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Thursday, 05 March 2015

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Upfront

StanChart

Bouncing back

IFR 2072 28 February 2015 to 6 March 2015

Bill Winters is nothing if not shrewd, and that quality is on display again in his decision to take over the reins as CEO of Standard Chartered.

Top News

ECB

QE distortions arrive even before the party starts

IFR 2072 28 February 2015 to 6 March 2015 By

Even before it has begun, the European Central Bank’s looming bond purchase programme has already distorted prices to such an extent that a variety of public sector issuers are being forced to rethink their borrowing strategies.

European Central Bank (ECB) headquarters

ECB faces struggle to meet QE targets

IFR 2072 28 February 2015 to 6 March 2015 By

The European Central Bank will crank up its long-awaited quantitative easing programme in the coming days, injecting €60bn a month into already buoyant markets for bonds issued by sovereigns, supranationals and agencies, and asset-backed securities.

Argentina flag

Argentina shelves dollar bond sale

IFR 2072 28 February 2015 to 6 March 2015 By

Argentina’s attempt to sell at least US$2bn of new Bonar 2024 bonds to non-US investors was abruptly interrupted last week when a US judge ordered banks managing the sale to produce documents and witnesses for a deposition on the deal.

People enter and leave the headquarters building of Brazilian state oil company Petrobras in Rio de Janeiro

Petrobras downgrade shakes market

IFR 2072 28 February 2015 to 6 March 2015 By , Paul Kilby

Moody’s shocked bond investors last week with a surprise two-notch downgrade that put Brazilian oil company Petrobras in junk territory. The move was seen by some investors as overly assertive, leaving them to add exposure incrementally.

Mexican national flag

EM euro issuance set for record high

IFR 2072 28 February 2015 to 6 March 2015 By

Euro-denominated emerging market sovereign issuance will soar to its highest levels ever on the back of the European Central Bank’s quantitative easing programme, as issuers outside the eurozone seek to take advantage of falling euro yields, according to bank analysts.

The logo of the new Financial Conduct Authority (FCA) is seen at the agency's headquarters in the Canary Wharf business district of London

Jitters as FCA looks at allocations

IFR 2072 28 February 2015 to 6 March 2015 By Alex Chambers, ,

The Financial Conduct Authority will reveal in March whether new issuance of debt and equity will come under its competition review, a prospect that has set bankers’ nerves on edge.

A tale of two currencies

Euro deals cheaper than dollars

IFR 2072 28 February 2015 to 6 March 2015 By , Jonathan Schwarzberg

Global borrowers are using cheaper pricing in the European leveraged loan market to increase the size of euro-denominated tranches and push down pricing on more expensive US dollar tranches as companies arbitrage the transatlantic markets to secure best pricing on large loans.

Fed

Regulators transfer fire-sale risk to investors

IFR 2072 28 February 2015 to 6 March 2015 By Philip Scipio

The US Federal Reserve is becoming concerned that rules designed to make the financial system safer may have inadvertently transferred risk from banks to investors.

1Malaysia

IPO key as 1MDB cleans house

IFR 2072 28 February 2015 to 6 March 2015 By , S Anuradha

State-owned investment fund 1Malaysia Development has reaffirmed plans to offload a stake in its power unit, hinting that the delayed IPO of the entity remains essential to the group’s efforts to reduce its debt burden.

IFR Magazine Top News in Full (subscription required)

People & Markets

A sign outside the headquarters of JP Morgan Chase & Co in New York

JP Morgan pays the price for size

IFR 2072 28 February 2015 to 6 March 2015

JP Morgan has admitted it will need to rethink its prime brokerage, derivatives and deposits strategies after being named as one of only two banks globally that will need to meet the highest capital surcharge levels due to its size – the other being HSBC.

Bill Winters

​Winters hired to revive Standard Chartered

IFR 2072 28 February 2015 to 6 March 2015

Bill Winters, the former co-head of investment banking at JP Morgan until he was ousted in 2009, has been appointed chief executive of Standard Chartered. He joins on May 1 and a month later will take over the reins from incumbent Peter Sands, who is retiring after eight years in the job.

