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Wednesday, 01 April 2015

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Upfront

China

Back in the game

IFR 2076 28 March 2015 to 3 April 2015

When it comes to China, JP Morgan’s recent troubles are well known. The US bank, however, clearly hasn’t written off its China investment bank just yet.

Top News

Spain

Buyers grow fed-up of QE effect

IFR 2076 28 March 2015 to 3 April 2015 By

Investor frustration at how expensive euro public-sector debt has become was on display last week, with the Kingdom of Spain receiving a surprisingly tepid response to a 15-year linker and Germany-guaranteed KfW having to switch to US dollar funding.

Heinz and Kraft

Kraft-Heinz mega deal given thumbs up

IFR 2076 28 March 2015 to 3 April 2015 By , , , Jonathan Schwarzberg

Markets cheered the US$46bn merger between US food giants Kraft Foods and HJ Heinz last week, breathing a sigh of relief that the deal would not be financed by a wave of new debt.

StanChart

Two get Yankee CoCo ball rolling

IFR 2076 28 March 2015 to 3 April 2015 By , Alice Gledhill

Yankee European bank CoCos and bond issuance to meet total loss absorbing capacity regulations finally got going in the US dollar market last week, with HSBC and Standard Chartered bringing Additional Tier 1 debt and Credit Suisse the first debt offering from a holding company entity of a European bank outside of the UK.

China

US deals off to record start

IFR 2076 28 March 2015 to 3 April 2015 By

Borrowers have sold record amounts of debt in the US bond markets so far this year, as businesses race to shore up their finances and seize the moment before any rise in interest rates.

JPM

JP Morgan flexes China muscle

IFR 2076 28 March 2015 to 3 April 2015 By , Denny Thomas

JP Morgan has underwritten a €6.8bn (US$7.3bn) bridge loan for China National Chemical Corp (ChemChina), in a rare example of a mainland state-owned enterprise turning to a single foreign bank to support an overseas acquisition.

The Telecom Italia headquarters is seen in downtown Milan

Equity-linked springs to life in EMEA

IFR 2076 28 March 2015 to 3 April 2015 By

EMEA equity-linked issuance has leapt by more than US$4.5bn in the space of seven days, raising hopes that the market is finally managing to compete with the enormous liquidity and extraordinary terms on offer from straight debt for both investment-grade and high-yield issuers.

Austria

Heta concerns spread

IFR 2076 28 March 2015 to 3 April 2015 By

Evidence is mounting that Austria’s decision last month to put Heta Asset Resolution, the rundown vehicle of regional lender Hypo Alpe Adria, into a €11bn debt moratorium is backfiring.

Ukraine

Ukraine offer close to being tabled

IFR 2076 28 March 2015 to 3 April 2015 By

Ukraine is aiming to set out the broad terms of its proposed debt restructuring to bondholders within a few weeks of a whirlwind tour of the US and Europe by the country’s US-educated finance minister Natalie Jaresko, according to several sources close to the situation.

Citi

Argentina debt fight rages on

IFR 2076 28 March 2015 to 3 April 2015 By

Citigroup may have narrowly avoided losing its operating licence in Argentina, but bondholders are still between a rock and a hard place after the latest court rulings on Argentina’s debt.

China

Fees plummet on China Re IPO

IFR 2076 28 March 2015 to 3 April 2015 By

A bidding war for the Hong Kong listing of China’s biggest reinsurer has raised concerns that intense competition is making it harder for IPO sponsors to recoup their costs.

European Union flags

EMIR clearing mandate set for 2016

IFR 2076 28 March 2015 to 3 April 2015 By

Europe’s swaps clearing obligation looks set to be further delayed – potentially to 2016 – as regulators and lawmakers thrash out the final details for regulatory technical standards (RTS) within a legal framework that provides no equivalent to the No-Action relief that eased the implementation of a US mandate two years ago.

MoneySupermarket

You're so not MoneySuperMarket

IFR 2076 28 March 2015 to 3 April 2015 By Graham Fahy

An attempted £100m sale of shares in MoneySuperMarket by founder Simon Nixon on Wednesday has revealed an emerging sense of caution among investors. Nixon was forced to reduce the number of shares on offer, before finally conceding defeat and pulling the deal entirely when investors refused to meet his price.

