International Financing Review is the leading source of fixed income, capital markets and investment banking news, analysis and commentary. IFR's team of market specialists report on capital-raising across asset classes, from rumour to market reception.
A pair of four-part US dollar bond deals from Amgen and Westlake Chemical on Thursday demonstrate the desire of companies to seize on the current funding environment and grow into a recovering economy. The biotechnology company Amgen, rated Baa1/A-/BBB+, is taking advantage of low Treasury rates and tight spreads to refinance some US$4bn of debt coming due in 2022 with a new US$5bn debt raise. According to Refinitiv data, the stack of debt maturing in 2022 is the company's biggest for the next 10 years and Thursday's refinancing exercise will free up more cash to be used for a series of bolt-on acquisitions and shareholder returns. Even though the transaction is expected to be relatively leverage neutral, Amgen has used free cash flow to return around US$8.3bn to shareholders over the last twelve months representing 62% of its free cash flow. Amgen has also executed acquisitions of Five Prime Therapeutics for US$1.9bn, Kyowa Kirin for US$400m and Teneobio for US$900m, according to a report from CreditSights. Amgen launched a US$1.25bn seven-year at 65bp over Treasuries, a US$1.25bn 10-year at 85bp over, a US$1.15bn 20-year at 105bp over and a US$1.35bn 30-year at 115bp over. Initial price thoughts were set in the area of Treasuries plus 85bp-90bp, 100bp-105bp, 120bp-125bp and 130bp-135bp, respectively. The company broke a three-year hiatus from the IG bond primary last year when it priced US$9bn across nine tranches in two trips to the market. The new 10-year note looks to offer some 10bp of additional spread compared with its outstanding 2.3% February 2031, which is trading at a G spread of around 75bp, according to MarketAxess data. Meanwhile, Westlake Chemical – which has not historically been a frequent or large issuer in the US dollar primary – is making a splash Thursday with a US$1.7bn four-part deal to fund two acquisitions in its largest debt raise ever. The petrochemical company, rated Baa2/BBB/BBB, launched a US$300m three-year non-call one at 55bp over Treasuries, a US$350m 20-year at 125bp over, a US$600m 30-year at 140bp over and a US$450m 40-year at 165bp over. Bookrunners struggled to tighten spreads at the longest end of the maturity spectrum where initial price thoughts were set in the area of Treasuries plus 87.5bp, 145bp, 155bp and 170bp, respectively. The deal is expected to help fund the company's US$3.2bn spend to acquire PVC company LASCO Fittings and building products company Boral Industries. At the final size, the four-part deal is equal to nearly half of Westlake Chemical's outstanding bond debt and greatly extends its maturity profile, which has never gone beyond 10 years before, according to IFR data. Indeed, because of the added length in the bonds, the 40-year offering is launched with nearly 65bp of additional spread over the company's most recent bond – its outstanding 3.375% 2030 that was last seen trading at around a G spread of 103bp, according to MarketAxess data. "The market likes that the company will do what it takes to maintain mid-Triple B ratings," one investor said. "Anything with some spread is getting strong bids in the market."
Marketplace loan investor Theorem Partners has returned to the US ABS market this week with a US$500m consumer loan-backed deal, offering investors a riskier package of assets compared with its inaugural deal last year, according to rating agency Kroll. The San Francisco-based firm, which selects and invests in marketplace loans based on its rating system using data science and machine learning, is expected to price the Theorem Funding Trust 2021-1 transaction this week. Credit Suisse is the lead bookrunner and Goldman Sachs is the joint book manager. Orders for the latest Theorem ABS are taking some time to build as some investors want to learn more about Theorem's scoring system and custom loans, a buyside source said. Theorem's credit system rates each loan it invests in with a score ranging from 50 being the riskiest to 120 being least likely to default. Each 10-point drop in the loan score is equivalent to a relative 40% rise in expected annualized loss rates. In the latest deal, the share of loans with a rating of 90 or below make up 46% of the collateral pool, which is double the 23% in the smaller US$255m Theorem Funding Trust 2020-1 that priced last August. Loans comprising 32% of the pool are tailored using Theorem's risk-rating model rather than meeting traditional underwriting criteria such a borrower's credit score or debt-to-income ratio. Kroll said the custom loans may carry higher risk than traditional loans. None of these loans were included in Theorem's debut ABS. In addition, the loans sourced from LendingClub are now being originated under "materially less favorable agreements" with Theorem, according to Kroll. As LendingClub transitions into a bank, which has access to cheap funding from deposits, it has been able to reduce its reliance on institutional investors and shift more more legal and credit risks on the loans it sells to Theorem, Kroll said. Lower ratings The deal features a US$415.55m "A" class with an weighted-average life of 1.12 years, which has an initial price talk of EDSF plus 90bp-100bp, while the deal's US$46.34m "B" tranche with a 2.89-year WAL is talked at 140bp-150bp over swaps, according to a buyside source. To compensate for more risky loans, the overall debt structure offers initial credit enhancement of 18%, which is higher than the 15% in the first deal. Yet the two offered notes are expected to fetch lower ratings than a year ago. Kroll is expected to assign an A- rating to the "A" note, and a BBB- rating to the "B" note, both one notch lower than the same tranches in the issuer's debut deal. There is also a US$38.11m "C" note with a 3.09-year WAL, which is not offered. Kroll plans to rate it BB versus a BB- rating on the C note issued a year ago. Loan trends Overall marketplace consumer ABS have recovered after taking a beating a year ago due to the pandemic. They have improved in step with a rebounding job market and a variety of loan and rent relief programs. Annualized net losses in marketplace personal loan paper fell to 5.25% in July from 5.78% in June and 8.48% from a year ago, Barclays analysts said on Wednesday. Year-to-date unsecured consumer ABS issuance has reached US$9.8bn, already matching last year's total, according to IFR data.
