sections

Sunday, 11 December 2016

Piece of fudge

IFR 2163 10 December to 16 December 2016

What to do with Banca Monte dei Paschi di Siena?

Top News

Passers-by walk in front of a branch of French bank Credit Agricole in Marseille

Credit Agricole to win race for new senior debt

IFR 2163 10 December to 16 December 2016 By

Credit Agricole is poised to become the first bank to issue a new form of senior debt, thwarting expectations that BNP Paribas would open the new market and providing a much-needed template for what is expected to become a new European standard.

UniCredit headquarters

UniCredit gears up for €13bn rights issue

IFR 2163 10 December to 16 December 2016 By , Steve Slater

UniCredit is on course to raise more than €5bn from asset sales and is expected to follow that up by raising about €13bn from a rights issue this week to bolster its capital, people familiar with the matter and analysts said.

Monte dei Paschi bank headquaters

Monte dei Paschi faces bailout

IFR 2163 10 December to 16 December 2016 By , , Graham Fahy,

Banca Monte dei Paschi di Siena may have little option but to ask for a government bailout after the European Central Bank rejected a plea to extend the deadline on its €5bn recapitalisation efforts by three weeks.

ecb mario draghi

Bankers analyse prospects after ECB shock

IFR 2163 10 December to 16 December 2016 By

Bankers were left mulling issuance prospects after the ECB announced it would cut its monthly purchases by €20bn from April.

UniCredit's Polish unit Bank Pekao logo is seen on their branch in Warsaw

Mandatory disposes of residual Pekao stake

IFR 2163 10 December to 16 December 2016 By

Equity-linked bankers took an innovative approach to dealing with UniCredit’s remaining 7.3% stake in Bank Pekao, following the Italian bank’s disposal of 32.8% of the Warsaw-listed bank to PZU and Polish Development Fund.

Poland

Poland paints the sovereign market Green

IFR 2163 10 December to 16 December 2016 By , Robert Hogg

Poland could become the first sovereign to issue a Green bond, having mandated banks for a euro-denominated five-year issue, potentially pipping France to the post.

Pemex

Pemex bond success buoys LatAm hopes

IFR 2163 10 December to 16 December 2016 By

A blowout bond deal from state-owned Mexican oil company Petroleos Mexicanos last week has stoked hopes of a strong start to 2017 for Latin American issuance.

Brazil's JBS on Wednesday raised US$700m from the sale of eight-year dollar bonds

JBS pins debt reduction on IPO

IFR 2163 10 December to 16 December 2016 By

JBS is set to return to international capital markets in the first half of 2017 with a New York Stock Exchange IPO after government shareholders shot down its plan to redomicile in Ireland. The sprawling meatpacking empire will be carved up with its international operations floated while the bulk of its Brazilian operations remain listed in Sao Paulo.

Vehicles are seen through a window as they drive on Guomao Bridge during rush hour in Beijing, China, November 7, 2016

LGFV issues surge, despite warning

IFR 2163 10 December to 16 December 2016 By

Chinese local government funding vehicles have dominated Asian G3 issuance in recent weeks, despite repeat warnings that the sector no longer benefits from direct state support.

A woman holds Indonesian rupiah banknotes at a Bank Negara Indonesia (BNI) mobile bank in Jakarta

BNI joins FIG borrowers crowd

IFR 2163 10 December to 16 December 2016 By , Chien Mi Wong

State-owned Bank Negara Indonesia has returned to the loan market for the first time in nearly a decade, becoming the latest Asian bank borrower to take advantage of the cheap funding on offer.

IFR Magazine Top News in Full (subscription required)

People & Markets

Wall Street sign

Q4 surge caps milestone trading year

IFR 2163 10 December to 16 December 2016

US banks are on track to snap the three-year downtrend in fixed-income trading as JP Morgan, Citigroup and Bank of America said fourth-quarter markets revenue may be up 15% to 20% from a year ago.

tidjane thiam credit suisse

Thiam targets more markets cuts for Credit Suisse

IFR 2163 10 December to 16 December 2016

Credit Suisse is to cut more costs from its global markets division in an effort to meet group pre-tax profit targets for 2018.

UK watchdog asks to see annual reviews in pay scrutiny

IFR 2163 10 December to 16 December 2016

Major banks in London have been asked by Britain’s financial regulator to show performance assessments of senior staff to ensure they include wider cultural issues, such as risk management, when making bonus decisions.

CFTC urged to fix 'flawed' swaps rules

IFR 2163 10 December to 16 December 2016

CFTC Commissioner Christopher Giancarlo has called on his own commission to fix US swaps rules, which he said have fragmented the US$544trn OTC derivatives market and put US intermediaries at a competitive disadvantage.

