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Saturday, 20 September 2014

Alibaba IPO

Chapeau!

IFR 2051 20 September to 26 September 2014

If Alibaba’s stock had popped dramatically in debut trading on Friday – or indeed gone the other way – the Monday morning syndicate (including this magazine) would have been out in force second-guessing the decisions made by the real bankers on pricing or allocations.

Top News

Alibaba

Alibaba's US$21.8bn IPO delivers

IFR 2051 20 September to 26 September 2014 By Stephen Lacey,

A conservative valuation stance and a partly superstitious approach to pricing, even in the face of overwhelming demand, ensured the long-awaited US$21.8bn NYSE IPO of Alibaba Group was a mostly seamless exercise last week.

AngloGold

AngloGold debacle tarnishes UBS and Goldman

19 September 2014 By Graham Fahy

Institutional shareholders have humiliated AngloGold Ashanti by forcing the miner to abandon plans for a huge capital increase and a spin-off of its international assets.

Fresenius

100% debt convertible bond trumps HY

IFR 2051 20 September to 26 September 2014 By

Fresenius Medical Care has illustrated the flexibility of equity-linked products by removing any threat of dilution from its €400m convertible bond issue. By repurchasing the embedded option through a matching derivative from joint bookrunner Societe Generale, the dialysis product-maker secured 100% debt treatment and therefore did not require shareholder approval.

ECB

Low appetite for TLTRO

IFR 2051 20 September to 26 September 2014 By

Banks took less than a quarter of the funds available to them in the first of the European Central Bank’s long-awaited targeted longer-term refinancing operations, raising concerns that the institution’s latest efforts to reinvigorate lending in countries mired in recession and deflation may underwhelm.

ECB

S&P highlights ECB’s regulatory dilemma

IFR 2051 20 September to 26 September 2014 By

An analysis of the short-term funding of Europe’s 50 largest banks has shown how delicately the European Central Bank will need to tread over the next month as it completes its comprehensive assessment of the health of Europe’s banks.

AB InBev

AB InBev M&A sparks debt buzz

IFR 2051 20 September to 26 September 2014 By Shankar Ramakrishnan, Tessa Walsh

The highly liquid global debt markets are in fine fettle and easily capable of financing another mammoth M&A deal of around US$100bn, bankers said at LPC’s 20th annual loan conference in New York.

Credit Suisse logo

Fed slaps Credit Suisse for risky lending

IFR 2051 20 September to 26 September 2014 By Tessa Walsh, Natalie Harrison, Lynn Adler

Wall Street banks are expected to rein in reckless underwriting after the Federal Reserve appeared to single out Credit Suisse for flouting lending guidelines.

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange

Shoemaker execs flee with company loan

IFR 2051 20 September to 26 September 2014 By , Saeed Azhar, Carol Zhong

Lenders that provided a US$60m loan in August to Chinese Frankfurt-listed shoemaker Ultrasonic were left reeling after two of the borrower’s top executives disappeared after the company’s three-year loan had been drawn down in full.

Market volatility

Volatility likely for delayed CDS rebirth

IFR 2051 20 September to 26 September 2014 By

The rebirth of the US$21trn credit default swap market will be delayed by two weeks, Markit and ISDA confirmed on Wednesday, in a sign that the industry is struggling to get ready for the most substantial overhaul to CDS in over five years.

The Alcoa Aluminium plant in Alcoa, Tennessee

Alcoa prefunds US$2.35bn acquisition

IFR 2051 20 September to 26 September 2014 By Stephen Lacey,

Alcoa’s move to acquire Firth Rixson was widely applauded by the financial markets when it was agreed to in June. The acquisition, while expensive, marked a continued transition by the company toward higher, value-added precision parts and away from its roots as an aluminium producer and processor.

IFR Magazine Top News in Full (subscription required)

People & Markets

The Bank for International Settlements (BIS) in Basel

Basel zones in on trading books

IFR 2051 20 September to 26 September 2014

The Basel Committee on Banking Supervision has suggested that banks could be holding too little capital against their trading books as a result of overly optimistic models that underestimate the amount of risk within their bond, equity, loan and derivatives books. 

