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Monday, 20 November 2017

Talking junk

IFR 2210 18 November to 24 November 2017

For all the panicky headlines last week about the end of the world in junk bonds, the sector isn’t really in bad shape at all.

Top News

Bulls

Investors keep nerve as high-yield wobbles

IFR 2210 18 November to 24 November 2017 By , ,

Global high-yield markets were shaken by a number of pulled deals last week but investors insist it’s not yet panic time for the asset class.

Euro notes

Investors very sure about Verisure

IFR 2210 18 November to 24 November 2017 By ,

Investors piled into the €1.835bn leveraged loan and high-yield bond financing for Swedish alarms company Verisure last week, despite an aggressive structure that left many describing the deal as “top of the market” issuance.

Multiplan

H&F sweetens MultiPlan junk bond

IFR 2210 18 November to 24 November 2017 By

Private equity firm Hellman & Friedman had to sweeten the terms Thursday on an aggressive new junk bond that saddles one of its companies with another US$1.3bn of debt just to pay itself a dividend.

Cairge

'Underwriters' say Carige deal is back on track

IFR 2210 18 November to 24 November 2017 By

Banca Carige’s management scrambled to save the Italian bank’s capital-strengthening plan on Friday after the banks that provided volume underwriting for its €560m rescue capital increase balked at signing up for full underwriting.

PDVSA

Venezuela credit event leaves investors in uncharted waters

IFR 2210 18 November to 24 November 2017 By

Rating agencies and ISDA declared Venezuela in default last week, but with the sovereign continuing to pay debt, the situation for investors is anything but clear.

Green Bonds

Green bond issuance in 2017 hits US$100bn

IFR 2210 18 November to 24 November 2017 By

The Green bond market hit a milestone last week as issuance for the year passed the US$100bn mark, according to the Climate Bonds Initiative, an international organisation that promotes Green finance.

People walk past the R&D centre of Contemporary Amperex Technology Ltd (CATL) in Ningde, Zhejiang province, China.

Battery outfit to raise Rmb13bn from record ChiNext listing

IFR 2210 18 November to 24 November 2017 By ,

Battery giant Contemporary Amperex Technology is working on a record A-share IPO from China’s private sector, tapping into investor enthusiasm for new energy technology.

Reels of sewing thread

Stitch Fix forced to discount wares on IPO

IFR 2210 18 November to 24 November 2017 By

The fabric underlying the US IPO market is unravelling. Stitch Fix, a six-year-old online fashion store, became the latest victim of investor push-back, selling 8m shares at US$15 to raise US$120m, below the US$18–$20 targeted and less than the 10m shares launched.

Lexin joins shaky IPO pipeline

Lexin joins shaky IPO pipeline

IFR 2210 18 November to 24 November 2017 By

Chinese online micro-lender LexinFintech filed for a Nasdaq listing last week, joining an IPO pipeline that is already showing signs of indigestion after a glut of offerings from the sector.

BNP Paribas sign

BNP Paribas partners GTS for US Treasury trading

IFR 2210 18 November to 24 November 2017 By

BNP Paribas has partnered with electronic market-making firm GTS for US Treasury trading, cementing a new era of collaboration between banks and automated trading firms in an increasingly electronic market where technology is providing the competitive edge.

IFR Magazine Top News in Full (subscription required)

People & Markets

Banks face 'Kodak moment' from fintech

IFR 2210 18 November to 24 November 2017

Banks are facing seismic changes from the impact of new technology that is likely to see many collapse - akin to the near-death of Kodak from its failure to move with the times, a former boss of Barclays has warned.

Muted trading persists in Q4

IFR 2210 18 November to 24 November 2017

Tough trading conditions have continued during the fourth quarter, putting investment banks on track for another annual decline in revenues.

Bonuses set to swing higher

IFR 2210 18 November to 24 November 2017

It’s beginning to look a lot like Christmas for investment bankers with bonuses for this year set to rise as much as 20% over 2016 levels in some segments, according to consultancy Johnson Associates.

