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Thursday, 30 June 2016

British and EU flags

UK CLO managers scramble to meet "skin in the game" rules

30 June 2016 By Kristen Haunss, Mariana Ionova

UK CLO managers could change strategies to keep their “skin in the game” for fear of running afoul of European Union risk retention rules in the wake of a UK decision to leave the bloc.

Argentina flag

UPDATE – Argentina announces two-part US dollar bond – source

30 June 2016 By

The Republic of Argentina announced a two-part US dollar bond sale on Thursday, just three months after its historic return to the international capital markets.

British American Tobacco factory in Chile

Brexit fears put aside as corporates go for sterling

30 June 2016 By

British American Tobacco and Brown-Forman reopened the sterling corporate market on Thursday after a month-long hiatus, attracting blowout demand just a week after the UK voted to leave the European Union.

Salini Impregilo logo

European high-yield primary poised to return

30 June 2016 By

Shhhh! If you listen carefully you might just hear it – the sound of bond bankers daring to hope that the European high-yield primary market might soon reopen after the UK voted to leave the European Union.

KfW branch

KfW underlines market resilience with sterling deal

30 June 2016 By

Germany-guaranteed KfW hit the sterling market for a £350m tap of its 1.125% December 2019s in what was described by one banker as a demonstration of how unnervingly strong the market is despite the UK’s vote last week to leave the EU.

Intercept Pharmaceuticals logo

Intercept Pharma preps drug launch with US$400m CB

30 June 2016

Intercept Pharmaceuticals pivoted into the convertible bond market to fund commercialisation of its breakthrough liver disease drug, Ocaliva. The once high-flying biotech secured US$400m on the sale of a seven-year CB overnight Wednesday.

UniCredit bank headquaters

Italy's UniCredit appoints Mustier as new CEO -sources

30 June 2016 By Paola Arosio, Gianluca Semeraro

Italy’s biggest lender, UniCredit, appointed French investment banker Jean-Pierre Mustier on Thursday as its new chief executive, sources said, a remarkable comeback for a banker who was once fined for insider trading.

UBS logo

P&M: UBS streamlines investment bank amid "perfect storm"

30 June 2016 By Steve Slater

Three senior executives at UBS’s investment bank are leaving the division as chief executive Andrea Orcel continues to streamline the business to better deal with what he called “a perfect storm of challenges” in the market.

Standard & Poor's building in New York

S&P cuts rating on EU to 'AA' after Brexit

30 June 2016Updated: 30 June 2016

(Reuters) - Standard & Poor’s Global Ratings said on Thursday it had cut its long-term credit rating on the European Union to ‘AA’ from ‘AA+’ but raised its outlook to “stable” from “negative” after the United Kingdom voted to leave the bloc.

Global Medical IPO benefits as safe haven

29 June 2016 By Robert Sherwood

Global Medical REIT defied market expectations by raising US$130m from its IPO Tuesday. The offering was larger than expected, benefiting from a timely move by investors into defensive, yield-oriented stocks in the wake of last week’s surprising Brexit vote.

Deutsche Bank headquarters

Deutsche, Santander fail US stress test; Morgan Stanley gets second chance

29 June 2016

(Reuters) - US bank subsidiaries of Deutsche Bank AG and Banco Santander SA yet again failed the Federal Reserve’s stress test on Wednesday due to “broad and substantial weaknesses” in their capital planning processes.

GM logo

UPDATE – US high-grade bond volumes top US$700bn

29 June 2016 By Hillary Flynn

Jumbo deals from household names like Oracle and General Motors pushed the year’s US high grade volumes over US$700bn on Wednesday.

Alcentra logo

Alcentra setting up fund to invest in European distressed debt

29 June 2016 By ,

Alcentra, BNY Mellon’s speculative-grade investment arm, is setting up a fund that will invest in distressed debt of companies in Europe, according to a person with knowledge of the strategy.

Societe Generale logo

New commercial mortgage deal struggles after Brexit

29 June 2016 By

Societe Generale has widened guidance on its new US$736m commercial mortgage bond amid heightened volatility near quarter end and uncertainty in the wake of Britain’s vote to quit the European Union, buyside sources told IFR.