Cyber crime

Depressed bank returns face digitisation threat

IFR 2163 10 December to 16 December 2016

Weak economic growth, regulation and digitisation could significantly reduce profits for global banks in the next three years, to heap more pressure on an industry struggling to make decent returns, consultancy McKinsey said last week.

    More from People & Markets

    Bonds

    A man walks along Wall Street in New York

    US IG breaks records for sixth year

    IFR 2163 10 December to 16 December 2016

    US investment-grade bond issuance volumes reached US$1.284trn last week, breaking annual issuance records for the sixth year running, according to IFR data.

    AfDB widens Aussie green patch

    AfDB widens Aussie green patch

    IFR 2163 10 December to 16 December 2016

    Australia’s developing Green bond market got a modest, albeit welcome, boost from the African Development Bank’s 15-year Kangaroo sale last ast Tuesday – by far the longest such issuance Down Under.

    NRW marks end of year's euros

    IFR 2163 10 December to 16 December 2016

    Land NRW was potentially the last public debt issuer in euros this year, with the few other borrowers still wanting to raise funds in the currency this late into December now likely postponing deals after the ECB cut its monthly bond buying target.

    World Bank heralds sterling splurge

    IFR 2163 10 December to 16 December 2016

    World Bank caught the market’s eye with a £150m tap of its outstanding 1.375% December 2020 bonds on Wednesday, with bankers expecting the January issuance window to be awash with sterling trades.

    Lloyds sells first holdco Samurai

    IFR 2163 10 December to 16 December 2016

    Lloyds Banking Group priced ¥61bn (US$533m) of Samurai bonds on December 8, its first holdco issuance in yen, following its inaugural holdco issuance in US dollars and in the euro earlier this year. It was also the first Samurai issue since the unexpected outcome of the US presidential election.

      More from Bonds

      Loans

      Direct lenders challenge banks

      IFR 2163 10 December to 16 December 2016 By , Hannah Brenton

      A range of strategies are emerging among proliferating European direct lending funds, as the booming sector matures, that could either help or hinder banks as competition for profitable leveraged finance business heats up.

      Glencore and Qatar line up loan for Rosneft stake

      IFR 2163 10 December to 16 December 2016 By

      A consortium of Qatar’s sovereign wealth fund and commodities trader Glencore is lining up a non-recourse bank financing to support the purchase of a stake in Russian oil major Rosneft.

      Lenders grant Royal request

      IFR 2163 10 December to 16 December 2016 By , Carol Zhong

      Lenders on a US$380m loan to Royal Industries Indonesia last year have given it until February 15 next year to pay the first instalment.

      Lenders answer Wharf T&T’s call

      IFR 2163 10 December to 16 December 2016 By , Carol Zhong

      An enthusiastic response to Hong Kong’s largest LBO loan since 2012 has underlined the appeal of high yields in the Asian bank market.

      Repricing loans saves companies millions of dollars

      IFR 2163 10 December to 16 December 2016 By Jonathan Schwarzberg

      Home security systems company ADT Group has returned to the US leveraged loan market to slash its borrowing costs by repricing its buyout loan from April for the second time, as a lack of loans leaves investors with few options but to agree.

      Mylan inks US$4bn refinancing

      IFR 2163 10 December to 16 December 2016

      Drugmaker Mylan has agreed a US$4bn refinancing. The deal is split equally between an unsecured revolving credit with Bank of America Merrill Lynch that is priced at 120bp over Libor and a term loan led by Goldman Sachs that is priced at 137.5bp.

      DigitalGlobe shops US$1.475bn refi

      IFR 2163 10 December to 16 December 2016

      Satellite company DigitalGlobe floated guidance on a US$1.475bn term loan to refinance debt. The deal, led by Barclays, comprises a US$1.275bn term loan B and a US$200m revolving credit facility.

      UK: Greene King amends and extends

      IFR 2163 10 December to 16 December 2016

      Pub company Greene King has amended and extended its existing revolving credit facility.

      More from Loans

      Equities

      India: NSE set to file IPO draft

      IFR 2163 10 December to 16 December 2016

      National Stock Exchange plans to file a draft prospectus for its IPO of Rs60bn-Rs70bn (US$899m-$1bn) with the Securities and Exchange Board of India in late December.

      China: Clear skies for Galaxy IPO

      IFR 2163 10 December to 16 December 2016

      China Galaxy Securities has cleared a China Securities Regulatory Commission hearing for its proposed Shanghai IPO.

      China: Jangho has designs on subsidiary IPO

      IFR 2163 10 December to 16 December 2016

      Shanghai-listed Jangho Group has secured board approval for a proposed spin-off and a listing of subsidiary Steve Leung Design Group on the main board of the Stock Exchange of Hong Kong.

      China: New Century yet to decide on IPO launch

      IFR 2163 10 December to 16 December 2016

      New Century Healthcare has won approval for its proposed IPO from the Stock Exchange of Hong Kong.

