M&A propels Goldman to top spot

I NEVER USED to spend too much time poring over the results of the European Central Bank’s quarterly bank lending surveys. In the past, I’d typically scan-read them on the train on the way home to save office time. And that was despite a number of people from the Street telling me they see me on the train, something which has made me wary of the perils of prying eyes. Just imagine if I’m found reading not some top-secret report or leaked bank strategy document – supporting the romantic ideal that people maintain towards the media – but was...

SEC regulations coming into effect in June will for the first time give investors the same information that ratings agencies had previously had exclusively before they assigned a credit rating to a new securitisation bond. Starting on June 15, the buy-side will have access to due diligence reports and other information about the collateral underlying securitisation deals. The goal is to increase transparency in an asset class blamed for much of the financial crisis, when the agencies cut corners, and worse, while investors claimed not to notice...

Europe’s warped credit markets took a new turn on Tuesday when Poland became the first emerging markets borrower to issue a bond at a negative yield. Until last week, the only sovereigns to have sold new debt at negative rates had been the highest-rated eurozone governments – and those deals had been denominated in euros. Poland issued in Swiss francs instead, taking advantage of a market with the lowest deposit rate in the world, at –0.75%. Poland’s SFr580m (US$622m) zero-coupon three-year is also the biggest bond ever printed with a...

Three medical diagnostics groups from Europe and the Middle East were at varying stages of initial public offerings last week, highlighting an increased appetite for healthcare stocks that has also witnessed an uptick in biotechnology groups opting for local rather than US listings. Management was in Paris last Wednesday for the launch of roadshows for a €440m–€474m Euronext IPO of French medical diagnostics group Labco. The price range is €7–€9, which will fetch primary proceeds for the company of €320m, with between €120m and €154m of...

The return to the US leveraged loan market by Swiss packaging company SIG Combibloc and pet store retailer PetSmart to slash pricing on buyout loans that signed just three months ago signals the start of a multi-billion dollar repricing wave. Borrowers are looking to take advantage of dropping spreads as a dearth of new loans and the creation of CLOs has created a supply-and-demand imbalance that has prompted companies to launch about US$16bn of repricing transactions in the past two weeks. Investor demand is so strong that SIG Combibloc and...

New York’s highest court last week began hearing what could be a landmark case in the litigation of shoddy pre-crisis mortgage lending, with ground-shaking implications for the MBS market. On the surface, the case centres on a legal technicality – when exactly the state’s six-year window begins for forcing originators to re-buy faulty loans underlying bonds. But the ultimate ruling by the New York Court of Appeals could in effect decide whether banks end up owing billions of dollars in damages over crisis-era MBS that went sour. As one...

The Republic of Portugal discovered last Wednesday that its long-dated paper has vastly diminished in popularity, when it returned to the market with a dual-tranche tap and was only able to raise €500m from the 30-year portion. The sovereign, rated Ba1/BB/BB+, priced a €2bn reopening of its 2.875% October 2025 note and a €500m reopening of its 4.1% February 2045 note, a deal that was buffeted by market volatility during execution. At the start of the year, sovereigns such as Portugal benefited from real-money accounts moving out along the curve...

Credit market participants have ramped up pressure for a change in rules governing single-name CDS, amid concern that declining appetite for the asset class is threatening its viability. Bankers and investors said urgent action was required to revive the fortunes of the single name market, including a move to biannual rolls, from the current quarterly formulation, and a swift migration to central clearing. “There are significant capital and balance sheet issues associated with single name CDS, which mean that non-cleared product has become...

Anshu Jain and Jurgen Fitschen’s plans to reduce assets at Deutsche Bank’s investment bank by nearly a quarter, at the same time as repositioning its business and geographic mix, look highly ambitious to execute, according to experienced bankers who have gone through similar processes. “It’s hard to cut a market-leading franchise, especially one you’ve had a big hand in building,” one senior FIG banker told IFR. “It’s been easier for other banks that have cut areas where they have not been so strong.” At last week’s strategy day Deutsche became...

Australian lender Bendigo and Adelaide Bank is sticking to the retail market for its latest offering of Additional Tier 1 notes, shunning the emerging wholesale market for the capital securities. Australia’s sixth-largest bank announced on the ASX last Monday an offering of new Convertible Preference Shares 3 (CPS3), callable after six years, to raise approximately A$200m. Coming after wealth manager AMP broke new ground this year in becoming the first financial entity to sell AT1 notes in Australia’s institutional bond market, Bendigo’s move...

Berlin Hypothekenbank’s €500m 0.125% seven-year Green Pfandbrief debut attracted a book of close to €2bn, a level of demand that could lure other issuers to the market despite the hurdles. The transaction was not only Berlin Hyp’s first trade in the format, but also the first time covered bond investors have had the opportunity to buy a Green Pfandbrief. “This was a major project for the bank that involved a lot of extra work, including documentation, getting a second party opinion, as well as conducting an extensive investor roadshow,” said...

Investec made the most of the relative dearth of senior unsecured supply in the sterling market to bring a successful holding company issue that will help the bank comply with future regulatory requirements.  The issuer, Investec plc, is the holding company of the majority of the Investec group’s non-Southern African operations, with total assets of £22.7bn and shareholders’ equity of £2.3bn. It priced the £300m 4.5% seven-year offering via HSBC, Investec and Lloyds, a transaction that was effectively a debut for the borrower. “Investec...