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Thursday, 30 July 2015

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IFR ECM Roundtable 2015

IFR European ECM Roundtable 2015

IFR’s Europe, Middle East and Africa ECM Roundtable was held on June 25 just as Greece had caused European debt issuance to slump. Yet this was an upbeat discussion held amid a flurry of issuance.

IFR Future of IBD Roundtable 2015 Cover Image

IFR Future of IBD Roundtable 2015

IFR’s Future of IBD Roundtable, covering the primary origination and advisory businesses (capital markets underwriting and advisory), was a fascinating foray into a key set of client-facing businesses. These are businesses that may not have been a target for re-regulatory endeavour but they are businesses that have nonetheless been directly impacted by strategic efforts afoot in play across the industry as a result as banks seek to manage the seminal transformation from bloated revenue-seeking institutions to lean return-seeking institutions.

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Upfront

A China International Capital Corp branch

Litmus test

IFR 2093 25 July to 31 July 2015

The planned US$1bn Hong Kong IPO for China International Capital Corp, once the most influential investment bank on the mainland, is shaping up as an excellent barometer of foreign demand for all things related to China’s capital markets.

Top News

greece eurozone

Relief rally hits well before Greece crisis is over

IFR 2093 25 July to 31 July 2015 By

Debt market bankers reacted with unadulterated relief last week after Greece on Monday made €7bn of repayments and primary activity quickly cranked into gear as investors turned risk-on again. But there are plenty of voices warning the party may have started too soon and headline risks remain.   

restructuring ukraine privatbank

PrivatBank trades blows with investors

IFR 2093 25 July to 31 July 2015 By

PrivatBank’s insistence on protecting retail depositors at the expense of international creditors is threatening to push the Ukrainian bank into default, after investors rejected the lender’s attempt to restructure its debt.

IPO

Ferrari IPO showroom opens

IFR 2093 25 July to 31 July 2015 By

Ferrari started rolling towards its long-awaited US$1bn IPO last week by filing initial documents with the SEC, but investors will have to wait at least three months before they can place orders in the sportscar maker.

HY bonds softabnk

European high-yield clears €7bn debt pile-up

IFR 2093 25 July to 31 July 2015 By Robert Smith

The European high-yield market coped with a tidal wave of supply as banks cleared an enormous backlog of junk-rated debt before activity grinds to an enforced halt in August.

sainsury

Sainsbury shops around for best price

IFR 2093 25 July to 31 July 2015 By ,

A new sterling offer from J Sainsbury brought the corporate hybrid market back to life on Thursday, after a combination of interest-rate and Greece-related volatility put a swift halt on new supply in recent months.

Default worries close door to E&P names

IFR 2093 25 July to 31 July 2015 By

US oil exploration and production companies are again seeing their access to debt capital markets shrink, after a slide in oil prices put worries about defaults back on the radar.

Trafigura logo is pictured in the company entrance in Geneva

Troubling times for Trafigura

IFR 2093 25 July to 31 July 2015 By , Kane Wu, Carol Zhong

Commodity trading giant Trafigura Beheer is facing further scrutiny over its China operations as it looks to attract lenders to a US$1.6bn multi-tranche refinancing.

china IPO equities

CICC kicks off delayed IPO

IFR 2093 25 July to 31 July 2015 By

China International Capital Corp has filed its long-awaited application for a US$1bn Hong Kong listing, kicking off a challenging deal in a market still reeling from weeks of turmoil.

derivs china

Corporates extend China hedges

IFR 2093 25 July to 31 July 2015 By

International corporates are hedging their Chinese exposures for as long as a decade through the rapidly developing offshore renminbi market to protect earnings and investments. Increased hedging, including the increase in duration of hedges where five years had been considered long, is driven by a backdrop of looser monetary policy and a potential devaluation of the currency.

Greece bonds

Greek bank bondholders stake claims

IFR 2093 25 July to 31 July 2015 By

Bondholders in Greek banks are bracing themselves for possible restructurings of the institutions that could see them face losses, after the Greek government and its creditors in effect admitted that the four major lenders needed to be recapitalised.

