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Sunday, 28 August 2016

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MAR attacks

IFR 2148 27 August to 2 September 2016

The European Union’s market abuse regulation came into effect in July, with drastic implications for bond syndication both in Europe and beyond its borders.

Top News

European Union flags flutter outside the European Commission headquarters in Brussels

Junk bond issuers mull de-listings

IFR 2148 27 August to 2 September 2016 By Robert Smith

The trickle of high-yield issuers listing on offshore exchanges to circumvent new EU regulations may turn into a flood, as the burden of compliance scares away even US-listed companies and pushes market stalwarts to consider de-listing existing bonds.

21-25 W 34th Street, New York apple superdry wachovia cmbs

Pre-crisis mortgage bonds still haunt investors

IFR 2148 27 August to 2 September 2016 By

A New York City property that investors were told would be home to an iconic Apple store has instead wound up stuck in a mortgage bond facing hundreds of millions in unpaid debt.

Meitu to test Hong Kong market

Meitu to test Hong Kong market

IFR 2148 27 August to 2 September 2016 By

Loss-making “selfie” specialist banks on huge user base to offset consecutive losses

Anbang logo

Anbang RFP stirs compliance debate

IFR 2148 27 August to 2 September 2016 By ,

The potential listing of an Anbang Insurance Group company in Hong Kong is dividing equity arrangers, as some rush to pitch and others feel the parent’s mysterious ownership structure raises too many risks.

A vendor sells lemons at her stall at a market in Bangkok

​Sales top IPOs as private equity cashes out

IFR 2148 27 August to 2 September 2016 By Robert Sherwood,

Private equity firms are increasingly choosing outright sales instead of IPOs when it comes to cashing out of their investments as ECM is unable to compete with buyers capitalising on accommodative debt markets.

The logo of commodities trader Glencore is pictured in front of the company's headquarters in the Swiss town of Baar

Coal hedge turns sour for Glencore

IFR 2148 27 August to 2 September 2016 By

Glencore’s disclosure of a US$395m mark-to-market loss on derivatives contracts hedging 55m tonnes of coal production raised concerns about the opaque nature of the company’s trading operations.

An artisan paints an idol of Hindu god Ganesh, the deity of prosperity, at a workshop ahead of the Ganesh Chaturthi festival celebrations

India backs down over SUUTI sales

IFR 2148 27 August to 2 September 2016 By S Anuradha

India relaunched its tender last week for the sale of US$8bn–$9bn of shares with a third drafting of a conflict of interest clause that had put banks off the planned privatisations.

A man rides an electronic bike past a billboard for the upcoming G20 summit in Hangzhou

G20 looks at GDP bond details

IFR 2148 27 August to 2 September 2016 By

GDP-linked sovereign bonds, whose principal and coupons fluctuate depending on the issuer’s economic performance, are closer to becoming a key part of financing after the G20 issued a paper tackling obstacles to their launch, which experts followed up with further discussion at the Bundesbank.

Guard of honor attends the ceremony of raising the Polish flag on the clock tower of the Royal Castle

Panda bonds take Pole position

IFR 2148 27 August to 2 September 2016 By

The Republic of Poland achieved a strong result for the first Panda bond issue from a European sovereign last week, offering proof that the onshore renminbi market can be an attractive funding option for non-Asian issuers.

A logo of Monte dei Paschi is seen on a window in downtown Siena

BMPS numbers don't add up

IFR 2148 27 August to 2 September 2016 By Graham Fahy

Bankers working on Banca Monte Dei Paschi di Siena’s €5bn capital increase are struggling to come up with a structure that ensures the success of the share issue, while respecting the pre-emptive rights of its shareholders.

IFR Magazine Top News in Full (subscription required)

People & Markets

A Wall Street sign is pictured outside the New York Stock Exchange

Heat builds for US banks to split roles

IFR 2148 27 August to 2 September 2016

Top US banks could face renewed pressure to split the roles of chairman and chief executive after the Financial Stability Board this month launched a peer review of best corporate governance practice.

