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Wednesday, 31 August 2016

Svenska Handelsbanken sign

Svenska joins Yankee surge in quiet day for US high-grade

30 August 2016 By Hillary Flynn

Sweden’s Svenska Handelsbanken joined the surge of Yankee banks tapping the US dollar bond market this month in what was Tuesday’s only primary deal.

EpiPen auto-injection epinephrine pens

EpiPen maker Mylan hires banks for debut euro bond

30 August 2016 By

Mylan has hired banks for a euro-denominated multi-tranche debut euro bond, a day after the under-fire drugmaker announced it would launch a generic version of its EpiPen allergy injection at half the price.

Saipem logo

European high-yield primary back in action after August break

30 August 2016 By Robert Smith

The European high-yield market restarted this week after its August lull, with Italy’s Saipem kicking off a roadshow on Monday and a sterling issuer planning meetings for later in the week.

General view of Helsinki

Finland's sevens shift can't escape negative treatment

30 August 2016 By Tom Porter

Finland could print the first negative yielding syndicated euro sovereign deal as soon as Wednesday, setting a new milestone for the European bond market.

Signs advertising homes, sold, for sale and under offer

RMBS buyers look to non-banks in lieu of BtL stalwarts

30 August 2016 By , Mariana Ionova

Faced with waning bond supply from established UK buy-to-let RMBS issuers, investors are pinning their hopes on alternative lenders and legacy portfolio sales to fill the void.

Logo of the Financial Stability Board

Swaps reporting barriers widespread, FSB reports

30 August 2016 By

Legal barriers to reporting transaction data in the US$493trn over-the-counter derivatives market remain widespread while authorities’ access to data held by trade repositories is still hindered in the majority of jurisdictions, the Financial Stability Board warned in a report published on Friday.

LOANS: Evonik set to replace acquisition loans with bonds

30 August 2016

August 30, 2016 (LPC) - German chemicals company Evonik Industries will issue €1.9bn of bonds to fund its US$3.8bn acquisition of the specialty and coating additives business of Air Products & Chemicals Inc, replacing acquisition loans signed in June.

LOANS: Dublin office acquisition backed with €144m loan

30 August 2016Updated: 30 August 2016

August 30, 2016 (LPC) - The acquisition of One Spencer Dock, a Grade A office building in Dublin’s Docklands area, is being supported by a €144m, five-year loan underwritten by ING Real Estate and DekaBank.

LOANS: Armacell launches repricing of €445m TLB

30 August 2016Updated: 30 August 2016

August 30, 2016 (LPC) - Luxembourg-based high-tech insulation firm Armacell has launched a repricing to slice 50bp off the margin on its €445m term loan B, banking sources said.

WinWater Home Mortgage logo

US$6bn list of mortgage bonds up for auction

29 August 2016 By

A US$6.2bn list of residential mortgage bonds goes up for auction on Tuesday in what will be the largest sale of its kind in nearly two years.

Morningstar logo

Morningstar eyes ratings push after getting SEC approval

29 August 2016 By

Morningstar hopes to expand its ratings business after winning Securities and Exchange Commission approval to rate the debt of corporations and financial institutions.

HSBC headquarters in London

UPDATE – HSBC executive pleads not guilty in US over forex scheme

29 August 2016

(Reuters) - A senior HSBC Holdings Plc executive pleaded not guilty on Monday to charges that he participated in a fraudulent scheme to front-run a US$3.5bn currency transaction by one of the bank’s clients.

Caesars Palace hotel in Las Vegas, Nevada

Caesars faces US$11bn in bondholder lawsuits

29 August 2016

(Reuters) - Shares in Caesars Entertainment Corp shed 16% on Monday after a US judge cleared the way for billions of dollars in bondholder lawsuits against the casino group to proceed, setting up a possible judgement as soon as Tuesday in New York.

Coca-Cola logo

UPDATE – Coca-Cola, three Yankees hit high-grade bond market

29 August 2016 By Hillary Flynn

Four borrowers were poised to raise US$7.8bn in the US high-grade bond market on Monday, upending expectations that issuance would be virtually shut down until after Labor Day.

P&M: RBS veteran Mehra joins Ratnakar Bank

29 August 2016

Brijesh Mehra, a veteran with RBS in India, has joined Ratnakar Bank as head of corporate, institutional and transaction banking. 