US footwear company Crocs is back in the junk bond market to raise funds for share repurchases, after tapping the primary market for its debut deal in March. Crocs, rated B1/BB- by Moody's and S&P, priced a US$350m 10-year non-call five senior unsecured note at 4.125% on Thursday. The footwear brand is taking advantage of the low rate environment to extend the average maturity of its capital structure with the new notes, which carry two additional years above its previous 4.25% 2029 offering. The 2029s were last trading at a cash price of 103.4 cents on the dollar on Thursday to yield 3.4%, according to MarketAxess. Price talk for the new unsecureds was in the 4.25% area, reflecting how the company is straddled between a Single B and Double B rating. The average yield for a Single B issuer was 4.73% versus 3.22% for the average Double B bond, according to ICE BofA data. Bookrunners for the deal are Morgan Stanley (lead left), BofA Securities, Citigroup and PNC. The popularity of its flagship clogs and increased demand for casual attire during the pandemic have fueled strong earnings growth for the footwear brand over the past few quarters. The company has also cut down on its unprofitable retail outlets while shoring up its digital marketing efforts. Net income jumped to US$319m in the three months ending in June 30, from US$56.6m in the comparable quarter last year, when consumer demand for clothing waned. Crocs also has US$198m of cash on its balance sheet as of June 30 and ample borrowing capacity with a largely untapped US$500m revolving credit facility maturing in 2024. The bright outlook is not without problems. The company's supply chain could suffer from the surge of Covid cases in Vietnam, its primary manufacturing hub. "Our expectation is that we will see some temporary factory closures in the next quarter as Vietnam battles Covid. They, unfortunately, don't have access to or the ability to administer the amount of vaccine that we have in this country," said Crocs CEO Bill Rees in a July 22 earnings call. Rees said the company did have some flexibility to move some production capacity out of Vietnam, but there was not enough room in other factories to take up the slack if a bigger shift was necessary. And analysts fret the company's reliance on its clogs may also plant the seeds of its decline. If consumers' capricious tastes shift, it could leave bondholders vulnerable. "As a footwear wholesaler/retailer, the company is subject high level of competition in the footwear sector. It is also subject to fashion risk which is heightened due to the company's narrow product focus in casual footwear and significant exposure to a single silhouette," said a Moody's analyst. Still, the company appears confident in its prospects as it ramps up its share buyback program. Crocs bought US$300m of shares in the second quarter, up from the US$50m of shares it snapped up in the first quarter. The footwear firm reported it was still authorized to repurchase around US$700m of its stock as of June 30. The company is prevented from paying out dividends under the indentures of its 4.25% 2029 note.
US footwear company Crocs is back in the junk bond market to raise funds for share repurchases, after tapping the primary market for its debut deal in March. Crocs, rated B1/BB- by Moody's and S&P, priced a US$350m 10-year non-call five senior unsecured note at 4.125% on Thursday. The footwear brand is taking advantage of the low rate environment to extend the average maturity of its capital structure with the new notes, which carry two additional years above its previous 4.25% 2029 offering. The 2029s were last trading at a cash price of 103.4 cents on the dollar on Thursday to yield 3.4%, according to MarketAxess. Price talk for the new unsecureds was in the 4.25% area, reflecting how the company is straddled between a Single B and Double B rating. The average yield for a Single B issuer was 4.73% versus 3.22% for the average Double B bond, according to ICE BofA data. Bookrunners for the deal are Morgan Stanley (lead left), BofA Securities, Citigroup and PNC. The popularity of its flagship clogs and increased demand for casual attire during the pandemic have fueled strong earnings growth for the footwear brand over the past few quarters. The company has also cut down on its unprofitable retail outlets while shoring up its digital marketing efforts. Net income jumped to US$319m in the three months ending in June 30, from US$56.6m in the comparable quarter last year, when consumer demand for clothing waned. Crocs also has US$198m of cash on its balance sheet as of June 30 and ample borrowing capacity with a largely untapped US$500m revolving credit facility maturing in 2024. The bright outlook is not without problems. The company's supply chain could suffer from the surge of Covid cases in Vietnam, its primary manufacturing hub. "Our expectation is that we will see some temporary factory closures in the next quarter as Vietnam battles Covid. They, unfortunately, don't have access to or the ability to administer the amount of vaccine that we have in this country," said Crocs CEO Bill Rees in a July 22 earnings call. Rees said the company did have some flexibility to move some production capacity out of Vietnam, but there was not enough room in other factories to take up the slack if a bigger shift was necessary. And analysts fret the company's reliance on its clogs may also plant the seeds of its decline. If consumers' capricious tastes shift, it could leave bondholders vulnerable. "As a footwear wholesaler/retailer, the company is subject high level of competition in the footwear sector. It is also subject to fashion risk which is heightened due to the company's narrow product focus in casual footwear and significant exposure to a single silhouette," said a Moody's analyst. Still, the company appears confident in its prospects as it ramps up its share buyback program. Crocs bought US$300m of shares in the second quarter, up from the US$50m of shares it snapped up in the first quarter. The footwear firm reported it was still authorized to repurchase around US$700m of its stock as of June 30. The company is prevented from paying out dividends under the indentures of its 4.25% 2029 note.