A sign outside the headquarters of JP Morgan Chase & Co in New York

US banks toughen internal stress tests

IFR 2051 20 September to 26 September 2014

US banks have toughened up their internal stress testing after pressure from the Federal Reserve, with more pessimistic projections for the economy, unemployment and loan repayments leading to lower projected capital levels in the latest mid-year tests.

SG

Debt opens doors for SG in Asia

IFR 2051 20 September to 26 September 2014

Societe Generale is seeking to add more debt capital markets bankers to boost its share of financing markets in China, India and South-East Asia and help to connect Asian enterprises with capital and investments in Europe and Africa.

Financial Conduct Authority logo

Banks facing equity research overhaul

IFR 2051 20 September to 26 September 2014

European investment banks are trying to figure out how to make equity research pay, after the latest regulatory push to break the current “bundled” arrangements that allow dealing commissions to pay both for executing trades and for associated services such as research.

Intesa Sanpaolo logo

Italian NPL sales set to accelerate

IFR 2051 20 September to 26 September 2014

Sales of non-performing loans in Italy are expected to pick up once the country’s banks, increasingly overburdened by their size and number, have got past the hurdle of next month’s publication of the European Central Bank’s asset quality review and accompanying stress tests.

The headquarters of the People's Bank of China in Beijing

China injects US$81bn into biggest banks

IFR 2051 20 September to 26 September 2014

China’s central bank is injecting a combined Rmb500bn (US$81.35bn) of liquidity into the country’s top banks, according to media reports, a sign that authorities are stepping up efforts to shore up a faltering economy.

Greek banks to get DTA capital boost

IFR 2051 20 September to 26 September 2014

Greece appears set to join Italy, Spain and Portugal as the latest country to permit its banks to convert deferred tax assets into capital, in a controversial move that comes just six weeks ahead of eurozone-wide stress tests that are expected to highlight billion-euro shortfalls across the currency bloc.

Banks win concessions on LCR

IFR 2051 20 September to 26 September 2014

US regulators have loosened some of the requirements in the final liquidity coverage ratio after intense lobbying from the industry, offering banks a rare victory in the post-crisis regulatory landscape.

    More from People & Markets

    Bonds

    The London Eye is seen near the Houses of Parliament at dawn in central London

    UK readies first Dim Sum issue

    IFR 2051 20 September to 26 September 2014

    The United Kingdom is to become the first foreign country to issue an offshore renminbi bond in a move that points to the currency’s growing global appeal and the UK’s desire for London to be the major offshore renminbi hub.

    Phones 4U administrator shoots down debt-for-equity plan

    IFR 2051 20 September to 26 September 2014

    Phones 4U’s administrator, PwC, said there is little chance of a debt-for-equity swap proposed to save the business of succeeding, during a phone call with bondholders on Thursday.

    Burger King readies bond financing for Tim Hortons buy

    IFR 2051 20 September to 26 September 2014

    US fast-food chain Burger King last week began marketing a long-awaited US$2.25bn high-yield bond to help finance its US$11.5bn acquisition of Canadian doughnut group Tim Hortons.

    Nordea paves way for Swedish flurry

    IFR 2051 20 September to 26 September 2014

    Nordea has set the stage for a flurry of Swedish contingent capital issues, after its US$1.5bn icebreaker last week locked in the lowest yields yet for a US dollar trade.

    Acosta LBO leads US$1.055bn high-yield day

    IFR 2051 20 September to 26 September 2014

    Private equity firm Carlyle completed the financing of its US$4.75bn leveraged buyout of sales and marketing firm Acosta on Monday at attractive rates, giving the high-yield market a boost following a string of tough trades and pulled deals.

    American Airlines leads post Fed high-yield supply

    IFR 2051 20 September to 26 September 2014

    A benchmark unsecured bond from American Airlines (AA) blazed a trail in a US high-yield market that saw four drive-by deals on Thursday as issuers seized on a more positive tone to move forward with trades.

    Busy sovereigns sell €17bn

    IFR 2051 20 September to 26 September 2014

    It was another busy week for sovereign issuance in Europe with just over €17bn raised across the continent.

    Frenzied demand greets dollar funders

    IFR 2051 20 September to 26 September 2014

    The insatiable bid for SSA paper showed no sign of fading last week, with bank treasuries snapping up longer-dated deals in a bid to meet their liquidity coverage ratios and central banks looking to park cash at the short end.

