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Saturday, 23 February 2019

Flood warning

IFR 2272 23 February to 1 March 2019

After a brutal fourth quarter of 2018 and a very slow start to this year, US ECM syndicate desks are hoping to make up for lost time by bringing a flood of IPOs in the next three months.

Top News

A combination file photo shows Wells Fargo, Citigbank, Morgan Stanley, JPMorgan Chase, Bank of America,

US banks make equities land grab

IFR 2272 23 February to 1 March 2019 By

The big five US banks grabbed an extra US$4.5bn of revenue from equities trading last year - much of it at the expense of European rivals due to new European Union trading rules.

Egypt

Egypt makes right call as dollar bond strikes a chord

IFR 2272 23 February to 1 March 2019 By

Egypt’s decision to issue in US dollars ahead of a euro offering was vindicated after the sovereign sold a US$4bn triple-tranche transaction on Tuesday that was more than five times subscribed, enabling leads to wipe out a new issue concession at final pricing.

High leverage multiple on debt backing Godiva Japan buyout

Godiva serves up tasty multiple

IFR 2272 23 February to 1 March 2019 By

Cash-rich private equity firms and Japanese banks flush with liquidity are pushing the boundaries of leveraged finance in Asia, with an unusually high leverage multiple expected on the buyout of Godiva Chocolatier’s businesses in parts of the region.

Windstream office

Judge hands hedge fund shock win in Windstream default case

IFR 2272 23 February to 1 March 2019 By

A US judge ruled on February 15 in favour of an activist hedge fund that alleged telecoms company Windstream defaulted on its junk bonds in 2015, a decision that surprised the market and puts the company at increased risk of bankruptcy.

An Uber and Lyft car

Lyft parks IPO in front of Uber

IFR 2272 23 February to 1 March 2019 By

Ride-sharing unicorn Lyft is poised to lead a packed schedule of US IPOs next month with a US$2bn-plus offering that could set the stage for larger arch-rival Uber’s eagerly awited debut as early as the following month.

Non-bank nerves raise RMBS costs

Non-bank nerves raise RMBS costs

IFR 2272 23 February to 1 March 2019 By ,

There are early signs that the downturn in Australia’s housing market is raising the cost of funds for the country’s specialist mortgage lenders, with RMBS investors demanding a hefty premium for the latest non-bank offering.

Santander

No sign of AT1 contagion for Santander

IFR 2272 23 February to 1 March 2019 By

A €1bn five-year senior unsecured bond from Santander Consumer Finance last Tuesday showed no signs of investor ill will towards the Santander name following the bank’s decision not to call an Additional Tier 1 transaction the previous week, with the deal attracting some €4bn of demand.

Italy

Nexi starts IPO process

IFR 2272 23 February to 1 March 2019 By

It may be eerily quiet in Europe’s ECM market, but things are bubbling away in the background in Italy. Payment services company Nexi took a step further towards its planned €2.2bn-€2.5bn listing last Friday, filing a registration document to seek approval from the relevant Italian authorities, a banker on the deal confirmed.

J-REITs bulk up for 2020 Olympics

J-REITs bulk up for 2020 Olympics

IFR 2272 23 February to 1 March 2019 By

Japanese real estate investment trusts are rushing to raise equity financing to acquire assets in the hope that property prices will shoot up ahead of the Tokyo 2020 Olympics.

Fortive logo

Fortive lands US$1.25bn CB at sub-1%

IFR 2272 23 February to 1 March 2019 By

Fortive, like former parent Danaher before it, proved an opportunistic user of the capital markets by landing US$1.25bn at a sub-1% coupon from the sale of a three-year convertible bond on Tuesday.

IFR Magazine Top News in Full (subscription required)

People & Markets

Upturn helps Barclays quieten activist

IFR 2272 23 February to 1 March 2019

Barclays’ corporate and investment bank delivered a 26% jump in profits last year after a resilient trading performance in the last quarter, helping it fight back against an activist investor who wants it to slash its investment bank.

UBS to fight €4.5bn French penalty

IFR 2272 23 February to 1 March 2019

UBS will appeal the verdict of a French court that ordered the Swiss bank to pay criminal penalties of €3.7bn and civil damages of €800m for illicitly soliciting money in France and laundering proceeds stemming from a tax fraud between 2004 and 2012.