IFR Magazine Top News in Full (subscription required)

People & Markets

IFR Asia Credit Analyst Jonathan Rogers

Solar projects are a ray of light for India

IFR 2093 25 July to 31 July 2015

INDIA, UNDER PRIME Minister Narendra Modi, is embarking on a renewable energy drive of staggering ambition. He’s aiming to ramp up energy production from renewables to a massive 200GW by 2022. The scale of that ambition is vast: the current levels of energy derived in India from renewable energy – largely consisting of wind and solar power – is estimated at around 6GW.

More steps to regulatory overkill

IFR 2093 25 July to 31 July 2015

THE MUCH-MALIGNED Volcker Rule finally came into existence last week despite a barrage of lawsuits, much gnashing of industry teeth, and countless protestations that the rule merely cements how little regulators, policymakers – and Paul Volcker – really understand about the functioning of capital markets.

Credit Suisse, UBS, Standard Chartered shares since May 1 2015

​Thiam holds fire at Credit Suisse

IFR 2093 25 July to 31 July 2015

Credit Suisse’s new chief executive Tidjane Thiam refrained from outlining exact details of his plans for the Swiss bank when delivering second-quarter figures – his first set of results since joining last month – but dropped hints he is minded to follow the broad strategy adopted by arch rival UBS.

Morgan Stanley logo

Morgan Stanley rides equity trading wave

IFR 2093 25 July to 31 July 2015

Morgan Stanley was the latest US bank to report better than expected investment banking results powered by equity trading. Like its peers, Morgan Stanley cited particular strength in Asian markets. That could make the results harder to replicate going forward.

Lazard logo

Lazard outperforms Evercore

IFR 2093 25 July to 31 July 2015

Lazard led independent investment banks in challenging bulge bracket banks in the M&A advisory space in the second quarter as the total value of deals kept pace with the record levels seen in 2007. Lazard was again able to earn enough from advisory mandates to overtake Citigroup and rank fifth in the year to-date among top US banks.

    More from People & Markets

    Bonds

    LBOs great and small find a home

    IFR 2093 25 July to 31 July 2015

    A slew of LBO deals cleared the market with relative ease this week, as Balta, GFKL, Labco and Verallia all priced without having to resort to deep original issue discounts.

    RWE completes hybrid mission

    IFR 2093 25 July to 31 July 2015

    RWE successfully printed US$500m of hybrid debt last week, rounding off a financing exercise that will allow it to retire and replace another hybrid at the first opportunity, and avoid the wrath of S&P.

    Australian Prudential Regulatory Authority

    More capital pressure for Aussie majors

    IFR 2093 25 July to 31 July 2015

    Australia’s five biggest banks face higher capital adequacy requirements after the regulator lifted the minimum average risk weight on residential mortgages.

    Issuers make hay while the sun shines

    IFR 2093 25 July to 31 July 2015

    A second strong week of covered bond supply made this the busiest July in years, with more than €13bn raised so far as issuers make the most of an improved market backdrop.

    Logo of the International Capital Markets Association

    Banks push ICMA to include social bonds in principles

    IFR 2093 25 July to 31 July 2015

    Three banks are jointly lobbying for the International Capital Markets Association (ICMA) to expand its Green Bond Principles to include social and sustainability bonds within its remit, in a bid to give such instruments wider recognition.

      More from Bonds

      Loans

      loans

      Summer buzzin'

      IFR 2093 25 July to 31 July 2015 By

      Some €6bn of loans have flooded Europe’s leveraged loan market since mid-July, as lenders take advantage of more stable macro conditions to syndicate deals and sell down risk before an expected slowdown in August.

      StandardAero logo

      Sponsors find ways to beat lev lending guidance

      IFR 2093 25 July to 31 July 2015 By Jonathan Schwarzberg

      Issuers are increasingly tapping banks that are not subject to the federal regulators in charge of implementing leveraged lending guidance, which led to a slight increase in leverage levels in the second quarter.

