Top Stories from IFR Magazine
By raising a combined US$14.25bn in one day, Brazil’s Petrobras and Indonesia’s Pertamina underscored the enormous bid for emerging market credits. The two oil trades generated nearly US$60bn in demand between them, endorsing the asset class’s place in a global credit market that was once the sole domain of G7 borrowers.
Concerns at the start of the year that the eurozone’s flagging peripheral countries would struggle to fulfil their hefty funding programmes in the capital markets were quelled last week, after Spain and Italy passed the halfway mark of their scheduled 2013 funding with oversubscribed benchmark deals.
The many global banks that have established securities joint ventures in China knew their investment would take time to pay off. The latest numbers, however, show that process may be taking longer than expected.
ISDA is consulting on a proposal to add another credit event for financial CDS, in order to adapt to sweeping changes in regulation that will give supervisory authorities the power to bail in the debt of floundering institutions.
Tesla Motors always was, and will be for some time, a story stock requiring investors to whole-heartedly embrace founder Elon Musk’s long-term vision to justify current valuations. Fresh off its first-ever quarterly profit, the electric car maker not only enlisted a legion of supporters but drew in some critics in the process by securing more than US$1bn of fresh equity.
Hedge funds were caught short in the first stage of Commerzbank’s €2.5bn rights issue as the sale of ex-rights shares by the government did not provide the expected opportunity to close positions. Shorting Germany’s second largest bank by assets was a popular and easy trade in recent weeks, but its success in driving the share price down by nearly 30% took it to a valuation level that generated real interest from long-only investors.
Fitch shook up the US securitisation market last week when, on the eve of a long-awaited US SEC public roundtable on credit rating industry reform in Washington DC, it issued an unsolicited comment lambasting the Triple A ratings given by two of its rivals to a new single-asset CMBS linked to a trophy Manhattan office building.
The Banque de France and the large French banks are working on fusing securitisation and covered bonds to boost access to funding for the country’s SMEs, creating a mechanism to help banks use their SME books more efficiently at the repo window. BNP Paribas, Credit Agricole, Natixis, Societe Generale and possibly others are working on the proposals.
Ally Financial is finally able to move forward with plans for an IPO to pay off the remaining US$11.1bn of bailout money it still owes the US government, now that it has reached agreement with its bankrupt mortgage subsidiary Residential Capital.
Lawyers are seeing a marked increase in queries from hedge funds regarding the best choice of legal mechanism to cram down minority lenders in different jurisdictions in restructuring situations. The cash-rich funds are piling into the debt of potentially distressed names such as Frans Bonhomme, which entered talks with lenders last week.
A heated disagreement over CDS margin requirements is edging towards a conclusion after the SEC presented a new proposal to the Interc ontinental Exchange and a handful of CDS clearing banks relating to cross-margining of single-name and index CDS positions.
The all-Asian line-up of arranging banks and sponsors on the US$890m leveraged buyout of Chinese software and IT firm AsiaInfo-Linkage is a first in the region. The US$330m debt package underlines the development of Asia's loan market and a growing acceptance of Chinese buyout structures.
It is increasingly likely that Greece will become the first sovereign ever to choose to restructure debt owed to the IMF – putting in question for the first time the IMF’s status as an unchallengeable preferred creditor when it comes to sovereign debt.
Portugal is plotting a return to regular bond auctions after winning back its traditional European investor base in a sellout €3bn 10-year bond syndication last week – its first new benchmark issue since its bailout in 2011.
China’s securities watchdog on Friday handed out its toughest punishment to date for an IPO underwriter with a decision to bar Ping An Securities from sponsoring any new listings for three months.
Private equity firms renewed selling of legacy portfolio companies last week through capital-committed stock sales, raising a total of US$3.8bn from portfolio companies. Selling by Apollo, Blackstone, Carlyle and others corresponds with the continued march of equities to all-time highs and the end of the first-quarter reporting season.
A record-breaking coupon on a €1.75bn Hutchison Whampoa hybrid bond last week is expected to lure other Asian corporates into the market as they seek to get the cheapest funding possible for these subordinated instruments.
Booming global demand for high-yield debt allowed two Asian issuers from previously unloved sectors to complete ground-breaking new issues last week.
