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Saturday, 21 January 2017

Barefoot devotees crawl and walk over the people as they jostle to touch the image of the black statue of Jesus Christ during the annual Black Nazarene Catholic religious feast in Manila, Philippines

Shipping it in

IFR 2167 21 January to 27 January 2017

After a slow start to the year, the sovereign sector hit its stride last week.

Top News

bons phillipines

EM sovereigns in pre-Trump rush

IFR 2167 21 January to 27 January 2017 By ,

The EM bond market burst into life last Wednesday when five sovereign US dollar deals hit the screens as issuers sought to get in ahead of Donald Trump’s inauguration on January 20.

Belgium

Italy and Belgium set stage for euro frenzy

IFR 2167 21 January to 27 January 2017 By

A fresh ratings downgrade and a potential banking crisis were not enough to keep investors away from Italy’s syndicated bond deal last week, with the issuer almost matching the huge demand seen in Belgium’s record-breaking trade days earlier.

Lehman

Brexit case threatens Lehman claims

IFR 2167 21 January to 27 January 2017 By

Junior creditors of Lehman Brothers’ London arm have more reasons than most to curse the Brexit case clogging up the UK Supreme Court over the past six weeks. The judgment in the Brexit case is to be delivered this Tuesday, but the use of the court’s time may have proved costly to the Lehman creditors.

A box of donuts

Donuts for Deutsche

IFR 2167 21 January to 27 January 2017 By

Bankers receiving bonuses are to become an even more endangered species at Deutsche Bank after its management board said a quarter of all staff – the majority of them in the investment bank – would not receive an individual award for 2016.

Ford logos are seen at the assembly line of a Ford car factory

Ford sets new template for rule-compliant ABS

IFR 2167 21 January to 27 January 2017 By

Ford Motor Credit helped to reopen the dormant asset-backed securities market last week when it sold the first-ever public bond to fully comply with post-crisis regulations.

A sunflower field

Kernel to bring Ukraine in from the cold

IFR 2167 21 January to 27 January 2017 By

One of the world’s largest exporters of sunflower oil is poised to become the first Ukrainian corporate to issue a bond since 2013.

A Japan Post employee

Japan Post set for second delivery

IFR 2167 21 January to 27 January 2017 By Robert Hartley

Japanese ECM bankers now know their year will be made or ruined by whether they can secure a role on the Japanese government’s second round of selling Japan Post.

Detsky Mir shop Moscow

International banks return to Russian IPOs

IFR 2167 21 January to 27 January 2017 By

The IPO of Russia’s number one toy store Detsky Mir is the first float since the imposition of sanctions on the country to include foreign banks. It is only the fourth IPO in the country since US and European financial sanctions were introduced in March 2014, just days after Russian hypermarket Lenta had completed its listing.

A H-IIA rocket, Telesat's broadcast and telecommunication satellite, lifts off from the launching pad at Tanegashima Space Center on the Japanese southwestern island of Tanegashima

Lev loan repricing turned up to 11

IFR 2167 21 January to 27 January 2017 By Lynn Adler, Jonathan Schwarzberg

Almost a third of the US leveraged loan market has taken advantage of huge demand for floating-rate assets to cut pricing on existing debt over the last year, shaving interest payments by millions of dollars, and the floodgates are still wide open.

AppDynamics logo

Early IPO rush points to better 2017

IFR 2167 21 January to 27 January 2017 By

The US IPO market sprang into action with a spate of deal launches last week, brightening bankers’ hopes that new-issue volumes will pick up substantially this year.

IFR Magazine Top News in Full (subscription required)

People & Markets

Commodities revival aids FICC surge

IFR 2167 21 January to 27 January 2017

Commodity trading activity bounced back in the second half of last year to raise optimism that better times are ahead for banks that stuck with the business while rivals ran for cover.

Banks snap FICC losing streak in 2016

20 January 2017

US banks blew away earnings expectations in the fourth quarter, powered by a 43% jump in fixed income, currency and commodities across the top five firms from a year ago.