Koji Fujiwara, President and CEO of Mizuho Bank, core banking unit of Mizuho Financial Group, attends an interview with Reuters at the bank's headquarters in Tokyo, Japan.

Mizuho to slash jobs amid profit pressure

IFR 2210 18 November to 24 November 2017

Mizuho Financial Group will slash its headcount by around a quarter in the next decade in an effort to shrink its cost base and boost dwindling profitability.

Index test looms for China bonds

Index test looms for China bonds

IFR 2210 18 November to 24 November 2017

China’s efforts to open its domestic bond market to foreign investors may soon be rewarded with inclusion in some of the world’s biggest debt indexes.

    More from People & Markets

    Bonds

    Patience pays off for Volvo

    IFR 2210 18 November to 24 November 2017

    Volvo Car priced a €500m long seven-year trade at 2% after waiting out the high-yield market’s softening following the end of its roadshow on Wednesday.

    Week in Numbers - November 18 2017

    Week in Numbers - November 18 2017

    IFR 2210 18 November to 24 November 2017

    Salt brings 'aggressive' 10-year into HY wobble

    IFR 2210 18 November to 24 November 2017

    Swiss mobile operator Salt brought a €400m 10-year non-call five senior secured refinancing trade at 4%, pricing aggressively despite a soft backdrop that has seen telecoms names hit in particular.

    A Valiant effort with first standalone Swiss covered

    IFR 2210 18 November to 24 November 2017

    Valiant Bank on Wednesday brought the first Swiss franc-denominated contractual covered bond from a standalone domestic bank, garnering a large book for a popular deal.

    Investors drink up rare Italian in covered wave

    IFR 2210 18 November to 24 November 2017

    Friday the 17th might be considered unlucky in Italy, but Mediobanca’s decision to offer a rare covered transaction - only the fifth from the jurisdiction this year - paid off.

      More from Bonds

      Loans

      Euro notes

      Investors very sure about Verisure

      IFR 2210 18 November to 24 November 2017 By ,

      Investors piled into the €1.835bn leveraged loan and high-yield bond financing for Swedish alarms company Verisure last week, despite an aggressive structure that left many describing the deal as “top of the market” issuance.

      Japanese lenders warm to infra funds

      Lenders warm to infra funds

      IFR 2210 18 November to 24 November 2017 By Wakako Sato

      Infrastructure funds are gaining a foothold in the Japanese debt markets as the maturing solar power sector provides alternative lending opportunities for Japan’s liquid banks.

      Indian corporates switch to bonds as loans dry up

      IFR 2210 18 November to 24 November 2017

      Indian companies are finding it easier to raise funds through bonds than bank loans, as a surge in bad credit chokes off bank lending while investors seek higher-yielding investments for their cash.

      China: Shougang seeks two-year loan

      IFR 2210 18 November to 24 November 2017

      State-owned steelmaker Shougang has launched a two-year loan of up to US$300m.

      China: Huawei launches US$1.2bn bullet

      IFR 2210 18 November to 24 November 2017

      Huawei Technologies has launched a US$1.2bn five-year bullet loan.

      Blackstone acqn loan launches

      IFR 2210 18 November to 24 November 2017

      An A$715m four-year acquisition loan to back private equity firm Blackstone Group’s acquisition of a portfolio of logistics property assets from Goodman Group has been launched into general syndication.

      Australia: Royal Adelaide to refinance

      IFR 2210 18 November to 24 November 2017

      The sponsors of the Royal Adelaide Hospital are in talks to refinance the A$2.6bn (US$2bn) 84-month project loan ahead of the May 2018 maturity date.

      Australia: MINT seeks debut

      IFR 2210 18 November to 24 November 2017

      Hospitality company Minor International (MINT) is seeking a debut A$150m five-year term loan for refinancing purposes.

      More from Loans

      Equities

      Logos of Woodside Petroleum are seen at Gastech, the world's biggest expo for the gas industry, in Chiba, Japan.

