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Tuesday, 31 May 2016

Mylan headquarters

UPDATE – US high-grade logs record US$177.424bn month

31 May 2016

Multi-billion dollar bond sales from Mylan, Pfizer and JP Morgan on Tuesday took the biggest month ever in US high-grade issuance to a final tally of US$177.424bn.

Atkore International logo

CD&R races to sell Atkore via IPO

31 May 2016 By

Private equity firm Clayton Dubilier & Rice is preparing to bring its third portfolio company to public markets in less than a month with early Tuesday’s launch of electrical circuit raceway maker Atkore International’s US$264m NYSE IPO.

Thales logo

French duo test appetite for sub-1% yields

31 May 2016 By

Demand for Thales and RCI Banque bonds was much lower than the multi oversubscribed books seen on corporate deals in recent weeks as the low-yielding trade failed to gather much investor enthusiasm.

Kelvion logo

Kelvion heat exchangers sub bonds plummet

31 May 2016 By Robert Smith

Kelvion’s subordinated bonds fell more than six points on Tuesday, after the German heat exchangers business posted poor first quarter results.

Veneto Banca logo

Cash calls could undermine Atlante's Italian NPL support

31 May 2016 By Mariana Ionova

Italy’s plan to securitise its banks’ bad loans could be curtailed if an upcoming cash call for Veneto Banca squeezes the country’s new rescue fund dry of capital.

Ignazio Visco

Bank of Italy calls for state intervention in bank crises

31 May 2016

(Reuters) - Bank of Italy Governor Ignazio Visco urged the European Union to backtrack on new rules aimed at shielding taxpayers from having to prop up ailing banks, warning authorities may be unable to stop contagion in a crisis.

Pfizer World Headquarters building

Five deals hit US high-grade market to close record month

31 May 2016 By Hillary Flynn

Five borrowers hit the US high-grade market on Tuesday, closing out the biggest month of issuance on record with a last burst of supply on the final day of May.

banks

Qatar builds theme park stake

31 May 2016 By

Qatar Holding has built an 11% shareholding in Dubai Parks & Resorts through the theme park operator’s Dh1.68bn (US$457m) rights issue.

Goldman Sachs sign

P&M: Goldman CMBS banker Strain leaves firm

31 May 2016Updated: 31 May 2016 By

Jonathan Strain, co-head of US commercial real estate finance at Goldman Sachs, has left the firm, according to a source familiar with the matter.

HSBC building in Canary Wharf

P&M: HSBC hires UBS's Cronje as investment bank COO

31 May 2016 By Steve Slater

HSBC has appointed Andre Cronje as chief operating officer of its investment bank, hiring him from UBS where he held a similar position.

Credit Suisse logo

Credit Suisse outsources derivatives clearing

31 May 2016 By

Credit Suisse will outsource its post-trade derivatives operations and technology to a third-party to reduce costs on capital-intensive clearing services for futures and over-the-counter swaps.

KfW

KfW swamped with interest for negative-yielding five-year bond

31 May 2016 By

KfW received more than €6.75bn of demand for the first five-year negative yielding SSA benchmark as investors give up on getting any returns in the European bond market.

Deutsche Bank headquarters

P&M: Cree retires from Deutsche Bank SSA

31 May 2016 By

* Corrects Jallport’s role and reporting line

Mitsubishi UFJ Financial Group Inc in Tokyo

P&M: MUFG appoints Kuwahara as EMEA CEO

31 May 2016 By

Mitsubishi UFJ Financial Group has appointed Masahiro Kuwahara as chief executive for Europe, Middle East and Africa and the bank’s resident managing officer for EMEA.

A sign is seen outside a branch of Santander in Wilmslow, northern England

P&M: Santander cuts rates staff in Madrid, London - sources

31 May 2016 By Steve Slater

Spain’s biggest bank Santander has let go of a handful of sales and trading staff in its rates business in Madrid and London, people familiar with the matter said on Tuesday.

