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Tuesday, 02 September 2014

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Upfront

Trading room

Avoidance tactics

IFR 2048 30 August to 5 September 2014

Attempts to shoehorn much of the US$710trn over-the-counter derivatives market on to exchange-like platforms have gained little traction within the buyside community.

Top News

elliott mamagement argentina

Elliott extends fight to China

IFR 2048 30 August to 5 September 2014 By Davide Scigliuzzo

A unit of billionaire Paul Singer’s Elliott Management, which is Argentina’s main holdout creditor, is extending its legal fight with the South American nation to China.

Burger King

Burger King feeds hungry lenders

IFR 2048 30 August to 5 September 2014 By Leela Parker Deo, Mariana Santibanez

US loan investors, hungry for more new-money paper, were served a Whopper-sized acquisition loan when fast food giant Burger King and Canadian coffee and doughnut chain Tim Hortons agreed to join forces. The merger will create the world’s third-largest quick-service restaurant company and, with a multi-billion institutional term loan component, the tie-up gives a boost to the M&A financing pipeline heading into September.

A general view of the lobby outside of the Carlyle Group offices in Washington

Carlyle seals rare Japanese FI LBO

IFR 2048 30 August to 5 September 2014 By Wakako Sato

A ¥54bn (US$520m) financing backing the leveraged buyout of SBI Mortgage has underscored the hunger for higher yields among Japanese financial institutions starved of lending opportunities.

Hong Kong Airlines

Flights with shares in landmark IPO

IFR 2048 30 August to 5 September 2014 By Fiona Lau

Hong Kong Airlines intends to offer retail investors free flights in an attempt to drive demand for the city’s first dual-currency IPO.

A man is silhouetted in front of a Bank of China's logo at its branch office in Beijing.

China's AT1s to change HY landscape

IFR 2048 30 August to 5 September 2014 By Lianting Tu

An expected deluge of bank capital bonds from China’s biggest lenders is set to change the make-up of Asia’s G3 high-yield market, as investors sell PRC property credits in exchange for similarly yielding Additional Tier 1 securities.

debut sukuk south africa

List of sukuk debutants set to grow

IFR 2048 30 August to 5 September 2014 By Abhinav Ramnarayan, Lianting Tu,

Islamic finance markets are set to receive another boost in the coming weeks with the potential addition of two more non-Islamic countries to the list of sovereign sukuk issuers.

derivs

Buysiders avoid SEFs with non-standard swaps

IFR 2048 30 August to 5 September 2014 By Mike Kentz

Up to three-quarters of interest rate swaps executed by US buyside firms are being structured in a way that avoids Dodd-Frank requirements for trading standardised derivatives on exchange-like platforms.

International Capital Markets Association logo

​ICMA backs new sovereign bond CACs

IFR 2048 30 August to 5 September 2014 By

The International Capital Markets Association, representing many of the world’s major issuers and their advisers, has reached agreement on new recommended sovereign bond clauses that could avert the problems that have afflicted Argentina in restructuring its debt.

IFR Magazine Top News in Full (subscription required)

People & Markets

Keith Mullin 475px June 2014

Funding gap? What funding gap?

IFR 2048 30 August to 5 September 2014

LIKE EVERYONE ELSE, I’ve been watching with interest as Germany adopts a more accommodative stance towards France and the latter’s struggle to reach its 3% budget deficit target in return for a firm commitment to economic reform.

Michel Barnier

Huge structural reforms await banks

IFR 2048 30 August to 5 September 2014

Major international banks that have spent the last five years trying to comply with Basel III rules on the levels of capital they must hold, now face the tortuous prospect of a further five arduous years implementing regulatory reforms restricting how their operations are structured.

A Goldman Sachs sign is seen above the floor of the New York Stock Exchange

Banks in MBS settlement talks

IFR 2048 30 August to 5 September 2014

The US Department of Justice has turned its attention to settlement talks with Goldman Sachs and Morgan Stanley over allegations that the investment banks knowingly packaged and sold problematic mortgage-backed products, according to sources with knowledge of the conversations.

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

Dirty work

IFR 2048 30 August to 5 September 2014

SPARE A THOUGHT for Manhattan Federal Court judge Thomas Griesa. The 83-year-old at the centre of the battle by US hedge funds to negotiate preferential terms with Argentina probably saw the summer break as a time for some light relief.

Bank revenues slide

Top banks see fee income drop

IFR 2048 30 August to 5 September 2014

Revenue at the world’s 10 largest investment banks fell 5% in the first half of the year, as continued weakness in fixed income trading departments outweighed a strong rebound in advisory services on deals.

    More from People & Markets

    Bonds

    Logo of Swiss pharmaceutical company Roche

    Roche bonds on the cards

    IFR 2048 30 August to 5 September 2014

    Roche is set to return to the US dollar bond market for the first time in five years if it is successful in its plans to purchase biotechnology company InterMune for US$8.3bn.

