sections

Friday, 16 November 2018

Times they are a-changin’

IFR 2260 17 November to 23 November 2018

The year opened with a bang for the German covered bond market when a €1bn January 2025 Pfandbrief issue for market darling LBBW was priced at an eye-watering 20bp through mid-swaps, the sector’s tightest in memory.

Top News

Volkswagen

Too much, too soon for Volkswagen?

IFR 2260 17 November to 23 November 2018 By

Volkswagen paid significant concessions to raise €5.15bn-equivalent in euros and sterling last week, triggering intense debate over whether the deal’s execution has decisively shifted pricing power to investors or whether the company was simply a victim of tricky circumstances.

A CCTV camera is pictured next to the logo of UniCredit SpA's German unit HVB in Munich

UniCredit lifts Pfandbriefe out of negative spreads

IFR 2260 17 November to 23 November 2018 By

UniCredit Bank printed the first Triple A, intermediate-dated German Pfandbrief priced without a negative swap spread in over two and a half years last week, with its Italian connection cited as the prime factor.

SoftBank readies record Japan IPO

SoftBank readies record Japan IPO

IFR 2260 17 November to 23 November 2018 By , Miho Ozawa

SoftBank Corp, the mobile phone unit of Softbank Group, is pressing ahead with a mammoth ¥2.41trn (US$21.1bn) IPO, hoping a decent yield will help the deal sail through a turbulent market.

Naftogaz

Gazprom swims but Naftogaz drowns

IFR 2260 17 November to 23 November 2018 By

Two bitter rivals entered the primary market last week, but while Gazprom emerged unscathed with a euro offering, its Ukrainian adversary Naftogaz’s proposed US dollar bond drowned in a sea of troubles.

Gilts' Brexit rollercoaster

Brexit accord leaves British finance out in the cold

IFR 2260 17 November to 23 November 2018 By , ,

The UK’s financial services industry greeted the news of a draft Brexit agreement with weariness and worry on Thursday, citing multiple hurdles that the government must overcome before they can Brexit-proof the industry.

A woman walks into a branch of TSB bank in London

TSB falls foul of Brexit chaos

IFR 2260 17 November to 23 November 2018 By

TSB Bank was forced to pull a debut Sonia-linked sterling covered bond after its decision to bring the trade as UK politicians digested the draft Brexit agreement backfired.

Senator Elizabeth Warren (D-MA)

Senator Warren sounds alarm on lev loans

IFR 2260 17 November to 23 November 2018 By

US Senator Elizabeth Warren sent a letter to regulators on Wednesday expressing concerns about underwriting standards in the leveraged loan market, which she says could pose serious risks to the economy.

Tongcheng-Elong

China techs slash IPO valuations

IFR 2260 17 November to 23 November 2018 By

Two companies backed by Chinese tech giants Tencent and Alibaba have had to slash their valuations below their pre-IPO levels to push ahead with Hong Kong listings in weak markets.

General Electric

GE bonds pummelled by Triple B fears

IFR 2260 17 November to 23 November 2018 By

General Electric’s transition to Triple B has been painful, with some of its bonds now trading like junk and further selling expected as investors rethink their exposure.

Baker Hughes yard in Williston, North Dakota

GE rushes to raise cash with Baker Hughes sale

IFR 2260 17 November to 23 November 2018 By

Ailing conglomerate General Electric sought to ease concerns about its liquidity and excess leverage by raising US$3.8bn from an accelerated sale of its stake in oilfield services unit Baker Hughes, but the move may have only temporarily relieved pressure on its share price.

Johnson Controls sign

Lenders ready 2019’s first jumbo buyout

IFR 2260 17 November to 23 November 2018 By

The US leveraged loan market is looking forward to its first jumbo buyout loan of 2019, after the US$13.2bn acquisition of Johnson Controls International’s power business by private equity firm Brookfield Business Partners.

IFR Magazine Top News in Full (subscription required)

People & Markets

Citigroup reviews China JV setup

Citigroup reviews China JV setup

IFR 2260 17 November to 23 November 2018

Citigroup is looking at exiting its securities joint venture in China in favour of a new partnership with majority control, making it potentially the first foreign bank to walk away from an existing partnership following regulatory changes earlier this year.

