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Monday, 23 October 2017

This way to the hen-coop, Mr Fox

IFR 2206 21 October to 27 October 2017

What’s the best way to avoid being accused of cheating? Invent the rules of the game yourself, of course.

Top News

Andrew Bailey, Chief Executive Officer of the Financial Conduct Authority, speaks during a "Reuters Newsmaker"

'Life after Libor' language puts banks in control

IFR 2206 21 October to 27 October 2017 By , , ,

Who would you trust to decide the precise levels of coupon payments you receive on your debt holdings after Libor is discontinued?

Senator Pat Toomey

Door opens for Congress to end lending rules

IFR 2206 21 October to 27 October 2017 By

The investigative arm of Congress said on Thursday that US bank guidelines on leveraged lending are subject to Congressional review, clearing the way for them possibly to be overturned.

A young Chinese athlete exercises in front of a Chinese flag at a gymnastics hall at the Shichahai sports school in Beijing.

China snubs rating agencies for sovereign return

IFR 2206 21 October to 27 October 2017 By

The People’s Republic of China will go without international ratings for its first US dollar sovereign bond since 2004, raising doubts over whether it will still achieve its goal of setting a liquid global benchmark.

Rio Tinto CEO Jean-Sebastien Jacques poses for photographs before announcing Rio Tinto's 2017 first-half results in London, Britain.

Rio Tinto faces fraud allegations

IFR 2206 21 October to 27 October 2017 By , Jim Regan

The US Securities and Exchange Commission last Tuesday charged Rio Tinto and two of its former top executives with fraud, saying they inflated the value of coal assets in Mozambique and concealed critical information while tapping the market for billions of dollars.

Qudian leads Chinese US IPO rush

Qudian leads Chinese US IPO rush

IFR 2206 21 October to 27 October 2017 By

Online microlender Qudian has raised US$900m from the biggest Chinese listing in the US in a year, underscoring the strong appetite of American investors for fast-growing and reasonably priced mainland companies.

Santander

Yankees show love for Santander's SNP debt

IFR 2206 21 October to 27 October 2017 By ,

Spain’s Banco Santander returned to the US dollar market last week raising US$2.5bn of so-called senior non-preferred bonds in a widely expected deal that will help it close in on one of the biggest shortfalls of loss-absorbing debt among the world’s largest banks.

ECB Exit

ECB eyes end of QE but retains corporate commitment

IFR 2206 21 October to 27 October 2017 By

After more than €2trn of bond purchases, the European Central Bank is expected on Thursday to announce the phasing out of its quantitative easing programme, with plans to reduce – and eventually halt – its purchases over the course of next year.

Global support for Vincom IPO

Global support for Vincom IPO

IFR 2206 21 October to 27 October 2017 By

Global investors piled into Vincom Retail’s D15trn (US$680m) IPO, Vietnam’s largest, as it offered a rare opportunity to buy into the frontier market’s rapid economic growth.

Commercial properties line the western side of Sydney's Central Business District in Australia.

Aussie cooling worries investors

IFR 2206 21 October to 27 October 2017 By

A cooling property market is prompting some global fund managers to take a defensive approach to Australian credit.

novo banco espirito santo bes

Novo Banco CDS settlement to include deposits

IFR 2206 21 October to 27 October 2017 By

The package of assets used to determine settlement on credit default swaps referencing Novo Banco will include a fixed-term deposit option granted to noteholders who redeemed their bonds in the bank’s US$4.74bn tender offer.

IFR Magazine Top News in Full (subscription required)

People & Markets

CLSA outlines ambitious growth plans

IFR 2206 21 October to 27 October 2017

One year after announcing its integration with Citic Securities International, CLSA is looking to grow its market share across multiple product lines.

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

I box

IFR 2206 21 October to 27 October 2017

THERE’S NOTHING ECM bankers like more than beating up their rivals, but after retiring from Barclays earlier this year, Sam Dean appears to be taking this literally.

Banco Popular investors denied rescue details

IFR 2206 21 October to 27 October 2017

Former investors in Banco Popular, the Spanish bank bought by Santander for €1 in a rescue deal in June, have had their attempts to obtain documents blocked by the European authorities and are considering their next steps in seeking compensation.

