International Financing Review is the leading source of fixed income, capital markets and investment banking news, analysis and commentary. IFR's team of market specialists report on capital-raising across asset classes, from rumour to market reception.
Noel Quinn is leaving HSBC. The news seemed to surprise the market – the sign of a tight and well-managed comms plan. A departing CEO is guaranteed media coverage. And the fact the news was delivered sensibly and calmly on results day implies careful planning and prep. In other words, the right people internally were briefed at the right time with a very steady hand on the communications tiller. For senior managers unexpectedly jumping ship, comms people have only one important question – who will replace them? The strategy here is to try and move the story forward, focusing on the new and not the old (who, if they have gone to the competition, is now a traitor). Taking control of the story, we say. That might sound like an easy question to answer because of course the bosses have been boasting to analysts and the media about bench strength, depth of talent, etc, and anyway everyone is supposed to have a succession plan for these occasions. Naturally, it often isn’t. And we PRs find ourselves spouting lines about not being forced into a quick decision, taking time to find the right person, giving internal candidates (of which there are several, you understand) a fair and equitable chance to pitch for the job. And then – quite often – an outsider gets the role. This might be billed as an upgrade, taking advantage of the availability of a major player in the relevant market who would bring important experience and new skills to the bank. This could well be the case, though it will invariably irritate the rest of the team who now feel like B-list players. Then journalists want to meet the new boss to talk about their plans. We resist these requests – said new boss needs time to get their feet under the desk and anyway, they don’t have plans yet. But they will soon and you, dear journalist, will be one of the first invited to meet them. But sometimes bosses can’t help themselves. They believe they are the “special one” and demand things such as 100-day comms plans that include rounds of internal townhalls and media engagements. Our hearts sink. We have watched this cycle again and again – supermen and superwomen seeking to reinvent a department, bringing in practices from their former employers, tweaked with their personal divine-like touch and looking to preach to the uninitiated. But embedded culture is tough to move, and sooner or later the newbie realises, as their misplaced spirit slowly breaks, it ain’t going to work. Until they do, the PRs hope to limit the superperson’s exposure to the media and temper their hunger for internal TED talks. We are only thinking of them, after all. They’ll thank us for it one day.Complicated Controlling the comms surrounding a senior leaver or joiner becomes much more complicated when they hire their own PR support. Most banks prohibit this but that doesn’t stop people getting advice privately. Some very senior bankers think they are so important they actually demand their employer provides personal PR support, separate to the rest of the comms team. I watched a former comms colleague take on a role of supporting a senior individual as he left one bank and joined another, all paid for by the new employer. I didn’t envy my ex-colleague’s position but she managed it with aplomb, mainly because she is smart and empathetic, understanding how her presence might cause resentment within the home team. She worked hard to avoid any friction. Private advice behind the scenes can be even trickier to manage. It takes a few developments to detect – an unexpected reference in a story here; the unusual positioning of a deal there. But eventually the unmissable touch of a comms specialist can be seen. It takes one to spot one. Personal private comms advice usually does not bode well for a banker. Their actions can be interpreted as treason and can even lead to their departure. This may have been in the
Rather than taking market share away from banks, the influx of private credit funds into Asia is filling underserved parts of the market and creating new business for financial institutions. In the US and Europe, private credit ate into the leveraged finance market, especially term loan Bs in recent years, as issuers sought certainty with club-type deals during rates volatility – a trend that has since reversed. In Asia-Pacific, the dynamic has been different. While Australia and India are extremely competitive battlegrounds for banks and funds looking to provide credit, the rest of the region has more room for new players. “In Asia, private credit is complementary as opposed to competing or substituting for loans,” said Joe Cheung, head of loan syndications for Asia ex-Japan ex-Australia in the leveraged capital markets and special situations group at UBS. “It provides capital that banks would not typically finance – high growth but negative Ebitda companies, underperforming companies that have crown jewel assets or challenging sectors for the bank market.” Andrew Tan, CEO for Asia-Pacific and head of Asia-Pacific private debt at investment firm Muzinich, said that regulatory trends have caused banks to focus their lending on the biggest names, creating a gap in the market for private credit in Asia. “Banks are gravitating towards large and upper middle-market companies, pushing them away from SMEs and low to core middle-market companies, which are the ones that will take up more regulatory capital,” said Tan. Some global asset managers that have raised multi-billion US dollar funds and tend to write US$100m-plus tickets are heard to have struggled to deploy their funds in Asia since they target the biggest companies. “If you are a private credit fund focused on mainstream lending to larger companies, definitely you are going head-to-head with banks,” said Tan. “If you are focused on capital solutions, trying to do something banks are not able to get their heads around, like special situations and distressed debt, there’s more room.” More room In some markets, like Singapore, government policies have encouraged local banks to lend to SMEs, but in others there is more room for credit providers. “Hong Kong is an example where we are seeing some gaps forming,” said Tan. “Banks are distracted by the real estate crisis in China and pulling back on risk-taking, so that throws up opportunities in financing smaller businesses.” Private credit funds may also be willing to take positions in subordinated debt tranches, while banks are only willing to provide senior debt. “Banks in Asia are likely to view the rise of private credit as more an opportunity than a threat,” said Eng-Lye Ong, partner at law firm Dechert in Singapore. “Private credit lenders can participate in syndicated or club loans originated by banks and buy debt that banks no longer wish to hold. They will also be willing to look at lending junior debt where senior bank debt is already in place, and lending to companies introduced by banks that are unable to satisfy the bank’s lending criteria.” Companies that once met banks’ lending criteria might no longer qualify. “In a higher interest rate environment, asset valuations typically weaken and banks face loan-to-value limitations that might prevent them from lending or refinancing, which presents private debt with an opportunity to come in,” said Muzinich’s Tan. Conversely, if smaller companies grow using private credit they might graduate to syndicated loans. Companies can choose between the two sources of financing depending on whether they want to prioritise keeping interest costs low or paying 10%–15% but obtaining more flexible terms. “If an issuer wants more leverage and flexibility, it might explore the private credit market for bespoke financings, s
