The dollar SSA market has had a convincing return to life, following agreement on the US debt ceiling, with three issuers finding a good reception at all points on the curve. Any issuer wanting dollar funding will have to be quick about it, however. An FOMC meeting next week provides a natural bookend to what is a constructive window. “Everything’s gone very well, actually,” said a lead on Tuesday's Municipality Finance deal, “probably better than we expected, looking at the amount of supply that’s come today. We have had a really ugly calendar for much of the last couple of months and we’ve got an ugly calendar for the next three weeks. ... People are trying to fit into the good windows.” The Asian Development Bank’s equally split US$4bn dual-tranche offering was Tuesday’s main event. The supranational got a US$5bn-plus book for the two-year tranche and US$4.9bn-plus for the 10-year. Credit Agricole, Deutsche Bank, JP Morgan and Morgan Stanley set the two-year’s spread at 23bp over SOFR mid-swaps, 1bp in from the 24bp area guidance. They set the 10-year at plus 49bp, again 1bp tight to guidance. The 10-year offered a 3bp to 4bp new issue concession, a second banker said, while the two-year left a premium of about 1.5bp. Pricing the 10-year was complicated by the lack of recent primary issuance at that tenor. The last dollar SSA 10-year was a month ago, IFR data shows, when Inter-American Development Bank printed a US$2.25bn bond at 53bp over SOFR mid-swaps. Much of the comparable paper at the 10-year point is trading tight because of that low supply, the second banker said. That IADB deal and ADB's own 10-year from January provided the primary comparables for the deal, he said. The two-year was problematic, too, the second banker said, thanks to rapidly shifting swap spread levels, which complicated pricing. "Front end swap spreads have been exceptionally volatile," he said. That problem is compounded by the fact that the syndicate had to price the deal versus swaps, while trying to appeal to buyers who are motivated by spreads versus Treasuries, the second banker added. MuniFin got a US$2.6bn-plus bid for its US$1bn no-grow December 2027 bond. Barclays, BMO, Daiwa and Nomura landed the deal at 45bp over SOFR mid-swaps, 2bp in from the 47bp area IPTs. Rentenbank got a US$1.8bn book for its US$1.25bn five-year. Citigroup, HSBC, RBC Capital Markets and TD Securities ran the German agency’s deal and set the spread at 35bp over SOFR mid-swaps, 1bp tight to the 36bp area IPTs. The German agency got the deal away despite pricing the trade "exceptionally tight", according to the second banker, who said the deal priced around where some supranational names are trading in the secondary market. "The US dollar market is not always appealing for euro-based borrowers from an economics point of view," said a Rentenbank official. "Through a favourable combination of [the] cross-currency basis and swap spreads, a project at the belly of the curve appeared attractive, in a market that has been overall undersupplied." The deal was not just an effort to maintain a presence with US investors. Dollars provided Rentenbank cheaper funding than what was on offer in the single currency, the official said: "Up to five years, we do see some significant relative value in US dollars compared to euros. The longer the maturity, the more this pricing advantage disappears." The trio’s success on Tuesday dispels the bad taste in dollars that NRW.Bank’s US$500m two-year left last Thursday. The deal did not produce a book update and did not tighten from IPTs of SOFR mid-swaps plus 25bp. Encouraged by Tuesday’s smooth executions, two Swedish names decided to tap the market. Swedish Export Credit Corporation has gone for a five-year appearance, which BMO, BNP Paribas, Citigroup and Scotiabank are marketing at IPTs of 55bp area over SOFR mid-swaps. Kommuninvest has decided on a US$
