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Saturday, 23 September 2017

Journey to the West

IFR 2202 23 September to 29 September 2017

In a rational market, increasing the supply of a product tends to lower the price. But for China’s offshore US dollar sovereign bonds, this has somehow had the opposite effect.

Top News

Chinese national flags flutter in front of the Great Hall of the People before the opening ceremony of Chinese People's Political Consultative Conference (CPPCC) in Beijing.

China closes in on sovereign return

IFR 2202 23 September to 29 September 2017 By ,

The People’s Republic of China is finalising the underwriting syndicate for its first US dollar sovereign bond since 2004, moving closer to a deal that has already had an impact on corporate credit curves.

APP heads back to debt market

APP heads back to debt market

IFR 2202 23 September to 29 September 2017 By ,

Asia Pulp & Paper, the group behind Asia’s biggest corporate default, is looking to sell US dollar bonds for the first time since 2001 as it seeks to rebuild relationships with international investors.

Noble Group logo

Noble CDS ruling dodges bilateral settlement

IFR 2202 23 September to 29 September 2017 By

ISDA’s determinations committee last week reiterated its decision to “dismiss” a default question relating to Noble Group, but managed to avoid the controversial bilateral settlement of credit default swaps by ruling that counterparties have insufficient information on the issuer’s extended loan to serve valid notices against each other.

ZhongAn swamped on Hong Kong IPO

ZhongAn swamped on Hong Kong IPO

IFR 2202 23 September to 29 September 2017 By

The first major financial technology IPO in Hong Kong has drawn overwhelming demand from both institutional and retail investors, showing the city’s ability to support high valuations for new-economy companies.

South African flag

Tie-up overshadows South Africa return

IFR 2202 23 September to 29 September 2017 By

South Africa sold US$2.5bn of bonds on Tuesday in its first transaction since its downgrade to junk status - but all the chatter was about the line-up of the bookrunners.

The entrance to the Toys "R" Us Times Square store is seen in New York

Playtime over for Toys 'R' Us

IFR 2202 23 September to 29 September 2017 By , Jonathan Schwarzberg

Toys ‘R’ Us has agreed a US$3.125bn debtor-in-possession financing as it seeks to restructure US$5bn of long-term debt.

NBG

Greek bank close to re-opening trade

IFR 2202 23 September to 29 September 2017 By

National Bank of Greece is close to mandating a €300m-€500m three-year covered bond, according to sources familiar with the matter, in what would be the first Greek bank bond sold since 2014.

A Hapag-Lloyd container being loaded

Debt-laden Hapag-Lloyd to launch US$400m rights issue in days

IFR 2202 23 September to 29 September 2017 By

Hapag-Lloyd will launch its US$400m rights issue in the next few days, as the shipping giant seeks to bring down debt that has ballooned as a result of its merger with Middle East peer UASC.

A car from Invitation Homes is shown parked outside a rental home

SEC probes home valuations in mortgage bonds

IFR 2202 23 September to 29 September 2017 By

Regulators have asked Blackstone subsidiary Invitation Homes, one of the largest US landlords, to provide information on how it values homes that end up bundled into mortgage-backed bonds.

Bain preps Asia’s largest buyout

Bain preps Asia’s largest buyout

IFR 2202 23 September to 29 September 2017 By , Wakako Sato

Bain Capital’s proposed ¥2trn (US$18bn) acquisition of the memory-chip business of Japan’s Toshiba is set to stretch the boundaries of Asian leveraged finance as the region’s largest buyout.

IFR Magazine Top News in Full (subscription required)

People & Markets

Record investment banking for Jefferies

IFR 2202 23 September to 29 September 2017

Independent investment bank Jefferies reported a record three months for investment banking and defied expectations with only a modest slide in third-quarter trading results.

The logo of Swiss bank UBS is seen at an office building in Zurich, Switzerland.

UBS doubles down on China JV

IFR 2202 23 September to 29 September 2017

UBS Group’s top investment banker is looking to its onshore Chinese securities venture to drive growth in an uncertain period for global investment banking.

Credit Suisse overhauls IBCM in Europe

IFR 2202 23 September to 29 September 2017

Credit Suisse has appointed Mathew Cestar and Jens Welter co-heads of its investment banking and capital markets (IBCM) business in Europe, the Middle East and Africa as part of a raft of leadership changes.