Photo illustration of beer flowing from a bottle of Stella Artois into a glass, part of the Anheuser-Busch InBev group, seen against a SABMiller logo,

Megabrew deal lands US$2bn payday for advisers

IFR 2148 27 August to 2 September 2016

Brewers Anheuser-Busch InBev and SABMiller will pay almost US$2bn in fees to banks, lawyers, PR firms and others advisers to complete the largest consumer products takeover ever.

Barclays global finance head Langley to leave amid rejig

IFR 2148 27 August to 2 September 2016

John Langley, Barclays’ head of global finance and risk solutions (GFRS), is leaving after a decade at the firm, as the British bank rejigged the structure of its investment bank into two distinct units led from London and New York.

Hemp exchange gets CFTC go-ahead

IFR 2148 27 August to 2 September 2016

The US Commodity Futures Trading Commission has given a green light to the first US regulated platform for hemp derivatives by granting full swap execution facility status to the Seed Commodity Exchange.

Swap dealers seek clarity on threshold change

IFR 2148 27 August to 2 September 2016

CFTC commissioner Christopher Giancarlo has criticised the regulator for failing to take steps to eliminate an automatic drop in the threshold used to calculate swap dealer registration requirements due to take effect in December 2017, or at least to extend the existing arrangements.

    More from People & Markets

    Bonds

    Disappearing yields

    Covered bond issuance surges

    IFR 2148 27 August to 2 September 2016

    Euro covered bond supply hit its highest level for almost three months last week as historically low funding costs drove an onslaught of long-dated mandates, with more touted to come.

    UBS spearheads callable senior debt for European banks

    IFR 2148 27 August to 2 September 2016

    UBS last week placed the first callable public-senior unsecured euro deal from a European lender, the latest sign of how a changing regulatory landscape is shaping the way banks raise funding.

    Yield hunters turn sights on Kiwi

    Yield-hunters turn sights on Kiwi

    IFR 2148 27 August to 2 September 2016

    New Zealand underlined its appeal last week as the world’s highest-yielding Triple A rated sovereign as it cruised to its NZ$2bn (US$1.46bn) target on a 2037 syndicated bond.

    Hunt for bond yield helps credits on the cusp

    IFR 2148 27 August to 2 September 2016

    Investors are dipping down the credit curve to boost returns, allowing both Triple B rated borrowers and those at the upper rungs of the junk bond space to pay historically low yields.

    ANZ sets AT1 margin

    IFR 2148 27 August to 2 September 2016

    Australia and New Zealand Banking Group has allocated A$1.3bn for its latest Additional Tier 1 capital notes offer, ANZ Capital Notes 4, following the bookbuild.

      More from Bonds

      Loans

      PE firms put more capital into LBOs

      IFR 2148 27 August to 2 September 2016 By Leela Parker Deo, Jonathan Schwarzberg

      Higher company valuations and lenders wary of risky investments are pushing private equity firms to increase the size of equity contributions for leveraged buyouts to near historic highs in the face of fierce competition from cash-rich corporate buyers.

      Sri Lankan fans raise their national flags during a one-day international cricket match

      Sovereign gets largest syndicated facility

      IFR 2148 27 August to 2 September 2016 By

      The government of Sri Lanka made an impressive return to the loan markets after eight years to seal its largest syndicated facility after increasing its three-year loan to US$700m from a targeted size of up to US$500m.

      Libor floors in spotlight again after UK rate cut

      IFR 2148 27 August to 2 September 2016 By

      Lenders are once again focused on Libor floors on European investment-grade loans after the Bank of England cut UK interest rates to 0.25% from 0.5% in early August as part of its response to Britain’s shock vote to leave the EU in June.

      Xylem closes in on US$1.3bn bridge

      IFR 2148 27 August to 2 September 2016

      Commitments were due on Friday for water technology company Xylem’s US$1.3bn 364-day bridge loan.

      J&J markets US$10bn revolver

      IFR 2148 27 August to 2 September 2016

      Conglomerate Johnson & Johnson is in the market to refinance the company’s existing US$10bn 364-day revolving credit facility.

      Topps nets new add-on

      IFR 2148 27 August to 2 September 2016

      The Deutsche Bank-led US$130m incremental term loan for baseball-card maker Topps has sold at a 99.5 OID.

