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Monday, 16 January 2017

Words’ worth

IFR 2166 14 January to 20 January 2017

You surely don’t need to be a literary critic to flourish in the high-grade bond market, but sometimes a close reading of the text really does help.

Top News

Portugal

Portugal's costa-packet 10-year

IFR 2166 14 January to 20 January 2017 By

Portugal paid a hefty price last week for its first syndicated trade since April 2016, and market participants are wondering if this is a taste of what is to come as the European Central Bank moves closer to reducing monthly purchases in its bond buying programme.

A man looks at a UniCredit logo

UniCredit woos substitute investors

IFR 2166 14 January to 20 January 2017 By , Graham Fahy

UniCredit is courting new investors to support its €13bn rights issue amid concerns that not all of its current shareholders will be willing – or able – to take up their rights in a transaction that is vital to turning around Italy’s biggest bank.

A UniCredit bank logo is seen in Rome

UniCredit AT1 coupons hang on swift capital-raising

IFR 2166 14 January to 20 January 2017 By ,

Concerns about banks’ ability to pay coupons on their Additional Tier 1 debt were reignited on Thursday, when UniCredit said it might not have capacity to pay the coupon on its AT1s if its capital-raising plan is not completed on time.

Broadcom President and Chief Executive Officer Scott McGregor stands in front of the company's logo

Investors fight back on aggressive terms

IFR 2166 14 January to 20 January 2017 By ,

Investors dug in their heels last week on three investment-grade bond deals that tried to include more issuer-friendly terms, signalling that – for now at least – enough is enough.

Chancellor of the Exchequer Philip Hammond leaves 11 Downing Street

Lloyds dribble-out shows the way

IFR 2166 14 January to 20 January 2017 By , Graham Fahy

Traders frequently dribble stock into the market when institutional investors are selling, but formal dribble-out plans – where the seller cedes control over sales of a stake to a single trader – rarely feature in ECM.

Uber

​Regulators criticise banks for Uber loan

IFR 2166 14 January to 20 January 2017 By Jonathan Schwarzberg, Olivia Oran

Federal regulators have criticised several Wall Street banks in relation to the handling of a US$1.15bn leveraged loan they arranged for internet-based taxi service Uber Technologies last summer.

Portugal's Millennium bcp

BCP to clear hybrids with €1.33bn rights issue

IFR 2166 14 January to 20 January 2017 By

Millennium BCP’s fourth capital increase in six years underlines why investors are cautious about believing that recapitalisations at European banks are ever the final step in fixing the balance sheet.

oil derrick, oil derricks, pump jacks, pump jack, oil well, production

Pressure pumper seeks to open 2017 US IPO market

IFR 2166 14 January to 20 January 2017 By

Keane Group, the Cerberus-backed oilfield services company, is off and running on an IPO targeting roughly US$300m. The offering, comprising both primary and secondary shares, is due to be priced this Thursday, which would make it the first US IPO of 2017.

Piraeus Bank

Piraeus Bank eyes bond market return

IFR 2166 14 January to 20 January 2017 By

Piraeus Bank is putting together plans to print the first bond issue from a Greek lender since mid-2014, in the latest sign that funding for the sector is slowly returning to normal after three years of capital controls and emergency assistance.

European Union and a Cypriot flags flutter atop the Presidential palace in Nicosia

Convincing comeback for Bank of Cyprus

IFR 2166 14 January to 20 January 2017 By

Bank of Cyprus priced its first public issue since bailing in bondholders during 2013’s Cypriot banking crisis, in one of the strongest indicators yet that its turnround story has won over investors.

IFR Magazine Top News in Full (subscription required)

People & Markets

Trading propels JP Morgan to strong Q4

IFR 2166 14 January to 20 January 2017

JP Morgan outperformed even the rosiest earnings forecasts in the fourth quarter as revenue from bond trading surged 31% to US$3.7bn, the US bank’s best final quarter in fixed income trading on record.

Basel IV set for lengthy phase-in to get deal done

IFR 2166 14 January to 20 January 2017

Banking regulators need to find common ground over key capital rules in the next two months or risk seeing years of trying to harmonise global regulation start to unravel.

UBS loses top China dealmaker

IFR 2166 14 January to 20 January 2017

Joseph Chee, a top deal-maker at UBS in Asia, has resigned to pursue his own interests, according to two people familiar with the departure. Chee is the second senior investment banker to leave the Swiss lender in recent weeks.

SEC, CFTC merger talk revs up as swaps rules scrutinised

IFR 2166 14 January to 20 January 2017

US swaps governance, currently split between the SEC and CFTC, could be brought under one roof as a regulatory overhaul promised by Donald Trump reopens a long-running debate about a merger between the two agencies.