Hong Kong-listed Super Hi International, which runs Chinese hotpot restaurant chain Haidilao in overseas markets, is planning a dual primary listing on Nasdaq. The move reverses a trend in recent years which has seen US-listed Chinese companies establishing a second listing in Hong Kong to be closer to Chinese capital amid escalating tensions between China and the US. The deal was filed on April 26 with a potential size of US$100m with Morgan Stanley and Huatai Securities leading the transaction. Hong Kong-listed Haidilao International, which runs Haidilao restaurants in China, spun off Super Hi in December 2022 in a listing by introduction, meaning Super Hi did not raise any money. Shares in Super Hi dropped 2.9% on Monday to HK$14.22 but are up 37% this year. Haidilao shares fell 0.3% to HK$17.92 but are up 23%. Super Hi said the US listing will broaden its shareholder base, raise additional capital, enhance its corporate image and influence in the international capital and consumption markets, and make its shares more liquid. It plans to use its US listing proceeds to open new restaurants internationally, improve its supply chain and expand its online delivery capabilities. Bankers away from the deal said the plan is proof that the US is currently a better market to tap international capital than Hong Kong for Chinese companies with international businesses. “Super Hi’s shares are trading well and they should be able to do a follow-on in Hong Kong to raise funds if it comes with a reasonable discount. But instead they are going to the US, currently a much more buoyant market, to tap international capital,” said one of the bankers. Super Hi runs 115 restaurants in 12 countries including the US, UK, Singapore, Thailand, Vietnam and Australia. The company reported net income of US$25.3m in 2023 compared with a loss of US$41.2m in 2022. Less Chinese Bankers have said more Chinese companies are setting up international business headquarters away from Hong Kong in an attempt to appear less Chinese ahead of potential US listings. Super Hi is domiciled in the Cayman Islands and based in Singapore. Notably, Super Hi’s SEC filing goes to some lengths to argue it is not a Chinese company. “We currently do not have restaurant business operations in Greater China (which includes mainland China, Hong Kong, Macau and Taiwan), and, when as part of HDL Group [the former parent)] did not have restaurant business operations in Greater China,” the filing states. Yet some members of Super Hi's board and management are Chinese nationals and the risk factors section of the SEC filing warns of the difficulty of bringing legal action against members of management who reside in mainland China. The company’s major shareholder with 47.6% is Zhang Yong, chairman of Haidilao International, while his spouse Shu Ping is Super Hi’s chairman. According to Haidilao's Hong Kong IPO offering document in 2018, Zhang and Shu are Singaporean and lived in Singapore at the time.
HSBC has started a search for a new chief executive after Noel Quinn surprised investors and staff by announcing plans to step down after five years leading Europe's biggest bank. Quinn said the timing was right as it was "a natural transition point" for the bank and himself as a major restructuring was now paying off. The Asia-focused bank said it has started the search for his successor, both internally and externally, and hopes to have a CEO in place during the second half of this year. The leading internal candidate is likely to be chief financial officer Georges Elhedery, but chairman Mark Tucker is likely to throw the net widely as he looks to get someone able to handle a complex international bank and often difficult tensions between China and the West. One potential external candidate could be Lloyds Banking Group CEO Charlie Nunn, who was previously a senior executive at HSBC. Quinn, 62, has implemented a major restructuring since taking over as CEO in August 2019. He has cut jobs, accelerated a shift to Asia, stripped out bureaucracy and sold big businesses in Canada, France and Argentina. HSBC delivered record profits last year and ramped up distributions to shareholders. “I spent some time reflecting over Christmas on the journey for the next few years and I felt personally it was time to get a better balance. It’s been a very intensive five-year period, in fact it’s been intense since September 2008," Quinn said. “At the end of the five-year transformation period it’s right to stand back and reflect. The next phase of the journey for HSBC has got to be a multi-phased and multi-year journey, so it’s a natural transition point for the bank, it’s a natural transition point for me." HSBC has never picked a CEO from outside the bank, which points to an internal successor. But it had also never picked an outsider as chairman before it appointed Tucker in 2017. He is known as tough leader who may think an outsider would be better for the bank, some people said. Tucker said Quinn informed him in early March of his intention to leave. He declined to comment on potential candidates but said he did not expect any significant immediate change from the new boss. “That strategy has put us in a very good place and we will continue with that strategy," he said. The bank's income has swelled in the past two years, thanks in large part to higher interest rates, and that tailwind could remain as rates look likely to stay higher for longer. Runners and riders Elhedery is the early frontrunner. He has been CFO since the start of 2023, and when he was promoted, Quinn said it was "with an eye to long-term succession planning". He is well liked and respected, insiders said. Elhedery was previously co-head of global banking and markets, where he ran the markets division from 2019, and took a six-month sabbatical in 2022 to spend time with his family and explore personal interests. He previously worked at BNP Paribas and Goldman Sachs and joined HSBC in 2005, moving up the ranks and running operations in the Middle East, North Africa and Turkey for several years. Other internal candidates are likely to include Nuno Matos, head of wealth and personal banking; Barry O'Byrne, head of commercial banking; and Greg Guyett, CEO of global banking and markets and a former senior executive at JP Morgan, including CEO for China. David Liao, co-CEO of The Hongkong and Shanghai Banking Corp, could be on a shortlist if the bank wants closer ties with China as Liao has strong links to regulators there. Nunn could lead the list of external candidates after winning plaudits as CEO of Lloyds since August 2021. Lloyds poached him from HSBC after a decade in London and Hong Kong, most recently as global head of wealth and personal banking. Other external candidates could include former Standard Chartered and HSBC executive Simon Cooper and Antonio Simoes, CEO of Legal & General and former executive of HSBC
Noel Quinn is leaving HSBC. The news seemed to surprise the market – the sign of a tight and well-managed comms plan. A departing CEO is guaranteed media coverage. And the fact the news was delivered sensibly and calmly on results day implies careful planning and prep. In other words, the right people internally were briefed at the right time with a very steady hand on the communications tiller. For senior managers unexpectedly jumping ship, comms people have only one important question – who will replace them? The strategy here is to try and move the story forward, focusing on the new and not the old (who, if they have gone to the competition, is now a traitor). Taking control of the story, we say. That might sound like an easy question to answer because of course the bosses have been boasting to analysts and the media about bench strength, depth of talent, etc, and anyway everyone is supposed to have a succession plan for these occasions. Naturally, it often isn’t. And we PRs find ourselves spouting lines about not being forced into a quick decision, taking time to find the right person, giving internal candidates (of which there are several, you understand) a fair and equitable chance to pitch for the job. And then – quite often – an outsider gets the role. This might be billed as an upgrade, taking advantage of the availability of a major player in the relevant market who would bring important experience and new skills to the bank. This could well be the case, though it will invariably irritate the rest of the team who now feel like B-list players. Then journalists want to meet the new boss to talk about their plans. We resist these requests – said new boss needs time to get their feet under the desk and anyway, they don’t have plans yet. But they will soon and you, dear journalist, will be one of the first invited to meet them. But sometimes bosses can’t help themselves. They believe they are the “special one” and demand things such as 100-day comms plans that include rounds of internal townhalls and media engagements. Our hearts sink. We have watched this cycle again and again – supermen and superwomen seeking to reinvent a