Coca-Cola to issue debut Kangaroo bond offering

31 May 2016 By

Drinks giant expected to price four and eight-year bonds tomorrow

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Kremlin wall

Wounded bear

IFR 2135 28 May to 3 June 2016

As PR exercises go, Russia’s first US dollar bond issue in nearly three years was a failure.

Top News

Russian national flag

Scepticism grows over Russian bond spin

IFR 2135 28 May to 3 June 2016 By

Russia underwhelmed with its first US dollar new issue in nearly three years, with questions about who bought the bond overshadowing the sovereign’s efforts to score a PR coup.

VTB Capital logo

Retreating rivals ease the path for VTB

IFR 2135 28 May to 3 June 2016 By

VTB Capital did not expect to end up as the only bank on the deal when it pitched to lead the Russian Federation’s long-awaited return to international bond markets. 

HSBC building in Canary Wharf

HSBC rises above Brexit turmoil

IFR 2135 28 May to 3 June 2016 By ,

A US$10bn order book allowed HSBC to price the year’s first Additional Tier 1 bond from a UK bank flat to its outstanding curve, but it still ended up paying one of its highest yields in the asset class.

Doha skyline

Qatar pushes size but performance mixed

IFR 2135 28 May to 3 June 2016 By

The wall of money scouring markets for any sort of yield shows no sign of crumbling, as Qatar discovered on Wednesday.

Dell logo

Dell’s waiting game to pay dividends

IFR 2135 28 May to 3 June 2016 By Lynn Adler, Jonathan Schwarzberg

Computer giant Dell’s decision to sit out months of extreme credit market volatility appears to have paid off as it has launched the biggest US syndicated term loan since last November into a market eager for exposure to debt backing the US$67bn acquisition of EMC Corp.

Carlyle Group offices

Banks shed debt backing Veritas LBO

IFR 2135 28 May to 3 June 2016 By

Banks have cleared nearly all of the riskiest debt backing Carlyle’s leveraged buyout of Veritas after selling US$450m of an unsecured junk bond issue last week, a source close to the situation told IFR.

US Foods delivery truck

US Foods leads IPO revival

IFR 2135 28 May to 3 June 2016 By ,

US Foods’ US$1.02bn float has highlighted an unlikely revival of US leverage-backed IPOs as financial sponsors take a more conservative approach to leverage and valuation.

A road construction site in Beijing

Onshore China creditors take up arms

IFR 2135 28 May to 3 June 2016 By Ina Zhou

China City Construction Holding Group’s offshore creditors find themselves in the unusual position of being first in line for repayment, while onshore bondholders continue to fret about the company’s fundamentals.

Net VIX futures positioning touches -94,000

VIX shorts raise stability fears

IFR 2135 28 May to 3 June 2016 By

Net short positioning in VIX futures has hit its most extreme level in almost three years, raising concerns of a repeat of August 2015, when an equity sell-off was exacerbated by a surge in Wall Street’s fear gauge as investors rushed to cover their volatility positions.

DBS automated teller machines

DBS opens new covered market

IFR 2135 28 May to 3 June 2016 By

DBS Bank broke new ground last week with the first covered Kangaroo bond from an Asian issuer, opening up the market for others as the senior secured format gains momentum in the region.

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People & Markets

Jonathan Rogers

Masters of the universal banking model

IFR 2135 28 May to 3 June 2016

Does the name Alexander Gerschenkron ring a bell? For many readers of this column, I would imagine probably not. Among the Pantheon of famous practitioners of economics – a science that appears more dismal by the week when invoked by hyper-emotional UK politicians – his name is absent. But is he relevant today? Absolutely.

UniCredit Chief Executive Officer Federico Ghizzoni

UniCredit: Turnaround CEO needed

IFR 2135 28 May to 3 June 2016

UniCredit is on the hunt for a new chief executive after ousting Federico Ghizzoni last week, and the new boss will immediately face a long “To Do” list, including selling businesses and raising billions of euros.

Forex trader

FX traders told 'market colour' chat allowed, details aren't

IFR 2135 28 May to 3 June 2016

Traders in the foreign exchange market will be banned from talking about any specifics on trades but allowed to disclose general “market colour” under proposals to improve conduct in the industry.