Window closing to change US stress test for 2018

IFR 2202 23 September to 29 September 2017

Hope is fading that the US Federal Reserve will make changes to its annual stress test of major banks in time for it to be used in 2018.

BAML promotes O'Neil in Europe leadership rejig

IFR 2202 23 September to 29 September 2017

Bank of America Merrill Lynch has promoted Jim O’Neil, who previously ran the UK government body that managed the taxpayers’ holdings in bailed out banks, to co-head its corporate and investment bank in Europe.

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    Bonds

    A sign for the 'Deutsche Bahn' building is pictured near main train station in Erfurt, Germany.

    Deutsche Bahn broadens Kangaroo market

    IFR 2202 23 September to 29 September 2017

    Deutsche Bahn pushed this year’s record tally of Australian corporate bond offerings further down the track on Thursday with a A$600m (US$480m) Kangaroo debut, the biggest so far for a European corporate issuer.

    Lawsuit worries delaying Syngenta bond: report

    IFR 2202 23 September to 29 September 2017

    Syngenta (Ba2/BBB-) delayed its dollar bond another week amid concerns that investors could be subordinated to claimants in lawsuits against the company, CreditSights said in a report.

    Miller Homes passes UK housing acid test

    IFR 2202 23 September to 29 September 2017

    Miller Homes sold a £425m dual-tranche trade last week, with most investors happy to brush aside some of their concerns about the UK housing market, though the deal came at the smaller end of size expectations.

    Financial bond deals priced in the week ending September 22

    IFR 2202 23 September to 29 September 2017

    Pricing dateIssuerAmountMaturityCoupon (%)ReofferSpread (bp)Yield (%)Pricing stepsNIP (bp)Book sizeRatingsBookrunnersDistribution US DOLLARS                           Sep 18 2017 Athene Global Funding (TAP) US$400m Jul 1 2022 3

    3M grabs investor attention with tender offer and M&A bond

    IFR 2202 23 September to 29 September 2017

    A US$2bn three-part deal by 3M with bond maturities of 5.5, 10 and 30 years that funded a tender offer garnered books of US$6.6bn on Thursday.

      More from Bonds

      Loans

      The entrance to the Toys "R" Us Times Square store is seen in New York

      Playtime over for Toys 'R' Us

      IFR 2202 23 September to 29 September 2017 By , Jonathan Schwarzberg

      Toys ‘R’ Us has agreed a US$3.125bn debtor-in-possession financing as it seeks to restructure US$5bn of long-term debt.

      Mercuria embarks on twin goal

      IFR 2202 23 September to 29 September 2017 By Carol Zhong

      Swiss commodities company Mercuria Energy Trading has mandated 11 banks on a US$850m loan to refinance and extend a multi-tranche facility signed last November.

      Hong Kong: HIFH goes tighter on new loan

      IFR 2202 23 September to 29 September 2017

      A HK$3bn-equivalent 364-day loan for Hong Kong-listed brokerage Huarong International Financial Holdings has gone into limited syndication at tighter pricing than a club facility still in the market.

      Hong Kong: Kingboard returns after two years

      IFR 2202 23 September to 29 September 2017

      Hong Kong-listed Kingboard Chemical Holdings is back for a HK$5bn (US$640m) four-year loan, two years after raising a HK$6bn refinancing facility.

      China: Eight for Formosa Chem loan

      IFR 2202 23 September to 29 September 2017

      Formosa Chemicals Industries (Ningbo) has allocated a US$155m-equivalent five-year term loan after attracting eight Taiwanese banks in general syndication.

      China: CAGR Gas debuts for US$120m

      IFR 2202 23 September to 29 September 2017

      Natural gas utility CAGR Gas (Hong Kong) is making its market debut for a US$120m three-year loan, with Far Eastern International Bank as mandated lead arranger and bookrunner.

      China: BAIC completes registration

      IFR 2202 23 September to 29 September 2017

      State-owned Beijing Automotive Group is still awaiting consent from lenders to its request for a waiver on registration of its latest €265m five-year offshore loan with Chinese regulators after completing the same.