Puerto Rico dismisses financial adviser early

IFR 2166 14 January to 20 January 2017

US restructuring firm Millstein & Co is out as Puerto Rico’s financial adviser, people familiar with the matter said.

    More from People & Markets

    Bonds

    US investors take shine to international SSA debt

    IFR 2166 14 January to 20 January 2017

    Public debt issuers found the going better than expected in US dollars last week to print over US$11bn of debt, with onshore US investors supporting trades by becoming more active in the international market.

    ​Supply set to continue

    IFR 2166 14 January to 20 January 2017

    German healthcare group Fresenius is expected to kick off proceedings this week with a €2.6bn deal, according to several market sources.

    Companies to front-load funding ahead of political turmoil

    IFR 2166 14 January to 20 January 2017

    Companies are rushing into the European market to raise financing ahead of 2017’s key political events, which could quickly turn sentiment sour. But just two weeks into the year, fatigue is already creeping in.

    Rentenbank reopens Kauris

    IFR 2166 14 January to 20 January 2017

    German government-guaranteed Rentenbank reopened the Kauri market last Friday with a NZ$75m (US$52m) tap of its 5.375% April 23 2024 bonds to raise the issue size to NZ$925m.

    AusNet goes private in kroner, eyes Aussie dollars

    IFR 2166 14 January to 20 January 2017

    AusNet Services, rated A3/A– (Moody’s/S&P), announced last Tuesday that it had privately placed, through arranger Citigroup, a NKr1bn (US$117m) 2.80% 10.5-year bond issue to refinance existing debt and fund capital expenditure.

      More from Bonds

      Loans

      Uber

      ​Regulators criticise banks for Uber loan

      IFR 2166 14 January to 20 January 2017 By Jonathan Schwarzberg, Olivia Oran

      Federal regulators have criticised several Wall Street banks in relation to the handling of a US$1.15bn leveraged loan they arranged for internet-based taxi service Uber Technologies last summer.

      Investors battle against scale-backs

      IFR 2166 14 January to 20 January 2017 By

      Lenders to European leveraged loans are seeing their allocations scaled back to such an extent that investors have been forced to inflate orders in a bid to attempt to secure decent ticket sizes.

      Strong demand supports high secondary prices

      IFR 2166 14 January to 20 January 2017 By Tessa Walsh,

      Loan traders expect a strong technical market and excess demand to support high secondary prices in early 2017 as fears of further rate rises funnel more cash into the asset class and traders focus on sectors that may benefit under the Trump administration.

      Market expects more leveraged M&A

      IFR 2166 14 January to 20 January 2017 By Jonathan Schwarzberg

      Bankers and investors are expecting US merger and acquisition activity to pick up in 2017 as fiscal stimulus, tax reform and other policies supporting economic growth are introduced by President-elect Donald Trump and the new Republican administration.

      PRC developers on funding spree

      Chinese developers on funding spree

      IFR 2166 14 January to 20 January 2017 By Yan Jiang

      China’s property developers are tapping the offshore loan markets to help refinance billions of dollars of maturing debt this year, adding to a string of international bond issues in recent months.

      Indonesia: TRI seeks to clean up capital structure of retail business

      IFR 2166 14 January to 20 January 2017 By , Chien Mi Wong

      Trans Retail Indonesia has mandated seven banks on a US$575m refinancing loan to help clean up the capital structure of its retail business. 

      Settlement times fall

      IFR 2166 14 January to 20 January 2017

      The time it takes to settle a US leveraged loan trade fell for the third straight year to 18.4 days in 2016, according to IHS Markit data, but the process still takes more than twice the time frame recommended by the national loan trade association.

      JPM provides Mars financing

      IFR 2166 14 January to 20 January 2017

      JP Morgan is proving the financing commitments backing candy and pet food manufacturer Mars’ US$9.1bn purchase of pet health care services provider VCA.

      More from Loans

      Equities

      Singapore: Garena calls for IPO pitches

      IFR 2166 14 January to 20 January 2017

      Online gaming portal and e-commerce provider Garena has selected Goldman Sachs to lead its IPO of about US$1bn.

      Singapore: Dasin seals first 2017 IPO

      IFR 2166 14 January to 20 January 2017

      Dasin Retail Trust has scored a 2017 first with its Singapore Exchange IPO of S$146m (US$102m) at a fixed price of S$0.80 per unit.

      Indonesia: Lippo Karawaci plans REIT

      IFR 2166 14 January to 20 January 2017

      Lippo Karawaci plans to list a REIT in February to raise Rp2.45trn (US$184m).

      India: BSE prepares for listing

      IFR 2166 14 January to 20 January 2017

      Bookbuilding for the Rs13.5bn (US$198m) IPO of BSE will run from January 23 to 25, a regulatory filing states.