Cheniere Energy Partners hit the bond market today for the first time as an investment-grade borrower, after two ratings agencies upgraded the US exporter of liquefied natural gas at the end of last year. The last time the issuer printed a bond was back in September 2021, when it was still rated high-yield. Fitch upgraded Cheniere Energy Partners a single notch to BBB– in September 2022. Its second investment-grade rating came from S&P in November. And last month Moody's put its rating on review for an upgrade. Active leads Morgan Stanley, CIBC, Credit Agricole, Natixis, RBC and Wells Fargo priced the US$1.4bn 10-year offering of senior unsecured bonds on Tuesday at US Treasuries plus 228bp, tightening from initial price thoughts in 255bp area. The upgrades reflect the aggressive debt reduction across Cheniere's subsidiaries and businesses in recent years. The natural gas company said it had paid down around US$7.5bn of long-term debt since launching its capital allocation plan in September 2021. Of that amount, US$900bn was completed in the first three months of 2023. "After the achievement of [investment-grade] across our corporate structure during the quarter, we have begun to shift our capital allocation weighting to our buyback program," said Zach Davis, Cheniere Energy's CFO in a May 2 earnings call. He said he expected to change the ratio of funds earmarked for debt repayment versus share buybacks from four-to-one to one-to-one. Proceeds from the Ba1/BBB–/BBB– rated unsecured bond will redeem its outstanding US$2bn 5.75% 2024 senior secured notes linked to the subsidiary housing Cheniere's Sabine Pass natural gas terminals.
Both the European Union and KfW won good traction with buyers despite appearing on the same day in euros. The EU’s mid-curve to long-end dual-tranche offering and KfW’s short-end bond stayed out of each other’s way, dispelling the notion that SSAs have to completely steer clear of EU syndications Buyers showed their increasing appetite for duration in the EU deal, cementing the impression that issuers can access longer funding if they want to as buyers adjust their strategies to a slower pace of rate hikes and anticipate a recession. The EU’s €4bn tap of its November 2042 print won a €44.7bn bid, while the €3bn December 2029 tap gathered a €31.2bn book. Danske Bank, Deutsche Bank, Goldman Sachs, JP Morgan and Societe Generale set the spread on the longer deal at 52bp over mid-swaps, 2bp in from the plus 54bp guidance. They set the shorter line at 3bp through, 2bp tighter than the less 1bp guidance. The bid both lines enjoyed was despite the minimal concession they left buyers with, a banker away from the deals told IFR. While the longer bond left a 1bp premium, the banker said, he saw no concession on the December 2029 deal. A second banker saw marginally more premium on offer. He said the 20-year paper offered a 2bp new issue concession, with the 2029 paper offering 1bp. That the EU is compensating buyers for a deeply inverted euro swap curve ensures a good bid for products like the 20-year, the first banker said, but in turn may dissuade other SSAs from going as long. “Other issuers who don’t have that much need for duration tend to stay away from [those longer tenors]; they don’t want to pay up,” the first banker said. “Their bonds are quoted at way tighter levels, but if you really want to push out €2bn to €3bn [for a major SSA], everybody would look at how the EU handles it because they are the liquid benchmark. For a lot of issuers, apart from the EU, the nominal spreads … are just too high.” The fact that the EU regularly supplies long paper also ensures that investors’ expectations do not face any pressure to shift in the form of a lack of supply, the first banker said. The second banker agreed that other SSAs are unlikely to replicate the EU’s long-end performance on Tuesday. He added that when it comes to other SSAs, the bid for duration is more likely to manifest itself in 10 to 15-year paper rather than anything longer. That 15-year paper materialised quickly. The day of the EU deal, France announced its newest inflation linker, a March 2039 deal. It tapped Barclays, BNP Paribas, Credit Agricole, Deutsche Bank and JP Morgan for the trade. That announcement followed Ile-de-France Mobilites’ mandate for a 15-year green bond via BNP Paribas, Credit Agricole, Natixis, Nomura and Societe Generale. Spain opted for a shorter offering. It mandated a