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Sunday, 19 May 2019

Still standing

IFR 2284 18 May to 24 May 2019

When the US-China trade dispute escalated once again at the beginning of last week, IFR called a DCM contact to ask whether a deal from EM issuer NEPI Rockcastle would be going ahead. The forthright response was along the lines of “Are you joking? Did you see the market? A complete bloodbath.”

Top News

Kenya

Staying the course: EM displays resilience to trade wars

IFR 2284 18 May to 24 May 2019 By

The Central and Eastern Europe, Middle East and African bond market proved its versatility last week as issuers announced a variety of structures for investors to pour over, even as an escalation in the US-China trade dispute pushed markets lower.

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Reverse Yankees are back on track

IFR 2284 18 May to 24 May 2019 By

Reverse Yankee issuance volumes have gone past the €40bn mark, double the amount sold in the whole of 2018, as US companies look to lock in ultra-low coupons in the euro market.

Blockchain technology benefits lauded

Figure targets blockchain first in ABS

IFR 2284 18 May to 24 May 2019 By

Online lender Figure Technologies, led by former Social Finance CEO Mike Cagney, is looking to sell the first ever securitisation of assets originated on a blockchain platform.

Uber

Uber IPO doomed by stock's lack of scarcity

IFR 2284 18 May to 24 May 2019 By ,

Investment bankers are concerned that the IPO of Uber Technologies illustrates how little control they can have over a key factor in the success of any IPO: just how many shares will flood the market in early trading.

VIX

Next frontier for credit traders: shorting volatility

IFR 2284 18 May to 24 May 2019 By

Betting on markets remaining calm has long been a popular, though risky, trade in finance. Now, a growing number of banks is looking to bring such strategies to corporate credit markets, the last major asset class where so-called short volatility trades are rare.

Pemex

Pemex seeks US$8bn loan amid uncertainty

IFR 2284 18 May to 24 May 2019 By , ,

A US$8bn loan for Pemex comes amid heavy investor uncertainty over the oil company’s debt load, but lenders wanting to maintain links with the Mexican state-owned oil producer and the left-wing administration overseeing the company may have little choice but to commit to the financing.

ICMA rules risk for Asian bonds

Asia bond bankers push for transparency

IFR 2284 18 May to 24 May 2019 By

Bond bankers in Asia have agreed to disclose the sum total of bookrunner orders for international bond sales, in response to calls for greater transparency around new issues.

Dimon hearing with House committee.jpg

Cost of capital: making it up as you go along

IFR 2284 18 May to 24 May 2019 By

It is a number regarded by many top executives and investors as crucial to judging an institution’s success. But the abstract nature of cost of capital in the banking industry can leave managers making key strategic decisions - including where to allocate investment - based on a large dose of guess work. JP Morgan boss Jamie Dimon has even described cost of capital as a fictitious number.

Nestle

Banks line up SFr5bn for Nestle Skin Health

IFR 2284 18 May to 24 May 2019 By

Banks are lining up a jumbo leveraged loan financing of around SFr5bn-equivalent (US$4.955bn) to back a SFr10.2bn sale of Nestle’s Skin Health business to a consortium led by EQT Partners and Abu Dhabi’s ADIA.

Pimco

Pimco scraps mortgage REIT IPO – again

IFR 2284 18 May to 24 May 2019 By

Pimco’s plan to create a mortgage REIT were thwarted once again last week after the fixed-income giant was unable to raise US$1bn through an IPO.

MetLife mobbed on yen debut

MetLife mobbed on yen debut

IFR 2284 18 May to 24 May 2019 By

US insurer MetLife made a sensational debut in the yen market last Thursday with a ¥151.7bn (US$1.38bn) five-tranche Global bond issue skewed towards 10-year and longer tenors.

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People & Markets

FX fines top US$11bn as EU comes in late

IFR 2284 18 May to 24 May 2019

Barclays, Citigroup, JP Morgan, Mitsubishi UFJ Financial Group and Royal Bank of Scotland were slapped with a combined €1.07bn fine by the European Union last week for rigging the foreign exchange market.

UniCredit, ING keeping tabs on Commerzbank

IFR 2284 18 May to 24 May 2019

UniCredit and ING are still showing signs of interest in Commerzbank after the collapse of the German bank’s merger talks with Deutsche Bank, although bankers said a deal remained a long shot and the financial merits were far from convincing.

EU tightens regulatory noose on London banks

IFR 2284 18 May to 24 May 2019

Proposals approved by European Union leaders last week will make it likely major investment banks will locate more of their European business outside the UK once it leaves the EU.

Shanghai-London Connect faces delays

IFR 2284 18 May to 24 May 2019

A tie-up between London and Shanghai to allow Chinese firms to raise money on the UK stock market and British firms to sell shares in China is facing a long delay and is not likely to happen this year, sources close to the matter said.

Goldman ramps up in South Africa, Japan

IFR 2284 18 May to 24 May 2019

Goldman Sachs is ramping up its presence in South Africa and plans to offer onshore fixed income and foreign exchange products, and has teamed up with Investec for equities trading.