      China: ​Hebei Yichen opens book

      IFR 2163 10 December to 16 December 2016

      Hebei Yichen Industrial, which provides rail-fastening systems, has started bookbuilding for a Hong Kong IPO of up to HK$839m (US$108m).

      China: Baozun prices follow-on

      IFR 2163 10 December to 16 December 2016

      Nasdaq-listed e-commerce company Baozun has raised US$73.5m from a follow-on offering at US$12.25 a share.

      China: Meitu gets clear picture

      IFR 2163 10 December to 16 December 2016

      Selfie-editing app developer Meitu will raise HK$4.88bn (US$629m) from its IPO, having priced it at the bottom of the HK$8.50-$9.60 indicative range.

      China: CSCF prices IPO at midpoint

      IFR 2163 10 December to 16 December 2016

      Beijing-based brokerage CSC Financial has raised HK$7.7bn (US$993m) from its Hong Kong IPO, after pricing the shares at the midpoint of the indicative range.

      More from Equities

      Derivatives

      Swaptions underprice US rates uncertainty

      IFR 2163 10 December to 16 December 2016 By

      Wide ranges in the potential outcomes for US rates through 2017 are leading investors to options markets, where implied volatility is underpricing a rising likelihood of both “boom” and “bust” scenarios, according to analysts.

      CDS sellers pose bigger contagion risk than CCPs

      IFR 2163 10 December to 16 December 2016 By

      Central counterparty clearing firms do not constitute a major source of systemic risk, but large counterparties that are heavy net sellers of credit default swaps could pose a threat to the financial system, according to a new study from the US Treasury.

      DERIVATIVES-CDS sellers pose bigger contagion risk than CCPs; OFR

      IFR 2163 10 December to 16 December 2016 By

      Central counterparty clearing firms do not constitute a major source of systemic risk, a new study from the US Treasury shows, but large counterparties that are heavy net sellers of credit default swaps could pose a threat to the financial system, irrespective of the health of the clearinghouse.

      LSE

      EC plans statement on Deutsche Boerse-LSEG deal

      IFR 2163 10 December to 16 December 2016 By

      The European Commission is expected on December 13 to outline its objections to the proposed tie-up between Deutsche Boerse and the London Stock Exchange Group, according to people familiar with the matter.

      ISDA and Markit launch variation margin protocol

      IFR 2162 3 December to 9 December 2016 By

      ISDA and IHS Markit have launched the 2016 variation margin protocol that automates the process for amending collateral documents and setting up new agreements to comply with uncleared swaps margin rules that are set to take effect in March.

      More from IFR Derivatives

      Digital Edition

      Access a digital edition of the latest print magazine here.

      To read the IFR Magazine Digital Edition you will need to enter your details in the login section.

      If you have forgotten your password, or would like to find out more about IF subscriptions, please email rm.clientsupport@thomsonreuters.com.

      CS promotes Tim Perry

      09 December 2016

      Credit Suisse promoted Tim Perry to global co-head of oil and gas investment banking in the investment banking and capital markets division, effective January 2017.

      Trump taps Goldman COO for economic council: report

      09 December 2016 By Philip Scipio

      Incoming US president Donald Trump has tapped Goldman Sachs COO Gary Cohn to head key White House advisory body the National Economic Council, NBC News reported on Friday.

      Athene, Apollo-backed insurer, prices US$1.1bn IPO

      08 December 2016 By

      Athene, majority owned by Apollo Global, priced an oversized US$1.1bn IPO on Thursday, selling 27m shares at US$40, sources in the underwriting syndicate told IFR.

      Freddie to sell first rated bond of reperforming home loans

      08 December 2016 By

      Freddie Mac is quietly marketing its first mortgage bond deal to package up once-problematic home loans on its books and receive investment grade ratings.

      CMBS pricing holds steady despite supply, looming year end

      08 December 2016 By

      Pricing levels on new commercial mortgage bonds were steady this week despite recent heavy supply and a race among banks to securitize loans before year end.

      UPDATE 2-Credit Agricole readies first senior non-preferred bond

      08 December 2016 By

      French bank Credit Agricole is arranging calls with Asian, European and US investors for what could be the first ever senior non-preferred bond issue, the bank said on Thursday.

      UPDATE 3-Ecuador returns to bond market as oil rallies

      08 December 2016 By

      Ecuador returned to the US dollar bond market Thursday for the third time this year, raising US$750m through a new 10-year note following a recent rally in oil prices.

      MOVES-Hedger to leave Credit Suisse

      08 December 2016 By

      Cameron Hedger, co-head of fund-linked products in Credit Suisse’s global solutions business, is leaving the Swiss bank as part of an expanded cost cutting plan announced on Wednesday, people familiar with the matter said.