long 10-year via Barclays, BBVA, Credit Agricole, Deutsche Bank, Goldman Sachs and Santander on the day of the EU deal.KfW goes short The EU usually gets the market to itself for its well-telegraphed syndications, bar the odd Germany deal that goes head-to-head with the supranational. KfW broke with that convention, however, mandating a May 2026 transaction via Bank of America, Commerzbank, Credit Agricole and TD Securities to be executed the same day as the EU's offering. The issuer did not face any penalties for that decision – it got a €14.5bn bid for the €5bn print, pre-rec – though it was seen offering an attractive level to clear the paper. The first banker away said the final 28bp through mid-swaps spread (1bp in from the guidance of less 27bp area) left 5bp of new issue premium, though the second banker saw it at 3bp. Nevertheless, KfW’s success goes at least some way to confirm the growing notion that issuers need not be wary of the EU’s syndications, as long as they steer clear of the same tenors. “[The concession]
Both the European Union and KfW won good traction with buyers despite appearing on the same day in euros. The EU’s mid-curve to long-end dual-tranche offering and KfW’s short-end bond stayed out of each other’s way, dispelling the notion that SSAs have to completely steer clear of EU syndications Buyers showed their increasing appetite for duration in the EU deal, cementing the impression that issuers can access longer funding if they want to as buyers adjust their strategies to a slower pace of rate hikes and anticipate a recession. The EU’s €4bn tap of its November 2042 print won a €44.7bn bid, while the €3bn December 2029 tap gathered a €31.2bn book. Danske Bank, Deutsche Bank, Goldman Sachs, JP Morgan and Societe Generale set the spread on the longer deal at 52bp over mid-swaps, 2bp in from the plus 54bp guidance. They set the shorter line at 3bp through, 2bp tighter than the less 1bp guidance. The bid both lines enjoyed was despite the minimal concession they left buyers with, a banker away from the deals told IFR. While the longer bond left a 1bp premium, the banker said, he saw no concession on the December 2029 deal. A second banker saw marginally more premium on offer. He said the 20-year paper offered a 2bp new issue concession, with the 2029 paper offering 1bp. That the EU is compensating buyers for a deeply inverted euro swap curve ensures a good bid for products like the 20-year, the first banker said, but in turn may dissuade other SSAs from going as long. “Other issuers who don’t have that much need for duration tend to stay away from [those longer tenors]; they don’t want to pay up,” the first banker said. “Their bonds are quoted at way tighter levels, but if you really want to push out €2bn to €3bn [for a major SSA], everybody would look at how the EU handles it because they are the liquid benchmark. For a lot of issuers, apart from the EU, the nominal spreads … are just too high.” The fact that the EU regularly supplies long paper also ensures that investors’ expectations do not face any pressure to shift in the form of a lack of supply, the first banker said. The second banker agreed that other SSAs are unlikely to replicate the EU’s long-end performance on Tuesday. He added that when it comes to other SSAs, the bid for duration is more likely to manifest itself in 10 to 15-year paper rather than anything longer. That 15-year paper materialised quickly. The day of the EU deal, France announced its newest inflation linker, a March 2039 deal. It tapped Barclays, BNP Paribas, Credit Agricole, Deutsche Bank and JP Morgan for the trade. That announcement followed Ile-de-France Mobilites’ mandate for a 15-year green bond via BNP Paribas, Credit Agricole, Natixis, Nomura and Societe Generale. Spain opted for a shorter offering. It mandated a long 10-year via Barclays, BBVA, Credit Agricole, Deutsche Bank, Goldman Sachs and Santander on the day of the EU deal.KfW goes short The EU usually gets the market to itself for its well-telegraphed syndications, bar the odd Germany deal that goes head-to-head with the supranational. KfW broke with that convention, however, mandating a May 2026 