A Wells Fargo bank branch

Wells Fargo stays coy as investment bank grows

IFR 2135 28 May to 3 June 2016

To the surprise of exactly no one, Wells Fargo played down talk of expansion in its investment banking business during last week’s investor day presentations.

Deutsche Bank CEO John Cryan

​Deutsche gets bloody nose from “say on pay”, others rebuked

IFR 2135 28 May to 3 June 2016

Shareholders of Citigroup, Goldman Sachs and Credit Suisse are angry at what their banks are paying executives, and Deutsche Bank investors are fuming.

    More from People & Markets

    Bonds

    European Central Bank (ECB) headquarters

    Market warns against ECB distortion

    IFR 2135 28 May to 3 June 2016

    Debt bankers fear market distortion and the crowding out of private investors if the European Central Bank targets large monthly volumes in its corporate bond-buying programme.

    US high-grade logs biggest month ever

    IFR 2135 28 May to 3 June 2016

    The US high-grade market logged its biggest month ever in May, topping US$160bn as borrowers locked up financing ahead of any possible rate hike coming this summer from the Fed.

    European Investment Bank

    Not quite sweet 16s for EIB

    IFR 2135 28 May to 3 June 2016

    The European Investment Bank pushed through a €3bn 16-year EARN on Tuesday, splitting opinion in the market, with some impressed by the issue size but others underwhelmed by the level of demand.

    Swiss Re's logo

    Swiss Re, Pru strike hot US dollar Reg S market

    IFR 2135 28 May to 3 June 2016

    Prudential will bring the first perpetual hybrid from a UK insurer since 2013, taking advantage of Asian private banks’ renewed appetite for fixed income instruments.

    UniCredit issues Tier 2 after comeback in secondary

    IFR 2135 28 May to 3 June 2016

    UniCredit seized on a rally in its subordinated bond spreads to issue its first institutional Tier 2 transaction in three years as the prospect of a new chief executive and potential capital raising revitalised the credit.

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      Loans

      Reichhold plant

      Unitranches grow in volatile market

      IFR 2135 28 May to 3 June 2016 By Leela Parker Deo, Jonathan Schwarzberg, Hannah Brenton

      Middle market sponsors are demanding bigger unitranche loans as the structure, which has typically been used for smaller deals, gains wider appeal due to challenging market conditions for second-lien loans in the US and heightened competition in Europe.

      Bayer logo

      Bayer sticks with debt-heavy Monsanto bid

      IFR 2135 28 May to 3 June 2016 By

      Bayer says that it intends to finance its US$62bn bid for Monsanto, the world’s largest seed company, with around US$46.6bn of debt, or 75% of the enterprise value of the transaction.

      Albertsons grocery store

      Weak secondary market may curtail refi wave

      IFR 2135 28 May to 3 June 2016 By

      A repricing wave has hit the loan space as US borrowers attempt to lower the spread of their existing term loans, though a weak secondary market signals that not every company will get their wish.

      Bank of Japan headquarters

      Lenders look overseas

      IFR 2135 28 May to 3 June 2016 By Wakako Sato

      Japanese banks are seeking better returns from high-yield products overseas to counter the impact of negative domestic interest rates on their already-thin returns from lending.

      Noble Group logo

      Noble fan club shrinks further

      IFR 2135 28 May to 3 June 2016 By

      Noble Group’s long-term access to financing remains in question after the beleaguered commodity trader’s latest syndicated loan drew a far fewer banks than in previous years.

      Dell logo

      Dell’s waiting game to pay dividends

      IFR 2135 28 May to 3 June 2016 By Lynn Adler, Jonathan Schwarzberg

      Computer giant Dell’s decision to sit out months of extreme credit market volatility appears to have paid off as it has launched the biggest US syndicated term loan since last November into a market eager for exposure to debt backing the US$67bn acquisition of EMC Corp.