      Credit Suisse logo

      MOVES-Peck goes to Credit Suisse

      08 December 2016 By

      Credit Suisse has confirmed that Robert Peck has been appointed head of global internet investment banking.

      US election surge helps cap recovery year for trading

      08 December 2016 By Philip Scipio

      US banks are on track to snap the downtrend in fixed income trading as JP Morgan, Citigroup and Bank of America said fourth quarter markets revenue could be up 15% to 20% from a year ago.

      Ecuador plans new 10-year benchmark bond: sources

      08 December 2016 By

      The Republic of Ecuador has announced a new 10-year bond sale, setting initial price thoughts at a yield in the low 10% area, according to market sources.

      MOVES-Credit Agricole promotes Bonnal within FIG syndicate

      08 December 2016 By

      Credit Agricole has promoted Andre Bonnal to assistant director within its financial institutions syndicate desk, according to a person familiar with the matter.

      MOVES-Agarwal to join BNP Paribas corporate DCM

      08 December 2016 By

      Harsh Agarwal will join BNP Paribas in January as part of the bank’s northern Europe corporate debt capital markets team, according to a source.

      Plaque of the Deutsche Boerse AG

      DERIVATIVES-EC plans statement on Deutsche Boerse-LSEG deal

      08 December 2016 By

      The European Commission is expected on December 13 to outline its objections to the proposed tie-up between Deutsche Boerse and the London Stock Exchange Group, according to people familiar with the matter.

      World Class Capital eyes mortgage debt expansion

      07 December 2016 By

      Commercial real estate firm World Class Capital Group is eyeing an expansion into mortgage lending and debt securities, a person with knowledge of the matter told IFR.

      All Latest news

      Special Reports

      IFR German Corporate Funding Roundtable 2016
      IFR convened its fifth annual German Corporate Funding Roundtable in Frankfurt in mid-November just as bond markets, led by US Treasuries, were starting their sharp re-pricing off the back of higher inflation expectations and tighter US money.

      IFR India's Path to Sustainable Growth Roundtable 2016
      IFR recently convened a highly insightful roundtable discussion in Washington DC, entitled “India’s Path to Sustainable Growth: Challenges and Opportunities”. State Bank of India chair Arundhati Bhattacharya delivered some affirmative opening comments that eloquently framed the discussion that followed./p>

      IFR German SME Funding Roundtable
      IFR’s 4th annual German SME Funding Roundtable, held at the end of September in Frankfurt, was another absorbing encounter.

      IFR US ECM Roundtable
      IFR’s US ECM Roundtable was held on September 12, just ahead of the Fed’s decision to hold the line on interest rates and the US presidential election. The Fed only postponed a cycle of rate-tightening and the end of the accommodative environment that has sustained the current bull market.

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

      Heads will roll

      IFR 2163 10 December to 16 December 2016

      FOR OFFICE WORKERS, the run-in to Christmas can result in dubious attachments to work colleagues (think: office parties), but for bankers, it’s all about finding dubious attachments to revenues in the hope of extracting the best possible bonus.

      Opinion

      Anthony Peters columnist format

      Thank you St Mario!

      Draghi certainly made sure that the time between the Italian referendum last Sunday and the last FOMC meeting of the year next Wednesday is not wasted and that there are no excuses yet for long pub lunches. 

      Crisis? What crisis!

      A recent trip to Milan left me with one abiding memory: the way in which nobody at all seems to be flapping over the outcome of Sunday’s referendum. 

      The politics show

      Today’s column should really start with a review of the rather good looking numbers that Friday’s US payroll report threw up but, not that it should come as a surprise, they have been swamped by a wave of political news. 

      Normalising the curve

      It’s time for the monthly US nonfarm payroll report but it’s safe to say no-one will be on the edge of their seat in anticipation. 

      keith mullin

      Are banks in denial over direct lending?

      I’ve been watching with interest the emergence of direct lending funds in Europe over the past couple of years and I’ve been moved to pose a question. 

      Slick back and relax

      For equity investors November went out with all bells ringing and whistles blowing. 

      Speak softly and carry a big stick

      European bonds were supposed to be in lock-down ahead of the Italian referendum but when it came to the Tesoro selling €1.5bn 10-year BTPs along with €1.75bn five-year notes and a mixed bag of 2022 and 2024 FRNs, there was no shortage of buyers. 

      Dog’s breakfast

      European bond markets remain a mess. 

      Bah humbug

      Do we in Europe really need to go into this Black Friday malarkey? We’ve already been hyped into getting excited about Halloween and Fathers’ Day, two very American excuses to go shopping for stuff nobody needs. 

      Reality... what a concept

      Has the world suddenly gone mad or has the world always been mad and is now trying to find a path back to sanity?