    More from People & Markets

    Bonds

    Asian issuers lead Samurai revival

    IFR 2284 18 May to 24 May 2019

    Two Asian issuers sold Samurai bonds last week, bringing the market back to life after a supply drought in April following the end of the bail-in bond boom.

    ReNew revisits offshore structure

    IFR 2284 18 May to 24 May 2019

    ReNew Power is returning to a controversial funding structure to access the international debt capital markets, in a sign that recent rule changes may allow more Indian companies to borrow overseas.

    China's SDIC makes welcome return

    IFR 2284 18 May to 24 May 2019

    China’s State Development & Investment Corp took advantage of a flight to quality in a weak market last week to raise US$1bn from its second international bond issue.

    China: Kaisa regains international ratings

    IFR 2284 18 May to 24 May 2019

    Kaisa Group Holdings regained ratings from Moody’s and S&P last week, four years after it became the first Chinese property developer to default on international bonds.

    Philippines beats Panda pricing

    IFR 2284 18 May to 24 May 2019

    The Republic of the Philippines beat its own high standards on its second visit to China’s Panda bond market, taking advantage of lower renminbi yields to raise more money at a tighter spread and lower coupon than it did in 2018.

      More from Bonds

      Loans

      Pemex

      Pemex seeks US$8bn loan amid uncertainty

      IFR 2284 18 May to 24 May 2019 By , ,

      A US$8bn loan for Pemex comes amid heavy investor uncertainty over the oil company’s debt load, but lenders wanting to maintain links with the Mexican state-owned oil producer and the left-wing administration overseeing the company may have little choice but to commit to the financing.

      China: COSCO Shipping entities to tap

      IFR 2284 18 May to 24 May 2019

      Units of Chinese state-owned China COSCO Shipping Corp are looking to raise loans totalling US$2.8bn.

      Hong Kong: SF Holdings loan backs DHL buy

      IFR 2284 18 May to 24 May 2019

      Shenzhen-listed logistics group SF Holding is raising HK$5bn (US$637m) from a five-year loan to take out a bridge facility backing the company’s purchase of the Greater China supply chain operations of Deutsche Post.

      Hong Kong: Ten tipped for China Lesso

      IFR 2284 18 May to 24 May 2019

      Ten banks are tipped to win the mandate to arrange the US$800m four-year loan for Hong Kong-listed home building materials manufacturer China Lesso Group Holdings.

      China: ICBC Financial clubs ship loan

      IFR 2284 18 May to 24 May 2019

      ICBC Financial Leasing has clubbed a US$190m three-year ship financing with two lenders.

      China: Far East Horizon increases refi

      IFR 2284 18 May to 24 May 2019

      Financial services company Far East Horizon has increased its three-year loan to US$1bn-equivalent from US$580m.

      China: CDB Financial launches loan

      IFR 2284 18 May to 24 May 2019

      China Development Bank Financial Leasing has launched a US$300m dual-tranche syndicated loan with three banks at the top, as it looks to wrap up a Ninja loan of a similar size.

      China: Ke.com eyes US$1bn debut

      IFR 2284 18 May to 24 May 2019

      Real estate brokerage website Ke.com, also known as Beike Zhaofang, is eyeing a three-year financing of up to US$1bn, marking its debut in the loan markets.

      More from Loans

      Equities

      Kiwi IPO drought continues

      IFR 2284 18 May to 24 May 2019

      New Zealand has lost out on a stock market listing that would have broken a two-year IPO drought after Vodafone Group instead agreed to sell its local business.

      China: Pujiang launches HK IPO

      IFR 2284 18 May to 24 May 2019

      Pujiang International, a construction materials provider, started bookbuilding last Thursday for a Hong Kong IPO of up to HK$852m (US$109m).

      China: Mabpharm launches HK IPO

      IFR 2284 18 May to 24 May 2019

      Mabpharm, an early-stage biopharmaceuticals company, started bookbuilding last Friday for a Hong Kong IPO of up to HK$1.5bn (US$195m).

      China: Mulsanne opens books for IPO

      IFR 2284 18 May to 24 May 2019

      Menswear company Mulsanne Group opened the books last Wednesday for a Hong Kong IPO of up to HK$1.18bn (US$150m).

      China: Frontage launches HK IPO

      IFR 2284 18 May to 24 May 2019

      Frontage Holdings started bookbuilding last Wednesday for a Hong Kong IPO of up to HK$1.6bn (US$205m).

      China: Xinyi Energy launches IPO

      IFR 2284 18 May to 24 May 2019

      Xinyi Energy started bookbuilding last Tuesday for a Hong Kong IPO of up to HK$4.4bn (US$563m), despite the sell-offs in global stock markets at the start of last week.

      China: Genova plans tech board, HK IPO

      IFR 2284 18 May to 24 May 2019

      Biotech company Genova Inc is planning to list on the Shanghai tech board as early as this year in a deal that could value the company at at least US$3bn, to be followed by an IPO in Hong Kong, according to people close to the transaction.

      China: Three firms clear IPO hearings

      IFR 2284 18 May to 24 May 2019

      Three companies have cleared IPO hearings at the China Securities Regulatory Commission on their plans to raise a combined Rmb6.3bn (US$916m).