IFR Magazine Top News in Full (subscription required)

People & Markets

BlackRock logo

Asset managers fight SIFI designation

IFR 2076 28 March 2015 to 3 April 2015

Three of the world’s biggest asset managers – BlackRock, Vanguard and PIMCO– have rejected the notion that they pose a systemic threat to the global financial system and dismissed suggestions that they be heavily regulated like large banks to mitigate the risks posed.

Ruth Porat

Porat ditches Morgan Stanley for Google

IFR 2076 28 March 2015 to 3 April 2015

Google wanted Ruth Porat, one of the highest ranking women on Wall Street, as its new chief financial officer and was willing to pay up to get her. The internet search giant will pay Porat US$70m in total compensation, according to regulatory filings with the Securities and Exchange Commission. That’s seven times her current compensation as the financial chief at Morgan Stanley.

HSBC bank logo

HSBC goes back to its Midland roots

IFR 2076 28 March 2015 to 3 April 2015

HSBC will move 1,000 senior bankers to Birmingham after deciding to locate its UK retail and commercial bank in the West Midlands city.

BNP Paribas headquarters in Paris

BNPP, HSBC, RBS living wills rejected as inadequate

IFR 2076 28 March 2015 to 3 April 2015

Living wills submitted by BNP Paribas, HSBC and the Royal Bank of Scotland were tagged by the Federal Reserve Board and the Federal Deposit Insurance Corporation for shortcomings, including the danger posed by derivative contracts that could not be resolved under the US bankruptcy code.

The US Securities and Exchange Commission (SEC) headquarters in Washington

SEC eases rules on stock offerings under US$50m

IFR 2076 28 March 2015 to 3 April 2015

US regulators have adopted a new rule that will scale back the states’ powers to police some public stock offerings, a move that advocates say will spur more capital-raising and critics claim that it could lead to more fraud.

    More from People & Markets

    Bonds

    Coca-Cola bottles

    US borrowers return home as European market loses lustre

    IFR 2076 28 March 2015 to 3 April 2015

    A costly currency swap and poor market conditions are taking the shine off the European bond market, sending US corporates that had been crossing the pond in droves back home for funding.

    Air France-KLM wins hybrid despite investor qualms

    IFR 2076 28 March 2015 to 3 April 2015

    Air France-KLM tested the depth of risk appetite in the corporate market on Wednesday, pricing an unrated hybrid deal despite a shaky backdrop and nervy investor chatter about the company’s motives.

    The company logo of the Bank of America and Merrill Lynch

    BofA Merrill confined by rocky senior market

    IFR 2076 28 March 2015 to 3 April 2015

    Bank of America Merrill Lynch had to make do with a smaller deal than its previous two trips to the senior euro market last Monday, as sentiment at the longer end of the curve showed little sign of improving.

    Chunky trade from Murray Energy eyed

    IFR 2076 28 March 2015 to 3 April 2015

    Three deals were expected to round out last week’s primary business on Friday and several issuers are already lining up to bring deals before Easter and Passover holidays, including a chunky commodity trade for coal miner Murray Energy.

    Spain's long linker sees muted demand

    IFR 2076 28 March 2015 to 3 April 2015

    The Kingdom of Spain issued its longest linker yet, though the deal received a relatively muted response against a backdrop of rising peripheral bond yields. 

      More from Bonds

      Loans

      Logo of Donbass Fuel Energy Co Holding (DTEK)

      Tough workout

      IFR 2076 28 March 2015 to 3 April 2015 By Sandrine Bradley

      Lenders are awaiting the outcome of Ukraine’s sovereign debt restructuring before embarking on billions of dollars of corporate financial restructuring in the war-torn region.

      Optimal Payments logo

      Optimal Payments takes €500m for Skrill buy

      IFR 2076 28 March 2015 to 3 April 2015 By

      Optimal Payments, a global provider of online and mobile payment processing transactions, is backing its €1.1bn acquisition of digital payment company Skrill with a five-year €500m term loan provided by Bank of Montreal, Barclays and Deutsche Bank, which underwrote the deal on an equal basis.

      thetrainline.com logo

      Trainline signals middle market shift

      IFR 2076 28 March 2015 to 3 April 2015 By

      KKR’s decision to finance its acquisition of British rail ticket website thetrainline.com with a £275m loan provided by a club of 12 lenders shows the changes afoot in European middle market lending as multiplying loan providers reduces the traditional need to syndicate loans widely.

