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Thursday, 26 May 2016

Gypsum Management & Supply logo

GMS prices 7m-share IPO at $21, low-end of range

25 May 2016

Housing data, though notoriously volatile, has provided a lift to home builders and suppliers.The release of favourable data for April on Tuesday provided momentum to private-equity backed wall board distributor Gypsum Management & Supply’s (GMS) IPO.

Axalta Coating Systems logo

Carlyle makes big dent in Axalta stake

25 May 2016

Private equity Carlyle Group cut another of its biggest public stock holdings Tuesday night, disposing of a US$700m stake in industrial and automotive paint maker Axalta Coating Systems.

JP Morgan offices in Canary Wharf

P&M: JP Morgan promotes duo after Norrey retirement

25 May 2016 By

JP Morgan has promoted two bankers to fill the gap left in its SSA business by the retirement of veteran banker Carl Norrey, according to an internal memo seen by IFR.

JCDecaux logo

Investors pile up on crossover names

25 May 2016 By

The scramble for yield was apparent in Wednesday’s corporate market when investors threw over €6bn of orders at deals from higher beta names.

Coca-Cola logo

Five high-grade issuers led by Coca-Cola in primary market

25 May 2016 By , Hillary Flynn

Two banks along with Coca-Cola Company, Brookfield Finance and Ventas Realty were in the high-grade market on Wednesday, looking to take advantage of a positive market backdrop.

Erste bank branch

Erste counters coupon concerns to land first AT1

25 May 2016 By ,

Erste Group Bank’s inaugural Additional Tier 1 bond was more than four times subscribed on Wednesday, negating fears that a comparatively slim coupon cover could prove a sticking point for investors.

Citi sign

Citigroup to pay US$425m over attempted benchmark manipulation

25 May 2016

(Reuters) - Citigroup and its affiliates have agreed to pay a collective US$425m to resolve civil charges the bank attempted to manipulate several key benchmarks, including the US dollar ISDAFIX, the Yen Libor and the Euroyen TIBOR, the Commodity Futures Trading Commission said.

European Central Bank (ECB) headquarters

ECB credit buying to start small, betting on issue boom

25 May 2016

(Reuters) The European Central Bank will aim to start small when it begins buying corporate debt in June, seeking first to lure new issuers and then slowly raise the monthly pace of purchases to €5bn–€10bn, several central bank sources have told Reuters.

P&M: Macquarie appoints new head of cash trading in Europe

25 May 2016 By Steve Slater

Macquarie has recruited Andrew Stancliffe as head of cash equities trading in Europe. He joins from Investec, where he had been head of trading for the past four years.

UniCredit Chief Executive Officer Federico Ghizzoni

UniCredit says CEO to step down

24 May 2016

(Reuters) - UniCredit Chief Executive Federico Ghizzoni is to step down, the Italian bank said on Tuesday, in a move expected to lead to a broader shake-up of the group and possibly a multi-billion euro capital increase.

Hertz logo

More high-yield issuers rush into primary market

24 May 2016 By

US high-yield issuers continued to pile into the primary market on Tuesday hoping to raise debt ahead of potential volatility in June, but conditions are not that easy as investors though open to risk-taking were price-sensitive and selective.

Russian national flag

UPDATE – Russia raises US$1.75bn in first Eurobond since sanctions imposed

24 May 2016

(Reuters) - Russia raised US$1.75bn on Tuesday in a Eurobond issue with foreigners the biggest buyers, a placement officials said showed there was international appetite for Russian assets despite Western efforts to scare off investors.

Spirit AeroSystems sign

US high-grade edges closer to one-month record

24 May 2016 By , Hillary Flynn

The US high-grade market inched closer to setting a new one-month record for supply on Tuesday as six borrowers led by UK bank HSBC jumped into the primary before the holiday weekend.

HSBC building in Canary Wharf

Investors put in over US$10bn of orders for HSBC's AT1

24 May 2016 By ,

Strong demand allowed HSBC to launch its US$2bn Additional Tier 1 deal well inside initial price thoughts on Tuesday.

Commodity Futures Trading Commission

UPDATE – US swaps regulator approves rule closing cross-border loophole

24 May 2016

(Reuters) - The US derivatives regulator on Tuesday said it had adopted a final rule on margins for uncleared swaps that cross national boundaries, as it aims to shield the country from risks created when offshore deals go sour.

