Top Stories from IFR Magazine
Piraeus Bank may sell the first senior unsecured bond from the country’s banking sector since 2009 this coming week, as the frantic scramble to buy debt tempts investors back to one of the eurozone’s most troubled stories. A successful deal would make Piraeus, at only Caa1/CCC/B– , the weakest-rated bank credit to raise senior debt.
Lloyds Banking Group is offering bondholders who helped rescue it five years ago the chance to swap their holdings into new debt or cash out now to avoid the risk of the bonds being called at par.
UK banks are plotting capital trades in their home currency market after Nationwide last week sold the largest such deal since the collapse of Lehman Brothers, unearthing a surprisingly deep pool of investor demand.
The International Monetary Fund is under political pressure to back a bailout of Ukraine that would have all the country’s debts honoured rather than insist on an alternative bail-in that would see US$12bn of obligations coming due in the next three years reprofiled.
Russian companies face higher interest rates and delays on billions of dollars of loans as the crisis in Ukraine makes foreign banks increasingly wary of lending to them. The uncertainty sparked by Russia’s military intervention in its neighbour may have implications for nearly 20 high-profile corporate loans in the pipeline.
Japan Display’s lofty premium to Asian competitors has not put investors off its ¥389.3bn (US$3.8bn) IPO, as institutions rushed to back the maker of displays for smartphones and other devices. With government-backed Innovation Network Corporation of Japan selling, the deal also serves as an important guide for other privatisations.
China’s first cross-border offering of commercial mortgage-backed securities since 2006 is set to underline the potential for overseas financings backed by onshore assets.
Loss-making Shanghai Chaori Solar Energy Science and Technology’s unprecedented missed coupon payment last week is set to trigger a change in attitude towards risk in China’s fast-growing capital markets.
Asset managers are revolutionising their approach to bond trading to counter growing fears over their ability to keep pace with redemptions in the event of a sudden pullback from fixed income. The move comes as regulators are scrutinising the precarious liquidity mismatch of mutual funds invested in increasingly illiquid corporate bond markets while offering investors daily liquidity.
The US Securities and Exchange Commission may be gearing up to regulate how investment banks allocate new bond issues, with the regulator launching an investigation into banks including Goldman Sachs, Citigroup and Morgan Stanley following complaints from investors.
Banks in the eurozone are now more exposed to government debt than at any time since the financial crisis began, with many increasingly using their balance sheets to prop up ailing governments, deepening the bank-sovereign link that has already pushed a number of countries and lenders into bailouts.
A tightly contested battle for French telecoms operator SFR between Numericable and Bouygues is a win-win for the loan market as both bids are backed by debt financings in excess of €10bn. Europe’s leveraged loan market is ripe for large financings: having strengthened their capital positions, banks are keen to underwrite, and cash-rich investors are desperate to put funds to work.
The European Union will delay its bond issue scheduled for next week, as it looks to finalise an aid package for Ukraine and seeks clarity from rating agency Moody’s, which is currently assessing the body’s creditworthiness, sources close to the discussions said on Friday.
The US investment-grade bond market was on fire again last week as investors devoured every one of 36 trades that raised a whopping US$50bn in the second-busiest week of all time.
Russia’s large banks are relatively well positioned to cope with potential economic sanctions on the country as a result of the crisis in Ukraine, according to analysts.
Independent investment adviser Moelis & Company is set to make the move from boutique to established market player with its US$100m NYSE IPO that comes just seven years after former UBS rainmaker Kenneth Moelis set up the eponymous shop.
A mooted bailout package from Western governments risks leading Ukraine to breach covenants on an outstanding Eurobond issue – and even causing it to default on all its debts. The country’s debt-to-GDP ratio could be pushed beyond the level agreed on December’s US$3bn of bonds issued to Russia.
AO World defied the belief that high-growth UK companies have to list overseas in order to secure premium valuations, as the online white goods retailer secured a market capitalisation in excess of annual sales for the entire sector. Tight allocations ensured enthusiasm carried through into the aftermarket, with shares gaining a third on debut.
Investment banks are expected to embrace accounting frameworks to measure the cost of funding derivatives books en masse this year, even though firms continue to take markedly different approaches to the subject. The moves are likely to result in banks collectively being forced to recognise billions of dollar of losses related to funding their derivative holdings.
Investors are turning a blind eye to shareholder-friendly activity by borrowers, as ballooning portfolios make the once heated topic of leveraging up to buy back stock a barely acknowledged risk when it comes to pricing bonds.