      LightSquared logo

      LightSquared bankruptcy exit plan earns court approval

      IFR 2076 28 March 2015 to 3 April 2015 By Nick Brown

      Wireless venture LightSquared on Thursday concluded three years of litigation with creditors, securing US Bankruptcy Court approval of a plan to end its Chapter 11 case and repay in full its largest creditor, Dish Network Corp chairman Charles Ergen.

      Post Holdings logo

      Investor demand for highly leveraged loans

      IFR 2076 28 March 2015 to 3 April 2015 By Jonathan Schwarzberg

      Strong investor demand for a US$700m leveraged acquisition loan for cereal maker Post Holdings shows that institutional investors are willing to buy the highly leveraged loans that US regulators are trying to curb.

      P&M: E Sun to epand operations in China, Vietnam

      30 March 2015

      E Sun Commercial Bank has received approval from regulators in China and Vietnam to open new branches, according to a bank statement released on March 22.

      LOANS: CMB Leasing mandates ANZ for US$300m aircraft financing

      30 March 2015

      CMB Financial Leasing has mandated ANZ for an aircraft financing of about US$300m for three planes – a Boeing 737, a Boeing 787 Dreamliner and an Airbus A320. The planes will be leased to two airlines.

      LOANS: Sharp cut likely in pricing of Sports Hub refi

      30 March 2015

      Sports Hub is looking take advantage of an improvement in its credit profile and a lack of deal-flow in Singapore to cut pricing significantly on its planned refinancing of a S$1.776bn (US$1.29bn) dual-tranche project loan. The pricing could go as low as half of the original level.

      More from Loans

      Equities

      The Royal Bank of Scotland (RBS) branch in central London

      RBS makes big dent in Citizens stake

      IFR 2076 28 March 2015 to 3 April 2015

      Royal Bank of Scotland took a big step towards meeting its goal of completely selling out of Citizens Financial by securing a strong pricing outcome on an upsized US$3.2bn sale of shares in the US regional bank.

      Qualitas Medical Group logo

      Malaysian IPO market shrinks

      IFR 2076 28 March 2015 to 3 April 2015

      The lethargic Malaysian IPO market is heading for an even slower year after indebted state fund 1MDB decided to look at buyers for its power assets as well as an IPO (see story) and Qualitas Medical Group postponed its US$150m float.

      Cellectis logo

      Cellectis caught in market sell-off

      IFR 2076 28 March 2015 to 3 April 2015

      French cancer therapeutics developer Cellectis had all the hallmarks of a hot biotechnology IPO – sponsorship from deep-pocketed pharmaceutical firms, a boost in size and a strong performance of the underlying shares over marketing.

      GF Securities logo

      China brokers power Asian ECM

      IFR 2076 28 March 2015 to 3 April 2015

      Investors flocked to onshore and offshore share sales last week from the red-hot Chinese brokerage sector, snapping up the chance to buy into the soaring A-share market at attractive valuations.

      Aabar monetises UniCredit holding

      IFR 2076 28 March 2015 to 3 April 2015

      Aabar Investments has issued a combination of five-year and seven-year bonds exchangeable into UniCredit to raise €2bn, making it the largest exchangeable ever to come from an unrated issuer. (See Top News for further equity-linked market coverage.)

      Software company connects for US$100m

      IFR 2076 28 March 2015 to 3 April 2015

      inContact may have secured the ideal ticker, though the “SaaS” moniker has not secured the investor mindshare one would suspect. The call centre Software-as-a-Service (SaaS) provider, which last accessed the equity markets in May 2013, took advantage of momentum to reconnect with investors with a US$100m, seven-year CB.

      China: Fuyao float fetches US$951m

      IFR 2076 28 March 2015 to 3 April 2015

      Fuyao Glass Industry Group has raised HK$7.39bn (US$951m) from its Hong Kong IPO, after pricing it at the top of the indicative range.

      Greattown to sell CBs

      IFR 2076 28 March 2015 to 3 April 2015

      Greattown Holdings has obtained board approval to issue six-year convertible bonds of up to Rmb2.2bn (US$355m). Shareholders will review the proposal on April 13.

      More from Equities

      Derivatives

      DAX board at the stock exchange in Frankfurt

      QE drives options strategy shift

      IFR 2076 28 March 2015 to 3 April 2015 By

      A surge in European stock prices, driven by the ECB’s €1.1trn monetary stimulus package, is driving stark changes in equity derivatives strategies across the region. A rush of inflows into rallying equity markets is opening the door for more protection buying as investors seek to lock in gains, while call overwriting strategies that dominated flow in recent years are losing their appeal.