      China: JD.com picks four for debut

      IFR 2202 23 September to 29 September 2017

      JD.com, China’s second-largest e-commerce company, has mandated four banks on its debut loan of US$500m.

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      Equities

      The logo of the Chinese logistics company Best Inc is seen outside a local delivery hub in Beijing, China.

      Best not the worst

      IFR 2202 23 September to 29 September 2017

      Chinese logistics company Best raised half of the targeted amount from its NYSE IPO after investors refused to accept the pricey valuation the Alibaba-backed company had sought.

      UK: Warehouse REIT completes £150m fundraising

      IFR 2202 23 September to 29 September 2017

      Warehouse REIT wrapped up its £150m AIM IPO on Friday September 15, with a “fantastic book of demand” from a wide range of investors, including pension fund managers, wealth managers, specialist real estate investors and retail investors.

      Despegar.com takes flight on IPO

      IFR 2202 23 September to 29 September 2017

      Despegar.com, Expedia’s online travel partner in Latin America, converted investor enthusiasm for economic recovery in the region into high-end pricing of its IPO.

      Saudi Arabia: Green light for Arabian Waterproofing

      IFR 2202 23 September to 29 September 2017

      Saudi Arabia’s Capital Market Authority (CMA) has given the green light for the listing of 30% of Arabian Waterproofing Industries.

      Germany: Winter and Meyer sell 14.3% of Corestate

      IFR 2202 23 September to 29 September 2017

      Founder Ralph Winter and shareholder Christof Meyer sold 14.3% of investment group Corestate on Wednesday evening to increase the free-float and position the shares for a future move to Deutsche Boerse’s Prime Standard trading segment.

      UK: Charter Court covered on £220m float

      IFR 2202 23 September to 29 September 2017

      Books are covered for mortgage lender Charter Court Financial Services Group’s London listing that will raise £20m in fresh capital alongside selling of around £200m by shareholder Elliott International and members of management.

      Equities WIN 2202

      Week in numbers - September 23 2017

      IFR 2202 23 September to 29 September 2017

      UK: Central Asia Metals raises capital for mine acquisition

      IFR 2202 23 September to 29 September 2017

      Central Asia Metals placed new shares on Friday to raise £113.04m to fund part of the cash consideration for its acquisition of Lynx Resources for US$402.5m. The placing was accompanied by a £24.4m sale of existing shares by non-executive director Kenges Rakishev.

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      Derivatives

      Noble Group logo

      Noble CDS ruling dodges bilateral settlement

      IFR 2202 23 September to 29 September 2017 By

      ISDA’s determinations committee last week reiterated its decision to “dismiss” a default question relating to Noble Group, but managed to avoid the controversial bilateral settlement of credit default swaps by ruling that counterparties have insufficient information on the issuer’s extended loan to serve valid notices against each other.

      Dealer swap margin hits US$1.41trn

      IFR 2202 23 September to 29 September 2017 By

      The 20 largest dealers have posted US$1.41trn of collateral backing their derivatives exposures, including US$977.5bn against uncleared swaps that are now subject to mandatory margin requirements.

      FX derivatives hide US$14trn of corporate debt

      IFR 2202 23 September to 29 September 2017 By

      Foreign exchange derivatives may be hiding up to US$14trn of debt from corporate balance sheets, exceeding the US$10.7trn of on-balance sheet dollar debt issued by non-banks outside the United States, the Bank for International Settlements said.

      Trumid adds continuous bond pricing

      IFR 2202 23 September to 29 September 2017 By

      Electronic bond-trading platform Trumid has launched a continuous pricing service for corporate bonds, which aims to ease a liquidity crunch by extending reliable bid/offer information to a broader range of fixed income securities.

      De Volksbank preps senior first

      IFR 2201 16 September to 22 September 2017

      De Volksbank has mandated banks for an inaugural senior trade, taking a further step on the long road to recovery after the Dutch government wiped out shares, Tier 1 securities and subordinated bonds in SNS Bank, its predecessor, in 2013.

      More from IFR Derivatives

      2017 IFR Awards logo

      IFR Awards 2017: Call for entries

      18 September 2017

      We invite banks to pitch now for the IFR Awards 2017.

