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But do we feel safer?
Seven banks failed the European banking stress test exercise, fewer than had been generally expected. Whether this result will fill the market with confidence in the European banking sector is doubtful. It is just as likely to lead to further questions about the credibility of the test. Solomon Teague reports.
Apache readies swift bridge takeout
The takeout of the US$5bn bridge loan backing Apache Corp’s US$7bn purchase of BP’s assets is readily taking shape, market sources said. Following the completion of a larger than expected equity raising, the exploration and production concern is poised to proceed with the bank loan and debt offering that would fully fund the all-cash acquisition. Apache Corp., which is buying US$7bn worth of assets from BP, is readying the takeout of the US$5bn bridge loan backing the purchase, according to market sources.
Oca-doh!
Ocado achieved the near-impossible last week by aggressively pricing its £369m IPO at a premium to Amazon, while also alienating its new shareholders by forcing the deal through at a level guaranteed to find little aftermarket support. Losses of 13.9% led to heavy criticism of both company and banks. Owen Wild reports.
Boost for stock dividends
After volatility stalled the market for single stock dividends, demand now finally seems to be picking up again. Earnings releases in the US and Europe are driving an ever-wider investor base to place bets on future payouts, with pension funds and other asset managers tempted by distressed prices following May’s sell-off. Gareth Gore reports.
Savvy Temasek impresses
The primary sterling market has enjoyed a mini-revival of late and took another step forward last week courtesy of Singapore’s Temasek Holdings, which made its debut in the currency with impressive results. The £700m dual-tranche issue also reopened the sector for Asian issuers after a one-year break in the process. Andrew Perrin and Jonathan Rogers report.
Tough challenge awaits the new man at UKFI
UK Financial Investments, the body that is responsible for managing the stakes the UK government took in British banks during the financial crisis, has appointed Jim O’Neil from Bank of America Merrill Lynch as head of market investments.
HSBC leaves the table
HSBC’s decision to pull out of MGM Grand Macau’s US$850m loan at the last minute has cost it a position on the borrower’s Hong Kong IPO. Whatever HSBC’s motives were, it has left many close to the deal surprised and bemused. Wendy Mock and Fiona Lau report.
IFR on Reuters Insider
July 27: Bank debt deals from the Middle East and North Africa to pick up
Middle Eastern and North African bank issuance is expected to pick up as institutions look to get deals done before the August lull, the start of Ramadan, and while US Treasury yields are low and investor appetite for such paper is rising.
July 20: Demand for EM bonds centres on dollars, not euros
There is huge demand for dollar-denominated sovereign debt from European emerging markets, but European banks facing stress tests have lost appetite for euro-denominated paper, says IFR’s John Weavers.
July 14: Europe's IPO Hopefuls Should Wait
IFR’s Editor-at-large Keith Mullin says European companies wanting to come to market should hold fire while the continent remains at the epicentre of market volatility.
Up Front
What price reputation?
The UK market is littered with IPOs that barely touched issue price and then registered big losses for investors – Gartmore, Debenhams, Sports Direct and HMV, to name just a few. Each is burned into the memories of investors, as are the names of the banks involved.
For a hundred million reasons
Credit Suisse’s renaissance in investment banking has been built around choosing the right clients to act for, and then throwing the full weight of the bank behind them.
But do we feel safer?
Seven banks failed the European banking stress test exercise, fewer than had been generally expected. Whether this result will fill the market with confidence in the European banking sector is doubtful. It is just as likely to lead to further questions about the credibility of the test. Solomon Teague reports.
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