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Friday, 12 February 2016

Capital CityCapital City logo    

P&M: DBRS hires former Fitch CEO Joynt as chairman

12 February 2016 By

DBRS Group, the parent company of rating agency DBRS, has appointed the former CEO of Fitch Ratings as its executive chairman.

Deutsche Bank CDS hits four-year wides

11 February 2016 By

Credit default swaps referencing Deutsche Bank hit four-year wides this morning after plans to write down the value of its Postbank retail unit added to concerns surrounding the bank’s capital ratios and its ability to meet coupon payments on AT1 bonds.

LeasePlan logo

UPDATE – LeasePlan postpones €1.55bn LBO bond – sources

11 February 2016 By , Robert Smith

LeasePlan has postponed a €1.55bn-equivalent holding company bond backing its leveraged buyout after a savage sell-off in financial debt forced underwriters to yank the deal from market.

Schlumberger headquarters

US companies tipped to sell euro debt in record numbers in 2016

11 February 2016 By , Hillary Flynn

US companies are lining up euro deals that could give the moribund European corporate bond market a much needed boost after a dire start to the year.

BNP Paribas logo

Negative convexity: AT1's very own doom spiral

11 February 2016 By

The sell-off in Additional Tier 1 bonds has been exacerbated by a phenomenon known as negative convexity, which is putting pressure on the already shaky asset class and threatening to keep bond prices at low levels and funding costs high.

Starbucks logo

US primary bond market shut for fifth straight day

11 February 2016 By , Hillary Flynn

Bankers again scrapped plans to sell new US corporate bonds on Thursday, the fifth consecutive day without issuance as the primary market was rocked by broader volatility.

Moody's sign

UPDATE – Rating agencies see 2016 uptick in junk-bond defaults

11 February 2016 By

Rating agencies said Thursday they expect high-yield bond default rates to increase by the end of 2016, as depressed commodity prices keep borrowers under pressure.

Alstria Office logo

Triple B REITs struggle with premiums

11 February 2016 By

Real estate firms Carmila and Alstria could be putting their bond deals on ice as they struggle to accept the high premiums required to print Triple B deals in turbulent market conditions.

Deutsche Bank headquarters in Frankfurt

Rally in Deutsche Bank debt short-lived

11 February 2016 By

Deutsche Bank bonds restarted their downward march on Thursday after a rally following rumours of a debt buyback proved short-lived.

Rentenbank logo

Rentenbank slowly builds up steam

11 February 2016 By

Germany’s Rentenbank inched in stages towards the finish line before printing a US$750m five-year FRN.

Morgan Stanley logo

UPDATE – Morgan Stanley to pay US$3.2bn to settle financial crisis-era charges

11 February 2016 By Sarah Lynch

(Reuters) - Morgan Stanley will pay about US$3.2bn to settle charges that it misled investors in residential mortgage-backed securities that later soured during the financial crisis, federal and state officials said Thursday.

Mario Draghi

Systemic risk rises as European banks falter

11 February 2016 By

Concern over a new European systemic crisis has increased sharply in recent days as wider swap spreads and higher short-term funding costs indicated rising pressure on interbank markets.

HSBC building in Canary Wharf

HSBC drops plan for 2016 pay freeze

11 February 2016 By Carolyn Cohn, Richa Naidu

(Reuters) HSBC, Europe’s largest bank, has dropped plans to freeze pay this year while remaining cautious on the outlook for its revenues, a memo from Chief Executive Stuart Gulliver seen by Reuters said on Thursday.

Higher costs hit Societe Generale

11 February 2016Updated: 11 February 2016 By

Societe Generale disappointed investors on Thursday despite lifting its proposed final dividend by two thirds to €2 a share. The French bank’s shares slid 12.6% to close at €27.50 after it took a series of unexpected provisions totalling €400m for litigation and writedowns for certain oil and gas exposures.

Avant out with whispers for first rated ABS

11 February 2016Updated: 11 February 2016 By

Online lender Avant is out with initial price thoughts on a US$300m ABS that securitizes subprime personal loans, its first to sport a public credit rating.

P&M: RBC hires Copeland as head of oil and gas

11 February 2016Updated: 11 February 2016 By Steve Slater

RBC Capital Markets has appointed Martin Copeland as head of oil and gas in London, hiring him from Evercore.