Investment banking revenue slumps 7% at US banks

IFR 2167 21 January to 27 January 2017

JP Morgan deposed Goldman Sachs from the top of the investment banking heap in 2016 - not because the bank surged ahead, but because as all banks fell back, Goldman fell further.

Morgan Stanley rejigs EMEA capital markets

IFR 2167 21 January to 27 January 2017

Claus Skrumsager, Morgan Stanley’s co-head of global capital markets in the EMEA region, is moving into the bank’s investment management division to start his own fund.

Who's moving where

IFR 2167 21 January to 27 January 2017

HSBC has hired Alexis Maskell from Deutsche Bank to head its account coverage within its financial sponsors group. Maskell will report to Gilles Collombin, head of its financial sponsors group. A memo from Matthew Westerman and Robin Phillips, co-heads of global banking, said HSBC was expanding its financial sponsors franchise after shifting last year from a country focus to an account-led model. Maskell covered key sponsors in Europe at Deutsche Bank, where he worked for nine years, having previously worked at Citigroup and Cazenove.

    More from People & Markets

    Bonds

    Swift Phoenix brings first Tier 3 ahead of May’s speech

    IFR 2167 21 January to 27 January 2017

    PGH Capital, a subsidiary of Phoenix Group Holdings, sold the first sterling Tier 3 transaction from an insurance company, ahead of potential market volatility from Theresa May’s speech last Tuesday outlining the UK’s Brexit strategy.

    Deutsche bids 'auf Wiedersehen' to 2016 turmoil with senior bond

    IFR 2167 21 January to 27 January 2017

    Deutsche Bank turned the page on a turbulent 2016 with its first senior unsecured euro benchmark for more than nine months, just weeks after agreeing a US$7.2bn penalty over the mis-selling of US mortgage debt.

    French banks fill boots well ahead of election

    IFR 2167 21 January to 27 January 2017

    French lenders are loading up on debt, increasing their euro and US dollar issuance by almost 85% year-on-year as they make up for lost time and preempt a potentially volatile market backdrop later this year.

    Australia breaks issuance record

    IFR 2167 21 January to 27 January 2017

    The Australian Office of Financial Management ticked several boxes with last Wednesday’s record-breaking A$9.3bn (US$7.0bn) syndicated offering of 2.00% December 21 2021 Treasury bonds.

    BPCE brings first senior non-preferred in yen

    IFR 2167 21 January to 27 January 2017

    BPCE priced ¥142.7bn (US$1.2bn) of three-part Samurai bonds via Daiwa, Mizuho, Natixis, Nomura and SMBC Nikko, in a deal that marked the first of its kind in yen.

      More from Bonds

      Loans

      Sri Lanka aims bigger

      IFR 2167 21 January to 27 January 2017 By

      Just four months after borrowing a record amount in the international loan market, the Democratic Socialist Republic of Sri Lanka has returned for an even larger facility of US$1bn on the back of its growing international profile.

      Banks balk at Dubai metro loan pricing

      IFR 2167 21 January to 27 January 2017 By Davide Barbuscia

      Some banks are baulking at participating in funding an extension of Dubai‘s metro because they say the proposed pricing does not reflect banks’ higher costs and the impact of lower oil prices on liquidity, Reuters reported.

      Hitachi Koki LBO pushes boundaries

      IFR 2167 21 January to 27 January 2017 By Wakako Sato

      A quartet of Japanese banks is providing debt financing with high leverage multiples to support private equity firm KKR’s ¥147.1bn (US$1.28bn) buyout of Hitachi’s power tools unit Hitachi Koki, in a sign that there is a lot of lender appetite for high-yielding assets in Japan.

      Defaults seen rising globally despite optimism

      IFR 2167 21 January to 27 January 2017 By Lynn Adler

      Higher corporate debt defaults and wider credit spreads are expected globally, although the outlook improved considerably in North America late last year with a new administration seen fostering faster US growth and the Federal Reserve’s recent hike signaling confidence in the US economy’s upward trajectory, a new survey shows.