      US junk bond sales top US$200bn so far this year: IFR

      22 September 2017 By

      Junk bond sales in the US so far this year topped US$200bn on Friday, putting supply some US$25bn ahead of the volumes seen over the same period in 2016, according to IFR data.

      UPDATE 1-US junk bond sales top US$200bn so far this year: IFR

      22 September 2017 By

      Junk bond sales in the US so far this year topped US$200bn on Friday, putting supply some US$25bn ahead of the volumes seen over the same period in 2016, according to IFR data.

      FreddieMac.jpg

      Freddie tests post-hurricane appetite for CRT deals

      22 September 2017 By ,

      Mortgage giant Freddie Mac is pre-marketing a new credit risk transfer (CRT) deal, which will test investor appetite for such securities after a bout of volatility in the sector following Hurricanes Harvey and Irma.

      Avantor cuts size of riskiest junk bond for VWR buy

      22 September 2017 By

      Avantor cut the size of the riskiest portion of a multi-billion junk bond sale backing its acquisition of VWR on Friday, after struggling to lure investors into the deal.

      IFR SNAPSHOT: Market finally embraces the quiet

      22 September 2017 By

      With the US and North Korea lobbing war rhetoric at each other, it seems like a good time this Friday morning for bond markets to take a breather.

      MOVES-CDPQ hires Mayans as head of private debt in Europe

      22 September 2017 By

      Canada’s CDPQ, formally known as Caisse de Depot et Placement du Quebec, has hired Luis Mayans as head of private debt in Europe.

      3M grabs investor attention with tender offer and M&A bond

      22 September 2017 By

      A US$2bn three-part deal by 3M with bond maturities of 5.5, 10 and 30 years that funded a tender offer garnered books of US$6.6bn on Thursday.

      Wind Tre eyes jumbo refinancing deal

      22 September 2017 By

      Italian telecommunications provider Wind Tre is preparing to launch a jumbo cross-border debt sale to refinance over €10bn-equivalent of debt, according to sources familiar with the matter.

      A car from Invitation Homes is shown parked outside a rental home

      REFILE-SEC probes home valuations in bonds

      22 September 2017 By

      Regulators have asked Blackstone subsidiary Invitation Homes, one of the largest US landlords, to provide information on how it values homes that end up bundled into mortgage-backed bonds.

      REFILE-EXCLUSIVE-T-Mobile, Sprint close to agreeing deal terms-sources

      22 September 2017

      T-Mobile US Inc is close to agreeing tentative terms on a deal to merge with peer Sprint Corp , people familiar with the matter said, a major breakthrough in efforts to merge the third and fourth largest U.S. wireless carriers.

      MOVES-FX trader Shah switches to BNP Paribas

      22 September 2017

      Neehal Shah has moved from Deutsche Bank to BNP Paribas as global head of G10 foreign exchange trading.

      Japan Post

      Japan Post covers retail book

      22 September 2017

      Japan Post Holdings has covered the chunky domestic retail portion of its ¥1.33trn (US$12.3bn) follow-on offering, putting the deal on course for a successful completion, according to a source close to the situation.

      Postal Savings Bank of China

      Postal Savings Bank of China prints Asia's biggest US$ AT1

      22 September 2017 By

      Postal Savings Bank of China (A2/A/A+) yesterday printed Asia’s largest bank capital offering with a US$7.25bn sale of Additional Tier 1 non-cumulative perpetual offshore preference shares.

      MOVES-Credit Suisse taps Wortendyke to replace Douthit

      22 September 2017 By

      Credit Suisse tapped Jason Wortendyke to replace Jeff Douthit as co-head of its Chicago office. Wortendyke will also continue to be global co-head of the diversified industrials and aerospace and defense group. Wortendyke will work with Todd Noffke, who has been co-head of Chicago since 2011.

      MOVES- Deutsche Bank hires ECM banker Smolkin from UBS

      21 September 2017 By

      Deutsche Bank named Justin Smolkin head of industrials, equity capital markets. Smolkin joins the bank from the ECM group at UBS. He will be based in New York and report to the co-heads of Americas Equity Capital Markets Jeremy Fox and Andrew Yaeger.

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