OHL logo

OHL bonds jump on Abertis sale

29 June 2016 By

Spanish construction company OHL’s bonds rallied on Wednesday following the news that its Mexican unit was selling shares in Abertis Infraestructuras to pay down debt and raise financing for its concessions business.

Cooling towers of France's Electricite de France nuclear power station are seen in Saint Laurent near Orleans

Brexit makes Hinkley decision tougher

29 June 2016 By

EDF’s decision on whether to push ahead with the £16bn Hinkley Point C nuclear power station project has been made a lot tougher following the UK’s Brexit result last week. The decision is now in the hands of French politicians, who are likely to have been shocked by last week’s vote. 

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Vote Leave campaign leader Boris Johnson

All gone wrong

IFR 2139 25 June to 1 July 2016

The one thing everybody knew last week was that Britons would never vote to Leave.

Top News

A trader from BGC reacts after Britain voted to leave the European Union

Brexit plunges markets into turmoil

IFR 2139 25 June to 1 July 2016 By , , ,

European capital markets have been plunged into deep uncertainty after the UK voted to leave the European Union, with bankers and investors struggling to digest what the unprecedented decision will mean.

Bank Street sign

Banks braced for pain after Brexit bombshell

IFR 2139 25 June to 1 July 2016 By Steve Slater

Thousands of bankers in Britain are fretting about their job security as the industry faces upheaval in trading operations and regulations in the wake of Britain’s decision to quit the European Union.

RBS building in London

Bank bonds plummet as UK walks

IFR 2139 25 June to 1 July 2016 By

UK and peripheral bank bonds were hit hard in secondary markets on Friday following Britain’s vote to leave the European Union.

A Union flag flies next to the flag of the European Union

Equivalence is key for post-exit UK banks

IFR 2139 25 June to 1 July 2016 By

The UK’s vote to leave the European Union is unlikely to give banks the bonfire of red tape long promised by many campaigners against EU rules and regulations.

Gold bullion

Referendum decision leads to gold rush

IFR 2139 25 June to 1 July 2016 By

Gold jumped as much as 8% on Friday, hitting a two-year high of US$1,358 an ounce as investors flooded to the world’s safe-haven asset in response to the UK’s vote to cut its ties with the European Union.

A man dressed as DC Comics' The Question in Manhattan

Unknown loan buyer triggers intrigue

IFR 2139 25 June to 1 July 2016 By , Kristen Haunss

A mysterious buyer is causing a stir in the US leveraged loan market.

Oi logo

Oi filing sparks CDS speculation

IFR 2139 25 June to 1 July 2016 By Robert Smith

Holders of Oi’s credit default swaps will be among the few investors cheering its bankruptcy filing, particularly as certain buyers were due to see their protection expire just hours after the Brazilian telecoms company filed on Monday.

Veneto Banca logo

Veneto rescue tests depleted Atlante

IFR 2139 25 June to 1 July 2016 By Graham Fahy

Italian rescue fund Atlante will take a substantial hit on its €1bn purchase of Veneto Banca shares even if the struggling bank is split into good and bad parts in an effort to find a buyer.

Twilio leaps in debut

Twilio surge reassures on unicorn demand

IFR 2139 25 June to 1 July 2016 By

Twilio’s near doubling on its debut last week proved US IPO investors do retain an appetite for large non-profitable tech companies, or so-called “unicorns”, stirring hopes of a long-awaited rebound in sector deal flow.

Chinese souvenirs

China to rattle sovereign debt battles

IFR 2139 25 June to 1 July 2016 By

Extensive lending by China to countries in emerging markets looks set to complicate the next wave of sovereign debt restructuring, particularly as the country has yet to join the Paris Club of official sector creditors.

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People & Markets

Jonathan Rogers

Indonesia's coal offers a cautionary tale for creditors

IFR 2139 25 June to 1 July 2016

FORGIVE MY RETURNING to Indonesia just a week after my last column on the topic but it’s worth the deja vu, since a big(ish) restructuring over there is winding its way to the supposed finish line and it shines a light on much else besides.

