Thin secondary bond market liquidity spurred investors to step up their use of credit default swaps during the past month’s sell-off in US high-yield. There is, however, still a risk of substantial losses even though there has been no major change to underlying credit fundamentals.
Vascular Biogenics went public and then, all of a sudden, it did not. As a result of an unusual set of circumstances, Deutsche Bank and Wells Fargo, joint bookrunners on the Israeli biotech’s IPO, terminated their underwriting agreement with the company seven full days after pricing after a “substantial US shareholder did not fund payment” for shares it had agreed to purchase.
Alibaba Group has potentially increased the future payout from its financial services affiliate just weeks before its New York IPO is expected to be launched.
The European Commission has lowered capital charges for insurers and pension funds investing in securitisation, making it less punitive for them to hold the asset class, according to a final draft circulated among member states.
Argentina debt talks collapsed last week as disagreements over the price of its bonds and the absence of a government guarantee to honour payments on them left both sides calling it a day.
In a seemingly perverse game of musical chairs, online travel site operator Priceline Group has cinched US$1bn at the most favourable terms possible in the form of a seven-year convertible bond issue. The question is whether the banks that found a seat – Wells Fargo and Citigroup – were able to extract a profit on the trade.
Holdout investors’ legal battle with Argentina could get a lot messier should holders of newly defaulted debt decide to declare principal and interest immediately due. The move, known as acceleration, could push Argentina into a new restructuring on up to US$30bn in debt and significantly complicate efforts to put its decade-long debt woes to rest.
Russia’s largest lenders have been forced to put their international DCM businesses on hold in the face of sanctions from the West, with some bankers in those divisions fearing for their jobs if the political stand-off is not resolved in the next six months.
The number of investors buying crash protection against a sharp fall in stock markets over the coming months has risen to its highest level since October 2008, according to Bank of America Merrill Lynch’s fund manager survey for August, while investor cash holdings have risen sharply to 5.1% – their highest level since June 2012.
The global leveraged loan market has been hit hard and fast by wider capital markets volatility. Massive outflows from US high-yield bonds in recent weeks have prompted a pricing correction in US loans, which is filtering through globally and has led to a raft of deals, including a high-profile US$3.9bn M&A loan for Charter Communications, being postponed until September or sweetened to sell. Where the US leads, Europe and Asia tend to follow, as foreign companies have been raising funds in the huge, liquid US TLB market, which has offered more favourable terms for the past two years. Deals have been delayed worldwide and pricing and discounts have widened, eating into lead banks’ profits, as borrowers and arrangers gamble that ...