City of Buenos Aires

Buenos Aires back in market after year's hiatus

24 May 2016 By

The City of Buenos Aires was poised to price an up to US$890m 11-year amortizing bond on Tuesday, its first deal in the capital markets in more than a year.

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Petrobras sets the ball rolling

Taking the plunge

IFR 2134 21 May to 27 May 2016

Holders of Petrobras’ new US$6.75bn two-part bond are fuming – and who can blame them? Multi-point drops on both the five and 10-year bonds, just a day after pricing, require some explaining.

Top News

Dell logo

Dell does well with US$20bn jumbo

IFR 2134 21 May to 27 May 2016 By Hillary Flynn

Computer giant Dell raised US$20bn through a six-tranche bond last week, completing the most critical part of an estimated US$41bn debt financing for its acquisition of EMC.

Petrobras headquarters

Petrobras strikes after Rousseff exit

IFR 2134 21 May to 27 May 2016 By

State oil company Petrobras last week became the first borrower from Brazil to sell foreign debt since June 2015 when it printed a US$6.75bn dual-tranche bond, but investors were left bemoaning its poor secondary market performance.

Lending Club logo

Citigroup declined to back Lending Club

20 May 2016 By Mike Kentz,

Citigroup told US regulators it was not willing to support troubled Lending Club after the marketplace lender’s CEO stepped down following a botched sale of loans.

Tesla Motors' mass-market Model 3 electric car

Tesla funds Model 3 with US$2bn follow-on

IFR 2134 21 May to 27 May 2016 By ,

Elon Musk’s Tesla Motors scored US$1.4bn from a sale of 6.5m shares last week that will help fund hyper-aggressive production targets for its new mass-market electric car. But the deal, Tesla’s largest since its IPO in 2010, was not without controversy.

Jjudge's gavel

SSA lawsuit may be first of many

IFR 2134 21 May to 27 May 2016 By

At least four more law firms may be lining up to sue a group of five banks for alleged collusion in bond trading, following a lawsuit brought by a US pension fund last week.

France

Short-sellers raise bets against Areva

IFR 2134 21 May to 27 May 2016 By Robert Smith

The steady drumbeat of bad news at Areva has made its bonds a target for short-sellers, which believe the worsening situation will hamstring the French government’s efforts to rescue the nuclear group.

lightbulb

Philips Lighting shines in Dutch pipeline

IFR 2134 21 May to 27 May 2016 By

Dutch issuance has dominated the European ECM pipeline so far in the second quarter, providing some of the year’s largest and highest-profile deals, yet activity in the rest of the region remains muted.

Pandas get real with GLP plans

Pandas get real with GLP plans

IFR 2134 21 May to 27 May 2016 By Ina Zhou

The Panda bond market, part of China’s drive to open its domestic capital markets by encouraging foreign issuers to raise onshore renminbi, may finally be on the verge of serving its intended purpose after a long period when deals have mostly been done for publicity reasons.

ChemChina headquarters

Few takers for ChemChina financing

IFR 2134 21 May to 27 May 2016 By Carol Zhong

The latest giant acquisition financing for a state-owned Chinese borrower is struggling in syndication, underlining the reluctance of global lenders to support China’s overseas ambitions.

Italy

Italian inflation-linked bond puzzles observers

IFR 2134 21 May to 27 May 2016 By

The Italian Republic raised eyebrows last week by bringing a syndicated inflation-linked bond to the market at time when expectations for growth and inflation in the eurozone are ebbing. 

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People & Markets

Greek debt: Up, up and stubbornly high

​Banks should cooperate on eurozone

IFR 2134 21 May to 27 May 2016

Bulge-bracket banks should collaborate more to come up with innovative and lasting solutions to the eurozone’s ongoing debt problems, according to a senior banker considered the father of the eurobond market.

IB product area revenues 2010-2016

Investment banks need 'surgical assessment' to lift returns

IFR 2134 21 May to 27 May 2016

Investment banks’ return on equity could slump to just 3.4% in 2017 from already depressed levels as falling revenues and rising regulation continue to pound the industry, a business consultancy says.

