Ant rumours put IPO back in focus

Two issues in two years, plus one sniffy comment from the European Banking Authority, is a lukewarm endorsement of green Additional Tier 1. Even as banks green every other part of their debt structures, notable scepticism still lingers around applying use of proceeds structures to their most subordinated capital. No doubt, some of these concerns are well founded. For one thing, how can investors be sure that green assets with finite (if often long) lives will continue matching this perpetual instrument? For another, would green AT1 absorb...

Direct lenders have edged out banks in a scramble to fund EQT and Mubadala's purchase of Envirotainer, a Swedish company that rents cold air cargo containers for pharmaceutical products. Private lenders including Goldman Sachs Asset Management are set to fund the acquisition by the Swedish private equity group and Abu Dhabi's state fund with a unitranche of just under €1bn. Direct lenders beat banks by stepping up to provide a higher leverage multiple. The deal is being inked with leverage of 8.25 times, with an extra turn of delayed draw, said...

Technology company KLA has signed an unsecured US$1.5bn five-year revolving credit facility that features sustainability-linked targets related to its increased use of renewable energy and its reduction of Scope 1 and Scope 2 carbon dioxide emissions.. The facility replaces the company’s US$1bn revolver from November 2017. It may be increased by up to US$250m and funds are for general corporate purposes. The maturity date may be extended by up to two one-year periods. As part of its sustainability initiatives, KLA has set a goal to use 100%...

Chemicals company Westlake has signed an unsecured US$1.5bn five-year revolving credit facility that replaces a US$1bn RCF from July 2018. The credit agreement features provisions for the incorporation of sustainability-linked pricing adjustments in the future. The deal’s maturity date may be extended by up to two one-year periods and may be increased by up to US$500m. The credit spread adjustment is 10bp and pricing is based on the borrower’s debt rating. For A3/A–/A– the commitment fee is 10bp and the margin is 100bp; for Baa1/BBB+/BBB+ it is...

A US Treasury ban on US firms buying outstanding Russian government debt looks set to complicate the auction process used to determine payouts on credit default swaps referencing the sovereign, sowing fresh confusion over the fate of these contracts. Trading volumes in Russian sovereign bonds have slumped following updated guidance from the Treasury’s Office of Foreign Assets Control published on Monday stating that US firms cannot buy Russian bonds or equities in secondary markets, though they can still sell these securities. That poses a...

Despite tough market conditions, a well flagged credit card deal from Carrefour Banque was joined by an under-the-radar Spanish auto loan deal from BBVA last week, showing that demand can still be found for substantial amounts of new issue paper, though not at any price. The two issuers took very different approaches to marketing, with Carrefour publicly announcing PASS Compartment France Notes Series 2022-1 and circulating a presentation on May 25 before holding calls and meetings the following week, while BBVA approached investors off screens...

The UK’s eight major banks, each with retail deposits of over £50bn, would not need bailing out by taxpayers as happened to some of them during the financial crisis in 2008, according to an assessment by the Bank of England of how the situation might be resolved in a similar crisis. Since then, regulators around the world have introduced new requirements for banks to hold sufficient capital that could be bailed in if losses meant lenders needed to bolster their capital levels. The UK banks tapped £137bn of public funds in 2008, but now have...

The Voluntary Carbon Markets Integrity Initiative has launched a new global code for the voluntary carbon market that will rate the claims that companies are making in a bid to address the rapidly growing market’s credibility problem. The VCMI has unveiled a provisional code of practice that aims to give a standardised benchmark for companies that are using voluntary carbon credits and recognise companies that are exceeding targets. The issuance of voluntary carbon credits exceeded US$1bn last year and they are expected to play a crucial role...

Altor Equity Partners raised SKr1bn (US$100m) on Thursday evening from the sale of 12.5m shares of Swedish green energy firm OX2 in an accelerated bookbuild. A wall-crossing exercise ensured the deal was covered at launch. Books were formally covered inside 15 minutes with pricing at SKr80 per share, a 12% discount to Thursday’s close of SKr90.95. According to one banker on the deal there was good demand from the local market as well as the rest of Continental Europe, the UK and the US, with a strong long-only element. Interest in the deal...

US ECM fundraising opportunities could be hard to come by in the next week as escalating inflation concerns, Wednesday's FOMC decision and calendar issues promise to keep activity light. No IPOs priced in the past week and few seem likely to launch/price near-term given bankers are advising most clients to wait for more settled market conditions. The S&P 500 dropped back below 4,000 points early on Friday, leaving it down nearly 19% from its early January highs and again on the cusp of bear market territory. Some bankers do not expect any...

Belgian property investor Retail Estates raised €55m in an accelerated intraday bookbuild on Thursday after initially targeting €50m. The deal priced at €64, a 7% discount to Wednesday’s close of €73.40 less the €4.60 dividend for the year to March 31 that had not yet been paid. Books were covered in around 30 minutes and were oversubscribed with a final skew towards existing investors as well as property specialists, long-only accounts and family offices. Excess demand enabled the company to raise the additional €5m. A total of 859,375...

Spreads on the most senior tranches of US CLOs widened by almost half a percentage point in the last two weeks as the asset class mirrored moves across capital markets that have been weighed down by rising inflation and concerns about a slowing economy. Recent US CLO Triple A tranches have been priced with coupons ranging from 175bp to 200bp over SOFR. In May, the average Triple A spread was 152.81bp, up from a 2022 low of 133.85bp in February, according to Refinitiv LPC data. Spreads across asset classes jumped in recent months, but for CLOs...