      More from Equities

      Franchisees criticize Jack in the Box securitization plans

      17 May 2019 By

      Burger chain Jack in the Box is drawing criticism from its franchisees as it prepares to lever up and refinance debt through a whole business securitization.

      Thomas Cook

      Thomas Cook falls further on 0p share target

      17 May 2019 By

      Thomas Cook bonds extended their collapse on Friday after Citigroup analysts warned that the company’s debt forecast implies zero equity value.

      Santander Consumer USA logo

      ABS issuers enjoy strong bid in cautious credit market

      17 May 2019 By

      A strong primary market has helped securitization issuers take advantage of lower rates to lock in cheap funding this week despite unsteady conditions elsewhere in credit markets.

      IFR SNAPSHOT-Primary digests 18 IG deals this week

      17 May 2019 By

      We end the week as investors digest the remains of 18 IG offerings.

      A worker packages plastic tubs at the Berry Plastic Corp. factory in Indiana

      Berry cuts bond size for better costs on M&A funding

      17 May 2019 By

      Berry Global downsized its junk bond but upsized a term loan B as it sought to extract cheaper funding costs for its acquisition of British packaging company RPC.

      MOVES-Pigasse promoted at Lazard

      17 May 2019 By

      Matthieu Pigasse, who heads Lazard’s business in France as well as its sovereign advisory practice globally, has been appointed global head of banking by the New York-listed group.

      MOVES-Hermes hires Roche for private debt and CLOs

      17 May 2019

      Hermes Investment Management has hired Kevin Roche as a director for private debt and CLOs. Roche previously worked at Allied Irish Banks.

      Warehouse

      Next-day delivery drives boom in industrial real estate loans

      16 May 2019 By

      A scramble by US retailers to roll out faster deliveries for online shoppers is driving continued appetite to lend against warehouse and industrial properties, despite some concerns over the impact of rising tariffs on retail.

      FCA Bank logo

      Trump's trade reprieve opens market to auto issuers

      16 May 2019 By

      Two European auto-related issuers took advantage of a reprieve in EU/US trade tensions to jump into the market on Thursday.

      Avantor

      Avantor lowers valuation on IPO, reopens books

      16 May 2019 By

      PE-backed laboratory products specialist Avantor dramatically overhauled terms of its proposed IPO this morning, significantly reducing the valuation but increasing the deal size to attain the proceeds targeted.

      European Union and Italian flags are seen in downtown Rome

      Acea edges its curve out

      16 May 2019 By

      Italian utility Acea took advantage of ultra-low euro corporate bond yields to push its curve out with a new nine-year bond on Thursday.

      Sampo Group logo

      Insurers take the lead in sub market

      16 May 2019 By

      Investors were served up a feast of subordinated insurance paper on Thursday, with not just one but two inaugural issues coming to market, showing that the primary sector is still very much open for issuers despite the tentative macro backdrop.

      HSH Nordbank

      HCOB shrugs off boycott for senior comeback

      16 May 2019 By

      Hamburg Commercial Bank shrugged off an investor boycott and wider market volatility to sell its first post-privatisation bond on Thursday, taking €1.1bn of orders for a €500m senior preferred.

      IFR SNAPSHOT-IG primary rolling sixes with more supply

      16 May 2019 By

      Another six deal day for the US IG primary on Thursday as issuers continue to see opportunity in markets after a jarring start to the week.

      EDC logo

      EDC turns to Sonia, again

      16 May 2019 By

      Export Development Canada is hoping to emulate its previous success in the Sonia-linked market when it brings its second bond of the year in the format, a five-year benchmark that is expected to price on Friday.

      EU Competition Commissioner Margrethe Vestager

      Five banks fined another €1.1bn for FX rigging

      16 May 2019 By

      Barclays, Citigroup, JP Morgan, Mitsubishi UFG Financial Group and Royal Bank of Scotland were slapped with a combined €1.07bn fine by the European Union on Thursday for rigging the foreign exchange market.

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      Special Reports and Roundtables

      IFR SSA Special Report 2019 IFR+SSA+Special+Report+2019
      Best laid plans: Few would be so presumptuous as to lay claim to the ability to plot the progress of the global economy with unerring accuracy on a constant basis. But there are still many that make the prediction game their stock in trade – with varying degrees of success.

      IFR Colombia Roundtable 2019 IFR+Colombia+Roundtable+2019+Homepage+image
      IFR held its first Colombia Capital Markets Roundtable on February 8 in Bogotá, bringing together high-profile issuers, borrowers and bankers to discuss the prospects for a country that looks set for renewed growth this year.

      IFR Awards 2018 IFR+Awards+2018+Homepage+Cover
      So here’s a funny thing. The one asset class that the great and good of the global economy seems to be worried about – leveraged loans – is just about the only one that has made money for investors in 2018.

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

      Six down

      IFR 2284 18 May to 24 May 2019

      THE GROUP OF banks fined for the latest investigation into manipulation of the foreign exchange markets did not just lack scruples – they also lacked imagination.