      MEG ties up loan as market reopens to oil and gas

      IFR 2167 21 January to 27 January 2017 By Jonathan Schwarzberg

      Canadian oil and gas company MEG Energy has completed a US$1.235bn deal that will be used to refinance debt and is part of an overall capital restructuring, potentially opening the door for other leveraged energy borrowers to tap the loan market.

      France: Eramet amends and extends

      IFR 2167 21 January to 27 January 2017

      Mining and metals group Eramet has amended and extended its €981m revolving credit facility.

      Netherlands: Trafigura launches US$1.5bn RCF

      IFR 2167 21 January to 27 January 2017

      Commodity trading firm Trafigura Beheer has launched into general syndication a US$1.5bn 364-day multi-currency revolving credit facility.

      UAE: Majid Al Futtaim in talks for RCF

      IFR 2167 21 January to 27 January 2017

      Dubai’s Majid Al Futtaim, a holding company which owns and operates shopping centres in the Middle East and North Africa, is in talks with banks to obtain a revolving credit facility likely to be in excess of US$1.5bn, Reuters reported.

      More from Loans

      Equities

      Oilfield services company hits gusher

      IFR 2167 21 January to 27 January 2017

      The case for investment in the oilfield services sector has less to do with absolute analysis, and more to do with valuation relative to oil producers. If E&Ps are now fully valued (and they are by historic standards), oilfield services stocks are cheap and offer higher operating leverage to growing oil production.

      Biotechs extend public, private marketing

      IFR 2167 21 January to 27 January 2017

      That biotechs are plying investors for capital is hardly surprising.

      Laureate tests investors with US$580m IPO

      IFR 2167 21 January to 27 January 2017

      Investors may have some extra homework to do as they consider higher education provider Laureate Education’s long-awaited US$580m IPO.

      Low debt opens doors for JELD-WEN IPO

      IFR 2167 21 January to 27 January 2017

      In 2016, investors pushed back against the high leverage of some private equity sponsor-backed IPOs, prompting bankers to advise companies to keep debt below a four times Ebitda threshold if they wanted to get deals done.

      Oldest Indian exchange prices IPO to go

      IFR 2167 21 January to 27 January 2017

      BSE is offering a handsome discount on its Rs12.4bn (US$182m) IPO to ease fears that investors will prefer to wait for the Rs60bn–Rs70bn float of bigger rival National Stock Exchange later in the year.

      China: TPG sells Li Ning stake

      IFR 2167 21 January to 27 January 2017

      TPG Stallion has raised HK$543m (US$70m) from the sale of part of its stake in Chinese sportswear company Li Ning.

      China: BoCom International files for IPO

      IFR 2167 21 January to 27 January 2017

      BoCom International has filed a listing application to the Stock Exchange of Hong Kong, according to parent Bank of Communications.

      China: K-12 providers come to market

      IFR 2167 21 January to 27 January 2017

      Wisdom Education International has raised HK$850m (US$110m) from its Hong Kong IPO, after pricing the shares at the bottom of the indicative range, according to people close to the float.

      More from Equities

      Derivatives

      Margin clarity sought on CCP resolution rules

      IFR 2167 21 January to 27 January 2017 By

      Derivatives dealers are calling on European lawmakers to explicitly exclude initial margin haircuts as a tool to cover losses in the recovery and resolution of a failing central counterparty clearinghouse.

      SEC, CFTC merger talk revs up as swaps rules scrutinised

      IFR 2166 14 January to 20 January 2017 By

      US swaps governance, currently split between the SEC and CFTC, could be brought under one roof as a regulatory overhaul promised by Donald Trump reopens a long-running debate about a merger between the two agencies.