transaction via Bank of America, Commerzbank, Credit Agricole and TD Securities to be executed the same day as the EU's offering. The issuer did not face any penalties for that decision – it got a €14.5bn bid for the €5bn print, pre-rec – though it was seen offering an attractive level to clear the paper. The first banker away said the final 28bp through mid-swaps spread (1bp in from the guidance of less 27bp area) left 5bp of new issue premium, though the second banker saw it at 3bp. Nevertheless, KfW’s success goes at least some way to confirm the growing notion that issuers need not be wary of the EU’s syndications, as long as they steer clear of the same tenors. “[The concession]
Lloyds Bank became the latest financial issuer to demonstrate the depth of the sterling covered bond market on Tuesday, printing a £1.25bn five-year FRN that was the biggest in the format for a UK issuer since January. A small flurry of issuance has hit the currency over the last three weeks with £3.85bn raised in the format from domestic and foreign issuers, generally demonstrating the market's depth. With the ink just dried on a much wider print for the Toronto-Dominion Bank the day before, leads Lloyds, BMO Capital Markets, BNP Paribas, HSBC and Santander opened books at guidance of 55bp area over Sonia. "Sterling covereds are working well, especially for UK banks," a banker on the deal said. "You're getting a 20bp tighter pricing versus Canadians. If they did a dollar deal, they'd pay Canadian prices. If they did a euro deal, they'd pay something similar to the Canadians too." With demand peaking at £1.65bn-plus, leads tightened pricing to 50bp over, which is where the trade priced. One banker away questioned the initial marketing level given that Nationwide Building Society had priced a £750m transaction in the same tenor at 48bp over, less than a week ago. "It didn't make sense to me. It's not like the market got worse," he said before the final terms and size were released. "Yes there was the TD deal which was a lot wider but if you're going to value the Lloyds, which you should do from a UK regulatory treatment perspective, materially tighter than an international name, then whether you're 2bp or 15bp tighter isn't going to materially change things." He did add however that the order book looked impressive and that he could see the logic of the starting level if Lloyds wanted to land a large transaction. "There's a lot of supply going on in covereds, in sterling and dollars, it's great to see markets other than euros working," he said. "That Lloyds deal was incredibly tight versus where they could have done anything in other markets." Another lead manager put fair value at 45bp and that the question had been how much Lloyds would have to come back of Nationwide to get a big size done. "We started at 55bp so the best we hoped for was a 50bp print," he said adding that 52bp was the base case. "We were hoping to get to 50bp but also wanted the size. We got an extra £500m over Nationwide and printed at 50bp, so that’s very pleasing." Don't push too far Pushing pricing too far could have been a risky strategy given the level of sensitivity. In the case of Nationwide, books dropped from £1.4bn-plus to £975m after the level was revised from 53bp area to 48bp. Books also dropped for Lloyds, from £1.65bn-plus to a final £1.4bn-plus. "The aim and objective of Nationwide was price, price, price and they wanted to price through RMBS and into the 40s," the lead manager said. "In our case, it was clear that we didn't want a £750m deal, the target was £1bn to the plus, and the threshold based on the feedback after Nationwide that through 50bp we would get lots of drops and sensitivity. If we had gone to 48bp, could we have printed £1bn, maybe, but it would have been a bit of jam job." Investors would have had one eye on where Lloyds had priced its most recent securitisation too. A £1bn five-year RMBS priced in May came at 52bp over Sonia. "You could say it's an example of: at 50bp, they're pricing through that RMBS they priced a few weeks ago which is restoring that natural sense of order between those asset classes," the banker away said.