SMFG outshines rivals in Q2 earnings

IFR 2260 17 November to 23 November 2018

Sumitomo Mitsui Financial Group outstripped its rivals during the second quarter as it reported a 37% jump in net profit, while the two other Japanese megabanks flatlined.

Australian ECM banker Simon Cox dies

IFR 2260 17 November to 23 November 2018

Notable Australian equity capital markets banker Simon Cox died last Saturday of a suspected heart attack.

Noble to appoint former Morgan Stanley banker as chairman

IFR 2260 17 November to 23 November 2018

Noble Group is expected to appoint former Morgan Stanley banker Ian Potter as its chairman as the battered commodities trader prepares for life following its restructuring.

Italian banks come to Carige's aid in €400m capital plan

IFR 2260 17 November to 23 November 2018

Italy’s Banca Carige confirmed it will get up to €400m from the country’s biggest banks and private investors to meet a European Central Bank year-end deadline to boost its capital.

    More from People & Markets

    Bonds

    China lender rethinks AT1 model

    IFR 2260 17 November to 23 November 2018

    Zhongyuan Bank sold US$1.395bn of Additional Tier 1 securities last week at a wildly off-market price, but the trade might still serve as a model for mid-sized Chinese banks looking to fill their capital needs.

    UBS

    UBS saves costs in Singapore

    IFR 2260 17 November to 23 November 2018

    UBS boosted Singapore’s reputation as the go-to venue for competitive bank capital, after it achieved significant savings from its first Additional Tier 1 offering in any Asian currency.

    KWG, Agile push HY sector wider

    IFR 2260 17 November to 23 November 2018

    Two Chinese high-yield property developers paid high coupons last week for their latest US dollar bonds, repricing the sector again.

    ICBC flops without Chinese support

    IFR 2260 17 November to 23 November 2018

    Industrial and Commercial Bank of China missed the mark in the US dollar market on Wednesday with a dual-tranche bond offering that fell flat after US demand failed to carry the deal.

    Credit Agricole moves fast in yen

    Credit Agricole moves fast in yen

    IFR 2260 17 November to 23 November 2018

    Credit Agricole has set an example for quick and opportunistic fundraisings in the Japanese debt market with a four-tranche ¥97.4bn (US$858m) Euroyen offering that proved just as popular as any deal in the more traditional Samurai format.

      More from Bonds

      Loans

      Indonesia revives M&A deal flow

      Indonesia revives M&A deal flow

      IFR 2260 17 November to 23 November 2018 By

      State-owned Semen Indonesia is raising US$1.25bn through a bridge loan for its proposed acquisition of the local business of Swiss company LafargeHolcim, catapulting Indonesia to the centre of event-driven financing activity in Asia.

      Senator Elizabeth Warren (D-MA)

      Senator Warren sounds alarm on lev loans

      IFR 2260 17 November to 23 November 2018 By

      US Senator Elizabeth Warren sent a letter to regulators on Wednesday expressing concerns about underwriting standards in the leveraged loan market, which she says could pose serious risks to the economy.

      Solenis nets US$550m-equiv deal

      IFR 2260 17 November to 23 November 2018

      Water treatment company Solenis has allocated a US$550m-equivalent incremental first-lien term loan funding the merger with BASF’s paper and water chemicals business.

      Scheme for Steinhoff's SUSHI debt

      IFR 2260 17 November to 23 November 2018

      The High Court of Justice in England and Wales has sanctioned a scheme of arrangement that will enable lenders to Stripes US Holding (SUSHI), a subsidiary of troubled South African retailer Steinhoff International Holding, to exchange their rights under a US$200m loan for similar rights under a new facility.

      Australia: SGSP closes A$650m refi

      IFR 2260 17 November to 23 November 2018

      SGSP (Australia) Assets is set to achieve financial close on a A$650m 5.5-year revolving credit facility.

      Duo fund unitranche for Greencross LBO

      IFR 2260 17 November to 23 November 2018

      Credit Suisse and UBS have won the mandate on a six-year unitranche loan of around A$500m (US$359m) backing US private equity firm TPG Capital’s leveraged buyout of Australian pet store owner Greencross.