All Latest news

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Italy

That (kitchen) sinking feeling

IFR 2119 6 February to 12 February 2016

At the end of January, Italian sovereign bonds tanked after the European Central Bank began making disgruntled noises about the worryingly high levels of bad loans permeating the country’s bloated banking system.

Top News

Financial Ministry palace in Rome

Italy goes the whole nine yards

IFR 2119 6 February to 12 February 2016 By

The Italian Republic priced a €9bn 2.70% 30-year benchmark on Tuesday that was lauded by bankers and underlines the extent to which the European Central Bank is able to allay market concerns around Italy in particular and the global economy in general.

Dell laptop

Dell's US$10bn loans test market

IFR 2119 6 February to 12 February 2016 By

The first US$10bn chunk of pro rata loans in a US$45bn financing package backing computer giant Dell’s purchase of data storage products maker EMC Corp is testing banks’ appetite for funded US dollar assets before tapping the institutional loan and high-yield bond markets.

A National Australia Bank (NAB) sign

Cheap and cheerful as UK IPOs return

IFR 2119 6 February to 12 February 2016 By

National Australia Bank breathed life into Europe’s 2016 IPO market last week, floating Clydesdale and Yorkshire Banking Group with a market capitalisation of £1.583bn. CMC Markets followed a couple of days later, with four more European pricings due this week.

Canary Wharf financial district

European banks' non-core losses hit €35bn

IFR 2119 6 February to 12 February 2016 By

Further losses linked to non-core assets at UBS, Credit Suisse and Deutsche Bank revealed over recent days – with more expected at Barclays when it updates the market next month ...

ChemChina headquarters

ChemChina smashes Asian record

IFR 2119 6 February to 12 February 2016 By

China’s largest chemical company is initially funding the deal entirely with debt through a mixture of recourse and non-recourse facilities, leveraging both its own balance sheet and that of its target.

A construction site in central Jakarta

Lippo misreads duration demand

IFR 2119 6 February to 12 February 2016 By

Lippo Karawaci’s fumbled attempt to extend its debt maturity profile has highlighted investors’ aversion to duration risk, pointing to the difficulties that the Asian high-yield market faces after a barren start to the year.

Ezubo logo

Fraud shatters China's P2P IPO dreams

IFR 2119 6 February to 12 February 2016 By ,

Last Monday, the state-run Xinhua News Agency reported that Ezubo, a peer-to-peer lending company in Anhui, had conned investors out of over Rmb50bn (US$7.61bn) through a Ponzi scheme.

Red Square

Russia bond sparks sanctions conundrum

IFR 2119 6 February to 12 February 2016 By

Investors are facing a conundrum if Russia decides to push ahead with plans to print a Eurobond this year, as bond market experts say that the money raised can be used to bypass Western financial sanctions on Russian companies.

Mask with colours of Columbia's flag

Colombia eyes bond as woes mount

IFR 2119 6 February to 12 February 2016 By

Colombia is preparing to tap the bond markets at a rough time, as a slide in oil prices has dented its fiscal accounts and is threatening the oil exporting nation’s credit standing.

Endurance International logo

Junk market faces Triple C test

IFR 2119 6 February to 12 February 2016 By

Leveraged finance bankers are chipping away at an up-to-US$30bn pipeline of high-yield bond sales at the fastest pace so far this year, but lower-rated credits remain a tough sell.

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People & Markets

Deutsche Bank headquarters in Frankfurt

Europe's banks trail behind US rivals

IFR 2119 6 February to 12 February 2016

Europe’s major investment banks underperformed their US rivals by a distance last quarter, signalling that market share gains by the big Wall Street firms in the past five years could accelerate in 2016.

Tidjane Thiam

'Perfect storm' hits Credit Suisse earnings

IFR 2119 6 February to 12 February 2016

Credit Suisse reported a SFr6.44bn pretax loss for the final three months of 2015 and chief executive Tidjane Thiam warned that “challenging” conditions in January could persist for the rest of the quarter, sending shares to their lowest point in over 20 years.

Jim Esposito

Goldman shake-up sees Esposito head securities strategy

IFR 2119 6 February to 12 February 2016

Goldman Sachs named Jim Esposito chief strategy officer in its securities division, a new role. Esposito was previously co-head of the global financing group, a role he assumed with Marc Nachmann after Stephen Scherr was named chief of strategy for the bank in 2014.