      Woodside block lights up Aussie ECM

      IFR 2210 18 November to 24 November 2017

      Energy giant Shell capitalised on a rally in oil prices last week to offload its entire A$3.5bn (US$2.7bn) stake in Woodside Petroleum in Australia’s largest block trade since early 2015.

      Japan: Nissin Foods pre-markets IPO

      IFR 2210 18 November to 24 November 2017

      Cup noodle maker Nissin Group last Monday started premarketing a US$200m Hong Kong IPO of its China and Hong Kong business.

      China: Wintime to sell EB

      IFR 2210 18 November to 24 November 2017

      Wintime Holdings Group has proposed issuing three-year exchangeable bonds of up to Rmb5bn (US$755m) in Shanghai-listed Wintime Energy.

      China: SDIC Power plans rights issue

      IFR 2210 18 November to 24 November 2017

      SDIC Power has secured board approval for a proposed rights issue of up to Rmb7bn (US$1.05bn). The power producer plans to offer up to 1.49bn rights shares on a 2.2-for-10 basis. Credit Suisse Founder Securities is working on the transaction.

      China: Bank of Chengdu clears IPO hurdle

      IFR 2210 18 November to 24 November 2017

      Bank of Chengdu has cleared a China Securities Regulatory Commission hearing for a proposed Shanghai IPO.

      China: Jianpu prices IPO below range

      IFR 2210 18 November to 24 November 2017

      Jianpu Technology, a financial products search and recommendation service, has raised US$180m from a NYSE IPO after pricing it below the indicative price range.

      China: Hebei Construction IPO arrives

      IFR 2210 18 November to 24 November 2017

      Hebei Construction Group plans to start pre-marketing a Hong Kong IPO of about US$300m on Monday, according to people close to the deal.

      China: Cofco Womai to pre-market IPO

      IFR 2210 18 November to 24 November 2017

      Cofco Womai, an online grocery store under Chinese food giant Cofco, is set to start pre-marketing a Hong Kong IPO next Monday, according to people close to the deal.

      More from Equities

      Derivatives

      JPM seeks fixed income SI status under MiFID II

      IFR 2210 18 November to 24 November 2017 By

      JP Morgan has said it plans to become a systematic internaliser for all fixed income instruments under MiFID II.

      KVA added to TriOptima risk analytics

      IFR 2210 18 November to 24 November 2017 By

      Post-trade processing firm TriOptima has expanded its triCalculate credit risk analytics service to include capital valuation adjustment (KVA), which reflects the cost of regulatory capital over the lifetime of an over-the-counter derivatives trade.

      Astaldi slumps further

      IFR 2210 18 November to 24 November 2017

      Italian construction firm Astaldi’s €750m 7.125% senior unsecured 2020s plummeted further last week on confirmation of its financial and capital strengthening plans and a writedown of its Venezuelan assets.

      Buehler debuts, Hochdorf eyes hybrid

      IFR 2210 18 November to 24 November 2017

      Buehler made its bond market debut on Wednesday with a dual-tranche five and nine-year that tested the appetite of Swiss investors for Triple B rated paper.

      Singapore futures track MSCI benchmarks

      IFR 2210 18 November to 24 November 2017 By

      Singapore Exchange launched its first derivatives contracts offering exposure to multi-currency and multi-country emerging market indices last week.

      More from IFR Derivatives

      GNC struggles to find debt buyers

      17 November 2017 By

      Vitamins and supplements company GNC Holdings is struggling to find buyers for a US$1.2bn bond-and-loan sale to refinance debt, sources familiar with the matter told IFR on Friday.

      S&P threatens Viacom with junk rating

      17 November 2017 By

      Standard & Poor’s placed Viacom’s BBB- rating on creditwatch with negative implications Friday, pointing to the media company’s heavy debt load.

      M&A risk no obstacle for HIT's return

      17 November 2017 By

      Looming M&A risk did little to put investors off a dual-tranche issue from France’s HIT, with books closing at around the €4.1bn mark.

      Volvo

      Patience pays off for Volvo

      17 November 2017 By

      Volvo Car is expected to price a €500m long seven-year trade at 2% after waiting out the high-yield market’s softening following the end of its roadshow on Wednesday.