Jefferies logo

Regional US banks on hiring spree as big rivals cut back

IFR 2134 21 May to 27 May 2016

Smaller, middle-market focused banks are hiring new bond traders and salespeople, sensing a growth opportunity as bulge-bracket firms cut resources and become pickier about their clients.

Houlihan Lokey signage

​Big defaults mean big business for US restructuring shops

IFR 2134 21 May to 27 May 2016

The spike in the high yield default rate is bad news for companies struggling under an unsustainable debt load, but good news for restructuring shops. Among the biggest independent investment banks, including Houlihan Lokey, Lazard, PJT Partners, Evercore Partners, and

Steven Maijoor

ESMA warns EC over bond transparency phase-in

IFR 2134 21 May to 27 May 2016

The European Commission’s proposed phase-in approach for bond market transparency rules will have little impact and could undermine the primary objective of the regulations, one of Europe’s chief regulators has warned. 

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    Bonds

    Argenta Spaarbank branch

    Argenta tackles bail-in target

    IFR 2134 21 May to 27 May 2016

    Argenta Spaarbank last week raised €500m of Tier 2 capital in a sign that Europe’s smaller lenders are stepping up their issuance of loss-absorbing debt, though they may be subject to lower regulatory requirements than previously thought.

    Manulife draws biggest S$ book

    Manulife draws biggest Sing dollar book

    IFR 2134 21 May to 27 May 2016

    Manulife Financial Corp drew the year’s largest Singapore dollar order book for its S$500m (US$366m) issue of Tier 2 notes, as investors took the chance to earn a relatively high yield without worrying about possible equity conversion.

    LafargeHolcim logo

    LafargeHolcim drops 20-year as investors push back

    IFR 2134 21 May to 27 May 2016

    LafargeHolcim was forced to pull a 20-year tranche of a jumbo bond sale on Thursday due to lack of demand, the latest sign of investor resistance in the heavily supplied ECB-fuelled corporate market.

    Double Bs dominate supply

    IFR 2134 21 May to 27 May 2016

    It was a busy week for crossover credit last week, with Nexans, Hanesbrands and Telecom Italia all pricing deals at three-handle yields

    Zurich ends dearth of insurance sub, lags in secondary

    IFR 2134 21 May to 27 May 2016

    Zurich Insurance last Tuesday brought the insurance sector’s first euro-denominated subordinated bond since March, though it struggled to perform in the secondary market.

      More from Bonds

      Loans

      AdvancePierre Foods logo

      Second lien set for syndication

      IFR 2134 21 May to 27 May 2016 By Jonathan Schwarzberg

      Banks are considering underwriting second-lien deals again after the market virtually shut down in late 2015, creating a trend that has been described as BYOJ, or “bring your own junior debt” for sponsors.

      Offshore platform

      Oil firms survive redeterminations but challenges ahead

      IFR 2134 21 May to 27 May 2016 By Sandrine Bradley

      Exploration and production borrowers in the European oil and gas sector are still facing several challenges to their reserve-based lending (RBL) facilities, despite the April borrowing base redeterminations having less impact than was expected, industry experts say.

      Flock of birds

      Early birds take hold despite improved market

      IFR 2134 21 May to 27 May 2016 By Hannah Brenton

      Banks and private equity sponsors are targeting early-bird investors in European leveraged loans, in a sign of continued caution despite improved market conditions.

      Owl Rock Capital Partners logo

      Institutional demand spurs direct lending platforms

      IFR 2134 21 May to 27 May 2016 By Leela Parker Deo

      Institutional demand for private credit is propelling capital formation in the US middle market, as a flurry of newly created direct lending platforms enter the mix and existing alternative debt capital providers continue to raise money and add scale.

      A man walks past a row of Taiwan's national flags in Taipei.

      Taiwanese banks shy away from China

      IFR 2134 21 May to 27 May 2016 By Yan Jiang, Evelynn Lin

      Banks in Taiwan are preparing for a cutback in lending to China amid expectations that the new Democratic Progressive Party government could take steps to restrict their exposure, local bankers say.

      General Mills

      General Mills seals US$2.7bn deal

      IFR 2134 21 May to 27 May 2016

      Food manufacturer General Mills completed a US$2.7bn five-year revolver that refinances and combines the company’s existing credit facilities.