The IG corporate bond primary expects at least eight offerings on Thursday as issuers continue to surge into the market to capture historically low borrowing rates before they reverse course. And while tamer, the HY primary is eyeing three offerings today in a week that has already seen over US$10bn priced in this arena. US stocks opened up sharply after a mixed closed on Wednesday, even as the spikes in Covid variant cases across the US continue to be a worrisome development, especially when it comes to the economic recovery. Jobs data this morning was roughly in line with expectations. The US Treasury 10-year benchmark note was slightly higher this morning at 1.21%. On Wednesday seven IG issuers sold offerings totaling US$6.3bn, lifting weekly volume to US$24.6bn, according to IFR data. Three HY issuers raised US$1.65bn in primary market. The average IG bond spread remained unchanged for the third consecutive market session on Wednesday at 93bp and the HY spread remained unmoved at 342bp, according to ICE BofA data. HIGH GRADE The US investment-grade primary continues its hot streak with eight new deals on Thursday including a pair of four-part trades. Westlake Chemical is one of the largest issuers on the day marketing its biggest trade ever. The petrochemical company is out with three-year non-call one, 20-year, 30-year and 40-year notes at initial price thoughts in the area of Treasuries plus 87.5bp, 145bp, 155bp and 170bp, respectively. The deal is expected to raise some US$3.2bn to fund its acquisitions of PVC company LASCO Fittings and building products company Boral Industries. At that size, the deal would nearly double the company's outstanding bond profile and greatly extend its maturity profile, which has never gone beyond 10-years before, according to IFR data. The other big issuer on the day is biotechnology company Amgen, which is shopping seven, 10, 20 and 30-year bonds at initial price thoughts in the area of Treasuries plus 85bp-90bp, 100bp-105bp, 120bp-125bp and 130bp-135bp, respectively. Amgen will use the proceeds to pay down some US$4.22bn of debt coming due in 2022, according to the filing and Refinitiv data. Other issuers on the day include investment firm Franklin Resources, Panama Airport Aeropuerto Tocumen, electric utilities Southern California Edison and Commonwealth Edison Company, and real estate investment trusts Mid-American Apartments and Tanger Properties. HIGH YIELD Only two new deals were announced on Thursday as the primary market slowed down from its frenetic pace at the start of the week. Junk-rated issuers have printed over US$11bn of bonds in the past three days alone, according to IFR data. Fashion brand Crocs is coming to the market for the second time this year with a longer-maturity deal. The company is raising a US$350m ten-year non-call five senior unsecured note on Thursday, after issuing a similar sized eight-year note in March. The auto finance arm of carmaker Ford is pricing today a five-year senior unsecured bullet note, returning to the junk bond market for the third time in 2021. From the pipeline, casino operator Bally's is expected to price on Thursday its US$2bn two-part senior unsecured note to help finance its buyout of UK online gaming company Gamesys, as it looks to expand its offerings beyond brick-and-mortar casinos. Guidance for the US$1bn eight-year tranche was in the 5.25% area and 5.50% area for the US$1bn 10-year portion. STRUCTURED FINANCE Asset-backed supply pricing is expected to slow on Thursday as issuers have started marketing deals for sale next week. Among the transactions left for pricing this week includes Theorem Partners' US$500m marketplace consumer loan securitization, THRM 2021-1. Four issuers have raised US$2.56bn so far this week, running behind the US$4.17bn total in the prior week, according to IFR. Sallie Mae on Thursday mandated Barclays, Goldman Sachs, JP Morgan and RBC as joint book managers for its latest private student loan ABS, the
KfW demonstrated the benefits of its flexible funding approach earlier this week, venturing into the undersupplied euro market to land a tap of its September 2030s at the tightest pricing level the agency has achieved this year in the currency. The landmark was achieved even though the deal came in early August. “It feels like we are in full summer mode and a lot of people are on vacation at the moment,” said Otto Weyhausen-Brinkmann, head of funding at KfW. “Monitoring the market consistently, even during the summer break, has really paid off. This is tightest print in euros we have achieved in 2021 and it’s a nine-year maturity.” The deal on Wednesday was the first SSA issuance in euros in a fortnight as KfW decided to capitalise on recent spread tightening after receiving assurances that there was sufficient demand despite the summer lull. “It’s the first two weeks of August which has historically been quiet and it’s a time of the year when you see hardly any benchmark transactions. But it’s better for us if there’s no one else looking to take the opportunity and we were glad to do so," said Weyhausen-Brinkmann. "However, we have seen that euro spreads in secondary markets have tightened significantly over the last couple of weeks and our discussions with the banks actually indicated there is some strong demand there. We were confident in getting the bond placed but pleasantly surprised to get a subscription level around 4.5 times." Final order books for the €1bn no-grow 0% September 2030 tap closed in excess of €4.4bn. The borrower has now raised almost €60bn of its €75bn-€80bn annual funding target which is pleasing for Weyhausen-Brinkmann given continued uncertainty around central bank policy and upcoming political events. "We are exactly in line with where we want to be at this stage. The second half of the year typically offers fewer months for potential issuance and there are some quite important central bank decisions in September," he said. “We also have German elections in September and then there is the EU which still has to do a decent amount of funding. Therefore, we are feeling very comfortable with only €15bn-€20bn remaining for the rest of the year.”US dollar green bond targeted Several key milestones targeted by KfW at the start of the year have already been met, including a record breaking €4bn green bond brought in April, a new 15-year euro benchmark in May and floating rate deals against the new benchmarks in US dollars and sterling. "We have already achieved many of our goals. We issued in Sonia and SOFR so we have now completed the risk-free family," said Weyhausen-Brinkmann. “We have a well diversified funding range so can switch between dollars, euros, sterling and so on. We have also been very active this year in private placements. We have now reached the same number of trades already this year that we did in total last year.” A remaining aim before year-end is to bring a large green bond to the US dollar market, according to Weyhausen-Brinkmann. "One thing that is still open is a larger US dollar green bond. This is still clearly on the agenda for the second half of the year," he said. KfW last brought a US dollar denominated green bond just under a year ago, a US$2bn 0.75% September 2030 note that matched the size of the borrower's largest green issuance in the currency.