Apptio joins expanding SaaS IPO queue

26 August 2016 By

Cloud-based management software provider Apptio publicly filed for a US$75m Nasdaq IPO Friday, adding its name to a lengthening queue of tech deals slated for September and October.

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European Commission headquarters

MAR attacks

IFR 2148 27 August to 2 September 2016

The European Union’s market abuse regulation came into effect in July, with drastic implications for bond syndication both in Europe and beyond its borders.

Top News

European Union flags flutter outside the European Commission headquarters in Brussels

Junk bond issuers mull de-listings

IFR 2148 27 August to 2 September 2016 By Robert Smith

The trickle of high-yield issuers listing on offshore exchanges to circumvent new EU regulations may turn into a flood, as the burden of compliance scares away even US-listed companies and pushes market stalwarts to consider de-listing existing bonds.

21-25 W 34th Street, New York

Pre-crisis mortgage bonds still haunt investors

IFR 2148 27 August to 2 September 2016 By

A New York City property that investors were told would be home to an iconic Apple store has instead wound up stuck in a mortgage bond facing hundreds of millions in unpaid debt. Apple never built a store on the 34th Street site.

Meitu to test Hong Kong market

Meitu to test Hong Kong market

IFR 2148 27 August to 2 September 2016 By

The Hong Kong IPO of Meitu, a Chinese developer of smartphone apps, is shaping up as a key test of the city’s appeal as a listing venue for high-growth technology companies. Xiamen-based Meitu, which produces apps that allow users to retouch “selfie” photos, is looking to raise as much as US$0.8bn–$1bn in a deal expected at the end of this year.

Anbang Insurance Group

Anbang RFP stirs compliance debate

IFR 2148 27 August to 2 September 2016 By ,

The potential listing of an Anbang Insurance Group company in Hong Kong is dividing equity arrangers, as some rush to pitch and others feel the parent’s mysterious ownership structure raises too many risks.

A vendor sells lemons at her stall at a market in Bangkok

​Sales top IPOs as private equity cashes out

IFR 2148 27 August to 2 September 2016 By Robert Sherwood,

Private equity firms are increasingly choosing outright sales instead of IPOs when it comes to cashing out of their investments as ECM is unable to compete with buyers capitalising on accommodative debt markets.

The logo of commodities trader Glencore is pictured in front of the company's headquarters in the Swiss town of Baar

Coal hedge turns sour for Glencore

IFR 2148 27 August to 2 September 2016 By

Glencore’s disclosure of a US$395m mark-to-market loss on derivatives contracts hedging 55m tonnes of coal production raised concerns about the opaque nature of the company’s trading operations.

An artisan paints an idol of Hindu god Ganesh, the deity of prosperity, at a workshop ahead of the Ganesh Chaturthi festival celebrations

India backs down over SUUTI sales

IFR 2148 27 August to 2 September 2016 By S Anuradha

India relaunched its tender last week for the sale of US$8bn–$9bn of shares with a third drafting of a conflict of interest clause that had put banks off the planned privatisations.

A man rides an electronic bike past a billboard for the upcoming G20 summit in Hangzhou

G20 looks at GDP bond details

IFR 2148 27 August to 2 September 2016 By

GDP-linked sovereign bonds, whose principal and coupons fluctuate depending on the issuer’s economic performance, are closer to becoming a key part of financing after the G20 issued a paper tackling obstacles to their launch, which experts followed up with further discussion at the Bundesbank.

Polish national flag

Panda bonds take Pole position

IFR 2148 27 August to 2 September 2016 By

The Republic of Poland achieved a strong result for the first Panda bond issue from a European sovereign last week, offering proof that the onshore renminbi market can be an attractive funding option for non-Asian issuers.

Banca Monte dei Paschi Siena

BMPS numbers don't add up

IFR 2148 27 August to 2 September 2016 By Graham Fahy

Bankers working on Banca Monte Dei Paschi di Siena’s €5bn capital increase are struggling to come up with a structure that ensures the success of the share issue, while respecting the pre-emptive rights of its shareholders.

