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Sunday, 23 July 2017

​Don’t be daft

IFR 2193 22 July to 28 July 2017

A new rule introduced without any fanfare by the European Union at the beginning of the month has the potential to significantly damage the European structured finance market.

Top News

Iraq

Iraq plans bond market return

IFR 2193 22 July to 28 July 2017 By ,

Iraq is preparing its first bond deal in more than a decade as the Gulf nation seeks to become the latest frontier credit to take advantage of attractive yields.

Mortgage

New EU rule imperils securitisation market

IFR 2193 22 July to 28 July 2017 By

A new European Union rule apparently designed to stop self-certified loans from being securitised - but with much wider implications - caused mayhem in the structured finance market last week. Spreads widened as the refinancing of certain RMBS paper was put in doubt, while potential new RMBS and NPL deals were shelved or put at risk.

Floor & Decor Holdings CEO Taylor looks on as traders and bankers set a price for his company's opening...

Floor & Decor add-on exploits new SEC rules

IFR 2193 22 July to 28 July 2017 By

Floor & Decor, the best-performing US IPO of 2017, became the first company to take advantage of new SEC rules allowing recent IPOs to file confidentially for follow-on stock sales, in an early sign that capital markets are embracing the securities regulator’s push to spur new issues.

Goldman Sachs sign

Goldman's trading reputation battered

IFR 2193 22 July to 28 July 2017 By

Another torrid quarter for trading at Goldman Sachs has prompted criticism that the bank has lost its way after senior management changes and needs to urgently fix its fixed income, commodities and currency business.

Abilio Diniz, the third largest Carrefour shareholder, attends the company's IPO at the Sao Paulo Stock Exchange

Carrefour spins off Brazil unit with IPO

IFR 2193 22 July to 28 July 2017 By

French retailer Carrefour spun off its Brazilian unit last week in the region’s biggest IPO in four years, bucking the trend of bad news in a country mired in a corruption scandal.

Euro and US dollar notes

Banks prep jumbo financing for VWR buy

IFR 2193 22 July to 28 July 2017 By

Banks are gearing up to launch a jumbo US$7.75bn-equivalent debt financing backing US life sciences company Avantor’s take-private of lab supplies company VWR Corp. Avantor, which is owned by New Mountain Capital, said that it would buy VWR Corp for about US$4.38bn on May 5.

CLP joins India's Green drive

Hong Kong debuts Energy Transition bonds

IFR 2193 22 July to 28 July 2017 By

Castle Peak Power introduced a new asset class to Asia’s growing Green finance market last week with a bond issue designed to help fund Hong Kong’s transition to cleaner forms of energy.

Greece comeback bond has to deal with debt ceiling

IFR 2193 22 July to 28 July 2017 By

Greece has hired six banks to break a three-year impasse that has locked it out of the international debt markets, but the International Monetary Fund’s concerns around the sovereign’s debt sustainability has cast doubt on the trade.

UniCredit

UniCredit's €16bn NPL deal nears finish

IFR 2193 22 July to 28 July 2017 By

UniCredit hopes to shift bad loans with a face value of €16.2bn off its books before the end of the month after signing an agreement with US funds Pimco and Fortress. The funds have committed to buy just over half of the portfolio for around €1bn.

A variety of Kroger branded foods

Kroger fills basket with US$1.5bn issue

IFR 2193 22 July to 28 July 2017 By

Kroger raised US$1.5bn of debt on Monday with the first bond sale from the grocery sector since Amazon’s agreement to buy Whole Foods sent shockwaves through the industry last month.

IFR Magazine Top News in Full (subscription required)

People & Markets

Morgan Stanley shows Goldman less is more

IFR 2193 22 July to 28 July 2017

Morgan Stanley beat arch rival Goldman Sachs in fixed income trading for the second quarter in a row, posting revenue of US$1.24bn, down 4% from a year ago.

Power and energy fuel 28% jump in restructurings

IFR 2193 22 July to 28 July 2017

The value of distressed debt and bankruptcy restructurings completed in the first half of this year jumped 28% from a year ago to US$105.9bn, led by the debt restructurings of Abengoa and Peabody Energy.