      Timothy Massad (R)

      Swap rules set for overhaul as Massad quits CFTC

      IFR 2165 7 January to 13 January 2017 By

      CFTC chairman Timothy Massad will step down on January 20, opening the door for a partial dismantling of the Dodd-Frank rules as Christopher Giancarlo – CFTC commissioner and outspoken critic of “flawed” derivatives rules – is widely tipped to take over.

      Euronext offers €510m for LCH French arm

      IFR 2165 7 January to 13 January 2017 By

      Pan-European exchange group Euronext has made a cash offer of €510m to take control of LCH.Clearnet SA, the Paris-based subsidiary of clearing group LCH, which is wholly-owned by the London Stock Exchange Group.

      BMPS CDS anomaly suggests safety for senior holders

      IFR 2164 17 December to 6 January 2017 By

      Pricing anomalies on credit default swaps referencing Banca Monte dei Paschi di Siena indicate rising expectations that senior bondholders will avoid being bailed in after the bank reopened an expanded debt-for-equity swap on subordinated debt.

      More from IFR Derivatives

      Digital Edition

      Access a digital edition of the latest print magazine here.

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      Rite Aid bonds drop on Walgreens deal doubts

      20 January 2017 By

      Bonds of junk-rated pharmacy chain Rite Aid plunged Friday after Bloomberg reported that US antitrust regulators pushed back on the terms of the takeover offer from Walgreens Boots Alliance.

      MOVES-BlackRock hires former UK finmin Osborne as adviser

      20 January 2017 By William James, Trevor Hunnicutt

      Former British finance minister George Osborne, who lost his job after Britain’s vote to leave the European Union, will join BlackRock as an adviser next month, the world’s largest asset manager said on Friday.

      DERIVATIVES-Margin clarity sought on CCP resolution rules

      20 January 2017 By

      Derivatives dealers are calling on European lawmakers to explicitly exclude initial margin haircuts as a tool to cover losses in the recovery and resolution of a failing central counterparty clearinghouse.

      Swap margin rules drive FX clearing surge

      20 January 2017 By

      LCHis set to expand its foreign exchange clearing operations to FX options and a broader range of non-deliverable forwards later this year, after clearing volumes on its ForexClear platform jumped more than 10-fold in the last six months.

      DERIVATIVES-SEC approves LCH for single-name CDS clearing

      20 January 2017 By

      The SEC has authorised LCH’s credit default swap clearinghouse, CDSClear, as a registered clearing agency, enabling the Paris-based platform to offer single-name CDS clearing to US clients through futures commission merchants.

      P&M: Hansen to head up Denmark at Danske Bank

      20 January 2017

      Danske Bank has hired Nordea’s head of ECM Christian Hansen to head up its origination focus in Denmark. Hansen, who joined Nordea just over 10 years ago, will start working for Danske in Copenhagen in August, reporting to global head of ECM Jens Plenov.

      Banks put 'hard' Brexit move plans into action

      19 January 2017 By Anjuli Davies, Andrew MacAskill

      Global banks have begun signalling how they will put plans into action to cope with a “hard” exit by Britain from the European Union.

      Skrumsager buyside move triggers Morgan Stanley rejig

      19 January 2017 By ,

      Claus Skrumsager, Morgan Stanley’s co-head of GCM in the EMEA region, is moving into the bank’s investment management division to start his own fund. Plans for the fund are at an early stage but will capitalise on Skrumsager’s wide experience in debt capital markets.

      MOVES-Boutique TMT adviser LionTree to open in Paris

      19 January 2017 By Dasha Afanasieva

      Boutique investment bank LionTree, focused on media, technology and telecommunications (TMT), said on Thursday it would open a Paris office headed by Fatine Layt.

      Ford sets new template for rule-compliant ABS

      18 January 2017 By

      Ford Motor Credit helped reopen the dormant asset-backed securities market this week after selling the first ever public bond to fully comply with post-crisis regulations.

      LatAm nations jump to bond market ahead of Trump

      18 January 2017 By

      Three Latin American nations led the charge into the US bond market on Wednesday, selling over US$5bn of new debt as the clock counts down to the inauguration of Donald Trump as US president.