Guyett to take HSBC banking reins as veteran Phillips leaves

IFR 2272 23 February to 1 March 2019

Robin Phillips, HSBC’s co-head of global banking for the past 13 years, is leaving the bank at the end of July to leave Greg Guyett in sole charge of the business.

JP Morgan to unveil growth strategy

IFR 2272 23 February to 1 March 2019

JP Morgan is expected to talk up plans to take market share in investment banking and trading in 2019 when the bank holds its annual investor day on Tuesday.

PROFILE-Debt banker and Railway Man: A journey into North Korea

IFR 2272 23 February to 1 March 2019

North Korea is an unlikely destination for a football tour, but any Premier League club hoping to crack the market for replica shirts in Pyongyang might want to give Florian Schmidt a ring.

    More from People & Markets

    Bonds

    India: Takeover triggers payday for REC bonds

    IFR 2272 23 February to 1 March 2019

    REC, formerly known as Rural Electrification Corp, has launched a consent solicitation to try to persuade offshore bondholders not to exercise the change of control put on US$1.85bn of its bonds following the company’s acquisition by Power Finance Corp.

    Japanese investors head back to bonds

    Japanese investors head back to bonds

    IFR 2272 23 February to 1 March 2019

    A positive atmosphere is taking hold in the Japanese corporate bond market as trust banks and asset managers quietly regain their appetite for investments.

    China: Kaisa shakes off past as HY rally continues

    IFR 2272 23 February to 1 March 2019

    Kaisa Group Holdings returned to the international markets on Tuesday with its biggest offshore bond since 2017, making the most of the rebound in sentiment in Asia’s high-yield market.

    UED cancels consent solicitation

    IFR 2272 23 February to 1 March 2019

    United Energy Distribution, rated A– (S&P), has cancelled a planned consent solicitation involving A$920m of outstanding bonds due in 2023 and 2024 after investors were unable to provide approval in the time period required by the company.

    Incitec plans replacement bond

    IFR 2272 23 February to 1 March 2019

    Incitec Pivot, rated Baa2/BBB (Moody’s/S&P), has mandated ANZ and CBA to arrange investor meetings starting on February 28 in Australia and Asia for a potential Australian dollar bond offering.

      More from Bonds

      Loans

      High leverage multiple on debt backing Godiva Japan buyout

      Godiva serves up tasty multiple

      IFR 2272 23 February to 1 March 2019 By

      Cash-rich private equity firms and Japanese banks flush with liquidity are pushing the boundaries of leveraged finance in Asia, with an unusually high leverage multiple expected on the buyout of Godiva Chocolatier’s businesses in parts of the region.

      Hong Kong: CTFE offers same pricing as last year

      IFR 2272 23 February to 1 March 2019

      Chow Tai Fook Enterprises is seeking sub-underwriters for a HK$6bn-equivalent (US$769m) five-year term loan, offering the same pricing as a larger borrowing closed last March.

      China: Zhongyu Gas ups loan to US$583m

      IFR 2272 23 February to 1 March 2019

      Hong Kong-listed Zhongyu Gas Holdings has further increased a three-year term loan to US$583m-equivalent from US$449m-equivalent following commitments from five lenders.

      China: Aoyuan pays up for club

      IFR 2272 23 February to 1 March 2019

      Hong Kong-listed property developer China Aoyuan Group has invited banks into an unsecured US$150m–$200m-equivalent three-year term loan.

      China: BoCom Leasing launches onshore loan

      IFR 2272 23 February to 1 March 2019

      Bank of Communications Financial Leasing has launched an onshore US$275m three-year term loan.

      China: Fosun sounds for up to US$400m

      IFR 2272 23 February to 1 March 2019

      Conglomerate Fosun International has sounded banks for a US$300m–$400m three-year term loan.

      China: Asia Symbol to amend security

      IFR 2272 23 February to 1 March 2019

      Paper and pulp producer Asia Symbol China Holdings received consent from all its lenders to amend the collateral on a US$740m dual-tranche loan signed in November 2017.

      EG Group seeks TLB

      IFR 2272 23 February to 1 March 2019

      UK petrol station operator EG Group has launched a A$400m (US$286m) Term Loan B to partially finance its acquisition of the petrol business of Australian supermarket chain Woolworths.