Who's moving where

IFR 2193 22 July to 28 July 2017

Claudio Boada, a former senior banker at Lehman Brothers, has been appointed by Natixis as senior adviser to its Madrid office to help the French bank’s expansion in Spain and Portugal. Boada will remain a senior adviser at The Blackstone Group, where he has been since March 2012, assisting the private equity firm with real estate assets and bank debt portfolios in Iberia. He spent 15 years at Lehman Brothers, including as chairman of its Spain and Portugal business. Natixis said he would be working with Carlos Perello, its country manager for Spain and Portugal.

Frankfurt wins as Citi, MS, Deutsche plan for Brexit

IFR 2193 22 July to 28 July 2017

US bank Citigroup is setting up a broker-dealership in Frankfurt for its European Union operations when Britain leaves the European Union, joining other Wall Street rivals choosing to move staff to the German financial centre.

Australia raises bank capital ratios

IFR 2193 22 July to 28 July 2017

Australia’s big four banks breathed sighs of relief last week after the latest review of capital requirements dampened fears of a shortfall in their common equity ratios.

    More from People & Markets

    Bonds

    Incitec Pivot markets Eurobonds

    IFR 2193 22 July to 28 July 2017

    Incitec Pivot, rated Baa2/BBB (Moody’s/S&P), met investors in Singapore and Hong Kong last Wednesday for a potential Reg S offering of US dollar senior unsecured bearer bonds under its EMTN programme.

    Kangaroo taps keep coming

    IFR 2193 22 July to 28 July 2017

    Auckland Council, rated Aa2/AA (Moody’s/S&P), tapped its 2.9% September 16 2027 Kangaroo bond for A$50m (US$40m) last Wednesday to lift the issue size to A$250m.

    John Deere prints below guidance

    IFR 2193 22 July to 28 July 2017

    John Deere Financial (A2/A/A) raised A$250m (US$198m) from last Wednesday’s five-year senior unsecured MTN offering that printed inside 90bp-95bp guidance, at asset swaps plus 88bp.

    ACU targets 10-year debut

    IFR 2193 22 July to 28 July 2017

    Australian Catholic University, rated Aa2 (Moody’s), has mandated NAB and UBS for a potential offering of 10-year Australian dollar Sustainability bonds following recent investor meetings arranged by the two banks.

    Toyota goes short

    IFR 2193 22 July to 28 July 2017

    Toyota Finance Australia, rated Aa3/AA- (Moody’s/S&P), issued a A$250m (US$198m) one-year senior unsecured floating rate note last Monday tjrough sole bookrunner NAB.

      More from Bonds

      Loans

      Euro and US dollar notes

      Banks prep jumbo financing for VWR buy

      IFR 2193 22 July to 28 July 2017 By

      Banks are gearing up to launch a jumbo US$7.75bn-equivalent debt financing backing US life sciences company Avantor’s take-private of lab supplies company VWR Corp. Avantor, which is owned by New Mountain Capital, said that it would buy VWR Corp for about US$4.38bn on May 5.

      Leasing firms eye cheap loans

      IFR 2193 22 July to 28 July 2017 By Yan Jiang

      A slew of Chinese leasing companies are tapping onshore and offshore syndicated loans for slightly over US$2bn, standing out in an otherwise slow market.

      Sri Lanka: Sovereign may upsize loan to US$1bn

      IFR 2193 22 July to 28 July 2017

      General syndication for the Government of Sri Lanka’s US$450m three-year financing has closed and the loan is likely to be increased to US$1bn.

      Trafigura's margin static

      IFR 2193 22 July to 28 July 2017 By

      Commodity trader Trafigura Beheer has obtained the same pricing on its latest US$1.5bn-equivalent multi-tranche financing as it did on last year’s visit.

      Australia: Seek closes A$917m refi

      IFR 2193 22 July to 28 July 2017

      Australian recruitment firm Seek last month closed a A$917m dual-currency refinancing that attracted commitments from existing lenders and new financier Bank of China.

      Australia: Icon Cancer Care loan cuts margins

      IFR 2193 22 July to 28 July 2017

      The A$460m five-year senior LBO financing backing the acquisition of Icon Cancer Care, Australia’s largest private oncology service provider, has been oversubscribed more than three times, allowing a 25bp cut in interest margins across all tranches.