department, bringing in practices from their former employers, tweaked with their personal divine-like touch and looking to preach to the uninitiated. But embedded culture is tough to move, and sooner or later the newbie realises, as their misplaced spirit slowly breaks, it ain’t going to work. Until they do, the PRs hope to limit the superperson’s exposure to the media and temper their hunger for internal TED talks. We are only thinking of them, after all. They’ll thank us for it one day.Complicated Controlling the comms surrounding a senior leaver or joiner becomes much more complicated when they hire their own PR support. Most banks prohibit this but that doesn’t stop people getting advice privately. Some very senior bankers think they are so important they actually demand their employer provides personal PR support, separate to the rest of the comms team. I watched a former comms colleague take on a role of supporting a senior individual as he left one bank and joined another, all paid for by the new employer. I didn’t envy my ex-colleague’s position but she managed it with aplomb, mainly because she is smart and empathetic, understanding how her presence might cause resentment within the home team. She worked hard to avoid any friction. Private advice behind the scenes can be even trickier to manage. It takes a few developments to detect – an unexpected reference in a story here; the unusual positioning of a deal there. But eventually the unmissable touch of a comms specialist can be seen. It takes one to spot one. Personal private comms advice usually does not bode well for a banker. Their actions can be interpreted as treason and can even lead to their departure. This may have been in the
Rather than taking market share away from banks, the influx of private credit funds into Asia is filling underserved parts of the market and creating new business for financial institutions. In the US and Europe, private credit ate into the leveraged finance market, especially term loan Bs in recent years, as issuers sought certainty with club-type deals during rates volatility – a trend that has since reversed. In Asia-Pacific, the dynamic has been different. While Australia and India are extremely competitive battlegrounds for banks and funds looking to provide credit, the rest of the region has more room for new players. “In Asia, private credit is complementary as opposed to competing or substituting for loans,” said Joe Cheung, head of loan syndications for Asia ex-Japan ex-Australia in the leveraged capital markets and special situations group at UBS. “It provides capital that banks would not typically finance – high growth but negative Ebitda companies, underperforming companies that have crown jewel assets or challenging sectors for the bank market.” Andrew Tan, CEO for Asia-Pacific and head of Asia-Pacific private debt at investment firm Muzinich, said that regulatory trends have caused banks to focus their lending on the biggest names, creating a gap in the market for private credit in Asia. “Banks are gravitating towards large and upper middle-market companies, pushing them away from SMEs and low to core middle-market companies, which are the ones that will take up more regulatory capital,” said Tan. Some global asset managers that have raised multi-billion US dollar funds and tend to write US$100m-plus tickets are heard to have struggled to deploy their funds in Asia since they target the biggest companies. “If you are a private credit fund focused on mainstream lending to larger companies, definitely you are going head-to-head with banks,” said Tan. “If you are focused on capital solutions, trying to do something banks are not able to get their heads around, like special situations and distressed debt, there’s more room.” More room In some markets, like Singapore, government policies have encouraged local banks to lend to SMEs, but in others there is more room for credit providers. “Hong Kong is an example where we are seeing some gaps forming,” said Tan. “Banks are distracted by the real estate crisis in China and pulling back on risk-taking, so that throws up opportunities in financing smaller businesses.” Private credit funds may also be willing to take positions in subordinated debt tranches, while banks are only willing to provide senior debt. “Banks in Asia are likely to view the rise of private credit as more an opportunity than a threat,” said Eng-Lye Ong, partner at law firm Dechert in Singapore. “Private credit lenders can participate in syndicated or club loans originated by banks and buy debt that banks no longer wish to hold. They will also be willing to look at lending junior debt where senior bank debt is already in place, and lending to companies introduced by banks that are unable to satisfy the bank’s lending criteria.” Companies that once met banks’ lending criteria might no longer qualify. “In a higher interest rate environment, asset valuations typically weaken and banks face loan-to-value limitations that might prevent them from lending or refinancing, which presents private debt with an opportunity to come in,” said Muzinich’s Tan. Conversely, if smaller companies grow using private credit they might graduate to syndicated loans. Companies can choose between the two sources of financing depending on whether they want to prioritise keeping interest costs low or paying 10%–15% but obtaining more flexible terms. “If an issuer wants more leverage and flexibility, it might explore the private credit market for bespoke financings, s
Hong Kong-listed Super Hi International, which runs Chinese hotpot restaurant chain Haidilao in overseas markets, is planning a dual primary listing on Nasdaq. The move reverses a trend in recent years which has seen US-listed Chinese companies establishing a second listing in Hong Kong to be closer to Chinese capital amid escalating tensions between China and the US. The deal was filed on April 26 with a potential size of US$100m with Morgan Stanley and Huatai Securities leading the transaction. Hong Kong-listed Haidilao International, which runs Haidilao restaurants in China, spun off Super Hi in December 2022 in a listing by introduction, meaning Super Hi did not raise any money. Shares in Super Hi dropped 2.9% on Monday to HK$14.22 but are up 37% this year. Haidilao shares fell 0.3% to HK$17.92 but are up 23%. Super Hi said the US listing will broaden its shareholder base, raise additional capital, enhance its corporate image and influence in the international capital and consumption markets, and make its shares more liquid. It plans to use its US listing proceeds to open new restaurants internationally, improve its supply chain and expand its online delivery capabilities. Bankers away from the deal said the plan is proof that the US is currently a better market to tap international capital than Hong Kong for Chinese companies with international businesses. “Super Hi’s shares are trading well and they should be able to do a follow-on in Hong Kong to raise funds if it comes with a reasonable discount. But instead they are going to the US, currently a much more buoyant market, to tap international capital,” said one of the bankers. Super Hi runs 115 restaurants in 12 countries including the US, UK, Singapore, Thailand, Vietnam and Australia. The company reported net income of US$25.3m in 2023 compared with a loss of US$41.2m in 2022. Less Chinese Bankers have said more Chinese companies are setting up international business headquarters away from Hong Kong in an attempt to appear less Chinese ahead of potential US listings. Super Hi is domiciled in the Cayman Islands and based in Singapore. Notably, Super Hi’s SEC filing goes to some lengths to argue it is not a Chinese company. “We currently do not have restaurant business operations in Greater China (which includes mainland China, Hong Kong, Macau and Taiwan), and, when as part of HDL Group [the former parent)] did not have restaurant business operations in Greater China,” the filing states. Yet some members of Super Hi's board and management are Chinese nationals and the risk factors section of the SEC filing warns of the difficulty of bringing legal action against members of management who reside in mainland China. The company’s major shareholder with 47.6% is Zhang Yong, chairman of Haidilao International, while his spouse Shu Ping is Super Hi’s chairman. According to Haidilao's Hong Kong IPO offering document in 2018, Zhang and Shu are Singaporean and lived in Singapore at the time.