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People & Markets

A Wall Street sign is pictured outside the New York Stock Exchange

Heat builds for US banks to split roles

IFR 2148 27 August to 2 September 2016

Top US banks could face renewed pressure to split the roles of chairman and chief executive after the Financial Stability Board this month launched a peer review of best corporate governance practice.

Photo illustration of beer flowing from a bottle of Stella Artois into a glass, part of the Anheuser-Busch InBev group, seen against a SABMiller logo,

Megabrew deal lands US$2bn payday for advisers

IFR 2148 27 August to 2 September 2016

Brewers Anheuser-Busch InBev and SABMiller will pay almost US$2bn in fees to banks, lawyers, PR firms and others advisers to complete the largest consumer products takeover ever.

Barclays global finance head Langley to leave amid rejig

IFR 2148 27 August to 2 September 2016

John Langley, Barclays’ head of global finance and risk solutions (GFRS), is leaving after a decade at the firm, as the British bank rejigged the structure of its investment bank into two distinct units led from London and New York.

Bank Street sign

​Bankers braced for post-Brexit redundancies

IFR 2148 27 August to 2 September 2016

Bankers based in the UK who see their roles moved overseas because of strategic changes by their employers after Britain’s decision to leave the European Union have little chance of suing their firms for unfair dismissal.

UBS logo

UBS leads bank group working on blockchain plan

IFR 2148 27 August to 2 September 2016

Swiss bank UBS is leading a team of four of the world’s biggest banks developing a system to enable financial markets to make payments and settle transactions quickly using blockchain technology.

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    Bonds

    Disappearing yields

    Covered bond issuance surges

    IFR 2148 27 August to 2 September 2016

    Euro covered bond supply hit its highest level for almost three months last week as historically low funding costs drove an onslaught of long-dated mandates, with more touted to come.

    Hunt for bond yield helps credits on the cusp

    IFR 2148 27 August to 2 September 2016

    Investors are dipping down the credit curve to boost returns, allowing both Triple B rated borrowers and those at the upper rungs of the junk bond space to pay historically low yields.

    Yield hunters turn sights on Kiwi

    Yield-hunters turn sights on Kiwi

    IFR 2148 27 August to 2 September 2016

    New Zealand underlined its appeal last week as the world’s highest-yielding Triple A rated sovereign as it cruised to its NZ$2bn (US$1.46bn) target on a 2037 syndicated bond.

    UBS logo

    UBS spearheads callable senior debt for European banks

    IFR 2148 27 August to 2 September 2016

    UBS last week placed the first callable public-senior unsecured euro deal from a European lender, the latest sign of how a changing regulatory landscape is shaping the way banks raise funding.

    OHL bonds hold firm after Mexican audit

    IFR 2148 27 August to 2 September 2016

    Obrascon Huarte Lain’s bonds held steady after the Spanish construction company last Monday made public the outcome of an audit in Mexico, which found US$16m-equivalent of irregularities.

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      Loans

      Marketo logo

      PE firms put more capital into LBOs

      IFR 2148 27 August to 2 September 2016 By Leela Parker Deo, Jonathan Schwarzberg

      Higher company valuations and lenders wary of risky investments are pushing private equity firms to increase the size of equity contributions for leveraged buyouts to near historic highs in the face of fierce competition from cash-rich corporate buyers.

      Sri Lankan fans raise their national flags during a one-day international cricket match

      Sovereign gets largest syndicated facility

      IFR 2148 27 August to 2 September 2016 By

      The government of Sri Lanka made an impressive return to the loan markets after eight years to seal its largest syndicated facility after increasing its three-year loan to US$700m from a targeted size of up to US$500m.

      Libor floors in spotlight again after UK rate cut

      IFR 2148 27 August to 2 September 2016 By

      Lenders are once again focused on Libor floors on European investment-grade loans after the Bank of England cut UK interest rates to 0.25% from 0.5% in early August as part of its response to Britain’s shock vote to leave the EU in June.

      Xylem closes in on US$1.3bn bridge

      IFR 2148 27 August to 2 September 2016

      Commitments were due on Friday for water technology company Xylem’s US$1.3bn 364-day bridge loan.

      Johnson & Johnson logo

      J&J markets US$10bn revolver

      IFR 2148 27 August to 2 September 2016

      Conglomerate Johnson & Johnson is in the market to refinance the company’s existing US$10bn 364-day revolving credit facility.