The IG corporate bond primary expects at least eight offerings on Thursday as issuers continue to surge into the market to capture historically low borrowing rates before they reverse course. And while tamer, the HY primary is eyeing three offerings today in a week that has already seen over US$10bn priced in this arena. US stocks opened up sharply after a mixed closed on Wednesday, even as the spikes in Covid variant cases across the US continue to be a worrisome development, especially when it comes to the economic recovery. Jobs data this morning was roughly in line with expectations. The US Treasury 10-year benchmark note was slightly higher this morning at 1.21%. On Wednesday seven IG issuers sold offerings totaling US$6.3bn, lifting weekly volume to US$24.6bn, according to IFR data. Three HY issuers raised US$1.65bn in primary market. The average IG bond spread remained unchanged for the third consecutive market session on Wednesday at 93bp and the HY spread remained unmoved at 342bp, according to ICE BofA data. HIGH GRADE The US investment-grade primary continues its hot streak with eight new deals on Thursday including a pair of four-part trades. Westlake Chemical is one of the largest issuers on the day marketing its biggest trade ever. The petrochemical company is out with three-year non-call one, 20-year, 30-year and 40-year notes at initial price thoughts in the area of Treasuries plus 87.5bp, 145bp, 155bp and 170bp, respectively. The deal is expected to raise some US$3.2bn to fund its acquisitions of PVC company LASCO Fittings and building products company Boral Industries. At that size, the deal would nearly double the company's outstanding bond profile and greatly extend its maturity profile, which has never gone beyond 10-years before, according to IFR data. The other big issuer on the day is biotechnology company Amgen, which is shopping seven, 10, 20 and 30-year bonds at initial price thoughts in the area of Treasuries plus 85bp-90bp, 100bp-105bp, 120bp-125bp and 130bp-135bp, respectively. Amgen will use the proceeds to pay down some US$4.22bn of debt coming due in 2022, according to the filing and Refinitiv data. Other issuers on the day include investment firm Franklin Resources, Panama Airport Aeropuerto Tocumen, electric utilities Southern California Edison and Commonwealth Edison Company, and real estate investment trusts Mid-American Apartments and Tanger Properties. HIGH YIELD Only two new deals were announced on Thursday as the primary market slowed down from its frenetic pace at the start of the week. Junk-rated issuers have printed over US$11bn of bonds in the past three days alone, according to IFR data. Fashion brand Crocs is coming to the market for the second time this year with a longer-maturity deal. The company is raising a US$350m ten-year non-call five senior unsecured note on Thursday, after issuing a similar sized eight-year note in March. The auto finance arm of carmaker Ford is pricing today a five-year senior unsecured bullet note, returning to the junk bond market for the third time in 2021. From the pipeline, casino operator Bally's is expected to price on Thursday its US$2bn two-part senior unsecured note to help finance its buyout of UK online gaming company Gamesys, as it looks to expand its offerings beyond brick-and-mortar casinos. Guidance for the US$1bn eight-year tranche was in the 5.25% area and 5.50% area for the US$1bn 10-year portion. STRUCTURED FINANCE Asset-backed supply pricing is expected to slow on Thursday as issuers have started marketing deals for sale next week. Among the transactions left for pricing this week includes Theorem Partners' US$500m marketplace consumer loan securitization, THRM 2021-1. Four issuers have raised US$2.56bn so far this week, running behind the US$4.17bn total in the prior week, according to IFR. Sallie Mae on Thursday mandated Barclays, Goldman Sachs, JP Morgan and RBC as joint book managers for its latest private student loan ABS, the
Volkswagen Financial Services became the first investment-grade corporate to issue in the euro market for over a week with a €2.5bn triple-tranche offering on Thursday. The boldness of the issuer's decision to test what demand still exists at this time of year was rewarded with solid subscription levels and limited concessions. VW FS (A3/BBB+) was able to fix the spread on a €750m February 2025, a €1bn February 2027 and a €750m February 2030 notes at 42bp, 55bp and 68bp over mid-swaps, having amassed combined orders of over €7.2bn. Final books dropped to over €6.2bn. Leads Commerzbank, Danske, DBS, Deutsche Bank, IMI-Intesa Sanpaolo and RBC opened books at spreads of 65bp-70bp, 80bp-85bp and 90bp-95bp. Bankers said fair value was in the high 30s on the 3.5-year, low 50s for the 5.5-year and low 60s on the 8.5-year, though one banker off the deal placed it at 45bp for the Feb 2027s. With market conditions constructive, there was confidence the trade would be fine. “You know what you have,” said one banker involved, pointing to attractive spread levels that have tightened throughout July, good buying activity in the secondary market, cash rich investors and the fact that VW FS had investors' full attention. To give a sense of how much its bonds have tightened, VW FS’s €800m 3.375% April 2028s were bid at 64bp at the start of last month, but by the start of August were at 55bp on Tradeweb. Over the same period, the iBoxx EUR non-financials senior index has tightened by about 5bp to 49bp. Despite the time of year, syndicate officials are optimistic about the prospect of further, if somewhat sporadic, issuance over the next few weeks in both euros and potentially sterling, especially given the success of recent deals. “Trades have gone well,” said a second syndicate banker. “Berkeley was an impressive result and I would be surprised if there wasn’t anything announced over the next fortnight.” On Wednesday, UK homebuilder Berkeley Group issued its inaugural benchmark, garnering a book of over £2.2bn for a £400m 2.5% August 2031 green bond, ending a run of poor results for corporate sterling issuers.