      Australia: Seek offers tighter pricing on refi

      IFR 2260 17 November to 23 November 2018

      Recruitment firm Seek is offering tighter pricing on its US$874m-equivalent facility compared with that on its previous visit to the loan market in June 2017.

      Australia: Treasury Wine ups loan

      IFR 2260 17 November to 23 November 2018

      Treasury Wine Estates has increased its dual-tranche refinancing to US$350m from US$300m.

      More from Loans

      Equities

      China: CSSC's ship-leasing unit to float

      IFR 2260 17 November to 23 November 2018

      CSSC (Hong Kong) Shipping Company plans to raise about US$300m-$500m from a Hong Kong IPO next year, according to people close to the deal.

      China: Fosun Tourism journeys to Hong Kong

      IFR 2260 17 November to 23 November 2018

      Fosun Tourism, a unit of Fosun International, started pre-marketing last Wednesday for a Hong Kong IPO of US$500m–$700m.

      China: Jinshang Bank plans IPO

      IFR 2260 17 November to 23 November 2018

      Jinshang Bank, a joint-stock commercial bank in China, is planning to list in Hong Kong in 2019, according to people familiar with the situation.

      China: Shenwan Hongyuan plans HK listing

      IFR 2260 17 November to 23 November 2018

      Shenzhen-listed brokerage Shenwan Hongyuan has announced a plan to sell shares in a Hong Kong listing to replenish working capital and fund business development.

      China: WuXi AppTec readies HK listing

      IFR 2260 17 November to 23 November 2018

      Shanghai-listed WuXi AppTec is set to start pre-marketing on Monday for a Hong Kong listing of at least US$1bn, according to people close to the deal.

      Koolearn pushes on with IPO

      IFR 2260 17 November to 23 November 2018

      Koolearn Technology, an online education services provider, plans to start pre-marketing a US$200m–$300m Hong Kong IPO this week despite new rules that have cast a cloud over fundraising by kindergartens, and the education sector more generally, in China.

      Australia: Heathley Healthcare REIT seeks listing

      IFR 2260 17 November to 23 November 2018

      Heathley Healthcare REIT is seeking to raise A$225m (US$164m) from an ASX listing on December 12.

      Australia: WorleyParsons seals retail rights offer

      IFR 2260 17 November to 23 November 2018

      WorleyParsons has completed the retail portion of a A$2.9bn (US$2.1bn) one-for-1.47 rights issue.

      More from Equities

      Logo of PG and E, the parent company of Pacific Gas and Electric

      PG&E bonds swing as fire investigation looms

      16 November 2018 By

      Spreads on some Pacific Gas & Electric bonds widened close to 500bp following the disclosure of an electrical incident just before the start of California’s deadly “Camp Fire”.

      IFR SNAPSHOT-Week ends on quiet note, Takeda ahead

      16 November 2018 By

      Borrowers remained sidelined on Friday as stock futures pointed to another down day on Wall Street and following further spread widening in the US credit market.

      Serbia's Parliament building in Belgrade

      United Group bondholders struggle to appoint counsel - Covenant Review

      16 November 2018 By

      Serbian telecom United Group’s bondholders have formed a majority non-consenting group against its consent solicitation, but are struggling to appoint legal counsel, Covenant Review said in a statement on Friday afternoon.

      MOVES-Deutsche Bank adds to European equity syndicate

      16 November 2018

      Dominic Auffenberg will start on Deutsche Bank’s EMEA equity syndicate desk in January. He joins as a director after a decade at Credit Suisse where he was also on the syndicate desk.

      Takeda pharma

      Takeda readies deal in test for high-grade bond market

      16 November 2018 By

      Takeda Pharmaceuticals is expected to test the US high-grade market’s tolerance for M&A bonds next week as it prepares to raise US$5.5bn in what remains very choppy conditions.

      Average Triple C spreads make rare move wider

      16 November 2018

      Year-to-date spreads on Triple C names in the US credit market widened 15bp on Thursday, only the third time they have done so this year, according to ICE BAML data.

      The Bank of America building is shown in down town Los Angeles, California

      Bank of America relegated as a G-SIB in latest rankings

      16 November 2018 By

      Bank of America has been demoted in the latest list of global systemically important banks, with the US bank falling to bucket two from bucket three, in a move that will free up capital at the lender.