      Australia: Cross Yarra raising A$4bn for PPP

      IFR 2193 22 July to 28 July 2017

      A syndicate of 11 lenders, including Australian majors ANZ and Westpac, have lined up around A$4bn (US$3.17bn) of debt to back the Lendlease Group-led Cross Yarra Partnership consortium’s winning bid for Melbourne’s A$6bn Metro Tunnel public-private partnership project.

      Australia: CEFC provides A$150m to Qube

      IFR 2193 22 July to 28 July 2017

      Clean Energy Finance will provide a A$150m seven-year bilateral term loan to logistics firm Qube Holdings to back the construction of a terminal in Sydney, the Australian government-owned renewable energy financier said on July 14.

      More from Loans

      Equities

      Malaysia: Khazanah sells CIMB block

      IFR 2193 22 July to 28 July 2017

      Malaysian state-owned investment firm Khazanah Nasional has raised M$571m (US$133m) from the sale of a block of 90.5m CIMB Group Holdings shares.

      India: SMTB exits Reliance Capital

      IFR 2193 22 July to 28 July 2017

      Sumitomo Mitsui Trust Bank has sold its remaining 2.8% stake in Reliance Capital in a Rs4.5bn (US$71m) block trade.

      India: InterGlobe plans follow-on

      IFR 2193 22 July to 28 July 2017

      The board of InterGlobe Aviation is to meet on July 31 to consider a follow-on offer to increase the company’s free float to 25% from 14.15%.

      India: Godrej Agrovet files for Rs13bn IPO

      IFR 2193 22 July to 28 July 2017

      Animal feed maker Godrej Agrovet has filed the draft prospectus for a Rs10bn–Rs13bn (US$155m–$200m) IPO and is targeting a fourth-quarter launch.

      China: CSRC approves nine IPOs

      IFR 2193 22 July to 28 July 2017

      The China Securities Regulatory Commission has approved the listing applications of nine companies aiming to raise an aggregate Rmb4.2bn (US$622m).

      China: Huarong to extend IPO validity

      IFR 2193 22 July to 28 July 2017

      China Huarong Asset Management will seek shareholder approval to extend the validity period of its Shanghai IPO plan. The original period expires on September 12.

      China: Shandong Gold plans HK listing

      IFR 2193 22 July to 28 July 2017

      Shandong Gold Mining has secured board approval to issue H-shares on the main board of the Stock Exchange of Hong Kong.

      Australia: Riversdale Resources plans IPO

      IFR 2193 22 July to 28 July 2017

      Coal company Riversdale Resources could raise up to A$300m (US$234m) in an IPO in the second half of the year, according to a person close to the deal.

      More from Equities

      Derivatives

      XPO Logistics' freight forwards deal funding

      IFR 2193 22 July to 28 July 2017 By

      Bradley Jacobs, the consummate dealmaker, reacquainted himself to equity investors, detailing plans to expand XPO Logistics with what turned into US$665.5m of new equity. Though Jacobs, who started and sold multiple businesses including United Rentals and United Waste Systems, has discussed potential acquisitions, no target was named alongside the stock sale.

      Banco Popular

      Value of Banco Popular legal claims set to determine CDS payout

      IFR 2192 15 July to 21 July 2017 By ,

      ISDA’s credit determinations committee is considering whether to include claims arising from Banco Popular’s written-down subordinated notes in the package of assets that can be delivered into an auction to determine credit default swap payouts.

      BNP Paribas

      BNPP acquires ING structured risk

      IFR 2192 15 July to 21 July 2017 By

      BNP Paribas has struck an agreement with ING to acquire risk relating to a €5bn portfolio of structured notes issued by the Dutch bank.

      BestX plans TCA expansion to liquid rates

      IFR 2192 15 July to 21 July 2017 By

      Start-up foreign exchange analytics platform BestX is set to expand its transaction cost analysis tool to fixed income markets next year, enabling participants to define and demonstrate best execution for liquid rates products in compliance with MiFID II.

      TrueEX

      Swaps antitrust claims trigger Federal probe

      IFR 2192 15 July to 21 July 2017 By Mike Kentz

      Allegations of anticompetitive behaviour in the interest rate swap market have become the subject of a federal investigation after the New York State Attorney General issued subpoenas relating to a private litigation between trueEX and IHS Markit.