      China Network Systems logo

      CNS buyout gets a re-run

      IFR 2093 25 July to 31 July 2015 By , Carol Zhong, Eric Zhao

      The five-year battle for control of Taiwan cable TV operator China Network Systems took a new twist last week as former suitors Far EasTone Telecommunications and Morgan Stanley Private Equity Asia raised funds for a revived bid. 

      Mercuria logo

      Mercuria sounds out on annual refi

      IFR 2093 25 July to 31 July 2015 By Kane Wu

      Mercuria Energy Trading is sounding out banks for its annual refinancing in Asia and is aiming to kick off syndication in a couple of months.

      Antares Capital logo

      Antares shops US$13.9bn buyout deal

      IFR 2093 25 July to 31 July 2015 By Leela Parker Deo, Jonathan Schwarzberg

      Antares Capital is lining up a US$13.9bn financing package that backs Canada Pension Plan Investment Board’s purchase of the middle-market sponsor finance platform from General Electric Capital and raises funds for future growth.

      Royal Mail post box

      Term loans becoming a rarity

      IFR 2093 25 July to 31 July 2015 By

      Term loans are becoming an increasingly rare breed of issuance in the European non-leveraged loan market as the continuing absence of M&A activity and attractive capital market alternatives lead corporate borrowers to eschew drawn term bank debt.

      John Keells trims resort loan

      IFR 2093 25 July to 31 July 2015 By

      John Keells Holdings, one of Sri Lanka’s leading conglomerates, has signed a US$395m seven-year project financing with sole mandated lead arranger and bookrunner Standard Chartered, after reducing the size from an originally planned US$445m.

      Anthem office building

      Anthem lines up US$27bn bridge

      IFR 2093 25 July to 31 July 2015

      Insurer Anthem has lined up a bridge loan of about US$27bn to help finance its US$54.2bn acquisition of health services company Cigna Corp.

      More from Loans

      Equities

      Technicians install solar panels on the roof of a house

      SunEdison plans global expansion

      IFR 2093 25 July to 31 July 2015

      SunEdison has launched an IPO for its international yieldco, TerraForm Global, while simultaneously agreeing to an acquisition partially funded by its domestic yieldco, TerraForm Power. The strategy to harvest cashflow from an ever-expanding empire of alternative energy yieldcos is evident, though those subsidiaries increasingly are bearing the costs.

      KONE logo

      Kone shareholder makes hasty exit

      IFR 2093 25 July to 31 July 2015

      UBS closed the gap with Goldman Sachs at the head of the EMEA ECM league tables with a summer selldown in Kone on Tuesday evening. Instead of enjoying a break under the Tuscan sun, its bankers sold around 5.4% of the Finnish elevator and escalator manufacturer in a deal valued at €864.67m.

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

      RBS accelerates Citizens exit

      IFR 2093 25 July to 31 July 2015

      Royal Bank of Scotland is preparing to sell another slice of its stake in Citizens Financial, a deal that could put it on track to completely exit the US regional bank much earlier than expected. Citizens last week filed for a secondary stock offering, coinciding with the release of its better than expected second-quarter results early on Tuesday.

      Sign board displays Toronto Stock Exchange stock information

      Canadian investors cool towards IPOs

      IFR 2093 25 July to 31 July 2015

      Dilawri Group of Companies, one of Canada’s largest automobile dealership owners, has successfully monetised a portion of its expanding empire through a C$75m (US$57.6m) IPO of Automotive Properties Real Estate Investment Trust. The offering was marketed on the basis of dividend yield and growth from lease renewals as well as potential future sales of dealerships into the REIT.

      Evergrande bottled water

      China: Amid IPO freeze, OTC is undiminished

      IFR 2093 25 July to 31 July 2015

      The PRC’s over-the-counter exchange continues to provide a platform for listings while China’s mainstream IPO markets are closed. Now bankers are urging smaller IPO candidates to consider switching to the OTC.