      Topps nets new add-on

      IFR 2148 27 August to 2 September 2016

      The Deutsche Bank-led US$130m incremental term loan for baseball-card maker Topps has sold at a 99.5 OID.

      Germany: Steico to increase loan

      IFR 2148 27 August to 2 September 2016

      Wood construction materials firm Steico will increase its existing syndicated loan to fund an expansion to its laminated veneer lumber production.

      Ladbrokes sign

      UK: Ladbrokes amends £600m TL

      IFR 2148 27 August to 2 September 2016

      Bookmaker Ladbrokes has amended a £600m term loan, allowing the financing to be extended by a further six months to July 2018.

      More from Loans

      Equities

      An investor walks past a screen displaying stock information at the Saudi Stock Exchange

      Evolution not revolution for IPOs

      IFR 2148 27 August to 2 September 2016

      Changes to rules on bookbuilding and foreign investment in Saudi Arabia will be evolutionary rather than revolutionary, according to bankers focused on the region.

      CommScope logo

      Reverse enquiry prompts CommScope sale

      IFR 2148 27 August to 2 September 2016

      In the week’s only US follow-on stock sale, Carlyle Group offloaded 10m shares of CommScope in a US$291.9m block trade overnight on Tuesday struck at no discount to market prices.

      Postal Savings Bank of China branch

      Cornerstones pave way for PSBC

      IFR 2148 27 August to 2 September 2016

      Postal Savings Bank of China plans to sell about 70% of its Hong Kong IPO shares to cornerstone investors in what is shaping up to be the largest float globally in two years.

      IPOs queue up for September, October

      IFR 2148 27 August to 2 September 2016

      Expectations are building that September and October will see a surge in IPOs and follow-ons, helping to restore the fortunes of US equity capital markets after a largely disappointing 2016.

      PDC Energy joins Permian land rush

      IFR 2148 27 August to 2 September 2016

      PDC Energy last week became the latest E&P looking to the Permian Basin to extend future production oppportunities and did so in size. The company is paying US$1.5bn to purchase two privately held companies from PE energy specialist Kimmeridge Energy.

      Philippines: Pilipinas Shell to pre-market IPO

      IFR 2148 27 August to 2 September 2016

      Energy company Pilipinas Shell Petroleum, a unit of Royal Dutch Shell, plans to pre-market its IPO of US$300m–$500m at the end of next month or in early October.

      Malaysia: QSR intends to relist

      IFR 2148 27 August to 2 September 2016

      QSR Brands intends to relist on Bursa Malaysia through an IPO of over US$400m next year, according to two persons with knowledge of the plan.

      Malaysia: Sime Darby plans placement

      IFR 2148 27 August to 2 September 2016

      Multinational conglomerate Sime Darby plans to sell 5% of its share capital through a placement potentially worth M$2.37bn (US$590m) before the end of the year.

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      Derivatives

      STRUCTURED FINANCE: China Securities revives credit derivatives

      30 August 2016 By Ina Zhou

      China Securities has reopened the mainland’s credit derivatives market after a five-year pause, reviving interest in a product that failed to catch on after a 2010 pilot scheme.

      Logo of the Financial Stability Board

      Swaps reporting barriers widespread, FSB reports

      30 August 2016 By

      Legal barriers to reporting transaction data in the US$493trn over-the-counter derivatives market remain widespread while authorities’ access to data held by trade repositories is still hindered in the majority of jurisdictions, the Financial Stability Board warned in a report published on Friday.

      The Commodity Futures Trading Commission building in Washington, DC

      Hemp exchange gets CFTC go-ahead

      IFR 2148 27 August to 2 September 2016 By

      The US Commodity Futures Trading Commission has given a green light to the first US regulated platform for hemp derivatives by granting full swap execution facility status to the Seed Commodity Exchange.

      Swap dealers seek clarity on threshold change

      IFR 2148 27 August to 2 September 2016 By

      CFTC commissioner Christopher Giancarlo has criticised the regulator for failing to take steps to eliminate an automatic drop in the threshold used to calculate swap dealer registration requirements due to take effect in December 2017, or at least to extend the existing arrangements.