    A Banco Santander branch

    AT1 market poised for revival

    IFR 2048 30 August to 5 September 2014

    Banco Santander and UniCredit will provide the first test of investor appetite for Additional Tier 1 debt in Europe, after the asset class was buffeted by serious headwinds during the summer months.

    Banks extend Australian tenors

    IFR 2048 30 August to 5 September 2014

    A growing number of foreign and domestic banks are pricing Australian dollar bonds with tenors beyond the country’s traditional five-year sweet spot, to attract yield-hungry investors.

    Finland opens market ahead of September rush

    IFR 2048 30 August to 5 September 2014

    The Republic of Finland breezed through a wide-open primary market window last week, pricing a €4bn September 2020 benchmark after attracting about €8.8bn of orders. The Triple A rated sovereign priced the transaction at 13bp through mid-swaps, which was flat to its secondary curve.

    BMW locks in super-low coupons

    IFR 2048 30 August to 5 September 2014

    BMW Finance, the financing arm of German auto maker BMW, was able on Tuesday to attract a strong order book for the first benchmark in almost a month in the European corporate bond market, despite printing at some of the lowest yields on record for an auto company.

      More from Bonds

      Loans

      Scientific Games

      New deals fuel cautious optimism

      IFR 2048 30 August to 5 September 2014 By Leela Parker Deo

      Two acquisition deals expected to contribute nearly US$9bn in new term debt to the US leveraged loan market brought summer to a close and optimism to bankers hoping the pipeline will continue to build in September. Bankers and investors said there are a slew of new deals in the works, though when and at what pace they launch is anyone’s guess.

      Gala Bingo club

      Leveraged market set for boost

      IFR 2048 30 August to 5 September 2014 By Claire Ruckin

      Bankers are preparing debt financings to back a number of potential sales that would provide a boost to the leveraged finance market and soak up some of the demand from cash-rich investors hungry for event-driven deals.

      Xiaomi Mi phones

      China: Xiaomi proves hit with lenders

      IFR 2048 30 August to 5 September 2014 By

      The strong response to Xiaomi’s US$1bn three-year dual-tranche loan is already being compared to Alibaba Group’s loan-market debut two years ago, except that the PRC smartphone maker has achieved tighter pricing.

      China: Alibaba seals US$3bn club

      IFR 2048 30 August to 5 September 2014

      E-commerce giant Alibaba Group Holding has signed a US$3bn five-year revolver on a club basis as it prepares to launch its multi-billion dollar IPO in the US. 

      Aker Solutions Holdings

      Aker, Akastor sign demerger loans

      IFR 2048 30 August to 5 September 2014

      Subsea technology firm Aker Solutions Holdings and oilfield services and drilling technology firm Akastor have signed loans to refinance and back their demerger from each other.

      Netherlands: VolkerWessels refinances FS

      IFR 2048 30 August to 5 September 2014

      Infrastructure and construction group VolkerWessels has agreed a €600m five-year revolver to replace a €595m forward start facility that was due to mature at the end of 2015.

      UK: Regus taps Schuldschein market

      IFR 2048 30 August to 5 September 2014

      Office rental firm Regus has placed a €210m Schuldschein to reduce borrowings under its existing £320m revolver. The financing comprises €165m of three-year notes and €45m of five-year notes.

      Finland: S Group agrees €565m loan

      IFR 2048 30 August to 5 September 2014

      Retail and service trade cooperative S Group has agreed a €565m five-year credit facility to back its logistics investments, including the construction of a new logistics centre for the distribution of groceries.

      More from Loans

      Equities

      Alibaba's logo is seen at its headquarters on the outskirts of Hangzhou, Zhejiang province

      Alibaba puts finishing touches to IPO

      IFR 2048 30 August to 5 September 2014

      China’s Alibaba has taken another step in readying itself for the imminent launch of its NYSE IPO, revealing strong operating momentum that it hopes will underpin a valuation of as much as US$200bn.

      Blackstone Group office

      Blackstone takes on Elon Musk

      IFR 2048 30 August to 5 September 2014

      Blackstone has turned its sights on the small, albeit growing rooftop solar panel installation market, a niche already controlled by Elon Musk and his cousins via SolarCity. Carved out of assets that Blackstone acquired in 2012, Vivint Solar last week entered registration with a proposed US$200m IPO.

      mexico japan samurai

      Mexico: MLPs may be country's next equity trend

      IFR 2048 30 August to 5 September 2014

      Master Limited Partnerships may soon join a growing list of asset classes in Mexico as corporations explore ways to fund growth on the back of recent reforms. Traditionally used in the US to finance natural resource development, MLPs are thought to be well suited for Mexico, where energy reform is expected to spark a boom in this sector.

      Bumi Armada logo

      Malaysia: Tail swallow in Bumi Armada

      IFR 2048 30 August to 5 September 2014

      A fixed-price block in Bumi Armada raised M$636m (US$202m) after pricing at M$2.96. Objectif Bersatu sold the shares to raise funds to subscribe to its entitlement in Bumi Armada’s rights offer.

