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Monday, 26 January 2015

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Upfront

European Central Bank (ECB) headquarters

Collision course

IFR 2067 24 January 2015 to 30 January 2015

So this is it. After much hemming and hawing, the European Central Bank has finally joined the quantitative easing ranks by pledging to buy at least €1.14trn of bonds in a bid to jolt the eurozone’s economies back to life and bring a rapid halt to the deflation now blighting some countries.

Top News

ECB

ECB adds €1.1trn bid to markets

IFR 2067 24 January 2015 to 30 January 2015 By ,

The European Central Bank will buy €60bn of debt a month under an expanded asset purchase programme designed to shake the eurozone out of six years of economic stagnation and push banks into selling bond holdings so they can use the cash to lend.

Spanish flag

Investors take QE bet via Spain 10-year

23 January 2015 By

Investors snapped up the Kingdom of Spain’s new 10-year bond last Tuesday in anticipation of the ECB’s announcement of a quantitative easing programme later in the week, a bet that appeared to pay off after a larger-than-expected package pushed the new notes dramatically tighter.

Ireland

Irish precedent gives Greece hope

IFR 2067 24 January 2015 to 30 January 2015 By

Greece’s Syriza might look to learn lessons from how Ireland successfully negotiated with the European Central Bank, should the opposition party form the next Greek government – as predicted – after this Sunday’s election and try to revise the country’s current €240bn bailout programme.

Azerbaijan

Storms ahead for EM sovereigns

IFR 2067 24 January 2015 to 30 January 2015 By

Black clouds are forming over emerging markets as analysts warn that a deluge of ratings downgrades is on the horizon, potentially triggering a torrent of forced selling as some investors become shut out of the market.

Tele Columbus

Early start for EMEA IPOs

IFR 2067 24 January 2015 to 30 January 2015 By

German cable group Tele Columbus priced its €474m Frankfurt IPO on January 22 – the earliest a fully-marketed float has priced in a new year in EMEA this century. It is also the first IPO to price globally this year, and there is good reason Europe has – on this rare occasion – come first.

Box

Box opens up

IFR 2067 24 January 2015 to 30 January 2015 By

Cloud content management and storage company Box went to extra lengths last week to ensure its US$175m IPO provided a windfall for investors, securing an eleventh-hour cornerstone commitment from a major existing backer before pricing the deal amid overwhelming demand for the shares.

O2

Li Ka-shing cranks it up with O2 bid

IFR 2067 24 January 2015 to 30 January 2015 By

Asia’s richest man, Li Ka-shing, is on an acquisition and borrowing binge as he sets about expanding his business empire barely a couple of weeks after announcing its reorganisation. His flagship Hutchison Whampoa is raising £6bn (US$9bn) through a loan to finance a proposed bid for Telefonica’s British unit O2.

Legend

Legend tests conglomerate charm

IFR 2067 24 January 2015 to 30 January 2015 By

Legend Holdings is mulling a Hong Kong IPO of US$2bn–$3bn this year at a time when other Chinese conglomerates are looking to spin off their assets to release investment value.

IFR Magazine Top News in Full (subscription required)

People & Markets

James Gorman

Lower costs boost Morgan Stanley

IFR 2067 24 January 2015 to 30 January 2015

Morgan Stanley – the last of the big Wall Street banks to see its funding costs fall meaningfully after the crisis – has said it expects these cheaper rates to start burnishing its bottom line this year, in turn helping it to hit its targeted return on equity of 10%.

Morgan Stanley logo

Morgan Stanley signals end to FIC cuts

IFR 2067 24 January 2015 to 30 January 2015

Morgan Stanley has signalled that more than three years of deep cuts to its fixed income and commodities trading business may finally be nearing an end, with bosses indicating that they might be willing to redeploy dollars in the business as positions roll off.

Eraj Shirvani

Shirvani to replace Corson at Credit Suisse

IFR 2067 24 January 2015 to 30 January 2015

Credit Suisse has overhauled the management of its emerging markets and credit products businesses, appointing Eraj Shirvani as global head of the EM group, taking over from Chris Corson who will take on a new role developing opportunities in fixed income, according to a source at the bank.

Andrew Tyrie

​Senior bankers face extra UK vetting

IFR 2067 24 January 2015 to 30 January 2015

Senior bankers could face extra checks to remain working in the UK after Andrew Tyrie, chairman of the Treasury Select Committee, warned regulators to be wary of simply allowing them to transfer their current regulatory certificates into a planned new senior managers’ regime.

Commerzbank logo

Commerzbank to cut 110, move London jobs

IFR 2067 24 January 2015 to 30 January 2015

Commerzbank plans to cut or relocate around 440 London jobs in investment banking and back office technology to Frankfurt and other cities to reduce costs, according to a memo seen by Reuters.

    More from People & Markets

    Bonds

    The JP Morgan Chase & Co headquarters in New York

    Funding levels fire up transatlantic bank issuance

    IFR 2067 24 January 2015 to 30 January 2015

    Lured by attractive financing rates in Europe, US banks are crossing the pond to help raise the funds they need to meet future regulatory requirements.