      The logo of commodities trader Glencore is pictured in front of the company's headquarters in the Swiss town of Baar

      Coal hedge turns sour for Glencore

      IFR 2148 27 August to 2 September 2016 By

      Glencore’s disclosure of a US$395m mark-to-market loss on derivatives contracts hedging 55m tonnes of coal production raised concerns about the opaque nature of the company’s trading operations.

      More from IFR Derivatives

      Digital Edition

      Access a digital edition of the latest IFR Magazine here.

      To read the IFR Magazine digital edition you will need to enter your details in the login section. If you have forgotten your password, or would like to find out more about IFR, please email ifr.clientsupport@thomsonreuters.com.

      Special Reports

      Asian Debt Capital Markets
      There is a clear driver behind the deals in Asia’s primary markets today, and that is the search for yield. From perpetual bonds in Singapore to subordinated Samurais in Japan and high-yield sovereign debt in Sri Lanka, investors are jumping at the chance to boost returns.

      Asian Bank Capital
      Bank capital has long been a hot topic in Asia, but the asset class has so far failed to ignite the kind of excitement that the Basel reforms once promised – at least outside of Australia. That is all about to change.

      Top 250 Borrowers
      Few would claim that the conditions in the capital markets could currently be described as normal. Even so, the underlying environment is both strong and deep. Includes IFR's Top 250 Borrowers ranking.

      Financing Sustainable Infrastructure
      Climate change has risen towards the top of the global policy agenda as the impact of rising temperatures is felt around the world. This is providing a strong impetus towards transitioning the world towards a low-carbon economy.

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

      Reality bites

      IFR 2148 27 August to 2 September 2016

      WITH MARKETS AS quiet as a Virgin East Coast train carrying Jeremy Corbyn, Bellwether ended up browsing the TV schedules in search of inspiration. It duly arrived in the form of Selasi Gbormittah, who works in Deutsche Bank’s global transaction banking department and is also such a whizz in the kitchen that he’s starring on the new series of The Great British Bake Off.

      Opinion

      James Saft - June 2014

      Kiss it goodbye, the great buyback boom is on the wane

      The great stock buyback boom may be on the wane, undermined by falling company earnings.

      keith mullin

      Enough. Time for monetary-regulatory co-ordination

      CONSIDER THE FOLLOWING. Stream 1: Monetary policy actions that achieve the square root of zero, which deprive savers and pensioners of income, have no discernible impact on companies’ preparedness to borrow in order to invest in the real economy, on banks preparedness to lend or for that matter on consumers’ preparedness to engage in conspicuous consumption and which consequently conspire to kill off growth drivers.

      Keith Mullin Commentary image

      More action needed on gender diversity

      Are G-SIBs doing enough to promote and support gender diversity in their senior executive ranks? On the evidence of the EBA’s recent survey and my own analysis of the most senior management bodies of US and European G-SIBs, clearly not.

      ​Not waving but drowning? More DCM tweaks

      INVESTMENT BANKS CONTINUE to tweak their debt org structures to gird themselves better to benefit from – or should that be survive? – opportunities in today’s abnormal debt market conditions driven by unorthodox monetary policy, the complex regulatory environment and uncertain economic growth.

      Anthony Peters columnist format

      Bring on September 21

      Another day, another Fed official on the tapes, another turn-around in sentiment with respect to the timing of the next US rate increase.

      keith mullin

      Are the Chinese eyeing Lloyds Bank?

      How about this for a great summer sizzler? The UK government sells its 9.1% in Lloyds Banking Group within the stated schedule of 2016–17, coinciding with the departure of Antonio Horta Osorio for pastures new. There’s already been some chatter about how long the group CEO will hang on and I gather some institutional shareholders are keen for the board to accelerate succession planning.

      Top 250 2016

      Top 250 Borrowers 2016

      Strength and depth: Few would claim that conditions in the capital markets could currently be described as normal. Nor that they have they been so for a while now, given the various stimulus programmes that have been enacted around the world in an effort encourage growth in the face of economies flirting with stagnation.

      IFR Financing Sustainable Infrastructure Report 2016

      IFR Financing Sustainable Infrastructure Report 2016

      Sustainable infrastructure agenda moves centre-stage

      IFR Turkey Special Report 2016

      Turkey 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.

      All Latest Special Reports