HSBC has started a search for a new chief executive after Noel Quinn surprised investors and staff by announcing plans to step down after five years leading Europe's biggest bank. Quinn said the timing was right as it was "a natural transition point" for the bank and himself as a major restructuring was now paying off. The Asia-focused bank said it has started the search for his successor, both internally and externally, and hopes to have a CEO in place during the second half of this year. The leading internal candidate is likely to be chief financial officer Georges Elhedery, but chairman Mark Tucker is likely to throw the net widely as he looks to get someone able to handle a complex international bank and often difficult tensions between China and the West. One potential external candidate could be Lloyds Banking Group CEO Charlie Nunn, who was previously a senior executive at HSBC. Quinn, 62, has implemented a major restructuring since taking over as CEO in August 2019. He has cut jobs, accelerated a shift to Asia, stripped out bureaucracy and sold big businesses in Canada, France and Argentina. HSBC delivered record profits last year and ramped up distributions to shareholders. “I spent some time reflecting over Christmas on the journey for the next few years and I felt personally it was time to get a better balance. It’s been a very intensive five-year period, in fact it’s been intense since September 2008," Quinn said. “At the end of the five-year transformation period it’s right to stand back and reflect. The next phase of the journey for HSBC has got to be a multi-phased and multi-year journey, so it’s a natural transition point for the bank, it’s a natural transition point for me." HSBC has never picked a CEO from outside the bank, which points to an internal successor. But it had also never picked an outsider as chairman before it appointed Tucker in 2017. He is known as tough leader who may think an outsider would be better for the bank, some people said. Tucker said Quinn informed him in early March of his intention to leave. He declined to comment on potential candidates but said he did not expect any significant immediate change from the new boss. “That strategy has put us in a very good place and we will continue with that strategy," he said. The bank's income has swelled in the past two years, thanks in large part to higher interest rates, and that tailwind could remain as rates look likely to stay higher for longer. Runners and riders Elhedery is the early frontrunner. He has been CFO since the start of 2023, and when he was promoted, Quinn said it was "with an eye to long-term succession planning". He is well liked and respected, insiders said. Elhedery was previously co-head of global banking and markets, where he ran the markets division from 2019, and took a six-month sabbatical in 2022 to spend time with his family and explore personal interests. He previously worked at BNP Paribas and Goldman Sachs and joined HSBC in 2005, moving up the ranks and running operations in the Middle East, North Africa and Turkey for several years. Other internal candidates are likely to include Nuno Matos, head of wealth and personal banking; Barry O'Byrne, head of commercial banking; and Greg Guyett, CEO of global banking and markets and a former senior executive at JP Morgan, including CEO for China. David Liao, co-CEO of The Hongkong and Shanghai Banking Corp, could be on a shortlist if the bank wants closer ties with China as Liao has strong links to regulators there. Nunn could lead the list of external candidates after winning plaudits as CEO of Lloyds since August 2021. Lloyds poached him from HSBC after a decade in London and Hong Kong, most recently as global head of wealth and personal banking. Other external candidates could include former Standard Chartered and HSBC executive Simon Cooper and Antonio Simoes, CEO of Legal & General and former executive of HSBC
Viking delivered solid gains on its NYSE debut on Wednesday even after aggressively upsizing its IPO by nearly 50% to US$1.5bn, underscoring the strength of long-only demand for larger offerings as the US new issue recovery takes hold. Shares of the TPG-backed luxury cruise line rose 9% in their opening session, in line with an average return of about 10% from this year's crop of 28 US IPOs and more consistently positive opening performance from the listings of companies such as Centuri, Ibotta, Loar, PACS, Rubrik and UL Solutions in the past...
The green bond market’s long-unfulfilled dream of green US Treasuries has moved significantly closer to reality with advice from the Treasury Borrowing Advisory Committee on Wednesday that the sovereign – soon to be the only advanced economy not active in the use-of-proceeds product after Japan’s entry in February and with Australia's arrival imminent – “could consider exploring the issuance of green bonds”. The committee, chaired by Deirdre Dunn, head of global rates at Citigroup, said the main reason for entering the market would be to...
The European leveraged finance market has kicked into overdrive, with issuers able to access ample liquidity from the leveraged loan and high-yield markets. Swiss alarm company Verisure, German low-cost hotel chain Motel One and UK supermarket operator Asda have crammed into the primary before year-end numbers go stale, enjoying demand levels across loans and bonds that were able to comfortably accommodate one of the busiest weeks since the start of the decade. "These issuers have or are establishing large capital structures and so it makes...
The European leveraged finance market has kicked into overdrive, with issuers able to access ample liquidity from the leveraged loan and high-yield markets. Swiss alarm company Verisure, German low-cost hotel chain Motel One and UK supermarket operator Asda have crammed into the primary before year-end numbers go stale, enjoying demand levels across loans and bonds that were able to comfortably accommodate one of the busiest weeks since the start of the decade. "These issuers have or are establishing large capital structures and so it makes...
The co-chair of a high-level independent expert group on debt, nature and climate has proposed creating a new “finance facility against climate change” to mobilise US$1trn through green bonds to fund mitigation measures in developing and emerging economies. The F2C2 proposal comes from Moritz Kraemer, chief economist at LBBW and a former head of sovereign ratings at S&P, and Ulrich Volz, professor of economics and director of the University of London SOAS Centre for Sustainable Finance, where Kraemer is also a senior fellow. “F2C2 will make...