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

Bellwether

IFR 2119 6 February to 12 February 2016

IS IT A bird? Is it a plane? No, it’s a bond deal.

 Ralph Schlosstein

Evercore sees M&A surge continuing, despite volatile markets

IFR 2119 6 February to 12 February 2016

Volatility in capital markets in the first month of this year will not dampen the surge in merger and acquisition deal flow that powered record earnings for independent investment banks. At least that’s the view of Evercore Chief Executive Ralph Schlosstein.

    More from People & Markets

    Bonds

    BMW logo

    Private placements to the fore as public primary dries up

    IFR 2119 6 February to 12 February 2016

    Torrid conditions pushed blue-chip corporates to turn to private placements in January as elevated premiums dampened public issuance in what is normally one of the sector’s busiest months.

    Goldman Sachs sign

    Outlook bleak for crumbling financials supply

    IFR 2119 6 February to 12 February 2016

    Banks looking to raise funding in the European market are facing an increasingly torrid backdrop, with 2016’s volumes considerably lagging last year’s, putting issuers on the back foot just as they need to make a dent in their programmes.  

    Fallen angels loom over Europe

    IFR 2119 6 February to 12 February 2016

    Analysts expect billions of euros of investment-grade corporate bonds to come crashing down to junk, and while the market is better prepared than ever to smooth the transition, there is still scope for some nasty shocks.

    EasyJet beats volatility to secure debut bond

    IFR 2119 6 February to 12 February 2016

    UK low-cost airline EasyJet made its European debut on Tuesday, attracting more than €5bn of demand from bond investors desperate for new supply in a market thrashed by volatility.   After a near-three-week issuance hiatus, EasyJet sold a €500m no-grow seven-year bond despite jittery equity markets and oil price swings that left other issuers on the sidelines.  “EasyJet ticked most of the boxes, but the deal was still a challenge due to it being a Triple B debut issuer, and particularly in this market nothing is a slam dunk,” said Marco Baldini, head of European corporate syndicate and European rates syndicate at Barclays.  

    Macquarie set for debut

    IFR 2119 6 February to 12 February 2016

    Macquarie Bank is set to become the sixth Australian lender to sell covered bonds, potentially denominated in euros, after a round of European investor meetings, starting this Monday. Barclays, HSBC and Societe Generale are the arrangers.

      More from Bonds

      Loans

      SolarWinds logo

      Anxious investors want tighter terms

      IFR 2119 6 February to 12 February 2016 By Jonathan Schwarzberg

      Worried investors are calling for tighter terms and conditions on US leveraged loans as pricing continues to move higher for lower-rated companies while the market tries to digest a multi-billion-dollar logjam of deals from last year in a deteriorating macroeconomic environment.

      A Staples in Burbank, California

      Euro market braced for turbulence

      IFR 2119 6 February to 12 February 2016 By Hannah Brenton

      The European leveraged loan market has so far withstood the turmoil gripping the US market – but with large US loans, including cross-border deals, forced to flex terms considerably, there are concerns that the storm could be heading across the Atlantic.

      Virtus Partners logo

      Moves to improve loan settlement times

      IFR 2119 6 February to 12 February 2016 By Kristen Haunss

      Investors in the US leveraged loan market are seeking to cut the time it takes to complete a trade, as regulators warn that funds may not be able to meet redemptions during volatility.

      Pump jack

      Regulators to classify more energy loans as high-risk

      IFR 2119 6 February to 12 February 2016 By Lynn Adler

      US regulators are likely to classify more oil and gas loans as high-risk when they start a new bank portfolio review in early February, due to the fall in crude prices to a 12-year low since the previous review. This will cut credit access and escalate defaults for cash-starved energy companies, analysts and investors said.

      Kemi Adeosun

      Loans hammered by low oil prices

      IFR 2119 6 February to 12 February 2016 By Sandrine Bradley

      Local and international banks are closely monitoring loan exposure of around US$16bn to the country’s oil and gas sector after the finance minister said that Nigeria needs to borrow around US$9bn to fund its 2016 budget deficit and capital projects as low oil prices continue to hammer emerging markets finances.