      Germany: Steico to increase loan

      IFR 2148 27 August to 2 September 2016

      Wood construction materials firm Steico will increase its existing syndicated loan to fund an expansion to its laminated veneer lumber production.

      UK: Ladbrokes amends £600m TL

      IFR 2148 27 August to 2 September 2016

      Bookmaker Ladbrokes has amended a £600m term loan, allowing the financing to be extended by a further six months to July 2018.

      More from Loans

      Equities

      An investor walks past a screen displaying stock information at the Saudi Stock Exchange

      Evolution not revolution for IPOs

      IFR 2148 27 August to 2 September 2016

      Changes to rules on bookbuilding and foreign investment in Saudi Arabia will be evolutionary rather than revolutionary, according to bankers focused on the region.

      South Africa: PPC firms up terms

      IFR 2148 27 August to 2 September 2016

      Cement maker PPC is pressing ahead with a R4bn (US$296m) rights issue that will help reduce its debt.

      Germany: E.ON’s Uniper reveals losses in run-up to spinout

      IFR 2148 27 August to 2 September 2016

      Utility E.ON has put out first-half numbers for Uniper, its legacy power-plant and energy trading operations, ahead of the latter’s spinout and intended listing in Frankfurt next month.

      Reverse enquiry prompts CommScope sale

      IFR 2148 27 August to 2 September 2016

      In the week’s only US follow-on stock sale, Carlyle Group offloaded 10m shares of CommScope in a US$291.9m block trade overnight on Tuesday struck at no discount to market prices.

      Trade Desk bulks up tech IPO pipeline

      IFR 2148 27 August to 2 September 2016

      The Trade Desk, an online advertising buying platform, has publicly disclosed plans to raise up to US$86.3m from an IPO that could launch and price as soon as next month.

      FB Financial, Everbridge show their hands

      IFR 2148 27 August to 2 September 2016

      Bank IPOs are likely to comprise at least part of the IPO comeback expected in September.

      IPOs queue up for September, October

      IFR 2148 27 August to 2 September 2016

      Expectations are building that September and October will see a surge in IPOs and follow-ons, helping to restore the fortunes of US equity capital markets after a largely disappointing 2016.

      Biotechs ready IPOs

      IFR 2148 27 August to 2 September 2016

      Biotech IPOs have been a constant in the US IPO market this year, although most of the deals that have been priced have so with heavy levels of insider support. Two hopefuls are looking to join the list after the Labor Day break. 

      More from Equities

      Derivatives

      Isolux Corsan logo

      ISDA Isolux decision draws parallels with Abengoa

      09 August 2016 By

      An ISDA Determinations Committee has ruled that a court petition by Spain’s Grupo Isolux Corsan Finance for a moratorium on coupon payments on €850m in bonds constituted a bankruptcy event, entitling buyers of credit protection to a payout.

      Regulator blockchain ambitions raise privacy concerns

      04 August 2016 By

      Financial market participants have expressed concern over regulator plans to use distributed ledgers to monitor derivatives markets, saying it may undermine their willingness to transact on the shared databases.

      Institutions develop a taste for bond ETFs

      21 July 2016 By

      ETFs have become a staple of European institutional equity portfolios over recent years, but fixed income investors have remained relatively oblivious to the merits of passive investing. Now, according to ETF provider BlackRock, attitudes are starting to change.

      ISDA rules credit event on Puerto Rico

      19 July 2016 By

      The International Swaps and Derivatives Association has determined that a failure to pay credit event occurred in respect to Puerto Rico missing bond payments of more than US$900m earlier this month.

      New US derivatives tax threatens equity hedging

      15 July 2016 By

      A new rule that brings some equity derivatives into the ambit of US withholding tax may undermine demand for hedging among overseas investors as brokers scramble to implement the requirements.

      More from IFR Derivatives

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      Capital CityCapital City logo    

      Apptio joins expanding SaaS IPO queue

      26 August 2016 By

      Cloud-based management software provider Apptio publicly filed for a US$75m Nasdaq IPO Friday, adding its name to a lengthening queue of tech deals slated for September and October.