    Southwestern Energy logo

    Southwestern breaks E&P ice

    IFR 2067 24 January 2015 to 30 January 2015

    Investors poured almost US$10bn of orders into a US$2.2bn three-part deal from Southwestern Energy last week, proving that for certain energy names willing to go the extra mile when it comes to offering value to investors, there is no shortage of interest.

    Europe readies for US wave

    IFR 2067 24 January 2015 to 30 January 2015

    The European corporate market could take on a distinct US flavour over the coming months, with a healthy pipeline of debut and regular issuers already building, syndicate officials say.

    ANZ Dim Sum does the trick

    IFR 2067 24 January 2015 to 30 January 2015

    Australian banking major ANZ revived the sleepy Dim Sum market with a Rmb2.5bn (US$403m) Tier 2 bond offering last week, becoming the first foreign issuer to sell a Basel III-compliant capital instrument denominated in renminbi.

    Noodle bonds reveal recovering risk appetite

    IFR 2067 24 January 2015 to 30 January 2015

    The sudden collapse of Phones 4U in September last year had a chilling effect on the European high-yield market, but runaway demand for a bond issue from noodle restaurant Wagamama shows that buyers are now returning to riskier credits.

      More from Bonds

      Loans

      Apollo Global Management logo

      Apollo pays premium for Presidio

      IFR 2067 24 January 2015 to 30 January 2015 By , Mariana Santibanez, Mike Stone

      The US$650m financing backing Apollo Global Management’s buyout of information technology services provider Presidio is facing pushback from loan investors wary of an unpopular sponsor, the deal’s high leverage and issues related to the credit itself.

      Kinder Morgan Tank Farm

      Kinder Morgan taps for Hiland buy

      IFR 2067 24 January 2015 to 30 January 2015 By , Karen Schwartz

      Energy and infrastructure company Kinder Morgan has agreed a US$2.025bn bridge loan provided by UBS to back its acquisition of Hiland Partners in a transaction that takes advantage of slumping oil prices to create a leading midstream platform in North Dakota’s and Montana’s Bakken shale formation.

      Low gas price

      Sustained period of low oil prices could weigh on BDCs

      IFR 2067 24 January 2015 to 30 January 2015 By Leela Parker Deo

      A prolonged period of depressed oil prices could put additional pressure on business development companies, which specialise in lending to middle market companies and are already feeling the pinch from portfolio yield compression and dividend cuts, bankers said.

      An Emirates National Oil Company (ENOC) gas station

      Gulf buoyed by host of deals

      IFR 2067 24 January 2015 to 30 January 2015 By Sandrine Bradley

      Lenders active in the Gulf loan market are hoping that US$6.4bn of deals agreed since the beginning of 2015 is a signal that there will be more deals from the region this year.

      A Taiwan High Speed 700T train

      Unsure future for Taiwan rail

      IFR 2067 24 January 2015 to 30 January 2015 By Eric Zhao

      Taiwan High Speed Rail Corp is facing potential bankruptcy or a restructuring of a NT$382bn (US$12.1bn) loan after the country’s legislators rejected a refinancing proposal.

      Four providing up to US$736m for AsiaSat buy

      26 January 2015

      Four banks are providing debt financing of up to US$736m for Carlyle Group’s acquisition of an initial indirect stake in and a subsequent buyout of Hong Kong-listed Asia Satellite Telecommunications Holdings (AsiaSat).

      LOANS: Casetek facility of US$300m pulls in five

      26 January 2015

      The US$300m three-year term loan for Casetek Holdings has been closed with five banks joining mandated lead arrangers and bookrunners ANZ and DBS.

      LOANS: Pelindo II drops retail lenders from reduced facility

      26 January 2015

      Pelindo II has dealt a blow to the hopes of a number of banks hoping for returns from its heavily oversubscribed US$1bn five-year amortising loan after deciding to scrap its syndication.

      More from Loans

      Equities

      A stock investor gestures as he monitors trading

      Signs of life

      IFR 2067 24 January 2015 to 30 January 2015

      Investors in deal-starved South-East Asia have welcomed a surge of ECM activity in the Philippines, where just last week two blocks were priced and two rights issues were announced.

      Trainline logo

      KKR buyout kills Trainline IPO

      IFR 2067 24 January 2015 to 30 January 2015

      Online train ticket retailer Trainline is in danger of becoming a bete noire for ECM bankers after two IPO cancellations, more than eight years apart, each time due to private equity swooping in.

      The Shake Shack restaurant in the Manhattan borough of New York

      Shake Shack serves up US$80m IPO

      IFR 2067 24 January 2015 to 30 January 2015

      New York-based hamburger chain Shake Shack has launched an IPO of up to US$80m set to price on Thursday.