      Computer Sciences Corp sign

      Computer Sciences taps for merger

      IFR 2135 28 May to 3 June 2016

      Computer Sciences Corp is backing its merger with the enterprise services segment of Hewlett Packard Enterprise with a US$3.06bn financing provided by MUFG, Royal Bank of Canada, Bank of America Merrill Lynch and Goldman Sachs.

      Yahoo terminates US$750m deal

      IFR 2135 28 May to 3 June 2016

      Technology company Yahoo! has terminated the company’s credit agreement and US$750m unsecured revolving credit facility to save on related fees and expenses.

      More from Loans

      Equities

      DONG Energy's power station

      Investor interest sees Dong swell

      IFR 2135 28 May to 3 June 2016

      The long-awaited part-privatisation of Dong Energy by the Danish state was launched with a valuation of up to DKr106.5bn (US$16bn) on Thursday. The valuation is even above the earlier analyst expectations of DKr80bn at the bottom of the range, where the energy utility would be valued at DKr83.5bn.

      Banco Popular headquarters

      Banco Popular slumps on capital call

      IFR 2135 28 May to 3 June 2016

      The management of Banco Popular will need to work hard to convince sceptical investors that a €2.5bn capital increase is big enough to steady the ship – and quickly, if they are to arrest the collapse in its share price before it is too late.

      Patrick Soon-Shiong

      California billionaire brings big data biotech

      IFR 2135 28 May to 3 June 2016

      Dr Patrick Soon-Shiong, a minority owner of the Los Angeles Lakers basketball team, had a busy agenda over the US Memorial Day Holiday weekend. The California billionaire, whose net worth is estimated at US$12.5bn, is touting Nant Health to investors in hopes of taking it public.

      Carlyle Group logo

      Carlyle goes into monetisation mode

      IFR 2135 28 May to 3 June 2016

      Private equity Carlyle Group cut two of its biggest public stock holdings via block trades last week, disposing of a US$700m stake in industrial and automotive paint maker Axalta Coating Systems and a US$367m position in government contractor Booz Allen Hamilton.

      Cikarang Listrindo logo

      Cikarang lifts hope for Indonesian ECM

      IFR 2135 28 May to 3 June 2016

      Indonesian equity offerings are picking up pace again as issuers bow to investor demands for lower valuations to compensate for volatile market conditions.

      Evonik logo

      Germany: CVC clears Evonik stake

      IFR 2135 28 May to 3 June 2016

      Private equity house CVC Capital Partners launched a buyback of its €350m 2% 2016 exchangeable bonds into speciality chemicals group Evonik last Monday night, alongside a sale of the shares underlying the paper.

      Tricky June beckons for US ECM

      IFR 2135 28 May to 3 June 2016

      Bankers remain confident June will be a busy month for IPOs and secondaries but face several potential macro obstacles that could make correctly timing transactions a tortuous exercise.

      Parsley Energy logo

      Parsley Energy enhances well economics

      IFR 2135 28 May to 3 June 2016

      Parsley Energy has become the latest of a select band of oil explorers and producers to raise new money to fund growth through acquisition.

      More from Equities

      Derivatives

      Pension funds  change strategies

      Pension funds switch to swaps

      IFR 2135 28 May to 3 June 2016 By

      Pension funds have moved away from government-bond focused interest rate hedging strategies and towards swaps after the relative return on over-the-counter trades rose compared with their cash counterparts.

      European Union and the British Union flags

      Hedges monetised on Brexit poll shift

      IFR 2135 28 May to 3 June 2016 By

      Investors are beginning to sell Brexit hedges ahead of the June 23 referendum to monetise elevated risk premia on UK assets as polls point to fading appetite for the UK to leave the European Union.

      Logo of index provider Stoxx

      Multi-asset strategies make ETF headway

      IFR 2135 28 May to 3 June 2016 By

      Multi-asset derivatives products are set to gain traction as private banks seek cheaper ways to gain passive exposure to strategies and investors search for alternative sources of alpha.

      Banks turn to blockchains to cut margins

      IFR 2135 28 May to 3 June 2016 By

      Banks are turning to ’smart contracts’ based on distributed ledger technology to help reduce collateral exposures and close out risk on over-the-counter derivative transactions.