Junior creditors agree to revised Norske Skog recap

IFR 2206 21 October to 27 October 2017

Norske Skog said an agreement has been reached between its shareholders and two main creditor groups to recapitalise the ailing pulp and paper producer, seemingly bringing the long-running dispute to an end.

Swaptions begin electronic shift

IFR 2206 21 October to 27 October 2017

Interest rate options have started a voluntary shift onto electronic platforms as Garda Capital Partners completed the first fully electronic swaption trade on Tradeweb’s swap execution facility.

    More from People & Markets

    Bonds

    Aflac serves generous spread

    Aflac serves generous spread

    IFR 2206 21 October to 27 October 2017

    US insurer Aflac last week paid its second visit of the year to the yen market, this time for an offering of hybrid Global yen bonds – a first from a foreign life insurer.

    CMA CGM vindicated

    IFR 2206 21 October to 27 October 2017

    CMA CGM printed its seven-year non-call three deal 125bp inside where it priced a five-year non-call two in July, a vindication of its decision to refuse to pay up for the longer maturity some three months ago.

    Berlin Hyp returns with second Green senior

    IFR 2206 21 October to 27 October 2017

    Berlin Hyp cemented its standing as one of the more established Green bond issuers in the financial sector as it sold a €500m 10-year senior.

    Investors lap up UnitedHealth bonds after sturdy earnings

    IFR 2206 21 October to 27 October 2017

    UnitedHealth Group’s US$4bn bond issue on Wednesday was more than three times subscribed. The trade came a day after the company reported that third-quarter net earnings attributable to shareholders had grown by more than 26% year-on-year.

    Take two in Tier 2: Arkea takes sector by storm

    IFR 2206 21 October to 27 October 2017

    The response to Credit Mutuel Arkea’s second euro Tier 2 this year surpassed expectations, with books of €4.2bn (pre-reconciliation) enabling the issuer to price the €500m 12-year non-call seven deal with a minimal new-issue concession.

      More from Bonds

      Loans

      Senator Pat Toomey

      Door opens for Congress to end lending rules

      IFR 2206 21 October to 27 October 2017 By

      The investigative arm of Congress said on Thursday that US bank guidelines on leveraged lending are subject to Congressional review, clearing the way for them possibly to be overturned.

      Chairman of Dalian Wanda Group Wang Jianlin speaks during a strategic cooperation signing ceremony with Sunac China Holdings Ltd. and R&F Properties in Beijing, China.

      Banks call time on Wanda

      IFR 2206 21 October to 27 October 2017 By Yan Jiang

      Some of Dalian Wanda Commercial Properties’ offshore lenders are demanding immediate repayment of loans after the Chinese property company was downgraded to junk status.

      Shibor loan scores with lenders

      Shibor loan scores with lenders

      IFR 2206 21 October to 27 October 2017 By Yan Jiang, Evelynn Lin

      The first loan priced over the Shanghai interbank offered rate (Shibor) has closed oversubscribed, marking a strong debut for the new benchmark rate, as well as borrower Merchants Union Consumer Finance.

      India: Mu Sigma buy loan closes

      IFR 2206 21 October to 27 October 2017

      The US$394.3m acquisition loan for Mu Sigma founder Dhiraj Rajaram to buy an additional stake in the Indian management consulting company has been signed.

      India: Yes Bank signs bigger Samurai

      IFR 2206 21 October to 27 October 2017

      Yes Bank has signed a ¥16.5bn (US$146m) one-year Samurai loan, which was increased from the ¥5bn target after being heavily oversubscribed.

      Hong Kong: Forestry doubles offshore loan

      IFR 2206 21 October to 27 October 2017

      State-owned China Forestry Group has doubled the size of its three-year offshore maiden term loan to HK$4bn (US$510m) from the initial target after drawing 18 lenders in general syndication.

      More flock to HGC LBO loan

      IFR 2206 21 October to 27 October 2017

      The HK$7.137bn (US$914m) five-year loan for investment manager I Squared Capital’s leveraged buyout of the fixed-line phone unit of Hong Kong tycoon Li Ka-Shing has had a blowout response, with more than two dozen banks joining.

      China: Yunnan Water seeks to tap

      IFR 2206 21 October to 27 October 2017

      Hong Kong-listed Yunnan Water Investment is in the market for a three-year loan of up to US$200m, 14 months after raising a US$130m facility.