US Federal Reserve building

US banks sail through stress test

IFR 2139 25 June to 1 July 2016

US banks were able to stay at least one step ahead of the Federal Reserve in the latest industry health-check, easily passing an annual test that had more demanding scenarios compared with previous years.

Visa credit cards

Visa deal to give Europe's banks timely Q2 lift

IFR 2139 25 June to 1 July 2016

Dozens of European banks will book hefty windfalls in the second quarter from the sale of their stakes in Visa Europe, after Visa Inc this week completed the purchase of its sister card payments firm.

Rothschild & Co logo

Rothschild reports record advisory revenues

IFR 2139 25 June to 1 July 2016

Rothschild & Co reported record annual revenues in its financial advisory business last week but warned that repeating that result in the current financial year will prove a challenge.

Jefferies logo

Jefferies ends FICC slump and signals brighter Q2

IFR 2139 25 June to 1 July 2016

The outlook for Jefferies has brightened thanks to stabilisation in markets in its latest quarter, helping the bank end a multi-year slump in fixed-income trading.

    More from People & Markets

    Bonds

    A trader from BGC reacts to the EU BREXIT referendum news

    US immune to Brexit volatility

    IFR 2139 25 June to 1 July 2016

    The UK’s stunning vote to quit the European Union roiled the global markets, but borrowers raising debt in the US may turn out to be largely immune to the turmoil.

    Logo of the European Investment Bank

    EIB primed for post-Brexit hiatus

    IFR 2139 25 June to 1 July 2016

    The European Investment Bank is likely to have to put its bond issuance on hold for the foreseeable future after the UK voted to leave the European Union last week. 

    ECB surprises with aggressive tack

    IFR 2139 25 June to 1 July 2016

    The European Central Bank’s corporate sector purchase programme got off to a strong start, with volumes in the first few days exceeding expectations.

    Brexit stops market

    IFR 2139 25 June to 1 July 2016

    Before a result few saw coming upended the market, most market participants were pretty sure the UK was going to choose to stay in the European Union.

    Dior jumps in ahead of vote

    IFR 2139 25 June to 1 July 2016

    Investors snapped up the opportunity to buy the only corporate paper in the primary market on Monday, from fashion house Christian Dior, which capitalised on the stable market window in the run-up to the UK referendum vote.

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      Loans

      GF Securities sign

      GFSec back on borrowing trail

      IFR 2139 25 June to 1 July 2016 By Carol Zhong

      After a challenging year for stock markets in China, GF Securities is back in the market for a loan of HK$3.5bn (US$451m), significantly bigger than its previous borrowing.

      Sogo department store

      Sogo shops for refinancing

      IFR 2139 25 June to 1 July 2016 By Chien Mi Wong

      Department store Sogo, the owner of a prime piece of real estate in Hong Kong, is wooing lenders for a HK$8bn (US$1bn) refinancing loan, which comes with rarity value and tight pricing amid a lack of deal flow in the city.

      United Biscuits logo

      Leveraged loan market left reeling by Brexit

      IFR 2139 25 June to 1 July 2016 By Hannah Brenton

      The European leveraged loan market has entered a period of uncertainty after Britain voted to leave the EU.

      Logo of data analytics firm Qlik Technologies

      Alternative lenders step into revolvers as maturity wall looms

      IFR 2139 25 June to 1 July 2016 By Leela Parker Deo, Jonathan Schwarzberg

      Alternative lenders are expected to take a larger share of leveraged lending from banks in the next two years as the non-bank lenders step in to help refinance the first wall of revolving debt to come due since updated leveraged lending guidance was implemented in 2013.

      Dell logo

      Brexit fears spread to the States

      IFR 2139 25 June to 1 July 2016 By , Lynn Adler, Jonathan Schwarzberg

      Economic and market upheaval spurred by Britain’s vote to leave the EU is spilling into the US leveraged loan market, knocking down bid prices and chilling new issuance while volatility escalates.

      Krispy Kreme doughnuts

      Krispy Kreme acquisition loan in market

      IFR 2139 25 June to 1 July 2016

      Krispy Kreme Doughnuts launched a US$500m loan via Barclays that will back the company’s acquisition by Luxembourg-based investment firm JAB Holding.