Cava launched an up to US$274.4m NYSE IPO on Monday, a test of new issue investors' willingness to again get behind companies that offer growth first and profits second. JP Morgan, Jefferies and Citigroup lead a syndicate of 11 banks marketing 14.4m shares in the Mediterranean-themed restaurant chain at US$17–$19 for pricing next Wednesday, June 14. The terms would give Cava a market cap of as much as US$2.1bn. Helping to ease the sale, T. Rowe Price and Capital Research have committed upfront to buy a combined US$100m of shares in the offering. T. Rowe, a 5.2% shareholder, already invested US$95m in Cava as part of a US$190m private funding round in March 2021. Cava, whose one-third shareholder is Belgian private investment firm Artal International, has previously raised a total of US$662.7m privately, all of which is being converted into common equity as part of the IPO. The IPO proceeds will fund the opening of 34 to 44 new restaurants this year, adding to Cava's current footprint of 263 restaurants. Cava's goal is to operate more than 1,000 restaurants by 2032. Founded in 2011, the company spends about US$1.3m to build each new restaurant and targets 35% return on that investment by the second year. Cava's IPO marks the first in some time that puts growth ahead of profits, a shift from the recent IPOs of mature, cashflow-generating businesses such as Kenvue (the Johnson & Johnson consumer health division) and Atmus Filtration Technologies (Cummins' auto filter arm). In the first quarter of 2023, the chain lost US$2.1m (down from a net loss of US$20m in the year-ago period) but grew revenue by 28% to US$203m. Same restaurant sales, a measure of organic growth, grew 14.2% in 2022 and 28.4% in the first quarter of this year. Cava's purchase of Zoes Kitchen for US$300m in 2018 has helped fuel expansion. Cava has since converted most of the 145 Zoes restaurants it acquired to the Cava brand. Though once a favored new issue theme because of their easy-to-understand business models and solid growth, restaurant chain IPOs have had mixed success in recent years. Sweetgreen, the last IPO to explore the theme,has struggled since pricing a US$364m NYSE IPO in October 2021. The salad chain's quarterly results disappointed, sending its shares tumbling all-time high of US$56.20 shortly after the IPO to US$9.84 currently.
Lloyds Bank became the latest financial issuer to demonstrate the depth of the sterling covered bond market on Tuesday, printing a £1.25bn five-year FRN that was the biggest in the format for a UK issuer since January. A small flurry of issuance has hit the currency over the last three weeks with £3.85bn raised in the format from domestic and foreign issuers, generally demonstrating the market's depth. With the ink just dried on a much wider print for the Toronto-Dominion Bank the day before, leads Lloyds, BMO Capital Markets, BNP Paribas, HSBC and Santander opened books at guidance of 55bp area over Sonia. "Sterling covereds are working well, especially for UK banks," a banker on the deal said. "You're getting a 20bp tighter pricing versus Canadians. If they did a dollar deal, they'd pay Canadian prices. If they did a euro deal, they'd pay something similar to the Canadians too." With demand peaking at £1.65bn-plus, leads tightened pricing to 50bp over, which is where the trade priced. One banker away questioned the initial marketing level given that Nationwide Building Society had priced a £750m transaction in the same tenor at 48bp over, less than a week ago. "It didn't make sense to me. It's not like the market got worse," he said before the final terms and size were released. "Yes there was the TD deal which was a lot wider but if you're going to value the Lloyds, which you should do from a UK regulatory treatment perspective, materially tighter than an international name, then whether you're 2bp or 15bp tighter isn't going to materially change things." He did add however that the order book looked impressive and that he could see the logic of the starting level if Lloyds wanted to land a large transaction. "There's a lot of supply going on in covereds, in sterling and dollars, it's great to see markets other than euros working," he said. "That Lloyds deal was incredibly tight versus where they could have done anything in other markets." Another lead manager put fair value at 45bp and that the question had been how much Lloyds would have to come back of Nationwide to get a big size done. "We started at 55bp so the best we hoped for was a 50bp print," he said adding that 52bp was the base case. "We were hoping to get to 50bp but also wanted the size. We got an extra £500m over Nationwide and printed at 50bp, so that’s very pleasing." Don't push too far Pushing pricing too far could have been a risky strategy given the level of sensitivity. In the case of Nationwide, books dropped from £1.4bn-plus to £975m after the level was revised from 53bp area to 48bp. Books also dropped for Lloyds, from £1.65bn-plus to a final £1.4bn-plus. "The aim and objective of Nationwide was price, price, price and they wanted to price through RMBS and into the 40s," the lead manager said. "In our case, it was clear that we didn't want a £750m deal, the target was £1bn to the plus, and the threshold based on the feedback after Nationwide that through 50bp we would get lots of drops and sensitivity. If we had gone to 48bp, could we have printed £1bn, maybe, but it would have been a bit of jam job." Investors would have had one eye on where Lloyds had priced its most recent securitisation too. A £1bn five-year RMBS priced in May came at 52bp over Sonia. "You could say it's an example of: at 50bp, they're pricing through that RMBS they priced a few weeks ago which is restoring that natural sense of order between those asset classes," the banker away said.
