first week of its roadshow.

      More from Equities

      Derivatives

      Buyside sticks with RFQ model

      SEFs seek elusive CLOB liquidity

      IFR 2052 27 September to 3 October 2014 By Helen Bartholomew

      A planned revolution in swaps trading that was intended to push much of the US$710trn over-the-counter derivatives market on to exchange-like venues has yet to have any significant impact beyond increasing the complexity of the existing market structure, according to some buyside firms.

      Logo of the International Swaps and Derivatives Association

      Trillions saved as swaps margining standards agreed

      IFR 2052 27 September to 3 October 2014 By

      The derivatives industry has taken a major step towards harmonising margining standards across the market, in a move that will slash the amount of high-grade collateral needed to be held against uncleared swaps under beefed up regulatory standards by trillions of dollars.

      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.

      Vol carry shifts to commodities

      IFR 2052 27 September to 3 October 2014 By Helen Bartholomew

      Systematic strategies that capture the volatility risk premium are gaining traction across alternative asset classes as investors embrace new index products that replicate the well-established equity volatility carry trade on a range of commodity underlying indicators.

      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

      Artus

      Southern exposure

      Patrick Artus of Natixis: Will the northern eurozone pull the South up, or will the South pull the North down?

      Goldman

      Goldman leads investment by Wall Street in new comms platform

      (Reuters) - After spending two years developing a wide-ranging communications tool for Wall Street, Goldman Sachs Group Inc says it has reached the perfect pitch.

      James Saft - June 2014

      Bill Gross and the Great Man theory of investing

      Jim Saft on some disturbing things about how we allocate capital.

      Bellwether. n. From the practice of placing a bell around the neck of a castrated ram

      A fresh start

      IFR 2052 27 September to 3 October 2014

      NOT LONG AGO, Bellwether compared Barclays boss Antony Jenkins to the now-former Manchester United manager David Moyes – and not in an entirely good way.

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      Why Spain is new euro zone poster childVideo

      Spain is being hailed the new poster boy for the eurozone. As it outlines its 2015 budget, Sonia Legg looks at the progress Spain’s made compared to France and Italy.

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      Abenomics updateVideo

      Why the sinking yen alone is not enough to fix Japan.

      All Spotlight

      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.