      MOVES-High-yield head Bennett leaves HSBC

      26 August 2016 By Robert Smith

      Jeff Bennett has left his role as HSBC’s head of high-yield capital markets EMEA, according to sources with knowledge of the matter.

      MOVES-Forshner appointed head of global corporate DCMCS at UBS

      26 August 2016 By

      UBS has appointed Chris Forshner as global head of corporate origination within its debt capital markets clients solutions business (DCMCS), according to a source.

      Swap dealers require clarity on threshold change

      26 August 2016 By

      CFTC commissioner Christopher Giancarlo has criticised the regulator for failing to take steps to eliminate an automatic drop in the threshold used to calculate swap dealer registration requirements, which is set to take effect in December 2017, or at least extend the existing arrangements.

      Bumper US$2bn payday for advisers on SABMiller deal

      26 August 2016 By Steve Slater

      Brewers Anheuser-Busch InBev and SABMiller will pay almost US$2bn in fees to banks, lawyers, PR firms and others advisers to complete the largest ever consumer products takeover.

      Hemp exchange gets CFTC approval

      26 August 2016 By

      The US Commodity Futures Trading Commission has given a green light to the first US regulated platform for hemp derivatives by granting full swap execution facility status to the Seed Commodity Exchange.

      MOVES-Fisch adds two to convertible bonds team

      25 August 2016 By Maud Davies

      Swiss boutique firm Fisch Asset Management has promoted Stephanie Zwick to head its convertible bonds team and hired Filip Adamec as portfolio manager for the business.

      EQUITIES: PSBC wins Hong Kong listing approval

      25 August 2016 By

      Postal Savings Bank of China has won listing approval from the Stock Exchange of Hong Kong for its proposed IPO, according to sources familiar with the situation.

      MOVES-Morgan Stanley's Kay leaves

      25 August 2016 By

      Valerie Kay, a managing director in senior relationship management at Morgan Stanley, has left the firm, according to two people close to the situation.

      MOVES-Barclays' GFRS head Langley to retire from industry

      24 August 2016 By

      John Langley, Barclays’ head of global finance and risk solutions (GFRS), is retiring from the industry to pursue other opportunities, according to an internal memo seen by IFR.

      UBS hedge fund whistleblower claims unfair dismissal

      24 August 2016 By Steve Slater

      A former investment manager at UBS’s hedge fund business O’Connor is claiming unfair dismissal and saying he was unfairly treated by the Swiss bank for whistleblowing.

      EQUITIES: Japan's Recruit in US$2.7bn secondary follow-on

      24 August 2016

      Shareholders of Japanese temporary staffing business Recruit Holdings are planning to raise ¥267bn (US$2.7bn) through a follow-on offering of secondary shares, according to a term-sheet.

      MOVES: Gramercy makes Tackney co-head of trading

      23 August 2016 By Philip Scipio

      Gramercy Funds Management named Chris Tackney a managing director and co-head of its trading desk.

      EQUITIES: CSRC approves PSBC’s Hong Kong listing plan

      23 August 2016 By

      The China Securities Regulatory Commission has approved Postal Savings Bank of China’s application to seek a Hong Kong listing, according to sources familiar with the situation.

      MOVES-Deutsche Bank hires Bloom to extend oil and gas coverage

      23 August 2016 By Philip Scipio

      Deutsche Bank has hired Lackland Bloom, former co-head of oil & gas investment banking at JP Morgan, to run its Houston office as a managing director in the natural resources group.

      MOVES-Danske adds Norum for SSA and FIG coverage

      23 August 2016 By

      Danske Bank has hired Susanna Norum as a senior originator in the debt capital markets team. Norum will cover financial institutions and sovereigns, supranationals and agencies.

      All Latest news

      Special Reports

      Asian Debt Capital Markets
      There is a clear driver behind the deals in Asia’s primary markets today, and that is the search for yield. From perpetual bonds in Singapore to subordinated Samurais in Japan and high-yield sovereign debt in Sri Lanka, investors are jumping at the chance to boost returns.