      A man dressed as DC Comics' The Question in Manhattan

      Unknown loan buyer triggers intrigue

      IFR 2139 25 June to 1 July 2016 By , Kristen Haunss

      A mysterious buyer is causing a stir in the US leveraged loan market.

      Cardinal Health ups revolver

      IFR 2139 25 June to 1 July 2016

      Drug distribution company Cardinal Health has increased its revolving credit facility to US$1.75bn from US$1.5bn and extended the facility to June 2021 from 2018.

      More from Loans

      Equities

      China Securities Regulatory Commission headquarters

      China crimps backdoor listings

      IFR 2139 25 June to 1 July 2016

      Companies looking to bypass China’s backlogged IPO pipeline through backdoor listings face new hurdles in light of draft regulations intended to clamp down on reverse takeovers.

      Algeria Stock Exchange

      IPO cancellation dents Algeria pipeline

      IFR 2139 25 June to 1 July 2016

      Hopes that the IPO of Societe des Ciments de Ain El Kebira (SCAEK) would continue the rapid expansion of the Algiers Stock Exchange have been dashed by a lack of interest.

      Centennial Resource Development logo

      Centennial Resource opens doors for public viewing

      IFR 2139 25 June to 1 July 2016

      Centennial Resource Development, a Permian Basin-focused exploration and production company, has started the clock ticking on its IPO. The offering would be the first by a US E&P in over two years and stands to benefit from growing investor interest in the Permian, and the Delaware Basin of the Permian in particular.

      Bank of Jiangsu

      China faces US$1.1bn IPO test

      IFR 2139 25 June to 1 July 2016

      Bank of Jiangsu has started pre-marketing China’s largest domestic listing since the country resumed IPOs last November, in a sign that regulators may be loosening controls on the size of listings one year after the market’s collapse.

      Inghams Enterprises logo

      Aussies hatch year's largest IPO

      IFR 2139 25 June to 1 July 2016

      Preparations for Australia’s largest listing of the year are under way as poultry producer Inghams Enterprises has mandated six banks for its potential IPO of A$1.5bn (US$1.1bn).

      Windstream office

      Windstream stages exit from REIT spin-off

      IFR 2139 25 June to 1 July 2016

      Telecoms company Windstream has sold its remaining 20% stake in wireless infrastructure REIT Communications Sales and Leasing in a two-part deal that reduces its debt burden.

      Brexit deals latest blow to US ECM

      IFR 2139 25 June to 1 July 2016

      A sub-par year for US equity capital markets got even tougher last week, as market volatility in the wake of the “Leave” campaign’s victory in the UK’s European Union referendum put near-term deal flow under a dark cloud.

      Former Gillette CEO targets US$350m on SPAC

      IFR 2139 25 June to 1 July 2016

      Centerview Partners’ James Kilts and David West are throwing their weight behind the world of special purpose acquisition companies. The duo submitted documents to US regulators last week outlining a US$350m target funding for Conyers Park Acquisition with Deutsche Bank and Goldman Sachs as joint bookrunners.

      More from Equities

      Derivatives

      European Union flag

      Brexit casts doubt on derivatives rules

      IFR 2139 25 June to 1 July 2016 By

      UK derivatives traders face two years of uncertainty surrounding their activities after the country’s vote to leave the European Union cast doubt on the scope of recent derivatives reforms and contractual terms that could be impacted by the surprise outcome.

      BCP, BMPS 5yr CDS

      BCP switch trade cost jumps on finance concern

      IFR 2139 25 June to 1 July 2016 By

      Banco Comercial Portugues, Portugal’s largest listed bank, has come under pressure in credit markets in recent days on concerns the bank may not have sufficient capital to cover its liabilities and carry out plans for an early redemption of contingent convertible securities.

      Citadel Securities office

      Citadel adds custom swaps in rapid expansion

      IFR 2139 25 June to 1 July 2016 By

      Citadel Securities has expanded its ambitions beyond benchmark vanilla interest rate swaps with a push into customised derivatives as the new entrant encroaches further onto the turf of big swaps dealers that have dominated the market for decades.