      Dell laptop

      Dell's US$10bn loans test market

      IFR 2119 6 February to 12 February 2016 By

      The first US$10bn chunk of pro rata loans in a US$45bn financing package backing computer giant Dell’s purchase of data storage products maker EMC Corp is testing banks’ appetite for funded US dollar assets before tapping the institutional loan and high-yield bond markets.

      Dominion Resources logo

      Dominion taps for Questar buy

      IFR 2119 6 February to 12 February 2016

      Power producer Dominion Resources is backing its US$4.4bn acquisition of natural gas distribution company Questar with a US$3.9bn senior unsecured bridge and term loan facility. Mizuho and RBC committed to provide the debt financing.

      ​RBC and CIBC to finance Rona buy

      IFR 2119 6 February to 12 February 2016

      RBC and CIBC have arranged committed financing to back home improvement retailer Lowe’s C$3.2bn acquisition of Canada’s Rona.

      More from Loans

      Equities

      RBL Bank branch

      Past failings delay RBL Bank IPO

      IFR 2119 6 February to 12 February 2016

      India’s stock market regulator has delayed the US$150m–$250m IPO of RBL Bank over previous violations of disclosure rules, complicating efforts to complete the country’s first bank listing since 2010. 

      Mark Papa

      New oil SPAC looks to clean up

      IFR 2119 6 February to 12 February 2016

      Now seems an odd time to raise money to launch a new oil company. As crude prices have slumped to the 30s, US explorers have found access to capital markets funding choked off. In an effort to fill the funding gap created by the new price dynamic, E&P companies are ditching assets.

      Biotechs reopen US IPO market

      Biotechs break IPO dry spell

      IFR 2119 6 February to 12 February 2016

      The US IPO drought of 2016 came to an end on Tuesday night as BeiGene and Editas Medicine priced the year’s first new issues. Each was already well oversubscribed from the outset of marketing, with bankers taking extra measures to ensure positive outcomes.

      Chinese investors react

      China worries shutter IPOs

      IFR 2119 6 February to 12 February 2016

      In an announcement on the Stock Exchange of Hong Kong last Wednesday, the company said it would not proceed with the IPO due to excessive market volatility. It had been due to price the flotation after books closed last Tuesday.

      ArcelorMittal steel plant in Liege

      Luxembourg: ArcelorMittal steels itself for US$3bn cash call

      IFR 2119 6 February to 12 February 2016

      Goldman Sachs, Bank of America Merrill Lynch and Credit Agricole are providing standby underwriting for a US$3bn capital raise for ArcelorMittal as the steel manufacturer works to pay down debt. The fundraising comes alongside the US$1bn sale of a 25% minority stake in Spanish engineering group Gestamp.

      American Campus Communities logo

      American Campus builds room for growth

      IFR 2119 6 February to 12 February 2016

      It has been a long time since American Campus Communities sold stock, at least in a publicly marketed transaction. Nearly four years after having last done so, the student housing REIT provided an incentive for investors to participate in a roughly US$643.5m overnight follow-on offering.

      China: CR Pharma plans float

      IFR 2119 6 February to 12 February 2016

      China Resources Pharmaceutical Group plans a Hong Kong IPO to raise at least US$1bn, according to people close to the deal.

      Japan: LaSalle Logiport REIT benefits from yield focus

      IFR 2119 6 February to 12 February 2016

      LaSalle Logiport REIT has raised ¥105.58bn (US$892m) from an IPO of new investment units, priced at the top of the indicative range, according to sources close to the deal.

      More from Equities

      Derivatives

      JP Morgan Chase & Co. corporate headquarters

      Structured products go green

      IFR 2119 6 February to 12 February 2016 By

      Structured note issuers are responding to a scramble for yield in the growing market for socially responsible investments by expanding cross-asset efforts in bespoke products linked to benchmarks with strong environmental, social and governance credentials.

      US Treasury swap spreads (Bp)

      Swap spreads jump on Treasury inflows

      IFR 2119 6 February to 12 February 2016 By Mike Kentz

      A surge of demand for US Treasury bonds pushed 10-year yields to 12-month lows and narrowed the negative gap against Libor-based financing rates that took hold in September.

      London Stock Exchange

      MS's Ross to head LSE's Curve

      IFR 2119 6 February to 12 February 2016 By

      The London Stock Exchange Group has appointed Andrew Ross as chief executive officer of its CurveGlobal derivatives platform. Ross joins after 16 years at Morgan Stanley where he was most recently global head of agency listed derivative electronic execution and European head of clearing. 

