Top Stories from IFR Magazine
Barclays and Credit Suisse laid to rest any doubts about the strength of global investor appetite for Additional Tier 1 capital from European banks when they attracted the US dollar equivalent of more than US$35bn of demand for their deals in the past week.
Bank of Ireland took a giant leap forward in its plans to return to mainstream banking last week when it successfully repaid €1.8bn of state aid, breaking free from the clutches of a government that supported it through the financial crisis.
China’s stalled IPO market could be back in business as early as January, but the reopening is unlikely to reverse the flow of Chinese companies planning to list in Hong Kong.
Microsoft tapped the euro and US dollar markets for US$8bn-equivalent of bonds last Tuesday and turned conventional wisdom on its head by showing that it could get better pricing and bigger size in Europe than it could at home. The dual-currency approach meant it achieved much better pricing and greater investor diversification than if it had issued entirely in dollars, according to the bankers involved.
True Corp is poised to complete Thailand’s second infrastructure trust IPO, even though anti-government protests on the streets in Bangkok have forced one equity deal out of the market.
JP Morgan, HSBC and Credit Agricole have denied being part of a cartel with Barclays, Deutsche Bank, RBS and Societe Generale to fix Euribor. The European Commission said it was continuing to investigate the three banks despite the latter four admitting to collusion last week.
The Islamic Republic of Pakistan launched its first syndicated loan in nearly 15 years, giving Asian lenders their first taste of a sovereign borrowing in over five years.
Hilton Worldwide impresses on multiple fronts. As one of the few pre-crisis mega buyouts remaining, the world’s largest hotels operator remains highly leveraged but squarely focused on rapidly ratcheting down leverage. A US$2.4bn IPO due to price this week and a debt overhaul completed in October are merely the latest steps in an ongoing rehabilitation.
Investment banks are finding it increasingly difficult to secure regulatory sign-off to reduce the vast sums of capital they are forced to hold against derivatives exposures under Basel III.
Las Vegas Sands, the world’s largest resort developer and operator, and Venetian Macau, its Asian luxury hotel and casino subsidiary, launched a massive combined US$8.45bn refinancing exercise in the US and Asia last week in an effort to take advantage of excess market liquidity to win better terms on its debt.
Ukraine’s short-term bond yields are threatening to spiral into default territory following the government’s refusal to sign a free trade agreement with the EU. But some analysts and traders reckon current prices provide a buying opportunity. The country’s rejection of an agreement with the EU last month sparked mass demonstrations in Kiev, as some protesters fear the government will instead seek closer ties with Russia. So far, however, there has been no sign that the administration led by President Yanukovych will conclude a deal with Russia either. Rather, the government appears to be trying to muddle through.
A surge in global stock markets since the start of the year is set to continue in 2014. But with index levels heading close to fair value, and in some cases surpassing it, the risk of a downside correction is raising the attraction of equity derivatives as a means of capturing the next wave of upside.
BNY Mellon has decided to shut its swaps clearing service just three years after the firm launched the business in an attempt to profit from the Dodd-Frank mandate for clearing OTC swaps.
Luxembourg-based cable and telecommunications company Altice is contemplating going public next year, according to market sources, as it looks for new funds to fuel its global expansion.
Nationwide Building Society did what many thought impossible last week and placed high-risk equity-like capital with fixed-income funds – a move that showed just how far traditional investors can be stretched to get a double-digit payout. The UK’s largest building society sold £500m of core capital deferred shares that offered investors a 10.25% distribution.
Europe’s peripheral banks are coming off ECB emergency liquidity, cleaning up their balance sheets, and issuing market funding. Banks, which hardly relied on the central bank to get liquidity before 2008, became hooked on it when the crisis took hold and wholesale funding avenues were shut or became too expensive.
Deutsche Bank has rejigged its European fixed income business in the latest sign of difficulties at what has historically been one of the industry’s foremost trading franchises.
M&G Chemicals, a subsidiary of Italy’s Mossi Ghisolfi, is facing an uphill battle to complete Hong Kong’s biggest overseas IPO in two years. Two of M&G’s arranging banks have walked away from the deal, while investors are more interested in China Cinda Asset Management’s HK$19bn (US$2.5bn) flotation (see Equities section).
A combination of weakening aftermarkets, investor fatigue and seasonal caution spurred the cancellation of one sizeable European IPO last week and the restructuring of another, despite earlier covered messages on both transactions.
The prospect of rising rates is expected to lead to a pick-up in liability management in emerging markets next year, as more issuers seek ways to improve their balance sheets.