      Eris and CBOE team up on derivatives

      IFR 2135 28 May to 3 June 2016 By

      CBOE and the Eris Exchange have entered into a strategic partnership to develop new products, seeking to tap into market reforms that could drive much over-the-counter derivatives activity towards exchanges.

      More from IFR Derivatives

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      Mullin on peer-to-peer lending

      US dollar bills

      P2P running out of steam? Thank God!

      12 May 2016

      Has the disruptive force of the P2P lending-cum-crowdfunding tornado been rendered impotent? It certainly looks that way. The alternative lending revolution that emerged from the global financial crisis as a grass-roots anti-bank movement has been curbed. The disruptors have been disrupted by the disruptees. 

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

      Game on

      IFR 2135 28 May to 3 June 2016

      ITALY’S UNICREDIT MIGHT not have a CEO at the moment, it might have Europe’s biggest portfolio of non-performing loans and it might need to raise capital, but it’s still got something going for it – and that something is its status as the main sponsor of the UEFA Champions league.

      Opinion

      Anthony Peters columnist format

      Good news all round

      I might be wrong – I usually am – but I sense a developing sea-change in markets’ behaviour as good news ceases to be bad news and bad news becomes good.

      keith mullin

      DB downgrade another signal of doom

      WAS THE ONE-NOTCH downgrade by Moody’s of Deutsche Bank’s ratings on May 23, reflecting concern around the increased execution challenges the bank faces in achieving its strategic aim, a further signal that John Cryan’s plans to rehabilitate the bank are doomed?

      James Saft - June 2014

      About that June or July rate hike

      Here is a short recipe: Take a weakening service sector, contracting corporate profits and capital expenditure, add a Federal Reserve rate hike and stand well back.

      James Saft - June 2014

      The downward spiral of IPO generations

      Initial public offerings are getting riskier and riskier, with increased volatility in earnings and share prices.

      keith mullin

      Who'd want to be CEO of UniCredit?

      Does the quest to find a replacement for Federico Ghizzoni as chief executive of embattled UniCredit have just a touch of the ‘who’d want that job’ fatalism around it?

      Anthony Peters columnist format

      A positive tone for the rest of the week

      It doesn’t really matter where you look – other than the Athens Stock Exchange index which was off by 1.08% - stock markets were on fire on Tuesday, in a reversal to beat all Tuesday reversals. 

      James Saft - June 2014

      What’s so scary about falling population, growth and prices?

      It may be time to question our common faith that the only natural and acceptable path is growth: for population, for prices and for the economy itself.

      Anthony Peters columnist format

      Three cheers for Bayer's cheek

      There used to be a bon-mot which said that when General Motors sneezes, America catches a cold. Now it appears to be that when the Fed puts its hand in its pocket in search of a handkerchief, European equities die of pneumonia.

      Anthony Peters columnist format

      The anonymous governing monster grows

      Back from a weekend built around the splendid wedding of Mr and Mrs PC Jones, both rising stars at HSBC. Having, on the day, met many of their bright and talented peers, I can confirm that the future is in good hands. I’m not sure I can say the same for the present.

      keith mullin

      ICMA and the road to full market legitimacy

      TO DUBLIN, WHERE 1,000 people signed up to attend the International Capital Market Association’s annual conference. That’s a record, by all accounts. What’s now called ICMA has been going since 1969 and people fondly recall the former Association of International Bond Dealers annual jamborees. These days, the event is a more thoughtful and serious affair and it’s become one of the highlights of the capital markets calendar.

      IFR Turkey Special Report 2016

      IFR Turkey Special Report 2016

      Star turn: In the fluid world of emerging markets, Turkey has this year presented more opportunities than its CEEMEA peers for investors to indulge their views.

      IFR SRI Special Report 2016

      IFR SRI Special Report 2016

      Green shoots: There are few subjects in the capital markets that have generated more headlines over the past few years than socially responsible investment.

      All Latest Special Reports