      Bayer logo

      Banks eye Bayer’s Monsanto bid

      IFR 2134 21 May to 27 May 2016 By

      News that German drugs and chemicals group Bayer has made an unsolicited bid for US seeds company Monsanto has raised hopes for a jumbo European M&A loan that could herald a wave of new deals in the second half of the year, bankers said.

      Abbott details bridge loans

      IFR 2134 21 May to 27 May 2016

      Drugmaker Abbott Laboratories detailed its US$17.2bn bridge loans backing the company’s US$25bn acquisition of medical device maker St Jude Medical.

      More from Loans

      Equities

      Digital Realty Trust logo

      Digital Realty sells on index entry

      IFR 2134 21 May to 27 May 2016

      Index-inclusion trades can make for sloppy execution. All participants know there is certain to be captive investor demand from index-hugging funds, and it is just as easy for other buyers to get in ahead of them.

      REUTERS/Luis Enrique Ascui

      Singapore IPO market is all REIT

      IFR 2134 21 May to 27 May 2016

      Singapore’s IPO market has had its busiest week in months following a prolonged drought of issuance. Frasers Logistics and Industrial Trust last week started pre-marketing a new issue of up to S$800m (US$585m), while Manulife US REIT made its trading debut.

      Chin Chu and William Foley

      Chui-Foley SPAC nets US$1.1bn on IPO

      IFR 2134 21 May to 27 May 2016

      CF Corp, the newly-designed special purpose acquisition company, had a strong conclusion to its US$600m IPO, of which there was little doubt as an earlier US$500m private round provided momentum.

      Cotiviti logo

      Cotiviti IPO leaves nothing to waste

      IFR 2134 21 May to 27 May 2016

      Cotiviti, which provides analytics-driven payment accuracy solutions for the healthcare and retail industries, is yet another sponsor-backed IPO aspirant hoping to lure investors with leverage at less extreme levels than many deals in recent years.

      Shell Midstream Partners logo

      Shell Midstream takes high cost funding

      IFR 2134 21 May to 27 May 2016

      Master limited partnerships remain capital-constrained, even the best in class. Having looked to private funding alternatives earlier in the year, MLPs are beginning to test the cost of funding in the public markets.

      Algeria Stock Exchange

      Stock market growth continues with IPO

      IFR 2134 21 May to 27 May 2016

      Algeria may soon have an entrant in the top 20 IPOs in the EMEA region this year following the launch on May 15 of an AD18.95bn (US$173m) offering for Societe des Ciments de Ain El Kebira.

      US Federal Reserve building

      Hawkish Fed frustrates ECM deal pick-up

      IFR 2134 21 May to 27 May 2016

      The hawkish drumbeat from the Federal Reserve last week shook market complacency about the pace of fed funds rate rises. These surprising developments have also added to the degree of difficulty for ECM issuers looking to exploit the current limited funding window, including at least six IPO aspirants this week.

      Delta Lloyd signage

      Netherlands: Delta Lloyd to sell stake in private bank

      IFR 2134 21 May to 27 May 2016

      Delta Lloyd is selling 30% of Van Lanschot in a marketed transaction that will considerably boost liquidity in the private bank’s shares. The transaction was flagged by the insurer at the beginning of the month and will provide a timely boost to its capital reserves.

      More from Equities

      Derivatives

      LCH catches up on portfolio margining

      23 May 2016 By

      Clearing house LCH has launched portfolio margining for interest rate products, enabling clients to offset exchange traded and over-the-counter derivatives for margin purposes.

      A trader looks at computer screens

      EQD hopes rest on second half

      IFR 2134 21 May to 27 May 2016 By

      Equity derivatives desks are on course for another disappointing quarter after a torrid start to the year drove a 15% slump in equity trading revenues to the end of March. Despite a so-far sluggish second quarter, dealers remain optimistic for an improved second half once Brexit clouds have lifted, as negative interest rates generate pent-up demand for structured notes that offer a yield pick-up.

      European Central Bank (ECB) headquarters

      Corporate leverage stokes credit sell-off fears

      IFR 2134 21 May to 27 May 2016 By

      A European corporate bond borrowing spree on the back of cheap funding costs has led to increased demand for cross-asset arbitrage, amid concern that spreads at current levels are insufficient to compensate for the risks of excessive leverage.