Defaults in Gedesco Trade Receivables 2020-1, a securitisation of Spanish factoring, promissory note and direct lending assets, jumped to 40.15% of the collateral pool at the end of April, according to the most recent investor report. Defaults had hit 27.34% of the pool by the end of March, according to the previous monthly report. In April, there were 1,577 new defaults on a nominal €31.68m. The defaults started to tick up in January after the originators, Gedesco and Toro Finance, failed to secure an extension of the revolving securitisation. The notes were downgraded by Kroll and Moody's at the beginning of May. Miguel Rueda, board president of originator and servicer Gedesco Finance, said cash collection has improved and payments increased in April and May. "The trustee is informed and progress is finally coming through," Rueda told IFR. "Obviously investors have been informed within the legal limits of disclosure." Gedesco's management has been engaged in litigation since last year with its private equity owner, JZ International, in Spanish and New York courts. JZI is suing Rueda, a former employee of the private equity firm, and another ex-employee, Ole Groth, alleging, among other things, that they fraudulently caused Gedesco to make loans to companies in which they had an economic interest. That suit was withdrawn without prejudice on June 3 but litigation is still taking place in Valencia. "Since the complaint in Spain includes the foundations of the complaint in [New York] and goes much further, the legal team has considered it convenient to withdraw the complaint from [New York]," said a spokesperson for JZ International. Meanwhile, Rueda said that Gedesco executives have filed a counterclaim for tort and interference against JZI in New York, although the details of that suit are not yet public.
Cava launched an up to US$274.4m NYSE IPO on Monday, a test of new issue investors' willingness to again get behind companies that offer growth first and profits second. JP Morgan, Jefferies and Citigroup lead a syndicate of 11 banks marketing 14.4m shares in the Mediterranean-themed restaurant chain at US$17–$19 for pricing next Wednesday, June 14. The terms would give Cava a market cap of as much as US$2.1bn. Helping to ease the sale, T. Rowe Price and Capital Research have committed upfront to buy a combined US$100m of shares in the offering. T. Rowe, a 5.2% shareholder, already invested US$95m in Cava as part of a US$190m private funding round in March 2021. Cava, whose one-third shareholder is Belgian private investment firm Artal International, has previously raised a total of US$662.7m privately, all of which is being converted into common equity as part of the IPO. The IPO proceeds will fund the opening of 34 to 44 new restaurants this year, adding to Cava's current footprint of 263 restaurants. Cava's goal is to operate more than 1,000 restaurants by 2032. Founded in 2011, the company spends about US$1.3m to build each new restaurant and targets 35% return on that investment by the second year. Cava's IPO marks the first in some time that puts growth ahead of profits, a shift from the recent IPOs of mature, cashflow-generating businesses such as Kenvue (the Johnson & Johnson consumer health division) and Atmus Filtration Technologies (Cummins' auto filter arm). In the first quarter of 2023, the chain lost US$2.1m (down from a net loss of US$20m in the year-ago period) but grew revenue by 28% to US$203m. Same restaurant sales, a measure of organic growth, grew 14.2% in 2022 and 28.4% in the first quarter of this year. Cava's purchase of Zoes Kitchen for US$300m in 2018 has helped fuel expansion. Cava has since converted most of the 145 Zoes restaurants it acquired to the Cava brand. Though once a favored new issue theme because of their easy-to-understand business models and solid growth, restaurant chain IPOs have had mixed success in recent years. Sweetgreen, the last IPO to explore the theme,has struggled since pricing a US$364m NYSE IPO in October 2021. The salad chain's quarterly results disappointed, sending its shares tumbling all-time high of US$56.20 shortly after the IPO to US$9.84 currently.