      More from Loans

      Equities

      Top Glove debut gives CBs a hand

      Top Glove debut gives CBs a hand

      IFR 2272 23 February to 1 March 2019

      The first equity-linked bond issue from Malaysia’s corporate sector since 2010 has raised hopes that the country’s convertible market may finally be reopening.

      China: Qingdao Rural sets IPO price

      IFR 2272 23 February to 1 March 2019

      Qingdao Rural Commercial Bank has set a price of Rmb3.96 per share for a Rmb2.2bn (US$325m) Shenzhen IPO.

      China: HuaxiSec shareholder to sell stake

      IFR 2272 23 February to 1 March 2019

      A shareholder in Shenzhen-listed Huaxi Securities plans to offload a stake of up to 5% in the brokerage within six months, in a deal that could be valued at Rmb1.23bn (US$180m) based on the brokerage’s closing price of Rmb9.37 last Wednesday.

      China: High-speed railway IPO on track

      IFR 2272 23 February to 1 March 2019

      Beijing-Shanghai High-speed Railway has restructured its capital to pave the way for a mammoth A-share IPO later this year.

      China: CSRC approves two Shenzhen IPOs

      IFR 2272 23 February to 1 March 2019

      The China Securities Regulatory Commission has given IPO approvals to Allmed Medical Products and Yes Optoelectronics, both of which aim to list on the Shenzhen Stock Exchange.

      China: Kepei partly exercises greenshoe

      IFR 2272 23 February to 1 March 2019

      China Kepei Education Group, a provider of private higher education, has partly exercised the greenshoe in its Hong Kong IPO, bringing the total deal size to HK$878.5m (US$112m).

      China: CSRC okays Dongzheng HK IPO bid

      IFR 2272 23 February to 1 March 2019

      Shanghai Dongzheng Automotive Finance, a subsidiary of car dealership China ZhengTong Auto Services Holdings, has received approval from the China Securities Regulatory Commission to pursue a listing in Hong Kong, according to an announcement from the mother company.

      China: Aoyuan gives details on spin-off

      IFR 2272 23 February to 1 March 2019

      China Aoyuan Group will reserve 8.9% of the new shares in its property management services subsidiary Aoyuan Healthy Life Group to its own shareholders when it spins off the company via a Hong Kong IPO, the property company said last week.

      More from Equities

      A man walks past in front of a sign board of Mitsubishi UFJ Trust and Banking Corporation, the asset management unit of Japan's Mitsubishi UFJ Financial Group Inc. (MUFG), in Tokyo.

      MUFG's US regulator tightens its grip

      22 February 2019 By

      Mitsubishi UFJ Financial Group’s US bank violated the Bank Secrecy Act and its underlying regulations, US bank regulator the Office of the Comptroller of the Currency said on Friday.

      IFR SNAPSHOT-One IG deal ends busy week for issuance

      22 February 2019 By

      In an otherwise quiet Friday, one IG offering is slated for sale, which will add to an already busy week. The pace of IG volume in 2019 continued to surge, with four deals totaling US$6.650bn priced on Thursday, bringing weekly issuance to US$25.900bn, and monthly issuance to US$77.170bn, according to IFR data.

      Heinz and Kraft

      Kraft Heinz bonds drop on confluence of bad news

      22 February 2019 By

      Bonds issued by Kraft Heinz were sinking on Friday after earnings fell short of expectations and as investors fretted about a US$15bn writedown as well as an SEC accounting probe.

      A welcome to Las Vegas sign

      VEGAS LINE-Record numbers expected for Vegas ABS bash

      22 February 2019 By

      The US structured finance market will descend on Las Vegas next week for the SFIG Vegas conference, with potential reform of Fannie Mae and Freddie Mac and the growth of private label mortgages expected to be key topics this year.

      Barclays bank

      MOVES-Grimstone to leave Barclays

      22 February 2019 By

      Gerry Grimstone is to step down as a non-executive director of Barclays at the end of this month and will also cease his role as chairman of Barclays Bank PLC, the ring-fenced retail subsidiary of the UK-listed group.