Jeff Urwin

Deutsche poaches Urwin to run investment bank

IFR 2072 28 February 2015 to 6 March 2015

Deutsche Bank has poached one of JP Morgan’s most senior bankers to run its investment bank, in a major coup for the firm and its ambitions to be best-of-the-rest in the Americas, where more than half of all industry fees are generated.

The Royal Bank of Scotland (RBS) branch in central London

RBS slashes investment bank again

IFR 2072 28 February 2015 to 6 March 2015

RBS is to take the axe to its already much-shrunken investment bank once again, with plans to pull out of 25 countries and dramatically cut assets, as chief executive Rob McEwan speeds up the bank’s retrenchment back to the UK.

HSBC Markets Revenues

HSBC ditches GBM targets after loss

IFR 2072 28 February 2015 to 6 March 2015

HSBC is coming under pressure to overhaul its struggling investment bank, after bosses were forced to ditch return-on-equity targets following a lacklustre fourth quarter, during which the business plunged into the red for the first time in eight quarters.

    More from People & Markets

    Bonds

    Belgium hits dollars for short-term debt

    IFR 2072 28 February 2015 to 6 March 2015

    The Kingdom of Belgium turned to the US dollar market for its third syndicated bond deal of the year, taking advantage of a favourable basis swap to get a US$2bn 1.125% three-year bond away. The conditions for issuers looking to issue in dollars and swap back into euros are at their best since 2012, with the ECB plan to print money pushing the basis swap into negative territory. “We have not seen a basis swap so deeply negative since 2012. Belgium was in a position to react quickly and take advantage of the opportunity that the US dollar market presented,” said Alex Barnes, head of SSA syndicate at Citigroup, a bookrunner along with Barclays, HSBC and Nomura. Leads spotted the basis swap at –31bp around the time they ...

    Coca-Cola bottles

    Coke uncaps Europe's possibilities

    IFR 2072 28 February 2015 to 6 March 2015

    US drinks maker Coca-Cola priced the second largest corporate bond deal in the European market last week, further validating the appeal of the single currency for foreign issuers.

    Valeant's jumbo to quench thirst for large liquid issues

    IFR 2072 28 February 2015 to 6 March 2015

    High-yield investors clamouring for chunky-sized trades with ratings closer to investment-grade will get another stab at picking up paper when pharma giant Valeant launches a US$9.6bn bond to finance its acquisition of Salix Pharmaceuticals.

    People walk past a Swedbank branch in Riga

    Priced-out Yankee issuers to reload after dire start

    IFR 2072 28 February 2015 to 6 March 2015

    European companies that ditched the dollar market in favour of their home turf this year may soon return thanks to an improving cross-currency swap and a recovery in spreads.

    Real money accounts storm Spain 15-year

    IFR 2072 28 February 2015 to 6 March 2015

    The Kingdom of Spain raised €7bn from the issuance of 15-year bonds maturing in July 2030, making use of a hefty order book to price the deal with a 1.95% coupon.     The sovereign, rated Baa2/BBB/BBB+, recorded a final order book of €20.151bn, including €1.5bn of joint lead manager interest for the trade.     “The last few transactions have tended to surprise us in terms of the depth and breadth of investor demand – normally for a 15-year bond you would expect a size of €4bn–€5bn, but in this case we were able to comfortably go up to €7bn given the quality of the order book,” said Pablo de Ramon-Laca Clausen, senior adviser for funding and debt management at the Spanish Treasury.

      More from Bonds

      Loans

      A Saudi Aramco oil tank

      Back on track

      IFR 2072 28 February 2015 to 6 March 2015 By Sandrine Bradley

      The Middle Eastern loan market is having the busiest start to a year since the financial crisis. Higher levels of activity could be sustained for the rest of the year if current discussions about event-based financing feed through to a spate of cross-border M&A activity.

      The offices of Springer Science+Business Media

      Springer raising extra €700m

      IFR 2072 28 February 2015 to 6 March 2015

      German publisher Springer Science+Business Media is raising an extra €700m of leveraged loans to back its merger with nature publisher Macmillan Science and Education.