Zhuhai Wanda Commercial Management Group is facing questions from China’s securities regulator over its need to raise funds from a Hong Kong IPO after it paid huge dividends in recent years. As part of the process of vetting the IPO, the China Securities Regulatory Commission on Friday posted enquiries on its website seeking more details on the company's corporate governance practices and operational status. One of the main areas the regulator focused on is the dividend payouts. According to a filing from Zhuhai Wanda in 2022, it paid combined cash dividends of Rmb13.2bn (US$1.86bn) from 2019 through 2021 and the first half of 2022, exceeding the Rmb11.5bn cashflow generated from operations during the period. In September last year, Zhuhai Wanda’s shareholders approved a resolution to pay a dividend of Rmb3.5bn. The company is also considering paying 65% of its annual distributable profit as a dividend after the listing. The CSRC also asked the company to clarify whether its dividend policy will have a big impact on its debt repayment ability and sustainability. The regulator asked it to disclose the short-term repayment risks that its controlling shareholder is facing regarding pre-IPO investments, such as share redemptions and early repayments. Investors have been worried about the delay in the IPO of the unit of Dalian Wanda Group, and whether it would add to the liquidity pressure of its debt-ridden parent. Dalian Wanda will need to repurchase about Rmb30bn of Zhuhai Wanda equity from pre-IPO investors if the unit fails to list by the end of 2023. The CSRC asked whether the company is providing guarantees to its controlling shareholder and related parties, and what measures it will adopt to ensure the IPO proceeds will not be used for real estate development. Under rules announced in December last year, developers can use proceeds to buy property-related assets, replenish working capital and repay debts, but not to buy land from local governments or develop new projects. It also asked Zhuhai Wanda to provide details on how it achieved a 98.8% average letting rate in the plazas it manages from 2019 to 2021. The company first filed for a Hong Kong listing in October 2021 and has since made another two filings. A deep correction in the real estate sector and a weak Hong Kong IPO market have forced the company to lower its fundraising target from US$3bn–$4bn to around US$1bn, IFR has reported. Citic Securities, Credit Suisse and JP Morgan are the sponsors. With uncertainty around the IPO's timing, Dalian Wanda is looking at alternatives to raise funds. Dalian Wanda Commercial Management Group, another unit of Dalian Wanda Group, last month said it is planning to package some of its consumer assets into asset-backed securities and real estate investment trusts after China’s regulators in March said they would expand the REIT pilot scheme to consumer infrastructure including department stores and shopping malls. According to Wanda Commercial, it operated 472 commercial plazas at the end of 2022, of which it owned 288 that are suitable for using as underlying assets of an ABS or REIT. The ABS and REIT issuance plans were disclosed in two statements across four days from Wanda Commercial to clarify market rumours. On May 26, the company said none of the banks that participated in Dalian Wanda's offshore syndicated loans had requested an early repayment after Zhuhai Wanda failed to list before May 8. The three syndicated loans, with an outstanding amount of US$1.3bn, carry a covenant that if Zhuhai Wanda fails to list by the deadline and if banks holding more than 66.67% of the loans request an early repayment of the loan, Dalian Wanda will need to make the repayment. Wanda Commercial sold two US dollar bonds in January and February this year, raising a total of US$700m. Despite the successful issuance offshore, its bond prices have been volatile in the secondary market. The uncertainty over the loan repaym
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