JP Morgan and BofA Merrill regain footing in bumper March

When it comes to China, JP Morgan’s recent troubles are well known. The US bank, however, clearly hasn’t written off its China investment bank just yet. Dogged by an investigation into its hiring of connected offspring, the bank’s Chinese business has been through more than its fair share of upheaval over the past two years, and has been forced to turn down lucrative mandates on more than one occasion to limit the damage to its reputation. Senior managers have been purged, embarrassing emails leaked and league table positions lost. In the ultra...

Three of the world’s biggest asset managers – BlackRock, Vanguard and PIMCO– have rejected the notion that they pose a systemic threat to the global financial system and dismissed suggestions that they be heavily regulated like large banks to mitigate the risks posed. Regulators across the globe are growing increasingly concerned about a problem they perceive to be real, and have pressed asset managers to prove they can withstand large redemptions without creating or exacerbating the next financial crisis. But the industry is fighting back....

A global hunt for yield enabled Freddie Mac to price its second risk-transfer RMBS with a first-loss piece much tighter than the previous deal, even though it includes riskier features. The US$860m deal, backed by loans with loan-to-value ratios of between 80% and 95%, saw strong demand within hours of being announced, a syndicate banker told IFR. The deal’s US$228m Single B plus rated M3 class was five times oversubscribed, and tightened to be priced at one-month Libor plus 380bp from earlier talk in the 400bp–410bp range. The first-loss slice...

RBS CHIEF EXECUTIVE Ross McEwan is certainly wasting no time in getting the bank down to its target size and shape. Selling the international private banking and wealth management business Coutts to Union Bancaire Privée and getting another slug of Citizens Financial away for proceeds of US$3.2bn (US$3.7bn if the greenshoe is exercised) follow the recent sale of its US and Canadian loan book to Mizuho. Moves to sell the Asian book as part of the bank’s exit from the region are similarly in train. Getting all the elements of the chunky...

Investor frustration at how expensive euro public-sector debt has become was on display last week, with the Kingdom of Spain receiving a surprisingly tepid response to a 15-year linker and Germany-guaranteed KfW having to switch to US dollar funding. Spreads have tightened dramatically since the ECB announced its sovereign and sovereign-guaranteed bond purchase programme in late January, a trend that has accelerated since the implementation began earlier this month. Many buyers seem to have had enough and bonds issued by the Italian sovereign...

Lenders are awaiting the outcome of Ukraine’s sovereign debt restructuring before embarking on billions of dollars of corporate financial restructuring in the war-torn region. More than US$5.2bn of corporate debt in the form of internationally syndicated loans, pre-export financings and project finance deals are scheduled to reach final maturity over the next three years, according to Thomson Reuters data. Almost all but a handful of these loans have now been passed into the hands of the banks’ work-out teams as the political situation in...

Aabar Investments has issued a combination of five-year and seven-year bonds exchangeable into UniCredit to raise €2bn, making it the largest exchangeable ever to come from an unrated issuer. (See Top News for further equity-linked market coverage.) Concurrent with the sale, and in a move that helped swell demand, the Abu Dhabi investment company launched a tender for its outstanding 2016 exchangeables into Daimler. The deal leaked on Monday morning and launched after the close that evening. The company and leads were still choosing between...

Royal Bank of Scotland took a big step towards meeting its goal of completely selling out of Citizens Financial by securing a strong pricing outcome on an upsized US$3.2bn sale of shares in the US regional bank. Citizens, whose US$3bn NYSE debut in September was the biggest US bank IPO on record, last week completed the largest follow-on equity sale by a US bank since 2009. The deal comprised an increased all-secondary offering of 135m shares (from 115m at launch) priced at US$23.75 each, or a 1% discount to last sale. The offering price was...

NN Bank successfully stepped into the public Dutch RMBS market on Friday, pricing at the tight end of talk with a well-covered book. Hypenn RMBS III, via ING, JP Morgan (arranger) and Rabobank was offered with a fast/slow pay structure of two-year and five-year Triple A notes – unlike the recent Storm deal from Obvion which was a single five-year tranche. Obvion is widely regarded as the market leader in Dutch RMBS, with a long history of issuance so an investor base familiar with its performance history. And while NN Bank’s portfolio is not...

Optimal Payments, a global provider of online and mobile payment processing transactions, is backing its €1.1bn acquisition of digital payment company Skrill with a five-year €500m term loan provided by Bank of Montreal, Barclays and Deutsche Bank, which underwrote the deal on an equal basis. Optimal will also raise an additional US$85m revolver, of which €5m-equivalent is expected to be drawn down on completion. The facilities pay an initial margin of 275bp over Euribor/Libor, subsequently based on a adjusted leverage grid. For leverage of...

inContact may have secured the ideal ticker, though the “SaaS” moniker has not secured the investor mindshare one would suspect. The call centre Software-as-a-Service (SaaS) provider, which last accessed the equity markets in May 2013, took advantage of momentum to reconnect with investors with a US$100m, seven-year CB. Jefferies, sole bookrunner, marketed for one day on Tuesday before locking in pricing at 2.5%, up 35%, the aggressive ends of price talk and after a 7.4% sell-off in the underlying – notably the bank is not one of the four...

SINGAPORE’S FOUNDING FATHER passed away last Monday and I have returned from a trip to Europe to find the city state convulsed with outpourings of grief that are unusual in a place renowned for its emotional reserve. In the queue leading to the Parliament House, where Lee Kuan Yew has been lying in state during a six-day period of national mourning, people waiting to view his coffin were openly weeping. I have never seen anything like it in person. The Straits Times, Singapore’s flagship newspaper, has run page after page of tributes since...