      More from Bonds

      Loans

      SAP logo

      Lenders ride M&A wave

      IFR 2051 20 September to 26 September 2014

      German car parts manufacturer ZF Friedrichshafen’s US$13.5bn acquisition of US-based TRW Automotive, and German business software maker SAP’s US$7.3bn takeover of US peer Concur Technologies, are the latest M&A transactions to provide a boost to a loan market weary of the grind of cut-price refinancing.

      Burger King logo

      Investors want a bigger bite of Whopper deal

      IFR 2051 20 September to 26 September 2014

      Investors are pushing back on pricing and terms on the US$7.25bn loan package that backs Burger King Worldwide’s US$12bn acquisition of Canadian restaurant chain Tim Hortons.

      Liquidity, low-growth point to healthy pipeline

      IFR 2051 20 September to 26 September 2014

      A strong credit environment, ample liquidity and a borrower focus on M&A-driven growth suggest a healthy outlook for acquisition-related middle market dealflow for the remainder of the year.

      ZF to seek investment grade after TRW buy

      IFR 2051 20 September to 26 September 2014

      German auto parts maker ZF Friedrichshafen is aiming for investment-grade status in the mid-term for the debt backing its US$13.5bn acquisition of US rival TRW Automotive Holdings.

      J&J rolls over revolver

      IFR 2051 20 September to 26 September 2014

      Conglomerate Johnson & Johnson is looking to roll over an existing US$10bn 364-day revolver agreed in 2013.

      Atlantis seeks club deal for refinancing

      IFR 2051 20 September to 26 September 2014

      Standard Chartered is leading a deal to refinance a US$880m five-year loan for Dubai’s Atlantis, The Palm that signed just over a year ago.

      Ultrasonic lenders to take legal action

      IFR 2051 20 September to 26 September 2014

      The lenders on a US$60m syndicated loan for Frankfurt-listed Ultrasonic are considering taking legal action against the company following the disappearance of its top executives. 

      Cognizant nets US$1bn bridge

      IFR 2051 20 September to 26 September 2014

      Information technology company Cognizant Technology Solutions has arranged a US$1bn bridge loan to support its US$2.7bn acquisition of healthcare software company TriZetto.

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      Equities

      Ackman close to US$2bn target

      IFR 2051 20 September to 26 September 2014

      Activist investor William Ackman will raise US$2bn in permanent capital with a listing of Pershing Square Capital Management in Amsterdam. Most of the deal was already covered at launch after a cornerstone process received more demand than expected and was set at US$1.5bn.

      Skylark

      Japan: Skylark cuts IPO size to US$734m, sets price range

      IFR 2051 20 September to 26 September 2014

      Skylark, a restaurant operator controlled by Bain Capital, has cut the size of its IPO to ¥80.1bn (US$734m) after shareholders decided to decrease the amount of secondary shares in the offering. 

      Cornerstones back Zalando float

      IFR 2051 20 September to 26 September 2014

      Books opened last Thursday for the €440.57m–€550.71m Frankfurt Prime Standard IPO of online fashion retailer Zalando with price guidance of €18–€22.50. The all-primary base deal comprises 24.47m shares for a free-float of 10%. There is also an up to 15% greenshoe, partly provided by Rocket Internet. The rest of the greenshoe comes from certain cornerstone investors.

      Jumbo Wanda IPO takes shape

      IFR 2051 20 September to 26 September 2014

      Billionaire Wang Jianlin’s Dalian Wanda Commercial Properties is raising funds in what will be Hong Kong’s biggest China-related property IPO.

      Medley IPO seeks permanent capital premium

      IFR 2051 20 September to 26 September 2014

      Medley Management, with US$3.3bn under management as at June 30, is hoping its fast growth and permanent capital focus will attract a premium valuation when it prices its US$132m NYSE IPO later this week.

      Impact success builds Thai REIT appeal

      IFR 2051 20 September to 26 September 2014

      The success of Impact Growth Real Estate Investment Trust’s Bt7.9bn (US$244m) IPO, Thailand’s first such listing, is encouraging other issuers to resume work on their floats.