      Rothschild replaces Millstein as Puerto Rico financial adviser - Reuters News

      18 January 2017 By Nick Brown

      Puerto Rico’s new government has hired Rothschild & Co to help it develop a fiscal turnaround plan and lead restructuring negotiations with creditors holding some US$70bn in debt, the government announced on Wednesday.

      MOVES-Houlihan Lokey buys IP specialist

      18 January 2017 By

      Houlihan Lokey has acquired Black Stone IP, a specialist advisory firm focused on valuing and trading intellectual property assets

      MOVES-MarketAxess hires Keller for fixed-income ETF product

      18 January 2017 By

      MarketAxess Holdings has hired John Keller as fixed-income ETF product manager.

      MOVES-RenCap hires Ayeni for sub-Saharan research

      18 January 2017

      Russian investment bank Renaissance Capital said it had appointed Adedayo Ayeni to head its industrials and consumer research for sub-Saharan Africa.

      MOVES-Piper Jaffray names Olson vice chairman of FIG

      18 January 2017 By Philip Scipio

      Piper Jaffray named David Olson vice chairman of its financial institutions group. In his new role Olson will help drive new business initiatives across investment banking, fixed income and equities in the FIG space.

      All Latest news

      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

      Hands free

      IFR 2167 21 January to 27 January 2017

      GUY HANDS REVEALED in a speech to business students that it was a “great relief” to abandon the lawsuit alleging Citigroup misled him into buying music publishing company EMI in 2007 because he could not remember the details of the deal.

      Opinion

      Anthony Peters columnist format

      Don't hold your breath

      It’s January 20, inauguration day. While markets will happily accept the excuse to sit back and do no more than absolutely necessary, the world hasn’t really stood still. 

      keith mullin

      Grumpy bankers least of Cryan’s woes

      Not that anyone should be surprised, but didn’t John Cryan have a demeanour of a weary man with a lot of troubles on his shoulders in his interview on CNBC?

      Clarity at last

      So British Prime Minister Theresa May finally announced that the UK will not only be leaving the European Union but that it will also, unequivocally, be leaving the single market too. 

      The not-very-normal new normal

      After a quietish Monday – it was Martin Luther King Jr. Day, which sees both bond and stock markets in the US closed – things can return to normal again today, assuming that there is anything left that could be deemed normal. 

      Body talk

      If equity markets are the brains and debt markets are the lungs, then foreign exchange markets have to be the heart and circulation of the economy. 

      Is derivatives clearing the biggest Brexit issue?

      It was the Xavier Rolet show Tuesday as the polished and articulate chief executive of London Stock Exchange Group turned on the charm and transformed the UK Treasury select committee hearing on the UK’s future economic relationship with the European Union – a very broad macro subject – into a detailed and decidedly micro discussion about derivatives clearing.

      Don't look back in anger

      On November 21 this column appeared with the opening lines “Even seasoned Washington watchers are struggling to work out what the Trump administration will look like and what message his choice of lieutenants will send to the rest of the world.” 

      Up, down or sideways?

      I spent time last night with a friend, a private investor, who looked at me and asked “what do we do next?” in an expectant way, which leads me to believe that he thinks my educated guess is going to be that much better than his own. 

      Clear skies or dark clouds

      I was talking to a private client stockbroker friend of mine a few days ago who was very busy writing the year-end performance reviews for his clients. We exchanged a few pleasantries about how one can’t ever get all the calls right although his portfolio of high-net-worth individuals is replete with clients who seem to struggle to grasp that single fact.

      Back to the future

      Before wondering how come, despite some fairly inconclusive numbers in Friday’s US December payrolls report, the Dow got as high as 19,999.63 in Friday’s trading, and in light of the Detroit Motor Show opening today, maybe we should reflect on the fact that it was a mere 10 years ago today that the late Steve Jobs revealed the iPhone.