      Boston Scientific logo

      Boston Scientific seeks funding for deleveraging plan

      21 February 2019 By

      Boston Scientific launched a five-part US$4.3bn no-grow bond Thursday as it looks to fund its acquisition of BTG and begin an 18-month deleveraging plan.

      A view shows the Standard & Poor's building in New York's financial district.

      S&P sees 2019 sovereign borrowing increasing to US$7.8trn

      21 February 2019 By

      S&P in a report on Thursday said it forecast that 2019 global sovereign debt borrowing will increase by 3.2% to US$7.8trn.

      Ecuador

      Ecuador bonds rally on IMF funding agreement

      21 February 2019 By

      Ecuador bonds rallied Thursday after the government and the International Monetary Fund inked a US$4.2bn funding deal that investors hope will eliminate the pressure to borrow from the bond market.

      A CSX gondola car full of coal moves through the switchyard in Brunswick, Maryland

      CSX tracks path through bond market amid leverage concerns

      21 February 2019 By

      CSX was in the market on Thursday with a two-part bond, but uncertainty around its deleveraging plan continued to spur caution when compared to its peers.

      Swedish flag/reuters

      Sweden draws in crowds despite tight Treasury print

      21 February 2019 By

      The Kingdom of Sweden made a triumphant return to the US dollar market after a year’s absence, bringing a US$2bn 2.5% three-year at one of the tightest spreads against Treasuries ever achieved by the issuer and other SSA borrowers.

      flags us europe.jpg

      Reverse Yankee issuance off to the races in 2019

      21 February 2019 By

      Reverse Yankee issuance has got off to a strong start this year, with volumes already at €14.7bn, according to IFR data.

      The headquarter of the European Bank for Reconstruction and Development (EBRD) is seen in London

      EBRD smashes own sterling record with second Sonia floater

      21 February 2019 By

      European Bank for Reconstruction and Development, which only reluctantly adopted issuance linked to Sonia in January, was back for a second helping on Thursday, smashing its own record in sterling with an £800m trade.

      CStone Pharma to pre-market IPO next week

      Addlife posts 99.3% take-up on SKr501m rights issue

      21 February 2019

      Swedish healthcare group Addlife reached a 99.3% take-up from shareholders on its SKr501m (US$53.5m) rights issue.

      BNP Paribas

      BNP Paribas racing through SNP target

      21 February 2019 By

      BNP Paribas bagged two further senior non-preferred deals in less than 24 hours, putting it more than halfway through its €14bn target for the format in 2019.

      Vallourec logo

      Vallourec assuages refinancing concerns, for now

      21 February 2019 By

      Short-term refinancing concerns around French industrial tube maker Vallourec were assuaged by the company’s earnings and an extension of its bank facilities.

      Australian flag is planted on a sandbag wall protecting a business on a flooded street in Brisbane.

      Aussie MBS issuer Pepper sells second euro tranche

      21 February 2019 By ,

      Pepper Group sold a €100m tranche off its latest non-conforming Australian RMBS on Thursday, the second time in three months it has tapped European investors.

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      Bank of the Year: JP Morgan

      Bank of the Year: JP Morgan

      IFR Awards 2018 By

      JP Morgan dominates investment banking in a way no other institution has in the modern era. Whatever the measure – wallet share, market share, revenue, profits, share price performance, or sheer presence – JP Morgan is the answer. For the second year running, it is IFR’s Bank of the Year.

      Read the write-ups on each award winner

      Special Reports and Roundtables

      IFR Awards 2018 IFR+Awards+2018+Homepage+Cover
      So here’s a funny thing. The one asset class that the great and good of the global economy seems to be worried about – leveraged loans – is just about the only one that has made money for investors in 2018.

      IFR IMF/World Bank Roundtable 2018 IFR+IMF+World+Bank+RT+2018+Cover+Homepage
      Delegates at the IMF’s annual meetings in Bali got an uncomfortable reminder of Asia’s vulnerability to unforeseen shocks with an earthquake in the small hours of October 11. The financial markets have been doing their part, too.

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

      Written in the stars

      IFR 2272 23 February to 1 March 2019

      INDIAN NON-BANKING FINANCIAL companies have had a tough time since Infrastructure Leasing & Financial Services defaulted last year, but not only did Shriram Transport Finance manage to tap the US dollar bond market last week, some of the NBFC stocks are now set to receive “astrological support”.