      RBC

      MOVES-Criqui leaves DB to join RBC

      17 November 2017 By

      Thomas Criqui, Deutsche Bank’s managing director and head of financial institutions group bond syndicate, has left the bank and is set to join RBC Capital Markets.

      IFR SNAPSHOT: Buy, sell, buy, repeat - for the moment

      17 November 2017 By

      What looked like the beginning of a rout in high yield earlier in the week is now - for the moment anyway - looking like investor indigestion.

      Not-so weak week

      17 November 2017 By Anthony Peters, BlockEx Capital Markets

      Nasdaq found another all-time high close yesterday at 6,793.291, now up 26.2% year-to-date despite some wags already marking the stock market wobbles of the previous few days as the beginning of the “big one”. 

      Morgan Stanley

      MOVES-Adubi heads to Morgan Stanley

      17 November 2017 By

      Ben Adubi has left Deutsche Bank to join Morgan Stanley’s public sector syndicate team, according to three sources familiar with the matter.

      Barclays

      Barclays achieves savings with S$200m T2

      17 November 2017 By Kit Yin Boey

      Barclays yesterday sold S$200m (US$147.6m) of 12.5-year non-call 7.5 bonds at 3.75% in its first issue of subordinated Tier 2 notes in Singapore.

      Bond issuance keeps pushing through investor fatigue

      17 November 2017 By ,

      The US dollar high-grade primary market showed some resilience on Thursday in the wake of an apparent bout of exhaustion earlier in the week.

      Multiplan

      Hellman & Friedman sweetens junk bond deal

      16 November 2017 By

      Private equity firm Hellman & Friedman had to sweeten the terms Thursday on an aggressive new junk bond that saddles one of its companies with another US$1.3bn of debt just to pay itself a dividend.

      ISDA panel says CDS payments triggered on Venezuela, PDVSA bonds

      16 November 2017 By

      A committee of the International Swaps and Derivatives Association (ISDA) ruled on Thursday that a failure to pay credit event had occurred with respect to bonds issued by Venezuela and its state-owned oil company PDVSA.

      PDVSA

      Industry panel rules Venezuela in default

      16 November 2017 By

      A committee of the International Swaps and Derivatives Association ruled on Thursday that Venezuela and state-owned oil company PDVSA have formally defaulted on their bonds.

      Andeavor draws big crowd on yield appeal

      16 November 2017 By

      Investors jumped all over Andeavor Logistics’ US$1.75bn trade, placing a massive US$12.7bn in orders for the three-parter and demonstrating the continued attraction of crossover names to a yield-starved bond buyer community.

      High-yield bond funds see fourth-largest outflow: Lipper

      16 November 2017 By

      US-based high-yield bond funds saw a net outflow of US$4.44bn in the week ended November 15, the fourth-largest weekly outflow on record, according to data from Lipper.

      ABS market bucks broader trend of credit weakness

      16 November 2017 By

      Heaviness in the corporate bond markets did not seem to spread to the US ABS market this week with deals inundated with investor demand and most issuers pricing new issues at tight levels.

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      Special Reports

      IMF/World Bank Report IFR+IMF+Report+2017+Cover+web
      Emerging market countries, where the IMF has concentrated much of its resources, reveal a strange state of affairs.

      Top 250 Borrowers Top+250+Borrowers+2017
      Normality redefined: There comes a time when things have been out of kilter with what would generally be construed as normal for so long that they begin to become accepted as ‘just the way it is’. And so it is in the debt markets. Few would claim that conditions are currently normal, although just what that actually means is open to question.

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

      Seconds out

      IFR 2210 18 November to 24 November 2017

      AFTER ALL THE trash talk, the showdown of the year took place last week. No, this wasn’t ex-Barclays man Sam Dean’s bout at a charity boxing night (he escaped with an honourable draw), but Deutsche Bank chief John Cryan’s meeting in Frankfurt with Adam Tan, CEO of China’s HNA Group, Deutsche’s major shareholder.