      Sunrun seeks to replenish solar pipeline

      IFR 2093 25 July to 31 July 2015

      SunRun is looking to the public equity markets to extend growth through an IPO targeting as much as US$268.5m in fresh capital. The largely primary offering builds on a recent securitisation that underpins economics of long-term power sales.

      Neos flourishes in market debut

      IFR 2093 25 July to 31 July 2015

      Neos Therapeutics benefited from strong investor demand that allowed for an upsize of its IPO.

      The Shake Shack restaurant in the Manhattan borough of New York

      Shack insiders take big bite out of IPO gains

      IFR 2093 25 July to 31 July 2015

      Shake Shack insiders are looking to sell 4m shares in the fast-growing “fine casual” hamburger chain in an upcoming first-time follow-on stock sale, even after a steep decline in the company’s share price from post-IPO highs in May.

      More from Equities

      Derivatives

      Basis hits three-year wides

      CDS loses sight of cash

      24 July 2015 By Mike Kentz

      Credit default swap indices referencing investment-grade debt have diverged from underlying bond spreads, raising concerns that the instruments may no longer be an appropriate hedge for cash market exposures.

      LCH.Clearnet logo

      European buyside embraces clearing

      IFR 2093 25 July to 31 July 2015 By

      A record number of European buyside firms cleared swap transactions through central counterparties in recent weeks, suggesting larger investors are declining to wait until the requirements become law late next year.

      More from IFR Derivatives

      Digital Edition

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      OMFIF

      Lessons from an acquisition

      By David Marsh, Managing Director and Co-founder of OMFIF

      What the FT takeover means for Japan and Asia.

      OMFIF

      Consequences of French weakness

      By David Marsh, Managing Director and Co-founder of OMFIF

      German Greek exit proposal sows discord.

      All Guest Columnists: OMFIF

      Credit Suisse, UBS, Standard Chartered shares since May 1 2015

      ​Thiam holds fire at Credit Suisse

      Credit Suisse’s new chief executive Tidjane Thiam refrained from outlining exact details of his plans for the Swiss bank when delivering second-quarter figures – his first set of results since joining last month – but dropped hints he is minded to follow the broad strategy adopted by arch rival UBS.

      Morgan Stanley logo

      Morgan Stanley rides equity trading wave

      Morgan Stanley was the latest US bank to report better than expected investment banking results powered by equity trading. Like its peers, Morgan Stanley cited particular strength in Asian markets. That could make the results harder to replicate going forward.

      Lazard logo

      Lazard outperforms Evercore

      Lazard led independent investment banks in challenging bulge bracket banks in the M&A advisory space in the second quarter as the total value of deals kept pace with the record levels seen in 2007. Lazard was again able to earn enough from advisory mandates to overtake Citigroup and rank fifth in the year to-date among top US banks.

      Hayes Libor trial is no open-and-shut case, defence argues

      The criminal trial of Tom Hayes, the former trader charged with Libor rigging offences, is not an open-and-shut case despite reams of written requests made by him to others to influence interest rates, a London court heard last Tuesday.

      James Saft - June 2014

      China pulling the levers nearest to hand

      Saft: Resolve to overawe markets into rising seems to harden daily.

      Logo of the European Banking Authority

      EBA unveils 2016 stress test plans

      The European Banking Authority has given a glimpse into the EU-wide stress tests that will be set for banks in 2016. It has also provided a draft sample of the 109 banks taking part in the separate transparency exercise later this year.

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

      Suits you

      IFR 2093 25 July to 31 July 2015

      WE ALL KNOW the lengths bankers take to ingratiate themselves with clients. During the abortive tilt by Philip Green at Marks & Spencer more than a decade ago, Citigroup’s defence team led by Robert Swannell turned up at a results presentation dressed in the retailer’s suits. It clearly worked as Swannell went on to become M&S chairman.

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      Greece: EU unity at breaking point?Video

      French President Francois Hollande’s call for a new eurozone government to give extra drive to European unity is doing little to mask a growing sense of a continent fracturing on the Greek crisis. David Pollard reports.

      All Spotlight