      Asian Bank Capital
      Bank capital has long been a hot topic in Asia, but the asset class has so far failed to ignite the kind of excitement that the Basel reforms once promised – at least outside of Australia. That is all about to change.

      Top 250 Borrowers
      Few would claim that the conditions in the capital markets could currently be described as normal. Even so, the underlying environment is both strong and deep. Includes IFR's Top 250 Borrowers ranking.

      Financing Sustainable Infrastructure
      Climate change has risen towards the top of the global policy agenda as the impact of rising temperatures is felt around the world. This is providing a strong impetus towards transitioning the world towards a low-carbon economy.

      Reality bites

      IFR 2148 27 August to 2 September 2016

      WITH MARKETS AS quiet as a Virgin East Coast train carrying Jeremy Corbyn, Bellwether ended up browsing the TV schedules in search of inspiration. It duly arrived in the form of Selasi Gbormittah, who works in Deutsche Bank’s global transaction banking department and is also such a whizz in the kitchen that he’s starring on the new series of The Great British Bake Off.

      Opinion

      keith mullin

      Enough. Time for monetary-regulatory co-ordination

      CONSIDER THE FOLLOWING. Stream 1: Monetary policy actions that achieve the square root of zero, which deprive savers and pensioners of income, have no discernible impact on companies’ preparedness to borrow in order to invest in the real economy, on banks preparedness to lend or for that matter on consumers’ preparedness to engage in conspicuous consumption and which consequently conspire to kill off growth drivers.

      Keith Mullin Commentary image

      More action needed on gender diversity

      Are G-SIBs doing enough to promote and support gender diversity in their senior executive ranks? On the evidence of the EBA’s recent survey and my own analysis of the most senior management bodies of US and European G-SIBs, clearly not.

      ​Not waving but drowning? More DCM tweaks

      INVESTMENT BANKS CONTINUE to tweak their debt org structures to gird themselves better to benefit from – or should that be survive? – opportunities in today’s abnormal debt market conditions driven by unorthodox monetary policy, the complex regulatory environment and uncertain economic growth.

      Anthony Peters columnist format

      Bring on September 21

      Another day, another Fed official on the tapes, another turn-around in sentiment with respect to the timing of the next US rate increase.

      keith mullin

      Are the Chinese eyeing Lloyds Bank?

      How about this for a great summer sizzler? The UK government sells its 9.1% in Lloyds Banking Group within the stated schedule of 2016–17, coinciding with the departure of Antonio Horta Osorio for pastures new. There’s already been some chatter about how long the group CEO will hang on and I gather some institutional shareholders are keen for the board to accelerate succession planning.

      Anthony Peters columnist format

      The not-so-sweet smell of perplexity

      Everybody into the pond, everybody out of the pond! The minutes of the FOMC’s last meeting on July 27 were released yesterday and some reading they made. The bit which had noses twitching was the observation that the labour market was developing “somewhat slower” and – in the beautifully opaque way in which these minutes tend to be worded – “several voters” found the case a further and early tightening of monetary policy “less compelling”.

      Anthony Peters columnist format

      Gold coins and holiday reading

      It would appear that the concerns I have been expressing for quite some time now with respect to the efficacy of ongoing monetary policy are more widely shared than I had previously appreciated.

      Anthony Peters columnist format

      Dog-days of summer

      It might be Monday but it’s still August and, more strictly, we now find ourselves in the dog-days thereof. Given that, to many market operatives, volumes have felt more akin to August ones through many of the previous months, the residual scraps that clients are trading now will barely keep the wolf from the door. Sleepy markets of course don’t augur sleepy economics and the tapes are as busy as ever. 

      Keith Mullin

      Regulation: the FSB’s wayward love child

      REMEMBER THAT SILLY old song that tells of a guy who marries a widow with an adult daughter? The daughter marries the guy’s widower father, so becoming both the guy’s step-daughter and stepmother; both couples have children; and through a complex series of family relationships the guy ends up being his own grandfather?

      Jonathan Rogers

      Libor spike is cause for concern

      SOMETHING RATHER ODD is happening in the money markets. Libor is through the roof. It’s supposed to be a temporary spike based on US money market funds avoiding pending regulation, but I wonder.