      India: PE investors seek exits

      IFR 2051 20 September to 26 September 2014

      The recent rally in Indian stocks has offered private equity investors an opportunity to monetise their Indian holdings through initial public offerings.

      Cone Midstream markets growth of Marcellus

      IFR 2051 20 September to 26 September 2014

      Cone Midstream Partners, the jointly-controlled midstream operations of Consol Energy and Noble Energy, is built for growth and being marketed accordingly. The company launched marketing last week of a 17.5m unit initial public offering at US$19–$21, to bracket an initial yield of just 4.1%–4.5%.

      More from Equities

      Derivatives

      Automation weighs on rates volatility

      IFR 2051 20 September to 26 September 2014

      Historically low interest rate volatility has taken its toll on fixed income revenues, forcing many dealers to streamline their business models and rethink the future of FICC as the driver of investment banking profits.

      Dwindling liquidity forces pensions rethink

      IFR 2051 20 September to 26 September 2014

      The decision by one of Europe’s largest pension funds to reduce the tenor of its guaranteed pension products has brought into sharp relief the drop-off in liquidity in long-dated fixed income markets, as providers across the Continent look to manage a transition from defined benefit to defined contribution schemes.

      Judge backs extraterritorial approach

      IFR 2051 20 September to 26 September 2014

      A US District Court Judge has dismissed claims against the CFTC regarding its efforts to regulate foreign OTC swap activity that touches the US market.

      FSB tackles swaps data fragmentation

      IFR 2051 20 September to 26 September 2014

      The Financial Stability Board put forward proposals to build a central aggregator last week to combat data fragmentation in the US$710trn OTC derivatives market in order to help global regulators identify build-ups of systemic risk.

      Fed no-change sets hawkish tone

      IFR 2051 20 September to 26 September 2014

      Federal Open Markets Committee members abstained from changing language last week regarding short-term rates after QE ends next month – a dovish turn that opposed market predictions – but participants nonetheless absorbed a hawkish message from the central bank that led to a modest sell-off.

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      Capital CityCapital City logo    

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

      The morning after

      IFR 2051 20 September to 26 September 2014

      THE SCOTTISH INDEPENDENCE vote had traders on red alert, with some staff at Barclays clocking in at midnight on Friday in order to stay on top of the potential chaos in the global foreign exchange markets. Meanwhile, UBS strategist Geoff Yu was planning to stay up all night.

      IFR Awards lined up on table

      IFR Awards 2014: Call for entries

      We invite banks to pitch now for the IFR Awards and IFR Americas Awards 2014. In order to help with our selection, banks and issuers may submit brief written presentations along with supporting data. IFR journalists will also organise pitch meetings. However, pitching is entirely optional and consideration for an award will not be limited to advisers or issuers that participate in this way.

      Timothy Sifert

      Old China Hands need new tricks

      PRC-focused investment bankers now need more than just high-level connections to get by.

      FSB

      FSB tackles swaps data fragmentation

      The Financial Stability Board today put forward proposals to build a central aggregator to combat data fragmentation in the US$710trn over-the-counter derivatives market in order to help global regulators identify build-ups of systemic risk.

      GW4

      IFR Fantasy Football League - GameWeek 5 update

      A Diego Costa hat trick kept scores lofty in GW4 of the IFR FFL, as the gap at the top of the table tightened.

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      Scots say No, but Europe still on alertVideo

      A ‘No’ in Scotland, but Catalonia appears to be inexorably heading for its own breakaway bid in a Europe gradually beginning to change shape. Should investors be concerned? David Pollard reports.

      All Spotlight

      IFR IMF World Bank Report Cover 2014

      IFR IMF/World Bank Report 2014

      Playground rules - The collaborative effort of European governments and regulators is akin to children rushing around the school playground with a football. Enthusiasm and no lack of skill are undermined by issues of translation and the fierce desire of all to score the winning goal.

      IFR German SME Funding 2014

      IFR German SME Funding Roundtable 2014

      The lack of credit in the real economy and the paucity of cash available for investment have been cited all over Europe as a major blocker of growth and investment, particularly for small and medium-sized enterprises. It’s an emotive issue that’s has the attention of politicians of all hues.

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