The Reserve Bank of India's proposals for tighter lending rules for infrastructure projects will increase provision requirements for financial institutions in the country, according to analysts. In a draft circular on May 3, the central bank proposed that lenders set aside a provision of 5% for standard assets in a phased manner during the construction phase of a project. The current provision for infrastructure projects is 0.4% of the loan amount. Analysts expect credit costs and provisioning to increase sharply for public sector banks and non...
The co-chair of a high-level independent expert group on debt, nature and climate has proposed creating a new “finance facility against climate change” to mobilise US$1trn through green bonds to fund mitigation measures in developing and emerging economies. The F2C2 proposal comes from Moritz Kraemer, chief economist at LBBW and a former head of sovereign ratings at S&P, and Ulrich Volz, professor of economics and director of the University of London SOAS Centre for Sustainable Finance, where Kraemer is also a senior fellow. “F2C2 will make...
Goldman Sachs and HSBC have scrapped a cap on bonuses for UK staff to return to more flexible pay structures, although bankers and headhunters said there are mixed views on the reversal as bankers have become accustomed to the safety of higher fixed pay. HSBC on Friday secured overwhelming approval from shareholders to abolish the cap, with 99.3% of shareholders who voted at the bank’s AGM approving the plan. Barclays shareholders are due to vote on Thursday on a similar resolution. UK regulators had limited the amount of variable pay a bank...
The Reserve Bank of India's proposals for tighter lending rules for infrastructure projects will increase provision requirements for financial institutions in the country, according to analysts. In a draft circular on May 3, the central bank proposed that lenders set aside a provision of 5% for standard assets in a phased manner during the construction phase of a project. The current provision for infrastructure projects is 0.4% of the loan amount. Analysts expect credit costs and provisioning to increase sharply for public sector banks and non...
Zeekr Intelligent Technology, the premium electric car subsidiary of Geely Automobile, has launched a NYSE IPO of up to US$368m. The deal has already secured US$349.1m of indications of interest, or 95% of the float, from Geely Auto (up to US$320m), Israeli autonomous driving company Mobileye (around US$10m) and Chinese electric vehicle battery giant CATL (around US$19.1m). Zeekr is selling 17.5m primary American depositary shares, or 7.2% of the enlarged share capital, in an indicative price range of US$18–$21 each. There is a 15% greenshoe...
Canadian investment company Westaim returned to sell about 60% of its remaining stake in property and casualty insurer Skyward Speciality Insurance via a roughly US$170m follow-on stock sale. A syndicate led by Barclays, KBW and Jefferies is undertaking a day of marketing on Monday to sell 4.4m secondary shares or about 11% of Skyward ahead of pricing post-close. Early in Monday's session following news of the sale, shares of Skyward rose 1.7% to US$38.20, up nearly 14% this year and more than double the US$15.00 mark at which it priced a US$154.4m Nasdaq IPO in January last year. Skyward's strong stock price performance since then has enable to progressively sell its stake at incrementally higher prices. Westaim did not sell any of its shares (a 44.6% stake pre-IPO) in the IPO, but offloaded about 4m shares at US$23.00 in Skyward's first follow-on in June last year (cutting its stake to 28.4%) and another 3.6m at US$30.50 in another Skyward secondary in November last year (cutting the stake to 17.5%). As the sole selling shareholder in this week's offering, Westaim's stake will fall to 6.5% and, if the greenshoe is exercised, to 4.8%. There is a 90-day lockup on further sales. Westaim, along with co-investors, bought Skyward's predecessor in 2014, before providing additional funding in 2015 and more via a US$100m convertible preferred financing in 2020 (in which Westaim itself purchased US$44m of shares). The latest sell-down comes less than a week after Skyward last Wednesday reported better-than-expected first quarter earnings. The company delivered a 79% increase in adjusted operating income to 75 cents a share, 27.2% growth in gross written premiums, an 89.6% combined operating ratio (implying strong profitability at the underwriting level) and an annualized return on equity of 21.7%. Skyward, like much of the P&C insurance sector, has benefited from strong premiums in recent years. Yet CEO Andrew Robinson told analysts on the earnings call that the P&C insurance market was "increasingly nuanced for capturing profitable growth". "It's a kind of market that plays to great underwriters, which which I believe we have," Robinson said. "And I think it's a market that's a hell of a lot more favorable to a company like us than many of the other guys that are out there."