      Valeant Pharmaceuticals head offices

      Valeant taps for Salix buy

      IFR 2072 28 February 2015 to 6 March 2015 By

      Canada’s Valeant Pharmaceuticals is backing its US$10.1bn acquisition of US gastrointestinal drug-maker Salix Pharmaceuticals with a fully-committed financing from a syndicate of banks led by Deutsche Bank and HSBC.

      ProServ logo

      Banks take hit on ProServ buyout loans

      IFR 2072 28 February 2015 to 6 March 2015 By , Mariana Santibanez, Jonathan Schwarzberg

      Banks that underwrote a secondary buyout of UK-based undersea energy services company ProServ made a big loss on the US$480m of debt backing the deal.

      Alok banks on guarantee facility

      India: Alok banks on guarantee facility

      IFR 2072 28 February 2015 to 6 March 2015 By , Manju Dalal

      Indian textile manufacturer Alok Industries is making its biggest splash so far in the offshore loan markets, thanks to a credit-enhanced structure already gaining traction with smaller Indian borrowers.

      LOANS: HPCL refi of US$400m into general syndication

      03 March 2015

      The US$400m refinancing for state-owned oil company Hindustan Petroleum has been launched into general syndication.

      LOANS: April mulls multi-trancher of up to US$1.1bn

      03 March 2015

      Pulp and paper producer Asia Pacific Resources International, or April, is looking to obtain a multi-tranche loan of up to US$1.1bn.

      Boston Scientific

      Cardinal, Boston Scientific jump on M&A debt bandwagon

      02 March 2015 By ,

      (IFR/TRLPC) - Boston Scientific and Cardinal Health piled onto the healthcare M&A debt bandwagon on Monday, joining Actavis with their own new financing trades to help fund acquisitions.

      More from Loans

      Equities

      Shanghai Stock Exchange building

      China fights back on tech IPOs

      IFR 2072 28 February 2015 to 6 March 2015

      China plans to allow unprofitable technology companies to list on its mainstream stock markets, in a move that may stem the exodus of fast-growing internet companies to the US.

      Saga logo

      Private sale unlocks Saga demand

      IFR 2072 28 February 2015 to 6 March 2015

      A private selldown in over-50s travel and insurance group Saga unlocked enough dormant demand last Thursday to warrant a second transaction of the day, this time to institutional investors.

      Noble Energy logo

      Independent oil explorers build liquidity

      IFR 2072 28 February 2015 to 6 March 2015

      Exploration and production companies are bracing for a sustained period of low commodity prices by deleveraging through stock sales – and well-funded firms are surprisingly leading the way.

      A billboard advertising Aldermore bank

      Challenger gets back in the ring

      IFR 2072 28 February 2015 to 6 March 2015

      Challenger bank Aldermore has revived plans for a London listing in the expectation that the recent market rally and a conservative valuation will seduce investors that rejected the offering four months ago.

      Narendra Modi

      Boost for ECM ahead of Modi's budget

      IFR 2072 28 February 2015 to 6 March 2015

      High expectations for India’s national budget have sparked a rebound in equity offerings, with recent placements attracting strong demand and a growing pipeline of share sales.

      Health Care REIT logo

      HCN funds acquisition spree

      IFR 2072 28 February 2015 to 6 March 2015

      There are only a few companies that can consistently drum up US$1bn-plus of investor demand on an overnight basis. Health Care REIT is one among those that has benefited from its strong record as a consolidator of senior and assisted living properties.

      A pedestrian is seen passing the head office of the Lloyds Banking Group in central London

      UK: State discreetly reduces Lloyds stake

      IFR 2072 28 February 2015 to 6 March 2015

      The government has sold shares in Lloyds Bank totalling £500m as part of a low-key dribble-out programme that has allowed the shares to gently appreciate without interruption from state selling.

      Xencor expands investor base

      IFR 2072 28 February 2015 to 6 March 2015

      Orphan drug company Xencor returned to the market last week with its first follow-on offering since it’s deeply-discounted club IPO in December 2013.