      Memory chips

      Ecore collects debut high-yield deal

      16 November 2018 By

      Recycling company Ecore overcame market volatility to price a debut high-yield deal on Thursday, offering investors generous pricing and rare call protection on a floater.

      High-yield energy junk bonds take a beating

      High-yield energy junk bonds take a beating

      15 November 2018 By ,

      US high-yield energy junk bonds have been battered in the past couple of weeks with average spreads in the sector now trading at their widest levels in more than a year.

      Jetpak to float and refinance outstanding bond

      Jetpak to float and refinance outstanding bond

      15 November 2018

      Jetpak, a Swedish express delivery business largely servicing the B2B segment, has begun pre-marketing a Nasdaq First North Premier IPO, with primary proceeds of approximately SKr235m (US$26m) to be used alongside new bank debt to repay and refinance an outstanding SKr377.5m bond.

      Germany

      Munich Re underwrites success with generous premium

      15 November 2018 By

      A healthy new issue premium helped Munich Re pull off a strong result for its first subordinated bond since 2012, uncovering over €2.5bn of demand as broader markets sold off and TSB had to shelve a covered bond.

      IFR SNAPSHOT-Volatility dominates; IG primary sees one offering

      15 November 2018 By

      A wave of volatility is sweeping the markets, driving most IG issuers to the sidelines, and pushing spreads wider in the secondary.

      Gilts' Brexit rollercoaster

      SRB sets out post-Brexit advice on UK law MREL bonds

      15 November 2018 By

      The Single Resolution Board, which together with the European Central Bank decides how failing European Union banks should be resolved, has issued a paper setting out how banks under its watch should cope with Brexit.

      MOVES-Exotix strikes deal with Fundamental Intelligence

      15 November 2018 By

      Emerging markets broker Exotix Capital has struck a deal with economic research provider Fundamental Intelligence to distribute its products to Exotix clients.

      Norway

      Ice Group begins NKr3bn Oslo float

      15 November 2018

      Norwegian mobile broadband business Ice Group is targeting NKr3bn (US$353m) in primary proceeds from an Oslo listing. Ice Group operates in Norway, Sweden and Denmark, with proceeds from the float to expand its network in Norway and drive subscriber and revenue growth.

      Racks of samples are seen in a pharmaceutical lab

      Hansa Medical ABB totals US$75m

      15 November 2018

      Swedish biopharma Hansa Medical raised SKr453m (US$50m) in an accelerated bookbuild on Tuesday evening. Selling by the company’s largest shareholder Nexttobe at the same time took the deal size to SKr679.6m.

      All Latest news

      Digital Edition

      Access a digital edition of the latest print magazine here.

      To read the IFR Magazine Digital Edition you will need to enter your details in the login section.

      If you have forgotten your password, or would like to find out more about IF subscriptions, please email rm.clientsupport@refinitiv.com.

      Beckett

      A golden opportunity in stressed Turkish markets

      By David Beckett, head of Europe, SC Lowy, Berkay Oncel, European loan trader, SC Lowy

      Turkey’s secondary debt markets are starting to offer select opportunities following this year’s collapse in the Turkish lira and as a growing number of borrowers face difficulties caused by the weaker currency and a difficult operating environment.

      All Commentary

      Special Reports and Roundtables

      IFR US ECM Roundtable 2018 IFR+US+ECM+Roundtable+2018+Cover+Image
      IFR held its US ECM Roundtable on September 13 as stock market indices were nearing historic highs. Investors were showing greater resolve to chase performance by participating in ECM transactions not only in the public markets but in private as well.

      IFR IMF/World Bank Report 2018 IFR+IMF+2018+Cover+page
      If there is one thing that characterises both the International Monetary Fund and the World Bank, it is, by their very nature, their internationalism. Their results over their 70-odd-year histories have been achieved through collaboration – the greater the collaboration, the better the result.

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

      Time, Goldman please

      IFR 2260 17 November to 23 November 2018

      GOLDMAN SACHS HAD complained to the City of London Corporation that a development next to where its new European headquarters will stand could include bars and restaurants. It is also concerned that passers-by might be able “to see into” its offices.