GM Financial has announced on its upcoming SEC Registered US$1.3bn+ offered (no grow) prime auto lease ABS transaction, GM Financial Automobile Leasing Trust (GMALT) 2024-2. Joint Bookrunners: BMO Capital Markets (str), BofA, Deutsche Bank, GS and RBC Co-Managers: BNP Paribas, CIBC Capital Markets, MUFG, and Scotiabank Anticipated Capital Structure: * Classes A-2A and A-2B will be sized to demand; the Class A-2B will not exceed 75% of the aggregate Class A-2 ** Deal will not grow - TRANSACTION DETAILS - Ticker : GMALT 2024-2 Offered Size : $1.300+bn (No Grow) Registration : SEC Registered Ratings : S&P / Fitch Pxg Speed : 100% PPC to Maturity - Anticipated Timing - Launch/Pricing : Week of 5/6/2024 Exp. Settlement : 5/16/2024
EUR/USD firmed on Monday as last week's disappointing U.S. payrolls and ISM reports weighed on Treasury yields and euro zonedata continued to recover, but those data trends will have to persist to reverse the slide since December and target key resistance by 1.1000. Friday's 1.08125 high following dovish U.S. data ran into the downtrend line from March's recovery high. There's little top U.S. economic data this week, though plenty of scheduled Fed policymaker speaking engagements, beginning with Richmond Fed's Thomas Barkin at 1250 EDT and New York President John Williams at 1300. Likely more important for the Fed and dollar outlooks will be U.S. CPI and retail sales reports on May 15. Both are forecast to have cooled slightly from March readings, so would not support the dollar unless they beat forecasts. Despite the Fed now mostly priced to cut rates twice by year-end, Treasury yields are finding some support ahead of this week's Treasury refunding. The ECB remains priced to cut rates at its next meeting in June, and likely twice more by year-end versus September and December Fed cuts currently favored. EUR/USD also has the 100-day moving average by 1.0840 and Wednesday's daily cloud twist to clear. The 161.8% Fibo off April's base is at 1.09985, by the Jan. 5 and 11 swing highs there and at 1.1000. Support from the kijun, 30-DMA and tenkan are at 1.0743/38/31 and should hold unless geopolitically-driven derisking replaces current risk-on flows that support EUR/USD. For more click on FXBUZ Chart https://tmsnrt.rs/3wm9KOo
The US investment-grade primary, riding the coat tails of last week's sanguine Fed and supportive economic data, expects at least 14 offerings to price on Monday as issuers take advantage of lower yields and positive market vibes. Not to be outdone, the US high-yield primary announced eight deals this morning and six of those are expected to price today. In the week ahead, the economic data and Fed events do not carry the same weight or magnitude as those experienced by markets last week, starting with today's slate. Nevertheless, the tailwinds from last week are flowing into today, so far seeing the 10-year note yield lower in morning trade hovering around 4.50% and US stocks opening sharply higher. "The latter half of last week saw strong gains for most asset classes thanks to an FOMC meeting that avoided hawkish surprises coupled with a softer payrolls report on Friday that reignited hopes of a soft landing for the US economy," Deutsche Bank Research said in a report today. The 10-year Treasury yield saw its largest weekly decline of the year so far, down 15.5bp, while the S&P 500 posted its best two-day run in 10 weeks, up 2.18%, Deutsche said. Following the jobs data, markets raised their expectations of rate cuts, with the number of Fed cuts priced in by the December meeting rising 11.4bp, with 4.8bp of that on Friday, to 45bp, Deutsche said. "The hope for additional Fed rate cuts was given further fuel on Friday after the April ISM services PMI came in at 49.4 versus 52 expected, its lowest level since December 2022," Deutsche said. This morning the CME FedWatch Tool forecasted a 8.2% probability for a cut in the fed funds rate at the June meeting and a 49.3% probability for a cut in September. Last week in the IG primary 19 tranches were priced totaling US$19bn, lifting May IG volume to five tranches priced totaling US$4.2bn and closing out the month of April IG issuance on Tuesday with 110 tranches totaling US$109.28bn, according to IFR data. Market participants are expecting approximately US$31bn in IG supply this week, which would become the second-largest week in the IG primary market of the past two months, BMO said. Only the US$35.8bn issued during the week ending April 19 would exceed this week’s total, BMO said. The HY primary saw four tranches priced totaling US$2.6bn last week, lifting May volume to two tranches totaling US$1.3bn and closing the month of April with 32 tranches priced totaling US$23.53bn, according to IFR. The average IG bond spread tightened by 1bp to 80bp on Friday and the HY bond spread narrowed by 8bp to 308bp, according to ICE BofA data. "High grade spreads narrowed 1bp on Friday (and for the week as a whole) in response to the April jobs report that indicated a cooling labor market," BMO said. "After spending the past seven weeks confined to a range of just 6bp, spreads seem poised to break out of the range to the downside this week, with spreads opening the week at the bottom of the recent range and on top of YTD lows." The CDX IG five-year index spread closed at 50.244 on Friday and opened up tighter Monday, edging in to 49.694 in morning trade, according to LSEG data. The CDX HY five-year index price closed at 106.600 on Friday and opened higher on Monday, hitting 106.758 in morning trade. HIGH GRADE At least 14 investment-grade issuers are slated to price bonds today, with the biggest showing come from energy utilities. Today’s offerings include deals from OGE Energy, Commonwealth Edison, Southern California Edison, Consolidated Edison, Dominion Energy, Arizona Public Service and ITC Holdings. Elsewhere, in the financial sector, Athene Global Funding, Intercontinental Exchange, Ares Capital and Agree are all marketing new bonds. The financing arm of commercial truck maker PACCAR is also out to investors with a trade. The remaining deals come from the consumer sector. Coca-Cola and Kellanova, which was created after Kellogg spun off its North American cereal business l