      Hong Kong sets swaps clearing deadline

      IFR 2119 6 February to 12 February 2016 By

      The Hong Kong Monetary Authority and the Securities and Futures Commission have agreed a deadline of September 1 for the implementation of the first phase of Hong Kong’s mandatory clearing regime for OTC swaps as the jurisdiction prepares to fall in line with the G20 commitments agreed in 2009.

      Fund managers kick off SEC derivatives battle

      IFR 2119 6 February to 12 February 2016 By Mike Kentz

      Asset managers are bewildered by a recent Securities Exchange Commission proposal regarding the use of derivatives within mutual funds and are digging in for a drawn-out battle with the Commission regarding an eventual final rule.

      More from IFR Derivatives

      Digital Edition

      Access a digital edition of the latest print magazine here.

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      If you have forgotten your password, or would like to find out more about IF subscriptions, please email rm.clientsupport@thomsonreuters.com.

      Bank of the Year: UBS

      Bank of the Year: UBS

      IFR Review of the Year 2015 By

      How often has any bank been able to lay genuine claim to creating a benchmark for how the business is conducted? Faced with some tough decisions about its own future amid the chaos of the new order, UBS fashioned an innovative and sustainable operating model that is now a blueprint for others to follow. It is IFR’s Bank of the Year.

      IFR Awards 2015

      IFR Awards 2016

      IFR Awards dinner raises £1.22m for Save the Children

      01 February 2016

      The IFR Awards dinner on January 27 raised £1.22m for Save the Children with the banking community once again pledging large sums in support of the charity. Bank of the Year UBS and UBS Optimus Foundation together donated a record £800,000 to be named bookrunner.

      All IFR Awards 2015

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

      Bellwether

      IFR 2119 6 February to 12 February 2016

      IS IT A bird? Is it a plane? No, it’s a bond deal.

      Opinion

      James Saft - June 2014

      Desperately seeking alternatives to negative rates

      The basic problem with negative interest rate policy is that it gelds the banking system, says James Saft.

      John Plender

      Case for optimism rests on policy

      With Europe, Japan split, US and China can act.

      keith mullin

      Jes Men: Building a poor man’s JP Morgan

      Well that didn’t last long, did it?

      James Saft - June 2014

      Falling knives really do cut

      Buying shares that have been hit hardest is not a winning strategy, says James Saft.

      James Saft - June 2014

      The Geithner Asset Relief Program and the revolving door

      James Saft on JP Morgan’s loan to Tim Geithner.

      David Cameron

      After immigration, it’s London vs the euro area

      Europe starts preparing for future without the UK.

      OMFIF

      Europe’s three psycho-battles

      Spectre of ‘winner takes all’ in north-south split.

      keith mullin

      Goldman tools up for trouble

      DO GOLDMAN SACHS’s most recent executive shifts give away valuable clues as to how investment banks’ corporate and institutional clients will need to be serviced as this treacherous market gives rise to all sorts of doom and gloom scenarios and outlooks, and market-structure shifts in FICC call for new ideas?

      IFR

      BoJ - Experimental policy with a shock and awe focus

      Divyang Shah on Bank of Japan’s surprise negative interest rate policy.

      keith mullin

      One quarter’s earnings does not a strategy make

      If Aristotle were around today, he’d probably be a strategist or investment consultant.

      IFR Outlook for Indian Borrowers Roundtable 2016

      IFR Outlook for Indian Borrowers Roundtable 2016

      IFR’s Outlook for Indian Borrowers Roundtable took place in Singapore in December 2015. As with the Indian Credit Conference in Mumbai that had preceded it by a couple of weeks, the backdrop was IFR’s inaugural Indian Borrowers Survey, results of which are published in this supplement following the edited transcript.

      IFR India Offshore Financing Roundtable 2016

      IFR India Offshore Financing Roundtable 2016

      IFR’s most recent India Offshore Financing roundtable took place in Mumbai in late November 2015. It was well timed, in as far as it caught the market betwixt and between a series of capital markets, political and regulatory events that at one and the same time were creating a mixture of uncertainty and anxious expectation.

      All Latest Special Reports