      More from Equities

      Derivatives

      Vix, VStoxx performance

      Vol strategies add long bias

      IFR 2072 28 February 2015 to 6 March 2015 By

      The failure of volatility hedge funds to capture the volatility spikes of late 2014 is fuelling a shift in traditional systematic vol selling strategies as managers seek to more closely align performance with expectations against a backdrop of more frequent volatility shocks.

      Cheniere Energy logo

      LNG seeks swap market

      IFR 2072 28 February 2015 to 6 March 2015 By Mike Kentz

      A recent drop in natural gas prices, coupled with the impending inaugural shipment of liquefied natural gas out of the US by Cheniere Energy Partners, is reviving hopes from market participants that a liquid financial derivatives market attached to global LNG prices will finally develop.

      The Commodity Futures Trading Commission building in Washington, DC

      Utilities fire off at CFTC

      IFR 2072 28 February 2015 to 6 March 2015 By Mike Kentz

      Executives from public power utilities took aim at the CFTC on Thursday for failing to carve the firms out of planned rules capping the size of positions that firms can take in commodity derivative markets.

      ISDA calls for reporting harmony

      IFR 2072 28 February 2015 to 6 March 2015 By

      Incomplete and inconsistent data currently being reporting in the US$691trn over-the-counter derivatives market mean that regulators still lack a true picture of risk in individual jurisdictions, ISDA has warned.

      EBA advises CVA exemption monitoring

      IFR 2072 28 February 2015 to 6 March 2015 By

      The European Banking Authority has recommended annual monitoring of capital charge exemptions that European banks currently enjoy on corporate counterparty risk exposures stemming from uncleared swaps trades.

      More from IFR Derivatives

      IFR SSA Report 2015 Cover

      IFR SSA Special Report 2015

      In boxing, the crowd often rallies around the underdog – especially if the fight is in the country that invented the sport. After tumbling to the canvas, Greece has staggered back to its feet and is now risking everything in order to win.

      All Special Reports

      The IFR Awards 2014

      IFR Global 2014 Cover - Awards Page

      James Saft - June 2014

      China rates going lower as tide of capital flows out

      Saft: The temptation will be to allow its currency to fall…

      Fed

      Fed's Yellen questions whether Wall Street ethics up to par

      (Reuters) - The head of the US Federal Reserve took a swipe on Tuesday at unlawful and unethical behavior at banks, saying it raises questions over whether the values embedded on Wall Street have improved enough in recent years.

      LSE

      Court upholds British challenge to ECB policy on clearing houses

      The European Union’s second-highest court has ruled the European Central Bank (ECB) was wrong to insist that euro clearing houses should be based in the single currency area, a policy Britain had challenged to defend its financial sector.

      Ryanair bonds

      Analysis: Ryanair bond offers little legroom (free content)

      Ryanair adopted its famous price-squeezing strategy on its latest bond offer on Tuesday, although at a cost to orders, which sky-dived compared with its last venture.

      RBS

      RBS to cut up to 14,000 jobs in investment banking unit - FT

      (Reuters) - Royal Bank of Scotland is aiming to cut as many as 14,000 jobs in its investment banking units across the United States and Asia, the Financial Times reported.

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

      As the banker said to the bishop

      27 February 2015

      THESE ARE PAINFUL times for HSBC. But, like watching Madonna fall off a stage, that often means these are entertaining times for everyone else – as this week’s earnings call and appearance by Stuart “Vogue” Gulliver and Douglas “Ray of Light” Flint before the UK Treasury Select Committee demonstrated.

      Terra

      Terra Capital Partners CEO on the US commercial real estate market

      IFR’s Joy Wiltermuth talks to Bruce Batkin, CEO of Terra Capital Partners, on the US commercial real estate market. 

      If this video player is not displaying you may need to enable javascript or install the latest version of Adobe Flash Player

      Obama "concerned" over China's restrictive practicesVideo

      US President Barack Obama, in a one-on-one interview with Reuters White House Correspondent Jeff Mason, says China has laws working their way through the system that would force US tech companies to “turn over to the Chinese government mechanisms where they could snoop” on users.

      All Spotlight

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