* Priced. 3yr FRN: 3mS+98bps coupon / 100 px. 5.5yr FRN: 3mS+143bps coupon / 100 px. 5.5yr fixed: 4.206% ann coupon / 100 px / MS+143bps / 4.21% yld. TOE: 15:26/15:24/15:22 CEST (3Y FRN/5.5Y FRN/5.5Y FXD). FTT: Now. (3:26pm) * Final terms: 3yr FRN SEK500m at 3mS+98bps / 5.5yr FRN SEK800m at 3mS+143bps / 5.5yr fixed SEK700m at MS+143bps. Allocs & pricing later this pm. DNB is B&D. (12:59pm) * Combined books SEK2.85bn+ ex JLM, skew to 5.5yr tranches, subject 13:20 CEST. Spreads set: 3yr FRN at 3mS +98bps / 5.5yrs at 3mS/MS +143bps. Combined size capped at SEK2bn / 3yr capped at SEK600m. (12:10pm) * Combined books SEK1.85bn+ ex JLM, heavy skew to FRN tranches, may close at short notice. 3yr fixed tranche dropped. Guidance revised: 3yr FRN at 3mS +98/+100bps (wpir) / 5.5yr FRN/fixed at 3mS/MS +143/+145bps (wpir). (10:55am) ICA Gruppen AB (publ) is marketing an expected SEK1.5bn four-part senior unsecured green bond via Danske Bank and DNB Markets with guidance now out for a 3yr FRN at 3mS+100/+105bps; a 3yr fixed at MS+100/+105bps; a 5.5yr FRN at 3mS+145/+150bps; and a 5.5yr fixed at MS+145/+150bps. Pricing today. One or more tranches may be dropped. Maturity 14 May 2027 / 14 Nov 2029. Settle 14 May (T+5). Unrated. ISINs 3yr FRN SE0015810940 / 3yr fixed SE0015810916 / 5.5yr FRN SE0015810924 / 5.5yr fixed SE0015810932. Off MTN prog dated 2 May 2024, Nasdaq Stockholm listing, 2m denoms. UoP: an amount equal to the proceeds will be used in accordance with the Issuer's Green Finance Framework. (9:31am)
DATAMonday 23:01 GMT - UK April BRC Retail Sales00:30 GMT - Japan April JibunBK Composite Output Final00:30 GMT - Japan April JibunBK Services PMI Final06:00 GMT - German March Industrial Orders (exp 0.5% m/m, prev 0.2%)06:00 GMT - German March Manufacturing Output06:00 GMT - German March Consumer Goods06:00 GMT - German March Exports (exp 0.4% m/m, prev -2.0%)06:00 GMT - German March Imports (exp -1.0%, prev 3.2%)06:00 GMT - German March Trade Balance (exp EUR22.4bn, prev EUR21.4bn)06:00 GMT - UK April Halifax House Prices06:45 GMT - France March Current Account06:45 GMT - France March Current Account - Balance06:45 GMT - France Q1 Non-Farm Payrolls06:45 GMT - France March Imports06:45 GMT - France March Exports07:30 GMT - EZ April HCOB Construction PMI07:30 GMT - German April HCOB Construction PMI07:30 GMT - France April HCOB Construction PMI07:30 GMT - Italy April HCOB Construction PMI08:30 GMT - UK April S&P Global PMI:MSC Composite - Output08:30 GMT - UK April S&P Global Construction PMI (exp 50.0, prev 50.2)09:00 GMT - EZ March Retail Sales (exp 0.7% m/m, prev -0.5% and -0.3% y/y, prev -0.7%) ISSUANCE09:00 GMT - Austria 2.90% 10-year and 0.70% 47-year, EUR2.0125bn in total EVENTS07:00 GMT - Riksbank holds its Monetary policy meeting at which the executive board takes a decision on monetary policy including the policy rate08:00 GMT - Norges Bank Governor Ida Wolden Bache gives an introduction to the consultation on the Financial Markets Report 2024 in the Storting's Finance Committee12:30 GMT - Bank of England External member of the Financial Policy Committee Jonathan Hall delivers a speech at the University of Exeter ‘Monsters in the deep ….’ (Artificial Intelligence)
PRICE TALK: 8.00%-8.25% TIMING: Books close at 1:00pm ET today, pricing thereafter Genesis Energy, L.P. and Genesis Energy Finance Corporation , B3/B , announced a US$500m 8-year NC3 senior unsecured notes via JOINT BOOKRUNNERS: WFS, Capital One, Regions, SMBC, BNP, BofA, Citi, Citizens, Fifth Third, Scotiabank, Truist CO-MANAGERS: Comerica. Investor call today at 10:30am. pricing is expected today. UoP: To (i) to redeem all outstanding 2026 notes and (ii) for general partnership purposes, including repaying a portion of the revolving borrowings outstanding under the senior secured credit facilit
Graphic Packaging International, LLC(NYSE: GPK) , announced a US$500m 144a/RegS 8 years (July 2032) NC-3 (1st call at par plus 50% of coupon) Senior Notes via bookrunners: Jt Book-Running Mgrs: BofA (Left)/BNP/Fifth Third/Mizuho/PNC/Rabo/Regions/SMBC/TD/Truist/WFS Co-Managers: Cap One/Citizens/JPM/US Bancorp . Investor call today at 11:30am. Pricing is expected today. UoP: Net proceeds are intended to be used to repay a portion of the outstanding borrowings under the domestic secured revolving creditfacility, to pay fees and expenses incurred in connection with the offering of the notes and for general corporate purposes.
Canadian investment company Westaim returned to sell about 60% of its remaining stake in property and casualty insurer Skyward Speciality Insurance via a roughly US$170m follow-on stock sale. A syndicate led by Barclays, KBW and Jefferies is undertaking a day of marketing on Monday to sell 4.4m secondary shares or about 11% of Skyward ahead of pricing post-close. Early in Monday's session following news of the sale, shares of Skyward rose 1.7% to US$38.20, up nearly 14% this year and more than d
The MBS basis is leaning wider with Treasuries lower, albeit modestly, and contained to a tight range as supply from Treasury as well as corporates are offsetting geopolitical concerns with Israel carrying out an airstrike in the southern Gaza city of Rafah. The belly is slightly underperforming on the curve with 10s holding just above Friday’s 4.50% settlement close after hitting a low of 4.469% ahead of the New York open. US equity indices remain higher by 0.2% to 0.6% in the Nasdaq, whi
Swaps narrowed this morning after opening mixed, though with the slope of the spread curve still in steepening mode. Much of the narrowing move has been led by the pullback in Treasuries after the early heated geopolitical bid and spillover buying from Bunds, reversed on dealers hedging for this week’s $125bn Treasury Refunding package of auctions and huge rate-lock related paying/selling as thirteen IG deals lined up. According to LSEG Eikon swap spreads are: Roseanne.Briggen@LSEG.com
GM Financial has announced on its upcoming SEC Registered US$1.3bn+ offered (no grow) prime auto lease ABS transaction, GM Financial Automobile Leasing Trust (GMALT) 2024-2. Joint Bookrunners: BMO Capital Markets (str), BofA, Deutsche Bank, GS and RBC Co-Managers: BNP Paribas, CIBC Capital Markets, MUFG, and Scotiabank Anticipated Capital Structure: * Classes A-2A and A-2B will be sized to demand; the Class A-2B will not exceed 75% of the aggregate Class A-2 ** Deal will not grow - TRANSACTION D
EUR/USD firmed on Monday as last week's disappointing U.S. payrolls and ISM reports weighed on Treasury yields and euro zonedata continued to recover, but those data trends will have to persist to reverse the slide since December and target key resistance by 1.1000. Friday's 1.08125 high following dovish U.S. data ran into the downtrend line from March's recovery high. There's little top U.S. economic data this week, though plenty of scheduled Fed policymaker speaking engagements, beginning with
IFR hosts a comprehensive programme of conferences, seminars and roundtables throughout the year, providing authoritative insight into the trends and outlooks for specific regions and asset classes.
Access a digital replica of IFR's print magazine, updated each Friday. Plus regular Special Reports and Roundtables, covering industry themes and trends.