      China: Orient AMC plans pre-IPO placement

      IFR 2166 14 January to 20 January 2017

      China Orient Asset Management, one of the mainland’s “Big Four” distressed asset managers, has mandated CICC and Goldman Sachs to arrange a pre-IPO placement of about US$1.5bn, according to people familiar with the situation.

      China: Inspur applies for rights approval

      IFR 2166 14 January to 20 January 2017

      Inspur Electronic Information Industry has applied for approval to the CSRC for its proposed rights issue of up to Rmb3.1bn (US$449.3m). The data centre and cloud-computing provider plans to offer up to 300m rights shares on a 3-for-10 basis.

      ​China: DongguanSec updates prospectus

      IFR 2166 14 January to 20 January 2017

      Dongguan Securities has updated its preliminary prospectus for a proposed Shenzhen IPO intended to raise around Rmb1bn (US$145m), according to a person familiar with the situation.

      China: New Century prices at midpoint

      IFR 2166 14 January to 20 January 2017

      New Century Healthcare has priced a Hong Kong IPO of HK$883m (US$114m) at the midpoint of the indicative range of HK$6.36-$8.36.

      More from Equities

      Derivatives

      SEC, CFTC merger talk revs up as swaps rules scrutinised

      IFR 2166 14 January to 20 January 2017 By

      US swaps governance, currently split between the SEC and CFTC, could be brought under one roof as a regulatory overhaul promised by Donald Trump reopens a long-running debate about a merger between the two agencies.

      Timothy Massad (R)

      Swap rules set for overhaul as Massad quits CFTC

      IFR 2165 7 January to 13 January 2017 By

      CFTC chairman Timothy Massad will step down on January 20, opening the door for a partial dismantling of the Dodd-Frank rules as Christopher Giancarlo – CFTC commissioner and outspoken critic of “flawed” derivatives rules – is widely tipped to take over.

      Euronext offers €510m for LCH French arm

      IFR 2165 7 January to 13 January 2017 By

      Pan-European exchange group Euronext has made a cash offer of €510m to take control of LCH.Clearnet SA, the Paris-based subsidiary of clearing group LCH, which is wholly-owned by the London Stock Exchange Group.

      BMPS CDS anomaly suggests safety for senior holders

      IFR 2164 17 December to 6 January 2017 By

      Pricing anomalies on credit default swaps referencing Banca Monte dei Paschi di Siena indicate rising expectations that senior bondholders will avoid being bailed in after the bank reopened an expanded debt-for-equity swap on subordinated debt.

      Contrarians back European equity outperformance

      IFR 2164 17 December to 6 January 2017 By

       

      More from IFR Derivatives

      Digital Edition

      Access a digital edition of the latest print magazine here.

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

      EQUITIES: Japan to discuss Japan Post adviser appointments

      16 January 2017

      The Japanese government is gearing up for another round of shares sales in Japan Post as it prepares to discuss the selection criteria to appoint underwriters in a meeting next week, according to a Reuters report.

      Investors fight back on aggressive covenant terms

      13 January 2017 By ,

      Investors dug in their heels this week on three investment-grade bond deals that tried to include more issuer-friendly terms, signaling that – for now at least – enough is enough.

      UPDATE 1-Belize tries to change superbond schedule

      13 January 2017 By

      Belize has launched a consent solicitation in an effort to amend the amortization schedule and lower coupon payments on its 2038 bond.

      EQUITIES: Ezaki Glico sells US$264m CB

      13 January 2017

      Japanese food company Ezaki Glico has raised ¥30bn (US$264m) through the issuance of a 2024 zero-coupon convertible bond.

      EQUITIES: Cerberus sells US$287m Seibu block

      13 January 2017

      US private equity firm Cerberus Capital Management has raised ¥33bn (US$287m) through the sale of a block of shares in Japan’s Seibu Holdings, according to a source close to the deal.

      Nice Ltd terms out loan with CB

      12 January 2017 By

      Convertible bonds by definition are inherently bullish financial instruments, a view expressed by Nice Ltd.

      US bond market sees first corporate default of 2017

      12 January 2017 By

      Oilfield services company Shelf Drilling Holdings became the first company to default on a US dollar bond issue in 2017 after completing a distressed exchange, S&P said on Thursday.

      US banks ready bond issuance flood after earnings

      12 January 2017 By

      US banks are facing wider secondary market spreads as they prepare to unleash a deluge of bond issuance after reporting fourth-quarter earnings from Friday. Deals are expected to come thick and fast as banks strive to meet the Federal Reserve’s 2019 deadline for Total Loss Absorbing Capacity requirements

      Ford mandates for first full-compliance ABS deal

      12 January 2017 By

      Ford Motor Credit has mandated banks for the first publicly sold asset-backed security to comply fully with new regulations that came into force last year, according to paperwork seen by IFR.