Senior ECM bankers are struggling to explain the lull in marketed transactions – particularly IPOs – in Europe in the second quarter. After all, with equity indices punching through multi-year highs – Germany’s DAX posted new record highs from Tuesday onwards last week – now seems to be the perfect time to issue.
As investment banks continue to look for ways to boost capital, many are turning their attention to slashing the billions of dollars worth of risk-weighted assets associated with the market risk on their trading books, which have become a significant drag on profits since a beefed-up regulatory framework came into force last year.
Early demand for two big Hong Kong IPOs is signalling the revival of a market which, before last year, was the most active in the world.
Strong execution for the first European CMBS this year has prompted market participants to rethink the progress of the reawakening market, boosting confidence that this time it is for real, and that regular new-issue CMBS will be a feature of the market.
The Export-Import Bank of Korea is looking to issue bonds in the Scandinavian markets to take advantage of European liquidity, its funding managers have told IFR.
Thailand is preparing its first public issue of fixed-rate US dollar bonds since 1997 and plans to be a regular issuer in the offshore capital markets, the country’s top funding official told IFR in an interview.
Privately owned Stemcor, the world’s largest independent steel trading company, is discussing a standstill agreement on US$1.2bn of syndicated loans after failing to refinance a US$850m loan that had been scheduled to mature last month.
Banks in Portugal are not yet ready to give up cheap money from the ECB and to return in force to the debt capital markets, where they say funding is still too expensive – despite the runaway success of the sovereign’s syndicate comeback.
Years of badgering Apple to consider the virtues of taking on debt finally paid off for the investment banking industry – and for two banks in particular – when the world leader in consumer technology innovations issued a record-breaking US$17bn of bonds.
The UK government fired the starting gun on the privatisation of Royal Mail, as it confirmed it was about to invite pitches for lead roles on a planned IPO. Mandates are set to be awarded by the end of May, with the float envisaged for the autumn.
A US$9bn-plus order book for BBVA’s US$1.5bn Additional Tier 1 bond issue proved that the hunt for yield is transcending any fears about a potentially calamitous market correction down the road.
When Deutsche Bank decided to push the button on an accelerated fundraising last Monday afternoon, senior Deutsche ECM bankers were already busy wall-crossing investors interested in a primary fundraising for Carphone Warehouse. They had to quickly switch resources to bring investors over the wall for the bank’s own cash call before both deals launched later that evening.
Large holders of deposits in the two major Cypriot banks being restructured as part of the country’s €10bn bailout are considering the options available to maximise the recovery of their deposits.
The £4bn refinancing of Acromas, the private equity-owned firm behind travel company Saga and British motoring services firm the AA, will see a splitting of the two businesses into separate entities. An IPO is planned for Saga and the AA will be turned into a Triple B rated investment-grade company by having its debt restructured into a whole-business securitisation.
The Republic of the Philippines has no plans for a net foreign issuance of bonds this year, despite being propelled to full investment-grade status with a second upgrade on Thursday, and will still meet almost all of its 2013 funding needs in the local market, Treasurer Rosalia de Leon has said.
ING US’s US$1.27bn IPO ran into considerable push-back from investors yet still managed to debut with a modest gain last week, easing the path for future secondary share sales by Dutch parent ING Group.
Despite a stream of disappointing economic data, the iTraxx Main index – the bellwether for European corporate credit – last week dipped below the 100bp mark for the first time in two years.
Indian mining company Vedanta Resources has had to revise its loan financing plans after an attempt at a debut in the US Term Loan B market failed to gain traction with investors.
The Republic of Indonesia will seek to exchange some of its outstanding US dollar bonds for longer-term debt as part of a liability management programme, the country’s top funding official told IFR last week.
Standard Chartered, the first and only issuer of Indian depositary receipts, has published details of how they can be exchanged for common shares. The IDRs were not initially fungible with shares and the share price had languished until June 2011, when the Securities and Exchange Board of India indicated that it would change the rules to allow fungibility of IDRs on a half-yearly basis provided they were infrequently traded.
Alibaba Group’s acquisition last week of a US$586m minority stake in Sina Weibo, the popular Chinese micro-blogging service, has taken expectations surrounding the e-commerce giant’s potential IPO to a new level.
On Thursday, Slovenia proved its doubters wrong when it printed a hugely oversubscribed US$3.5bn bond deal, just two days after a Moody’s decision to downgrade its credit rating to junk status forced it to abandon a transaction in the middle of the execution process.