KfW demonstrated the benefits of its flexible funding approach earlier this week, venturing into the undersupplied euro market to land a tap of its September 2030s at the tightest pricing level the agency has achieved this year in the currency. The landmark was achieved even though the deal came in early August. “It feels like we are in full summer mode and a lot of people are on vacation at the moment,” said Otto Weyhausen-Brinkmann, head of funding at KfW. “Monitoring the market consistently, even during the summer break, has really paid off. This is tightest print in euros we have achieved in 2021 and it’s a nine-year maturity.” The deal on Wednesday was the first SSA issuance in euros in a fortnight as KfW decided to capitalise on recent spread tightening after receiving assurances that there was sufficient demand despite the summer lull. “It’s the first two weeks of August which has historically been quiet and it’s a time of the year when you see hardly any benchmark transactions. But it’s better for us if there’s no one else looking to take the opportunity and we were glad to do so," said Weyhausen-Brinkmann. "However, we have seen that euro spreads in secondary markets have tightened significantly over the last couple of weeks and our discussions with the banks actually indicated there is some strong demand there. We were confident in getting the bond placed but pleasantly surprised to get a subscription level around 4.5 times." Final order books for the €1bn no-grow 0% September 2030 tap closed in excess of €4.4bn. The borrower has now raised almost €60bn of its €75bn-€80bn annual funding target which is pleasing for Weyhausen-Brinkmann given continued uncertainty around central bank policy and upcoming political events. "We are exactly in line with where we want to be at this stage. The second half of the year typically offers fewer months for potential issuance and there are some quite important central bank decisions in September," he said. “We also have German elections in September and then there is the EU which still has to do a decent amount of funding. Therefore, we are feeling very comfortable with only €15bn-€20bn remaining for the rest of the year.”US dollar green bond targeted Several key milestones targeted by KfW at the start of the year have already been met, including a record breaking €4bn green bond brought in April, a new 15-year euro benchmark in May and floating rate deals against the new benchmarks in US dollars and sterling. "We have already achieved many of our goals. We issued in Sonia and SOFR so we have now completed the risk-free family," said Weyhausen-Brinkmann. “We have a well diversified funding range so can switch between dollars, euros, sterling and so on. We have also been very active this year in private placements. We have now reached the same number of trades already this year that we did in total last year.” A remaining aim before year-end is to bring a large green bond to the US dollar market, according to Weyhausen-Brinkmann. "One thing that is still open is a larger US dollar green bond. This is still clearly on the agenda for the second half of the year," he said. KfW last brought a US dollar denominated green bond just under a year ago, a US$2bn 0.75% September 2030 note that matched the size of the borrower's largest green issuance in the currency.
SoftBank-backed artificial intelligence drug researcher XtalPi has filed confidentially for a US IPO which could raise about US$400m–$500m as early as this year, said people with knowledge of the matter. The Shenzhen-based company, which also counts Tencent Holdings, Google, Sequoia China and China Life Private Equity Investment among its investors, is working with China Renaissance, CICC and Goldman Sachs on the planned float. XtalPi is going ahead with its US IPO as it believes it is not in a sensitive industry and the US investor base will probably have a better understanding of its business, said the people. It is understood that XtalPi’s filing was submitted before the US securities regulator said on July 30 that it will not allow Chinese companies to raise money in the US unless the risk is fully disclosed. SEC Chairman Gary Gensler said in a public statement that he had instructed his staff to make sure Chinese companies headed across the Pacific “prominently and clearly” disclose the uncertainty of Chinese government actions and whether they had permission from Chinese authorities to list in the US. It is unclear how the new disclosure requirements will affect the planned float. XtalPi did not respond to emails seeking comment. In September 2020, XtalPi secured a US$319m private round led by SoftBank’s Vision Fund, PICC Capital and Morningside Venture Capital. Founded in 2014 by a group of quantum physicists at MIT, XtalPi provides predictions on the physiochemical and pharmaceutical properties of small-molecule candidates for drug design, solid-form selection and other critical aspects of drug development.