      BioMarin Pharmaceuticals logo

      BioMarin refills coffers after acquisition

      IFR 2067 24 January 2015 to 30 January 2015

      BioMarin Pharmaceuticals replenished its cash reserves with US$792.6m of equity capital last week following its recent all-cash acquisition of muscular dystrophy drug firm Prosensa Holding NV.  

      Kot Addu Power logo

      Government to sell stake in Kapco

      IFR 2067 24 January 2015 to 30 January 2015

      The Pakistani government intends to divest its entire 40% stake in Kot Addu Power, or Kapco, through a capital markets transaction, minister of state for privatisation Mohammad Zubair told IFR in an interview.

      Mobileye logo

      Israel: Mobileye eases overhang concerns

      IFR 2067 24 January 2015 to 30 January 2015

      Mobileye, the autonomous driving software company that soared 48% on debut last August, filed last week for a US$500m follow-on that will allow early investors to sell some of their shares.

      ServiceMaster logo

      ServiceMaster sponsors ready to sell

      IFR 2067 24 January 2015 to 30 January 2015

      Insiders led by buyout firm Clayton, Dubillier & Rice (CDR) are preparing to sell about US$700m worth of shares in ServiceMaster Global, the owner of the largest termite and pest control business and the largest provider of home warranties in the US.

      US IPO activity set for lift off

      IFR 2067 24 January 2015 to 30 January 2015

      US IPO activity will pick up this week as 10 companies line up to consummate deals, overcoming what so far been a sporadic start to the year for new issues.

      More from Equities

      Derivatives

      Logo of inter-dealer broker Tradition

      SEFs prepare for build-out

      IFR 2067 24 January 2015 to 30 January 2015 By Mike Kentz

      Swap execution facilities in the US are poised to build out their trading functionalities and launch products in the early stages of 2015 in an effort to stay relevant in the soon-to-consolidate market that will eventually encompass the bulk of the US$693trn over-the-counter market.

      The JP Morgan Chase & Co headquarters in New York

      JP Morgan forms credit index group

      IFR 2067 24 January 2015 to 30 January 2015 By Helen Bartholomew

      JP Morgan has created a global credit index group within its credit trading department, as the US bank seeks to tap into growing demand from real money for alternative ways of making bets amid decreased liquidity in fixed income, commodity and currency cash markets.

      Swiss franc notes

      Swiss dislocation drives options activity

      IFR 2067 24 January 2015 to 30 January 2015 By Mike Kentz

      High Swiss franc volatility is driving options activity on the currency as some managers look to play an eventual return to normalisation after the Swiss National Bank rocked markets with the removal of a 1.20 cap on the euro-franc exchange rate.

      Swaps compression to make FX leap

      IFR 2067 24 January 2015 to 30 January 2015 By Helen Bartholomew

      Compression services that eliminate superfluous swaps trades are set to make the leap to foreign exchange markets later this year.

      UBS extends algo trading platform

      IFR 2067 24 January 2015 to 30 January 2015 By Alex Chambers

      UBS plans to expand the range of products that utilise its algorithmic electronic trading platform to include European government bonds next month, with interest rate swaps and short-term interest rates products expected to follow later in the year.

      More from IFR Derivatives

      Digital Edition

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      Investing in Midcaps Equities Roundtable 2014 cover image

      IFR Investing in Small and Midcap Equities Roundtable 2014

      IFR’s ‘Investing in Midcap Equities’ Webinar, held in London on October 30, tackled a lot of issues at play in an interesting but often challenging segment of the equity market.

      IFR German Corporate Funding Roundtable 2014 Cover image

      IFR German Corporate Funding Roundtable 2014

      Is Germany in a credit bubble, participants were asked at IFR’s 2014 German Corporate Funding Roundtable in September. It was the final question at the end of a thoughtful and insightful discussion. The cascade of answers was enlightening: “no”, “not yet”, “no, but it’s approaching”, “we’re close” and “it’s coming and it won’t be the banks that get hurt this time”.

      All Special Reports

      IFR

      IFR Awards dinner collects £1.1m for Save the Children

      Firms contributed more than £1.1m for Save the Children in the annual charity auction at the IFR Awards dinner in London on Wednesday.

      ISDA

      ISDA proposes CCP recovery framework

      The derivatives industry has proposed a detailed framework for the recovery of central counterparties in the event of a defaulting clearing member. ISDA’s latest contribution to the CCP default management debate comes as global regulators prepare new rules for the increasingly important infrastructure providers as large parts of the US$691trn over-the-counter derivatives market are mandated for central clearing.

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

      Easy riders

      23 January 2015

      EUROPEAN BANK CHIEFS got an easy ride at a question and answers session at the WEF meeting in Davos last week.

      The IFR Awards 2014

      IFR Global 2014 Cover - Awards Page
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      How optimistic are CEOs in Davos?Video

      As the World Economic Forum takes place in Davos, the latest survey of CEOs shows fewer are confident about economic growth than last year, Katie Gregory reports.

      All Spotlight