Russian banks are rushing to the rescue of large domestic companies by extending loans in order to save them from the prospect of default on US$100bn of foreign debt due this year. Most corporates are currently locked out of international capital markets due to sanctions and the growing economic crisis.
Attempts by Greece’s new anti-austerity government to secure a partial write-down of its €322bn debt pile could provide the first test for new asset package delivery rules included in new credit default swap definitions, raising the possibility of two separate auctions that could deliver very different recovery outcomes.
Tensions in Ukraine notched up on both the military and financial fronts last week as fighting continued in the east of the country and the Kiev government moved to appoint Lazard as its financial adviser ahead of a possible restructuring of its debts.
Germany and the Netherlands last week offered a glimpse of the dislocation caused by the ECB’s sovereign bond-buying initiative. Both conducted auctions that suffered at the hands of a market that appears all too keen to snap up paper that qualifies for the programme but is rather more reticent about venturing further afield.
Queue for the burgers, queue for the shares. Overwhelming demand saw New York-based hamburger chain Shake Shack price its IPO above its already upwardly revised marketing range and sent the shares soaring on their debut.
An offering of convertible bonds from Shanghai Electric Group last week, while welcome, will do little to halt the contraction of China’s equity-linked market as rising A-share prices trigger buyback covenants.
Books for the Madrid privatisation IPO of Spanish airport operator Aena were covered at €49, the mid-point of the €43–€55 price range, after just two days of bookbuilding, knocking out preferred investor Ferrovial. At €49 the privatisation would raise €3.41bn, not including a 3.82m share greenshoe.
Two jumbo M&A loans totalling US$12bn in the challenging retail sector are giving a volatile and cautious US leveraged loan market its first test of the year as increased government scrutiny makes it more difficult to syndicate riskier deals.
Pelindo II’s last-minute decision to cancel nearly half of a debut US$1bn syndicated loan disappointed the 43 lenders that had just completed credit approvals to join the Indonesian port operator’s generously priced facility.
Australia’s Cromwell Property Group reopened Asia-Pacific’s convertible bond market last week with a €150m (US$170m) offering, the region’s first euro-denominated convert since 2007.