      GrubHub returns for second course

      IFR 2048 30 August to 5 September 2014

      Online food ordering service GrubHub, one of 2014’s most hotly sought after IPOs, plans to return in the coming weeks with a first-time follow-on offering that will allow insiders to cut their holdings and raise a small amount of capital.

      Australia: PEP halves Veda stake

      IFR 2048 30 August to 5 September 2014

      Shareholders associated with Pacific Equity Partners have raised A$579.3m from a selldown of half their stake in credit checking service Veda.

      Australia: Medibank IPO in December

      IFR 2048 30 August to 5 September 2014

      The government has decided to go ahead with the IPO of state-owned health insurer Medibank Private this year.

      China: Up Energy places shares

      IFR 2048 30 August to 5 September 2014

      Up Energy Development Group raised HK$591m (US$76m) from a placement of 591m shares, or about 16.29% of its enlarged share capital.

      More from Equities

      Derivatives

      Barclays bank logo

      UPDATE: Rates businesses diverge

      IFR 2048 30 August to 5 September 2014 By

      The retrenchment in banks’ rates trading businesses shows little signs of abating, as what was once the engine room of investment banks’ revenue streams continues to feel the squeeze from the combined weight of tougher regulations and record low interest rates.

      Mario Draghi

      QE debate rages following Draghi comments

      IFR 2048 30 August to 5 September 2014 By

      Participants remain at odds over the likelihood of full-blown quantitative easing in Europe and continue to debate whether it is currently priced into markets, but this did little to deter a swift rally across fixed income assets last week on the back of a dovish speech from Mario Draghi at Jackson Hole.

      LCH.Clearnet logo

      Regulators tackle CCP resolution

      IFR 2047 23 August to 29 August 2014 By , Mike Kentz

      Six years on from the bankruptcy of Lehman Brothers, regulators have yet to draw up a framework to handle the collapse of a different breed of systemically important institutions that have become an integral part of financial markets: clearing houses for over-the-counter derivatives.

      Market volatility

      Skew spikes as hedging returns

      08 August 2014Updated: 08 August 2014 By Helen Bartholomew

      The recent equity market correction and corresponding jump in volatility have led to renewed demand for downside put options as investors seek to protect their equity exposure amid concerns that economic and geopolitical issues could conspire to deliver a rocky second half.

      Eurex logo

      Eurex enters swap futures battle

      IFR 2048 30 August to 5 September 2014 By Helen Bartholomew

      Eurex is set to throw its hat into the swap futures ring on Monday as its physically delivered euro interest rate contracts begin trading in a market that is already becoming flush with products ahead of a regulatory push towards listed swap alternatives.

      More from IFR Derivatives

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

      Dirty work

      IFR 2048 30 August to 5 September 2014

      SPARE A THOUGHT for Manhattan Federal Court judge Thomas Griesa. The 83-year-old at the centre of the battle by US hedge funds to negotiate preferential terms with Argentina probably saw the summer break as a time for some light relief.

      Shah June 24 2014

      ECB Watch

      Shah: Turning on taps when pipes are blocked is a futile exercise.

      Burger King logo

      Smaller M&A deals lag behind boom

      Burger King’s US$11bn deal to buy Canadian coffee chain Tim Hortons is the latest in a string of bumper merger and acquisition transactions that have reignited advisory fees for banks after a six-year drought.

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      China hints at 'new world order' with Hong Kong handlingVideo

      As Beijing squashes Hong Kong’s hopes for universal suffrage, Professor Willy Lam believes that this sets the stage for Beijing’s long-term goal of playing a substantial role in international policy.

      All Spotlight

      gw3

      IFR Fantasy Football League - GameWeek 3 Update

      01 September 2014

      Just three weeks in and several of the usual suspects have risen to the top of the IFR FFL.

      All IFR FFL

      Heron London

      Vertically challenged

      The City of London’s Heron Tower is set to play host to a unique relay race for charity, with teams sprinting up the tallest building in the Square Mile.

      IFR Top 250 Borrowers Cover 2014

      IFR Top 250 Borrowers 2014

      The bigger the better – in everything. Freddie Mercury, the late lead singer of Queen, wasn’t alone in judging the world and its wares solely on the merit of size. Take bond investors. When the Federal Reserve announced its intention to begin tapering its quantitative easing programme last May, expectations were of an inexorable rise in US yields.

      IFR Emerging Europe & Turkey Cover 2014

      IFR Emerging Europe and Turkey Special Report 2014

      At cruising altitude; turbulence ahead?: This report reaches you at a time when Emerging Europe and Turkey could be stuck on the tarmac. The political situation means Ukraine is grounded and Russia may yet have to consider an emergency landing, yet the rest of the CEE region appears to be about to take off.

      All Special Reports