Japan's yen bond market looks set to follow the example of yen swap brokers in switching to quotes tied to the Tokyo Overnight Average Rate (TONA). While syndicate bankers are still explaining the costs of issuing yen-denominated bonds based on Libor, the transition will likely accelerate once domestic bonds are priced based on TONA. Yen swap brokers ceased their yen Libor-based quotes at the close of business on July 30, switching to TONA-based quotes on August 2. The switch was encouraged by "TONA First", an initiative published on the Bank of Japan's website on July 26, which recommends liquidity providers such as interdealer brokers to change quoting conventions from yen Libor to TONA. Sources said TONA-based swap activity is growing after a subdued start when market participants adopted a wait-and-see stance. According to data from Japan Securities Clearing Corp, there were 518 overnight indexed swap-linked trades from August 2 to August 5, versus 162 Libor-linked trades. The number of Libor trades dropped sharply from 706 trades in the first four business days of July. However, the transition has been slow in cross-currency basis swaps. One source familiar with interdealer swap activity said USD/JPY basis swaps based on both Libor and SOFR/TONA are being traded, with Libor trades still bigger. Bankers in Tokyo said a complete shift to TONA is not necessarily a prerequisite for foreign issuers to come back to the yen market. One said foreign issuers can still sell yen bonds based on Libor if needed, while foreign issuers that keep the proceeds in yen rather than swapping back into the mother currency will be unaffected. An international yen supply drought since Renault's Samurai in late June is partly explained by the absence of foreign issuers during their summer holiday. A second banker said some foreign issuers want to see domestic issuers set a precedent, with at least one domestic issuer planning to shift away from Libor and issue bonds based on an alternative benchmark. Mitsubishi Corp, Japan's largest trading company, is planning to sell a 60-year non-call five subordinated bond in September, with the coupon to switch from a fixed-rate to TONA-linked if not called, according to a filing dated July 26. The second banker said he expects some European issuers to continue using JGBs as a reference even if the shift to TONA proceeds. To work around Libor's imminent termination, BNP Paribas, Credit Agrciole and Barclays used JGBs as a reference for the coupon resets in yen deals earlier this year. "Probably those who issue off their MTN programmes and haven't updated the programme to add TONA as a reference rate will continue to sell bonds based on JGBs."
EUR heavy across board in Asia, central bank expectations playing part EUR/USD 1.1834 to 1.1819 EBS despite EUR/JPY buoyancy, cross 129.87-94 More hawkish Fed talk, bouncing US yields, maybe strong US jobs data weigh German-US 10-year interest rate differential widening again, @172 bps Support good at 1.1800 however, E1.1 bln in option expiries there today Other nearby option expiries - 1.1825 E645 mln, 1.1865-1.1900 E1.1 bln EUR/GBP heavy too, Asia indicated 0.8492-97, EUR/CHF doesn't trade, @1.0722 Related comments nL1N2PC1FQ, nL1N2PC1E7, also nL4N2PC0VP For more click on FXBUZ EUR/USD hourly: https://tmsnrt.rs/3rWobSw EUR/USD nearby option expiries into next week: https://tmsnrt.rs/3rXznym German-US 10-year interest rate differential: https://tmsnrt.rs/3lw4uQq
CA Emerald Investments, a Carlyle unit, has raised Rs21.4bn (US$289m) through the sale of 19m SBI Life Insurance shares at the bottom of the Rs1,130–Rs1,136.85 range, according to a person with knowledge of the transaction. The final price represents a 0.6% discount to the pre-deal close of Rs1,136.85. SBI Life shares were up 0.5% at Rs1,140 this morning. Around 20 accounts participated and the top 10 received 80% of the deal. The shares sold in the clean-up trade represent 1.9% of the capital. Bank of America is the sole bookrunner.
USD/CNY idles, but widening tech crackdown may kick it into gear 100 DMA at 6.4710 is first trigger that could spur rally But bulls may be unconvinced till 200 DMA at 6.5053 goes China eyes social media creation of celebrities nL4N2PD0KJ State media warns of negative impact on youth, consumption habits Other Chinese media outlets criticize live-streaming video market For more click on FXBUZ CNY: https://tmsnrt.rs/3AiWtCi
-0.25% towards the base of a 0.7380-0.7406 range with consistent interest Delta sweeps Sydney as Australia widens COVID-19 restrictions nL1N2PC30V RBA - fiscal stimulus 'more appropriate' tool to curb virus hit nL1N2PC33Z RBA Governor Lowe generally upbeat - "return to strong growth next year" Charts; 5, 10 & 21 DMAs conflict, momentum studies climb - neutral setup 0.7395 21 DMA a magnet - 0.7306-0.7484 21 day Bolli bands define broad range Thursday's 0.7377 low and earlier 0.7406 high initial support and resistance For more click on FXBUZ aud 3 aug 6https://tmsnrt.rs/2X1Pdww
-0.05% with the USD a shade firmer in a low key 1.3915-1.3932 range Record UK starting salaries as jobs squeeze tightens - REC nL8N2PC7IN Decision for the BoE - is this the start of a sustained wages rise? Charts; 5, 10 & 21 daily moving averages climb - momentum studies base-rise Positive signals - bias remains higher while 1.3838 21 DMA holds 1.3991 61.8% June-July fall and 1.4015 upper 21 day Bolli pivotal resistance Break would bring 1.4090 76.4% retracement of June-July fall into play 1.3899 NY low and 10 DMA and 1.3932 Asian top first support resistance For more click on FXBUZ gbp 2 aug 6https://tmsnrt.rs/2VtAlXh
BNP Paribas has appointed Jason Yates as head of cash equities in Asia Pacific, effective immediately. Based in Hong Kong, he reports into Benjamin Dufour, head of prime solutions and financing in APAC, and to Vincent Desmarest, head of equity derivatives in APAC. Yates previously worked at Morgan Stanley for over 25 years in various cash equities roles. He ran their APAC execution platform from 2016 and was previously based in Singapore managing Southeast Asian Equities.