      A trader walks out of the CME Group

      NGL markets face liquidity test

      IFR 2076 28 March 2015 to 3 April 2015 By Mike Kentz

      Plummeting prices in the natural gas liquids sector could be shifting the dynamics of a nascent but booming hedging market for the products as participants say consumers could finally gain the leverage they need in a derivatives market that currently favours the big.

      The Chicago Board of Options Exchange (CBOE)

      ETNs boosted by VIX options slump

      IFR 2076 28 March 2015 to 3 April 2015 By

      Assets under management in exchange-traded products that track the CBOE’s Volatility Index increased in March as investors reverted to long volatility strategies ahead of what many see as triggers for an equity correction including US rate hikes and contagion from heightened volatility in other asset classes.

      CFTC clamps down on “untenable” reporting rules

      IFR 2076 28 March 2015 to 3 April 2015 By Mike Kentz

      The Dodd-Frank goal of a complete picture of swaps activity appears to be light years away. Chief regulator, the CFTC, is clamping down on industry compliance with newly established swaps reporting rules, just as market participants publicly complain to Congressional authorities that rules are too harsh.

      Tel-Aviv exchange plans derivatives boost

      IFR 2076 28 March 2015 to 3 April 2015 By Mike Kentz

      The Tel-Aviv Stock Exchange is banking on a derivatives build-out to stem a rising tide of Israeli start-ups exiting the country for more attractive public offering opportunities on foreign exchanges or looking to be acquired rather than waiting to list locally.

      More from IFR Derivatives

      IFR Latin America Special Report 2015

      IFR Latin America Special Report 2015

      Rather like the best Spaghetti Westerns, the usual suspects are present in Latin American finance – along with a familiar plot line on the tussle between order and chaos along an unruly frontier.   

      All Special Reports

      The IFR Awards 2014

      IFR Global 2014 Cover - Awards Page

      UK

      Markets sleepwalk as British election looms

      Saft: Britain’s lesson may soon be that politics will matter again.

      Auto ABS

      ABS: Busy March bumps up Q1 volumes

      A busy March pushed up Q1 issuance volumes in the European structured finance space to a decent total of around €22bn-equivalent of bonds placed. This covers all asset sectors, including consumer assets, CLOs, CMBS and secured corporates.

      BlackRock logo

      Asset managers fight SIFI designation

      Three of the world’s biggest asset managers – BlackRock, Vanguard and PIMCO– have rejected the notion that they pose a systemic threat to the global financial system and dismissed suggestions that they be heavily regulated like large banks to mitigate the risks posed.

      HSBC bank logo

      HSBC goes back to its Midland roots

      HSBC will move 1,000 senior bankers to Birmingham after deciding to locate its UK retail and commercial bank in the West Midlands city.

      China

      China eases housing tax, lending rules to fight downturn

      (Reuters) - China on Monday courted home buyers with a bigger tax break as it cut downpayment requirements for the second time in six months, stepping up a fight against sliding house prices that is imperiling the world’s second-biggest economy.

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

      The Bullring Fence

      IFR 2076 28 March 2015 to 3 April 2015

      AFTER MONTHS OF poring over plans to ring-fence its UK retail and commercial banking operations to meet regulatory requirements, HSBC has decided to send 1,000 of its bankers to Coventry – well about 20 miles west of there actually, to Birmingham.

      DealWatch

      DealWatch Awards 2014

      The Dai-ichi Life Insurance company has won Issuer of the Year, while Nomura Securities has been chosen House of the Year in the Thomson Reuters DealWatch awards for 2014.

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      US still cold on China-led infrastructure bankVideo

      The US pivot to Asia hits a hiccup with the new Beijing-led Asian Infrastructure Investment Bank as Washington and Tokyo are not keen on joining. Tara Joseph reports.

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      Heinz buys Kraft FoodsVideo

      The takeover will create the world’s fifth largest food and beverage company, Kraft Heinz. Analysts expect more M&A in the packaged food sector. Fred Katayama reports.

      All Spotlight

      IFRFFL

      IFR Fantasy Football League Update

      By IFR Fantasy Football League Secretary General

      As the Premier League breaks for international duties with eight game weeks remaining, it is still the Born Strikers of Thomas van den Born comfortably in the lead.

      All IFR FFL