HSBC’S CHAIRMAN MARK Tucker is looking for his third CEO in six years after Noel Quinn announced he was retiring. The timing of the announcement took markets by surprise, but on the bank’s earnings call Quinn was at pains to point out that he enjoyed a good relationship with Tucker throughout his tenure – except when it came to football. "The only point of difference myself and Mark have had over the past five years is he’s an ardent Chelsea supporter and I’m a Villa supporter. We concluded that debate with a 2–2 draw earlier this week." Tucker, fittingly, had the last word, and could be heard calling out in the background: “We were robbed,” in reference to Chelsea’s potential stoppage time winner, which was ruled out. But it appears the pair hadn’t settled for a draw in the boardroom. Tucker is a former professional footballer with a reputation similar to that of 1970s Chelsea defender Ron “Chopper” Harris, and it sounds like he may have taken Quinn out with the equivalent of a high tackle. According to the FT, Tucker may have precipitated Quinn’s retirement plans because he didn’t want them to clash with him stepping down in 2026. There was a double blow for Quinn as he announced his retirement days before HSBC tabled an AGM proposal to scrap its bonus cap, following an earlier move by Goldman Sachs. That gives Tucker more clout in the transfer market as he looks for a successor, although shareholders will hope he won’t copy the recruitment approach taken by his beloved blues, who have so far spent more than £1bn on players and two managers to achieve 11th place in the Premier League. JAMES GORMAN STEPPED down as CEO of Morgan Stanley at the time of his choosing, and now as executive chairman he’s able to set his legacy straight. In an interview with Betsy Graseck, Morgan Stanley’s global head of banks research, he talked about the lead role he played in the M&A deals that helped transform the bank – and it will have made uncomfortable viewing for M&A bankers who prize their art above all others. Gorman revealed his straightforward approach to dealmaking, which boils down to paying a full price and not hiding anything from the target. And rather than allowing Morgan Stanley’s M&A department to take the lead, Gorman negotiated all the deals himself. When it came to negotiating an equity conversion with Japanese shareholder MUFG in 2011, Gorman described a one-on-one meeting with MUFG’s then CEO Nobuyuki Hirano in a hotel. Rather than pulling up a spreadsheet or dialling into a conference call with advisers, Gorman produced a napkin and drew a line down the middle of it. On one side he said what he wanted and invited Hirano to fill in the other side. Gorman is a non-smoker but you get the impression that if he was, he'd have whipped a pen from behind his ear and scribbled on the back of a cigarette packet, rather than a napkin. But perhaps Gorman is getting carried away with his dealmaking prowess. The negotiations he referred to took place in 2011, when MUFG agreed to convert its preferred stock to common stock. The actual landmark US$9bn investment was struck in 2008, two years before he became CEO. IF CITIGROUP WAS hoping it would be rewarded for helping three of its former bankers to become billionaires, then it will be sorely disappointed. The founders of CVC, the private equity firm that was spun out of Citigroup three decades ago, have just become even richer following its IPO. So surely this was a time to remember their roots. Well sort of. CVC gave Citi a role as bookrunner, but that constituted mere crumbs from the top table as arch-rivals Goldman Sachs, JP Morgan and Morgan Stanley were handed glo-co roles. Goldman’s mantra is to be long-term greedy but when it comes to CVC, Citigroup could be forgiven for feeling long-term pissed off.
IFR hosts a comprehensive programme of conferences, seminars and roundtables throughout the year, providing authoritative insight into the trends and outlooks for specific regions and asset classes.
Access a digital replica of IFR's print magazine, updated each Friday. Plus regular Special Reports and Roundtables, covering industry themes and trends.
HSBC’S CHAIRMAN MARK Tucker is looking for his third CEO in six years after Noel Quinn announced he was retiring. The timing of the announcement took markets by surprise, but on the bank’s earnings call Quinn was at pains to point out that he enjoyed a good relationship with Tucker throughout his tenure – except when it came to football. "The only point of difference myself and Mark have had over the past five years is he’s an ardent Chelsea supporter and I’m a Villa supporter. We concluded that debate with a 2–2 draw earlier this week." Tucker, fittingly, had the last word, and could be heard calling out in the background: “We were robbed,” in reference to Chelsea’s potential stoppage time winner, which was ruled out. But it appears the pair hadn’t settled for a draw in the boardroom. Tucker is a former professional footballer with a reputation similar to that of 1970s Chelsea defender Ron “Chopper” Harris, and it sounds like he may have taken Quinn out with the equivalent of a high tackle. According to the FT, Tucker may have precipitated Quinn’s retirement plans because he didn’t want them to clash with him stepping down in 2026. There was a double blow for Quinn as he announced his retirement days before HSBC tabled an AGM proposal to scrap its bonus cap, following an earlier move by Goldman Sachs. That gives Tucker more clout in the transfer market as he looks for a successor, although shareholders will hope he won’t copy the recruitment approach taken by his beloved blues, who have so far spent more than £1bn on players and two managers to achieve 11th place in the Premier League. JAMES GORMAN STEPPED down as CEO of Morgan Stanley at the time of his choosing, and now as executive chairman he’s able to set his legacy straight. In an interview with Betsy Graseck, Morgan Stanley’s global head of banks research, he talked about the lead role he played in the M&A deals that helped transform the bank – and it will have made uncomfortable viewing for M&A bankers who prize their art above all others. Gorman revealed his straightforward approach to dealmaking, which boils down to paying a full price and not hiding anything from the target. And rather than allowing Morgan Stanley’s M&A department to take the lead, Gorman negotiated all the deals himself. When it came to negotiating an equity conversion with Japanese shareholder MUFG in 2011, Gorman described a one-on-one meeting with MUFG’s then CEO Nobuyuki Hirano in a hotel. Rather than pulling up a spreadsheet or dialling into a conference call with advisers, Gorman produced a napkin and drew a line down the middle of it. On one side he said what he wanted and invited Hirano to fill in the other side. Gorman is a non-smoker but you get the impression that if he was, he'd have whipped a pen from behind his ear and scribbled on the back of a cigarette packet, rather than a napkin. But perhaps Gorman is getting carried away with his dealmaking prowess. The negotiations he referred to took place in 2011, when MUFG agreed to convert its preferred stock to common stock. The actual landmark US$9bn investment was struck in 2008, two years before he became CEO. IF CITIGROUP WAS hoping it would be rewarded for helping three of its former bankers to become billionaires, then it will be sorely disappointed. The founders of CVC, the private equity firm that was spun out of Citigroup three decades ago, have just become even richer following its IPO. So surely this was a time to remember their roots. Well sort of. CVC gave Citi a role as bookrunner, but that constituted mere crumbs from the top table as arch-rivals Goldman Sachs, JP Morgan and Morgan Stanley were handed glo-co roles. Goldman’s mantra is to be long-term greedy but when it comes to CVC, Citigroup could be forgiven for feeling long-term pissed off.
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