      Morgan Stanley cuts bankers, bonuses as deals, IPOs stall: sources - Reuters News

      12 January 2017

      Morgan Stanley MS.N laid off a number of senior investment bankers last week and cut bonuses by roughly 15 percent because of a decline in revenue from dealmaking and capital raising across Wall Street

      UPDATE 1-Lloyds Bank names Schaeffer as new North America CEO

      12 January 2017 By

      Lloyds Bank has promoted Andy Schaeffer to be CEO for North America and moved up two senior bankers in its capital markets business.

      UPDATE 2-Honduras sees bond orders top US$5bn

      12 January 2017 By

      Honduras amassed more than US$5bn of orders for its US$700m 2027 bond on Thursday, allowing it to tighten pricing a good 25bp on its first cross-border issue in three years, sources told IFR.

      UPDATE 2-Junk borrowers expected to raise US$4.2bn Thursday

      12 January 2017 By

      Activity in the US junk-bond market fired up on Thursday, with six issuers expected to raise a combined US$4.2bn on the busiest day of the year so far.

      Lloyds Bank names Schaeffer as new North America CEO

      12 January 2017 By

      Lloyds Bank has promoted Andy Schaeffer to be CEO for North America, it said in an announcement on Thursday.

      Funds likely to dump investment bank research as MiFID II looms

      12 January 2017 By Tom Porter

      Asset managers are expected to desert the research services of the biggest investment banks, ahead of new rules that require the unbundling of research payments from trading commissions.

      MOVES-Mizuho hires Rivas to head EMEA derivatives risk solutions

      12 January 2017

      Mizuho Financial Group said it had hired former HSBC banker Borja Rivas to head its derivatives risk solutions business for Europe, Middle East and Africa.

      All Latest news

      Special Reports

      IFR Review of the Year 2016
      It’s normally fair to say that bankers grumbling about the state of the markets deserve the same sympathy as farmers moaning about the weather. It goes with the territory. And it is up to them to simply get on with it.

      IFR Americas Review of the Year 2016
      Markets are more agnostic about elections than the public at large. Even as half (or more) of America was gnashing its teeth over the election of the country’s first non-politician president since Eisenhower, the “Trump Rally” was in full flight.

      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>

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

      What the butler saw

      IFR 2166 14 January to 20 January 2017

      DOFFED CAPS ALL round to Rothschild, which is seeking to halt the potential brain drain from the City of London, one servant at a time.

      Opinion

      keith mullin

      Is derivatives clearing the biggest Brexit issue?

      It was the Xavier Rolet show Tuesday as the polished and articulate chief executive of London Stock Exchange Group turned on the charm and transformed the UK Treasury select committee hearing on the UK’s future economic relationship with the European Union – a very broad macro subject – into a detailed and decidedly micro discussion about derivatives clearing.

      Anthony Peters columnist format

      Don't look back in anger

      On November 21 this column appeared with the opening lines “Even seasoned Washington watchers are struggling to work out what the Trump administration will look like and what message his choice of lieutenants will send to the rest of the world.” 

      Up, down or sideways?

      I spent time last night with a friend, a private investor, who looked at me and asked “what do we do next?” in an expectant way, which leads me to believe that he thinks my educated guess is going to be that much better than his own. 

      Clear skies or dark clouds

      I was talking to a private client stockbroker friend of mine a few days ago who was very busy writing the year-end performance reviews for his clients. We exchanged a few pleasantries about how one can’t ever get all the calls right although his portfolio of high-net-worth individuals is replete with clients who seem to struggle to grasp that single fact.

      Back to the future

      Before wondering how come, despite some fairly inconclusive numbers in Friday’s US December payrolls report, the Dow got as high as 19,999.63 in Friday’s trading, and in light of the Detroit Motor Show opening today, maybe we should reflect on the fact that it was a mere 10 years ago today that the late Steve Jobs revealed the iPhone. 

      Lies, damned lies and statistics

      While a number of markets will be closed today for the feast day of the Epiphany, in the US they aren’t and we get down and dirty with the first payrolls report of the new year. 

      The considerable uncertainty of Trump

      Risk asset markets might have been on fire for the past eight weeks but yesterday’s release of the FOMC’s December minutes certainly put a damper on things. 

      keith mullin

      The Bono of investment banking

      “The greatest manager of any sales and trading organisation in the world … like Bono joining your rock band.”

      World rally championship

      Japan returned to work today with the Nikkei putting on over 2.5% in a single session, not only playing catch up but by taking the lead. Is there no stopping this rally? 

      2017: Known unknowns

      First up, of course, please permit me to wish all my readers, whether market professionals or just interested observers, a very happy and prosperous New Year.