      US Federal Reserve building

      Fed proposes swap stay rules

      IFR 2134 21 May to 27 May 2016 By

      The Federal Reserve has proposed new rules that would require buyside firms to temporarily waive contractual termination rights on derivatives following the failure of global systemically important bank counterparties.

      LCH compresses US$1 quadrillion of cleared trades

      IFR 2134 21 May to 27 May 2016 By

      Clearing house SwapClear has reached the milestone of US$1 quadrillion of compressed interest rate swaps, removing a huge chunk of notional outstanding from the derivatives market.

      More from IFR Derivatives

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      Mullin on peer-to-peer lending

      US dollar bills

      P2P running out of steam? Thank God!

      12 May 2016

      Has the disruptive force of the P2P lending-cum-crowdfunding tornado been rendered impotent? It certainly looks that way. The alternative lending revolution that emerged from the global financial crisis as a grass-roots anti-bank movement has been curbed. The disruptors have been disrupted by the disruptees. 

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

      Plugged in

      IFR 2134 21 May to 27 May 2016

      THE ULTIMATE AIM of global bank regulators is to make banks so safe and boring that they look and act like utilities. Deutsche Bank, no stranger to regulators in recent years, appears to have taken this advice to heart.

      Opinion

      James Saft - June 2014

      The downward spiral of IPO generations

      Initial public offerings are getting riskier and riskier, with increased volatility in earnings and share prices.

      keith mullin

      Who'd want to be CEO of UniCredit?

      Does the quest to find a replacement for Federico Ghizzoni as chief executive of embattled UniCredit have just a touch of the ‘who’d want that job’ fatalism around it?

      Anthony Peters columnist format

      A positive tone for the rest of the week

      It doesn’t really matter where you look – other than the Athens Stock Exchange index which was off by 1.08% - stock markets were on fire on Tuesday, in a reversal to beat all Tuesday reversals. 

      James Saft - June 2014

      What’s so scary about falling population, growth and prices?

      It may be time to question our common faith that the only natural and acceptable path is growth: for population, for prices and for the economy itself.

      Anthony Peters columnist format

      Three cheers for Bayer's cheek

      There used to be a bon-mot which said that when General Motors sneezes, America catches a cold. Now it appears to be that when the Fed puts its hand in its pocket in search of a handkerchief, European equities die of pneumonia.

      Anthony Peters columnist format

      The anonymous governing monster grows

      Back from a weekend built around the splendid wedding of Mr and Mrs PC Jones, both rising stars at HSBC. Having, on the day, met many of their bright and talented peers, I can confirm that the future is in good hands. I’m not sure I can say the same for the present.

      keith mullin

      ICMA and the road to full market legitimacy

      TO DUBLIN, WHERE 1,000 people signed up to attend the International Capital Market Association’s annual conference. That’s a record, by all accounts. What’s now called ICMA has been going since 1969 and people fondly recall the former Association of International Bond Dealers annual jamborees. These days, the event is a more thoughtful and serious affair and it’s become one of the highlights of the capital markets calendar.

      Anthony Peters columnist format

      No end in sight

      TGINTA – Thank God It’s Not Thursday again… I found it hard to put my finger on what felt so horrible about yesterday until I spoke to a senior private wealth manager who at no time in our conversation mentioned the words “buying opportunity”.

      James Saft - June 2014

      Fed to markets: we mean it this time, really

      Taking a page out of the high school relationship handbook, the Federal Reserve has a message for financial markets: start paying attention to us or we might start dating your friend.

      Anthony Peters columnist format

      Panic vs complacency

      Panic is not a good look in markets but then neither is complacency and there is little doubt that bond strategists have been living and thinking in a world coloured by Janet Yellen’s reputation as a fully paid-up dove. 

      IFR Turkey Special Report 2016

      IFR Turkey Special Report 2016

      Star turn: In the fluid world of emerging markets, Turkey has this year presented more opportunities than its CEEMEA peers for investors to indulge their views.

      IFR SRI Special Report 2016

      IFR SRI Special Report 2016

      Green shoots: There are few subjects in the capital markets that have generated more headlines over the past few years than socially responsible investment.

      All Latest Special Reports