      Power industry pushes back on derivatives rules

      IFR 2139 25 June to 1 July 2016 By Mike Kentz

      The US power transmission industry is attempting to roll back a recent CFTC amendment that would open up power producers and utilities to private litigation actions alleging fraud and manipulation in derivatives markets.

      Brexit drives jump in equity vol

      IFR 2139 25 June to 1 July 2016 By , Mike Kentz

      The UK’s referendum on EU membership caught equity derivatives traders on the wrong foot as the shock vote in favour of Brexit prompted a sharp sell-off in equity markets and pushed volatility to recent highs, running counter to a wave of upside positioning seen earlier in the week.

      More from IFR Derivatives

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

      No pain no gain

      IFR 2139 25 June to 1 July 2016

      THE IMPACT OF Brexit smacked Bellwether bang in the face on Friday morning. Rows of shell-shocked, glum-faced commuters travelling into London, to join the thousands who had worked overnight and seen first hand sterling plunge as results came in. Despite a 60% vote for Remain among Londoners, they had been outvoted by their countrymen around the land.

      Opinion

      keith mullin

      Common-sense outcomes emerge for capital markets in Brexit discussions

      IFR Editor-at large Keith Mullin examines the regulatory challenges as the dust settles on a post-Brexit London

      Anthony Peters columnist format

      No comment

      Over the past 20 years or so during which I have been writing my daily column, I have been asked innumerable times how I find something new to write about every day and whether I ever sit there with nothing to say. The answer is that there is always something interesting going on somewhere and often enough in corners of the world or in markets that the majority have not been focusing on. 

      Anthony Peters columnist format

      In debt we trust

      There’s no denying that Monday was ugly; really, really ugly. But why? Is there sufficient fundamental justification to wipe US$3trn off the value of global stocks? Does unwinding the British relationship with the EU justify this reaction or is it a bunch of traders and hedgies using the uncertainty to whip and drive markets for, pardon the term, the fun of it? 

      Anthony Peters columnist format

      Keep calm and carry on

      Since it became clear in the small hours of Friday morning that a majority of voters here in this democratic United Kingdom - of which, whether Nicola Sturgeon likes it or not, Scotland is still a part – chose to put the country on a path to exit the European Union, events have been overtaking events. 

      keith mullin

      Brexit will undermine London as a financial centre

      DOES THE UK vote to leave the EU jeopardise London as a financial centre? That’s the question that’s been on everyone’s lips for months. We might not have had a direct answer to that question immediately, with Morgan Stanley denying a BBC report on Friday that the firm had already begun moving 2,000 London-based investment banking staff.

      Anthony Peters columnist format

      Shock and awe

      I am staggered, I am speechless. It has been one hell of a night and one during which history is in the course of being made. Whether good or bad will be determined over the coming years or even decades but most certainly not in one day’s trading and even less on the last Friday before quarter-end. 

      keith mullin

      The rise and rise of UK investment banks

      IFR editor-at-large Keith Mullin doffs his cap to the rise of UK broker-dealers and investment banks in UK equities and ECM

      Anthony Peters columnist format

      Cometh the hour

      It’s June 23 and what had to be said has now been said, much of what needn’t have been said was also said but, in my humble opinion, much of what needed to have been said was left aside. Now it is up to the voters. 

      James Saft - June 2014

      The smart money is sitting the Brexit panic out

      All over the world financial advisors and brokers are calling clients and urging them to take steps to “make” or “save” money in light of the British vote on EU membership on Thursday.

      Anthony Peters columnist format

      Nearing the end

      If the only escape from endless Brexit talk is to watch 22 millionaires kicking a pigskin, then I suppose I’ll have to stick with Brexit. Let’s face it, it’s nearly over….or at least the referendum part of it is. 

      IFR Financing Sustainable Infrastructure Report 2016

      IFR Financing Sustainable Infrastructure Report 2016

      Sustainable infrastructure agenda moves centre-stage

      IFR Turkey Special Report 2016

      IFR Turkey Special Report 2016

      Star turn: In the fluid world of emerging markets, Turkey has this year presented more opportunities than its CEEMEA peers for investors to indulge their views.

      All Latest Special Reports