USD/JPY up another small leg in Asia, 109.75 to 109.88 EBS Upside going facing more resistance, especially pre-US jobs report Dealers suggest likely range between 109.62 100-DMA, 110.04 55-DMA USD/JPY already back in ascending Ichi cloud, 109.57-110.68 today Specs long from lower levels, Japanese exporters to help cap upside Some bids eyed from @109.75, option expiries to help contain action Today 109.50-80 $976 mln, 110.00 $500 mln, to 110.25 $423 mln more Continuing bounce in US yields supportive, Treasury 10s to 1.238% Risk more off in Asia despite Wall St rise, Nikkei near par @27,744 JPY crosses buoyant but quiet, EUR/JPY 129.87-94, GBP/JPY 152.80-97 AUD/JPY, NZD/JPY in favour on CB expectations, 81.05-30, 77.30-47 Related comment nL1N2P901K, also nL1N2PD011, AUD, NZD nL1N2PD023 On Japan data, BoJ nL1N2PD03F, for more click on FXBUZ USD/JPY hourly: https://tmsnrt.rs/2WVw6Ed Yield on US Treasury 10s - hourly: https://tmsnrt.rs/3lxd5SV Nikkei 225 hourly: https://tmsnrt.rs/3CvntAP
USD/CNH firm just above Thurs close as SSEC stays down 0.5% Needs a bigger push to get above 100 DMA resistance 6.4705 That impetus may come from US NFP, if it beats 870k forecast Simmering uncertainties over China regulatory clampdown persist China bans US-based educational tech app Duolingo nL1N2PD033 Gaming, e-cigaretter makers bave been in spotlight this week For more click on FXBUZ CNH: https://tmsnrt.rs/3CnRfY4
Japan's yen bond market looks set to follow the example of yen swap brokers in switching to quotes tied to the Tokyo Overnight Average Rate (TONA). While syndicate bankers are still explaining the costs of issuing yen-denominated bonds based on Libor, the transition will likely accelerate once domestic bonds are priced based on TONA. Yen swap brokers ceased their yen Libor-based quotes at the close of business on July 30, switching to TONA-based quotes on August 2. The switch was encouraged by "
EUR heavy across board in Asia, central bank expectations playing part EUR/USD 1.1834 to 1.1819 EBS despite EUR/JPY buoyancy, cross 129.87-94 More hawkish Fed talk, bouncing US yields, maybe strong US jobs data weigh German-US 10-year interest rate differential widening again, @172 bps Support good at 1.1800 however, E1.1 bln in option expiries there today Other nearby option expiries - 1.1825 E645 mln, 1.1865-1.1900 E1.1 bln EUR/GBP heavy too, Asia indicated 0.8492-97, EUR/CHF doesn't trade, @1
CA Emerald Investments, a Carlyle unit, has raised Rs21.4bn (US$289m) through the sale of 19m SBI Life Insurance shares at the bottom of the Rs1,130–Rs1,136.85 range, according to a person with knowledge of the transaction. The final price represents a 0.6% discount to the pre-deal close of Rs1,136.85. SBI Life shares were up 0.5% at Rs1,140 this morning. Around 20 accounts participated and the top 10 received 80% of the deal. The shares sold in the clean-up trade represent 1.9% of the cap
USD/CNY idles, but widening tech crackdown may kick it into gear 100 DMA at 6.4710 is first trigger that could spur rally But bulls may be unconvinced till 200 DMA at 6.5053 goes China eyes social media creation of celebrities nL4N2PD0KJ State media warns of negative impact on youth, consumption habits Other Chinese media outlets criticize live-streaming video market For more click on FXBUZ CNY: https://tmsnrt.rs/3AiWtCi
-0.25% towards the base of a 0.7380-0.7406 range with consistent interest Delta sweeps Sydney as Australia widens COVID-19 restrictions nL1N2PC30V RBA - fiscal stimulus 'more appropriate' tool to curb virus hit nL1N2PC33Z RBA Governor Lowe generally upbeat - "return to strong growth next year" Charts; 5, 10 & 21 DMAs conflict, momentum studies climb - neutral setup 0.7395 21 DMA a magnet - 0.7306-0.7484 21 day Bolli bands define broad range Thursday's 0.7377 low and earlier 0.7406 high initial s
IFR hosts a comprehensive programme of conferences, seminars and roundtables throughout the year, providing authoritative insight into the trends and outlooks for specific regions and asset classes.
Access a digital replica of IFR's print magazine, updated each Friday. Plus regular Special Reports and Roundtables, covering industry themes and trends.