      More from Loans

      Equities

      Varta sparks interest amid IPO rush

      IFR 2206 21 October to 27 October 2017

      European IPOs are coming thick and fast, with investors and syndicate desks trying to juggle them all in one of the busiest periods for ECM in recent memory.

      China eyes Saudi Aramco stake

      IFR 2206 21 October to 27 October 2017

      China is offering to buy up to 5% of Saudi Aramco directly, in a move that would give Saudi Arabia the flexibility to consider various options for its plan to float the world’s biggest oil producer on the stock market, sources have said.

      MongoDB draws huge demand for US$192m IPO

      IFR 2206 21 October to 27 October 2017

      Database software company MongoDB injected another dose of optimism into the resurgent US tech IPO market, surging 33.6% on debut on Thursday after drawing overwhelming demand for its US$192m IPO.

      Lean Aussie banks bring ECM joy

      Lean Aussie banks bring ECM joy

      IFR 2206 21 October to 27 October 2017

      The slimming down of Australia’s large banks threw up another win for equity capital markets last week after financial services company IOOF Holdings completed a A$461m (US$361m) placement to part-fund its acquisition of ANZ’s wealth business.

      South Jersey flags US$900m stock sale, MCB

      IFR 2206 21 October to 27 October 2017

      South Jersey Industries plans to raise US$850m-$900m from a combination of common equity and mandatory CBs to help fund its US$1.7bn acquisition of New Jersey and Maryland regulated gas assets from Southern Company Gas.

      Russia: Modest gain for footwear float

      IFR 2206 21 October to 27 October 2017

      Footwear retailer Obuv Rossii traded at a modest premium on debut on Friday, having priced its Moscow Exchange IPO at the bottom of Rbs140-Rbs170 guidance that morning.

      UK: HomeServe raises fresh capital for acquisitions

      IFR 2206 21 October to 27 October 2017

      Home emergency and repair services group HomeServe raised £125m on Thursday from a placing of new shares that will probably be used to pay for its likely acquisition of Dominion Products and Services. The capital will be retained and used for other potential acquisitions if the deal is not completed.

      UK: RWS fundraises for translation buy

      IFR 2206 21 October to 27 October 2017

      Intellectual property business RWS, which provides patent filing and search services, is buying Moravia, a US provider of technology-enabled translation services, for US$320m backed by an equity fundraising and a refinancing of existing debt.

      More from Equities

      Derivatives

      Swaptions begin electronic shift

      IFR 2206 21 October to 27 October 2017 By

      Interest rate options have started a voluntary shift onto electronic platforms as Garda Capital Partners completed the first fully electronic swaption trade on Tradeweb’s swap execution facility.

      Quantile makes swaps compression run

      IFR 2206 21 October to 27 October 2017 By

      Quantile Technologies has completed its first compression run of over-the-counter swaps cleared at LCH, after becoming the first firm in almost a decade to be granted ‘Approved Compression Service Provider’ status at LCH’s SwapClear platform.

      New tights for euro covereds

      IFR 2206 21 October to 27 October 2017

      Bank of Montreal and Helaba sold some of the tightest covered bonds from their respective jurisdictions last Thursday, with the latter setting the spread on its 10-year tap from the outset.

      Nestle dusts off Lux vehicle for multi-tranche first

      IFR 2206 21 October to 27 October 2017

      Nestle dusted off a Luxembourg-domiciled entity to issue its first multi-tranche euro trade since announcing a SFr20bn share buyback programme, the starkest sign yet of a shift in issuance strategy to accommodate shareholders.

      novo banco espirito santo bes

      Novo Banco CDS settlement to include deposits

      IFR 2206 21 October to 27 October 2017 By

      The package of assets used to determine settlement on credit default swaps referencing Novo Banco will include a fixed-term deposit option granted to noteholders who redeemed their bonds in the bank’s US$4.74bn tender offer.

      More from IFR Derivatives

      MOVES-Ramesh set to join Jefferies

      23 October 2017 By

      Bala Ramesh is set to join Jefferies syndicate team, banking sources said.

      Carige

      Carige bondholders hunker down ahead of equity raise

      23 October 2017 By

      Banca Carige’s debt exchange offer cleared its final hurdle on Saturday, but the bank’s broader plan to strengthen its balance sheet could yet disintegrate if a forthcoming €500m equity raise fails to lift off.