      More from IFR Derivatives

      Commuters travel in a Metrocable cabin in Caracas

      Venezuela bonds suffer week-long slide

      21 July 2017 By

      Venezuela bonds were ending the week dramatically lower on Friday as the government comes under pressure at home and abroad to abandon plans to rewrite the constitution.

      MOVES-ABN AMRO hires Huysmans from Deutsche as co-head of ECM

      21 July 2017

      Paul Huysmans has left Deutsche Bank after more than 11 years on the equity syndicate desk to join ABN AMRO as co-head of ECM later this year.

      Double B rated junk bonds hit post crisis low: BAML

      21 July 2017 By

      Spreads of Double B rated US junk bonds hit a new post-crisis tight on Thursday as investors poured cash into the asset class following several weeks of outflows.

      IFR SNAPSHOT-Week ends on a high for US credit

      21 July 2017 By

      The US credit market is ending a busy week on a high with inflows into both high-grade and junk bonds at their highest in three to four months.

      Triple B corporate bond spreads break post-crisis tights:BAML

      21 July 2017 By

      Average spreads on Triple B rated corporate US bonds set a post-credit crisis low of 140bp over Treasuries Wednesday, the second time this week that spreads have broken previous tights, according to IFR data.

      BAML picks Dublin as EU hub post-Brexit

      21 July 2017 By Anjuli Davies

      Bank of America Merill Lynch has picked Dublin to be its new base for its European Union operations as Britain prepares to leave the bloc, the US bank said on Friday.

      Anthony Peters columnist format

      Nothing really matters

      21 July 2017 By

      Other than the byline-free writers of The Economist nobody seems to get away with reminding readers that “I told you so” although today I feel I have the right to. 

      ZTO Express sorting centre

      Chinese courier ZTO sued for "untrue statements" in US IPO

      21 July 2017

      (Reuters) Chinese courier ZTO Express and the underwriters of its New York stock market listing have been sued by a US pension fund that alleges the firm exaggerated its profit margins to lure investors into its US$1.4bn initial public offering.

      An employee works behind the counter inside a China Life Insurance Co. branch in Nanjing, east China's Jiangsu province.

      China Life Overseas debut dollar bond sees strong demand

      21 July 2017 By

      China Life Insurance (Overseas), Hong Kong branch, rated A1/A+ (Moody’s/S&P), made its US dollar bond debut with an offering of US$250m subordinated 10-year non-call five capital securities.

      Church & Dwight cleans up with US$10.8bn book on M&A bond

      21 July 2017 By

      Arm & Hammer toothpaste maker Church & Dwight seemed to have got the timing right with its rare visit to the dollar bond market on Thursday to finance its acquisition of Water Pik.

      Investors get on board rare railcar ABS

      21 July 2017 By

      Pricing on a railcar asset-backed bond for Trinity Rail was tightened sharply on Thursday, after books for the trade were multiple times oversubscribed just hours after opening.

      Moody's sign

      Numbers of potential fallen angels decrease: Moody's

      21 July 2017 By

      The number of non-financial companies at risk of dropping from high-grade into junk is declining across the globe, according to a Moody’s report out on Thursday.

      Banking district in Frankfurt

      Citi plans EU broker-dealer in Frankfurt after Brexit

      20 July 2017 By

      US bank Citigroup said it will set up a broker-dealer in Frankfurt for its European Union operations when Britain leaves the European Union, joining other Wall Street rivals choosing to move staff to the German financial centre.

      Corporates front-run ECB as July issuance volumes double

      20 July 2017 By

      The primary corporate bond market paused on Thursday, with borrowers opting to let the ECB policy meeting unfold before resuming with an unusually busy month for the sector.

      Anthony Peters columnist format

      The only game in town: Guessing future policy

      20 July 2017 By

      Across Europe this morning market players will be chewing their fingernails in anticipation of what the ECB president Mario Draghi the patron saint of risk asset buyers, will have to say in his post-ECB Governing Council meeting press briefing. 

      Nordea bank logo

      Nordea delays HQ decision until September on banking union plans

      20 July 2017 By ,

      Nordea has delayed its final decision on potentially moving its headquarters to September, saying it wants to assess if Nordic countries join the euro zone’s banking union.

      All Latest news

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      IFR 2193 22 July to 28 July 2017

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