ANDREA ORCEL IS going to the very top when it comes to dismantling the strategy of his predecessor as UniCredit CEO, Jean Pierre Mustier. And by the top, Bellwether means His Holiness Pope Francis. Orcel has put the brakes on Mustier’s plan to sell the bank’s extensive art to fund social impact initiatives. In January, Mustier visited Pope Francis as part of the bank’s Art4Future project and agreed to allocate proceeds of the sale of three selected paintings to specific charity initiatives chosen by His Holiness. Now, Orcel wants to put the art on show so he can compete with arch-rival Intesa Sanpaolo, which displays its art in three museums across Italy. No doubt he’ll be seeking an audience with His Holiness sometime soon to explain himself. This must be the first time that the great man (Orcel, not the pope) has gone out of his way to prevent a deal happening. But his restraint didn’t last long – a day later he announced a plan to buy Monte Dei Paschi di Siena. CREDIT SUISSE REPORTED second-quarter earnings last week and as well as reporting a loss it had another surprise up its sleeve – a 172-page report into its failure relating to the collapse of Archegos, which resulted in a US$5.5bn loss for the Swiss lender. CEO Thomas Gottstein is keen to put as much distance as possible between himself and the incident, telling journalists that he only heard about the problems when they were reported in the media. Good to see that after just 16 months in the CEO's seat, Gottstein has developed the necessary Teflon qualities. But there’s also a question of how much power he wields now that Antonio Horta-Osorio is chairman. That wasn’t helped by the slightly mechanical delivery of the bank’s earnings. He made an error that Bellwether would have been proud of – saying the bank had hired 650 million private bankers, rather than 650, and that fuelled the impression he was either reading from a script written by someone else or he was in fact a puppet being controlled remotely by Horta-Osorio. Gottstein does deserve some credit though. At the start of the year he said he wanted to draw a line under the Spygate scandal and it’s fair to say he has – everyone’s completely forgotten about it thanks to the Greensill and Archegos crises. BELLWETHER HAS ENJOYED watching Deutsche Bank’s new US headquarters take shape thanks to regular LinkedIn postings by corp comms supremo Daniel Hunter. Last week, Hunter took a break from charting Deutsche’s grand design to comment on a news story: “It isn't often you see a headline like this! DB traders and Barclays bankers in one sentence. Fabulous to see my old shop, Barclays investment bank, as well as my current awesome shop, Deutsche Bank’s investment bank, supporting clients through good times and volatile times, supporting the economies of the nations we and our clients are present in, and contributing to our investors.” Hunter has done fine work flying the flag for Deutsche stateside but it will be interesting to see how this goes down with colleagues. Whatever their respective troubles in recent years, Deutsche and Barclays remain bitter rivals and Hunter has just done the PR equivalent of wearing a half-and-half football scarf to a Celtic versus Rangers clash.
IFR hosts a comprehensive programme of conferences, seminars and roundtables throughout the year, providing authoritative insight into the trends and outlooks for specific regions and asset classes.
Access a digital replica of IFR's print magazine, updated each Friday. Plus regular Special Reports and Roundtables, covering industry themes and trends.
ANDREA ORCEL IS going to the very top when it comes to dismantling the strategy of his predecessor as UniCredit CEO, Jean Pierre Mustier. And by the top, Bellwether means His Holiness Pope Francis. Orcel has put the brakes on Mustier’s plan to sell the bank’s extensive art to fund social impact initiatives. In January, Mustier visited Pope Francis as part of the bank’s Art4Future project and agreed to allocate proceeds of the sale of three selected paintings to specific charity initiatives chosen by His Holiness. Now, Orcel wants to put the art on show so he can compete with arch-rival Intesa Sanpaolo, which displays its art in three museums across Italy. No doubt he’ll be seeking an audience with His Holiness sometime soon to explain himself. This must be the first time that the great man (Orcel, not the pope) has gone out of his way to prevent a deal happening. But his restraint didn’t last long – a day later he announced a plan to buy Monte Dei Paschi di Siena. CREDIT SUISSE REPORTED second-quarter earnings last week and as well as reporting a loss it had another surprise up its sleeve – a 172-page report into its failure relating to the collapse of Archegos, which resulted in a US$5.5bn loss for the Swiss lender. CEO Thomas Gottstein is keen to put as much distance as possible between himself and the incident, telling journalists that he only heard about the problems when they were reported in the media. Good to see that after just 16 months in the CEO's seat, Gottstein has developed the necessary Teflon qualities. But there’s also a question of how much power he wields now that Antonio Horta-Osorio is chairman. That wasn’t helped by the slightly mechanical delivery of the bank’s earnings. He made an error that Bellwether would have been proud of – saying the bank had hired 650 million private bankers, rather than 650, and that fuelled the impression he was either reading from a script written by someone else or he was in fact a puppet being controlled remotely by Horta-Osorio. Gottstein does deserve some credit though. At the start of the year he said he wanted to draw a line under the Spygate scandal and it’s fair to say he has – everyone’s completely forgotten about it thanks to the Greensill and Archegos crises. BELLWETHER HAS ENJOYED watching Deutsche Bank’s new US headquarters take shape thanks to regular LinkedIn postings by corp comms supremo Daniel Hunter. Last week, Hunter took a break from charting Deutsche’s grand design to comment on a news story: “It isn't often you see a headline like this! DB traders and Barclays bankers in one sentence. Fabulous to see my old shop, Barclays investment bank, as well as my current awesome shop, Deutsche Bank’s investment bank, supporting clients through good times and volatile times, supporting the economies of the nations we and our clients are present in, and contributing to our investors.” Hunter has done fine work flying the flag for Deutsche stateside but it will be interesting to see how this goes down with colleagues. Whatever their respective troubles in recent years, Deutsche and Barclays remain bitter rivals and Hunter has just done the PR equivalent of wearing a half-and-half football scarf to a Celtic versus Rangers clash.
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Bellwether