Top Stories from IFR Magazine
European governments look set to lose the backing of their biggest group of creditors, with some of the region’s banks likely to trim the €1.72trn they own in low-yielding government debt in coming quarters, in a bid to boost profitability.
The China Securities Regulatory Commission is preparing IPO reforms that would allow market forces, rather than regulators, to dictate the key terms of future listings.
Rising market volatility claimed another victim, as Hopewell Hong Kong Properties, a spin-off of the property and hospitality arm of Hopewell Holdings, pulled its Hong Kong IPO of up to HK$6.05bn (US$780m).
European equity-linked issuance had dropped off so much in the second quarter that any deal is an event, but the return of 2012’s convertible bond poster child Volkswagen truly was a significant moment for this small but cherished market.
Germany has been doing its utmost to hype up its new-fangled regional funding initiative, the Deutschland Bond, but that has not stopped bank strategists calling the product a political charade and investors cursing its complexity.
After a long drawn-out and somewhat turbulent stay in the US IPO pipeline, Coty completed its US$1bn flotation last week. Following a 12-month dual-track process, Coty’s IPO drama continued into the aftermarket as the newly-issued shares immediately broke offer on Thursday, despite assurance from syndicate managers that the deal was well-covered.
One of 2012’s hottest US IPOs, human resources software company Workday, has taken advantage of highly favourable financing terms in the US convertible bond market to raise up to US$600m, almost as much as it raised from its October IPO.
As part of the never-ending search for alpha, institutional investors are taking a closer look at secondary opportunities in the private equity space and other private markets, where they are able to pick up assets at significantly improved valuations, and often with a lower risk profile than is available in primary markets.
A jumbo loan backed by a standby letter of credit facility for Chinese pork producer Shuanghui International has underlined the ability of China’s banks to support overseas acquisitions.
Mexico’s third-largest bank Grupo Financiero Banorte is awaiting the green light for a follow-on of up to US$3bn that could become the biggest deal in the country this year. The transaction also highlights the country’s burgeoning attraction versus former investor favourite Brazil.
There is a growing supply of purchasers for the riskiest slices of US CMBS deals and, as competition heats up, underwriting is deteriorating in the once-again booming commercial mortgage bond market, according to panelists speaking last Tuesday at the annual conference of the Commercial Real Estate Finance Council.
The key interest rate for the financing of short-term collateral flipped negative last week – a rare occurrence that stands as yet another warning sign that the Federal Reserve’s asset-buying stimulus programme is distorting markets.
Emerging markets have reached a critical juncture thanks to jittery Treasury markets, deteriorating fundamentals and poor returns since the beginning of the year.
Business services company Equiniti was forced to relaunch a £440m high-yield bond last week, two weeks after pricing the original deal, after the UK’s Financial Conduct Authority refused to approve the transaction.
Hedge funds that took a punt on Cyprus when the country ran into trouble last June have averted the threat of capital controls and stand to realise annual returns of at least 25% from buying the country’s four-year €1.4bn international bond that came due on June 3. Early indications are that the instrument is to be repaid in full.
Latvia may be allowed to sidestep exposure to countries already bailed out by the eurozone if it is admitted into the single currency bloc at the start of next year, a eurozone official close to the discussions told IFR last Tuesday.
Belgium made an opportunistic dash into the US dollar market on Monday, in a deal that proved to be a catalogue of errors and culminated in an embarrassing price correction.
A restructuring plan for Hibu, the directories business formerly known as Yell, is expected to be tabled by the end of the month after a two-year struggle to control its now £2.2bn debt burden.
Online retailer LightInTheBox brightened spirits with the first US listing from a Chinese company in more than six months, pointing to a tentative revival of US investor interest in China-related stocks.
New regulations currently being applied across Europe could see futures revenues slashed for clearing member firms that act as gateways to central counterparties.
Several European secondary loan trading desks have suffered losses after heavy oversubscription and a tough allocation process on German metering firm Ista’s buyout loan left desks with little or no paper to cover trades that they had already made.
Italy’s Snam managed to cut its borrowing cost on €3.5bn of revolving credits by amending existing loans, but bankers said that the highly rated gas distributor could have achieved bigger savings by mandating banks to arrange a new loan.
The effort to recapitalise Greek banks was never going to be a simple process; nor, it seems, a terribly transparent one.
Gagfah has given the strongest indication yet of its confidence in the reviving CMBS market by announcing a much bigger than expected €2bn transaction last week.
The International Monetary Fund has admitted that it broke its own rules in taking part in a €110bn bailout of Greece in May 2010, and ignored internal misgivings about debt sustainability because of fears that a lack of action could prompt turmoil in other eurozone countries.
The US Treasury Department has succeeded in maximising proceeds from the sale of part of its remaining stake in bailed out automaker General Motors by exploiting robust index fund demand alongside last Thursday’s re-inclusion of the stock in the S&P 500 index.
The primary Samurai market is regaining a spring in its step after an issuance drought of nearly three months.
Singapore staged another race last Monday and it had nothing to do with Formula 1. HSBC and Standard Chartered each launched their first Singapore-settled offshore renminbi bonds that day, overtaking local favourite DBS to become the first to issue renminbi-denominated bonds in the Lion City.
Highlighting the threat to trading liquidity and the risk of dislocation from the proposed financial transactions tax is starting to pay off for European banks, which are now expanding their strategies to warn of the dangers to the primary market.
Nasdaq OMX fired the starting gun in the race to become the dominant European derivatives exchange last Friday, when it launched a suite of interest rate futures on NLX, its new London-based trading platform.
Emirati healthcare provider Al Noor Hospitals Group last week launched a London IPO of up to US$540m-equivalent, becoming the second Gulf issuer in recent times to shun local bourses in favour of London.
Coty headlines a lengthy list of companies looking to access the US equity capital markets after the Memorial Day break. The global beauty cosmetics maker is marketing its 57.1m share all-secondary IPO with pricing scheduled for June 12.
The Lao People’s Democratic Republic has made its debut in the international bond markets, setting a template for other sovereign issuers from Asia’s frontier markets and for future borrowers from the country.
US dollar bond markets have fallen from their euphoric heights, as a violent spike in Treasury yields gave participants a dose of what to expect when the Fed tapers off its quantitative easing.
Japan’s largest IPOs of the year pressed ahead, despite a sharp drop in the stock market that marked an end to its six-month rally.
(Updates 10yr government bond yields in paragraph 8)
Investors betting on a continuation of Japan’s six-month runaway bull market suffered their biggest scare yet on Thursday as the Nikkei 225 lost more than 7% – its largest one-day loss in more than two years.
Goldman Sachs last week wrong-footed rivals by completing two sizeable follow-on block trades in one evening, overcoming the latest swoon in global stock markets and the ECM team’s own antipathy to such risk trades to deliver a tight pricing outcome on both deals.
The steady rise of global indices to multi-year highs has been accompanied by a growing fear of the correction that will follow.
China’s Hengan International Group printed Asia’s largest non-renminbi convertible bond in two years last week, raising hopes that even bigger fundraisings could follow.