      A man wearing 70's themed golden shoes and clothes dances on the street during the Schlagermove festival in Hamburg July 7, 2012. Thousands took part in the event, which is based on songs and fashion from the seventies.

      CBR Fashion adds to retailer trend

      23 October 2017 By

      German retailer CBR Fashion is out with a debut €450m 5NC2 senior secured, bringing another continental retailer with a chequered history to the European high-yield market.

      Procter & Gamble's Tide laundry detergent

      P&G rides in Nestle's slipstream

      23 October 2017 By

      Procter & Gamble will bring a rare euro trade later on Monday, a deal that follows in the slipstream of Friday’s €2bn three-trancher from Nestle as issuers make the most of buoyant conditions.

      A 15% drop in high-grade US corporate volume seen in 2018: BAML

      23 October 2017 By

      The impact of the Fed’s balance sheet reductions, tax reform and ending European QE is expected to trigger a 15% decline in US corporate high-grade new issue supply volumes in 2018, Bank of America Merrill Lynch said in a report on Monday.

      Logo of the European Stability Mechanism (ESM)

      ESM to issue inaugural five-year dollar benchmark

      23 October 2017 By

      The European Stability Mechanism is readying its US dollar debut, having mandated Citigroup, Deutsche Bank and JP Morgan for a five-year RegS/144A benchmark.

      Average IG bond spread hits post-crisis low of 101bp: BAML

      23 October 2017 By

      The average investment-grade US corporate bond spread tightened to a post-financial crisis low of 101bp, according to Bank of America Merrill Lynch data calculated on Friday.

      Danone

      Investors stand up for Danone hybrid

      23 October 2017 By

      Danone is expected to break the record for the lowest coupon on a euro hybrid corporate bond as investors’ desperate search for yield pushes them to buy riskier instruments.

      JP Morgan

      JP Morgan confident about opening up of China's banking sector

      23 October 2017 By

      JP Morgan’s Asia-Pacific vice chairman has said she expects Chinese regulators to lift restrictions on foreign banks operating in the mainland, joining a growing chorus of voices predicting an opening up in China’s banking sector.

      Bank of America and Merrill Lynch logo

      FCA hits BAML with £34.5m derivatives reporting fine

      23 October 2017 By

      The UK’s Financial Conduct Authority has fined Bank of America Merrill Lynch £34.5m for failing to report more than 68m listed derivatives under the European Market Infrastructures Regulation.

      Australia and New Zealand Banking Group logo

      ANZ settles rate-rigging case with ASIC

      23 October 2017 By Paulina Duran

      (Reuters) Australia and New Zealand Banking Group has reached a last-minute agreement to settle a case brought by the country’s securities regulator accusing it of manipulating the bank bill swap rate.

      MOVES-Yung resurfaces at BoCom

      23 October 2017

      Andy Yung has resurfaced at Bank of Communications, Hong Kong branch after departing HSBC.

      MOVES-RHB hires regional head of ECM

      23 October 2017

      RHB Bank has hired Ankur Khandelwal as head of equity capital markets for Asia, based in Singapore. He is due to start in mid-November.

      MOVES-Allianz appoints head of institutional solutions for APAC

      23 October 2017

      Allianz Global Investors has hired Philip Tso as head of institutional solutions for Asia-Pacific.

      MOVES-Baker McKenzie hires lawyer from UBS in Sydney

      23 October 2017

      Baker McKenzie has hired Antony Rumboll as partner in Sydney.

      Glencore

      Investors pour US$5.8bn of orders into Glencore trade

      20 October 2017 By

      Investors flooded Anglo-Swiss miner Glencore’s second US dollar bond this year with demand, placing almost six times as many orders as the deal’s US$1bn size.

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      Special Reports

      IMF/World Bank Report IFR+IMF+Report+2017+Cover+web
      Emerging market countries, where the IMF has concentrated much of its resources, reveal a strange state of affairs.

      Top 250 Borrowers Top+250+Borrowers+2017
      Normality redefined: There comes a time when things have been out of kilter with what would generally be construed as normal for so long that they begin to become accepted as ‘just the way it is’. And so it is in the debt markets. Few would claim that conditions are currently normal, although just what that actually means is open to question.

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

      I box

      IFR 2206 21 October to 27 October 2017

      THERE’S NOTHING ECM bankers like more than beating up their rivals, but after retiring from Barclays earlier this year, Sam Dean appears to be taking this literally.