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EM primary thrives but rates fears simmering
Emerging markets issuers across CEEMEA and Latin America once again triumphed in primary bond markets this week, with several sovereigns and corporates notching record low costs of funding. But there are signs that the direction of US rates is playing on investors’ minds, write Mariam Meskin and Oliver West.
21 Jan 2021 -
Sovcombank USD300m 3.4% Jan 25 social bond
21 Jan 2021 -
National Commercial Bank USD1.25bn 3.5% PNC6 AT1
21 Jan 2021 -
Turkey USD1.75bn 4.75% Jan 26 USD1.75bn 5.875% June 31
21 Jan 2021 -
Bahrain USD500m 4.25% Jan 28 USD1bn 5.250% Jan 33 USD500m 6.250% Jan 51
21 Jan 2021 -
Corporate bond investors 'freaking out' at ECB amid 'unhealthy' market
Europe’s high grade corporate bond investors are sounding the alarm that parts of the market are starting to look frothy, as the European Central Bank on Thursday gave no indication of any slowdown in its relentless bond buying programme. Mike Turner reports.
21 Jan 2021 -
NCB sells AT1, market anticipates govvie deal
Saudi Arabia’s National Commercial Bank sold an additional tier one bond this week. Some see the trade from the kingdom’s largest financial institution as a prelude to a bond sale by the sovereign, which could happen next week.
21 Jan 2021 -
Investors put ECB commitment to the test
European Central Bank president Christine Lagarde refused to be drawn into naming a specific spread target that the central bank will defend in a press conference on Thursday but investors may find out for themselves in the wake of the meeting. BTPs sold off sharply after Lagarde spoke, perhaps indicating that the central bank has not done enough to convince investors of its support.
21 Jan 2021 -
Aircraft lessors crowd to market after monster rally
Companies in the same sector often copy each other, but this year's string of bond issues by aircraft lessors has been exceptional, and is prompted by the sector's credit rehabilitation. Air Lease Corp took the recovery past a new milestone this week.
21 Jan 2021 -
UK GBP6.5bn 0.875% Jan 46
21 Jan 2021 -
Cades GBP1.5bn 0.125% Dec 25 social bond
21 Jan 2021 -
France EUR7bn 0.5% May 72
21 Jan 2021 -
NWB EUR500m 0% Feb 37
21 Jan 2021 -
EIB EUR1bn FRN Jan 28
21 Jan 2021 -
AIIB USD3bn 0.5% Jan 26 sustainable development bond
21 Jan 2021 -
People moves in brief: January 21, 2021
Mark Soriano joins Natixis — Deutsche's Frazer Ross is taking a sabbatical — Fidelity hires private credit team
21 Jan 2021 -
Benefit Street Partners prices last minute CLO reset
More managers are coming into the market to take advantage of tighter spreads, and refinance or reset CLOs while new CLO issuance is expected to really take off in the next two weeks.
21 Jan 2021 -
Direct lenders toughen up as latest Covid wave bites
Several industries once popular with direct lenders have struggled to cope through the coronavirus. Now, direct lenders say they have toughened terms for borrowers from these sectors.
21 Jan 2021 -
Buyers queue down the aisle for Tesco SLB
Tesco, the UK grocer, made a storming debut in the nascent sustainability-linked bond market on Wednesday, encouraging bankers who already expect corporate issuance using the novel structure to rocket this year.
21 Jan 2021 -
Banque Fédérative du Crédit Mutuel GBP400m 0.875% Dec 27
21 Jan 2021 -
Erste Group Bank EUR500m 0.25% Jan 31
21 Jan 2021 -
Swissie investors target quality not quantity
Swiss franc bond investors are pursuing high quality issues, with Münchener Hypothekenbank harnessing this demand to price a tap of its green preferred senior bond 12bp through fair value this week.
21 Jan 2021 -
Fresh hopes for euro FIG supply as spread backdrop improves
Banks are taking another look at funding conditions in the euro market after a strong week of recovery for senior debt spreads.
21 Jan 2021 -
Austrians keep quiet euro market ticking
A pair of Austrian banks kept a quiet senior euro market ticking over earlier this week. Erste targeted price over size with a new senior deal, while Oberbank attracted a granular orderbook on its first visit to the non-preferred market.
21 Jan 2021 -
High grade corporates get bumper demand despite ECB meeting
A trio of European corporate issuers brought bond deals on Thursday, shrugging off the potential distraction of a European Central Bank meeting.
21 Jan 2021 -
France smashes 50 year as EU preps first SURE deal of 2021
France stole the limelight in the euro public sector bond market this week as it set new records for 50 year benchmarks in terms of size, demand and yield. But next week all eyes will be firmly fixed on the EU, which is set to bring its first bond of the year under its Support to Mitigate Unemployment Risks in an Emergency (SURE) funding programme.
21 Jan 2021 -
AA’s £280m bond helps rare debt-lowering LBO
Barclays took out the bridge financing for TowerBrook and Warburg Pincus’s takeover of UK roadside assistance group The AA on Wednesday, selling a £280m five year bond at 6.5%.
21 Jan 2021 -
Cornerstones go mainstream for European IPOs
Companies are increasingly turning to cornerstone and anchor investors to support their IPOs across the price range before deals are launched. While the phenomenon is common in Asia and the Nordic markets, it has been rarer in UK and most continental European deals until now, but the trend is turning into the norm, reports Sam Kerr.
21 Jan 2021 -
Soriano surfaces at Natixis
Natixis has hired Mark Soriano, formerly at Barclays, for its capital structure and rating advisory team.
21 Jan 2021 -
EBRD shows patience to print flat to curve
The European Bank for Reconstruction and Development led the way on a busy Thursday in the SSA dollar market, printing $2bn flat to its curve.
21 Jan 2021 -
Rekeep opens the racy end
Italian facility management company Rekeep signalled market appetite for the spicier end of high yield this week, issuing a €350m five year non-call two at 7.25%. This will trim the company’s sky high funding costs, paying for the redemption of its 9% 2022s.
21 Jan 2021 -
ESG securitization: why CLOs are struggling to change colour
Green securitization is firmly on the menu as part of the European Union's push for sustainable investment. But one corner of the market is proving slow to change, despite taking baby steps in that direction.
21 Jan 2021 -
Land NRW scores with new 30 year ahead of ECB meeting
The State of North Rhine-Westphalia found plenty of demand as it came to the market with a new 30 year benchmark on Thursday, ahead of the European Central Bank’s first monetary policy meeting of the year.
21 Jan 2021 -
Bruxelles Lambert shrugs off ECB noise, issues new bond
Groupe Bruxelles Lambert, the Belgian investment holding company, found a warm response from the bond market on Thursday, despite the potential distractions of a European Central Bank meeting being held on the same day.
21 Jan 2021 -
Webuild and United spot window for opportunistic HY taps
Two issuers spotted a window on Thursday for opportunistic high yield issues, as the Crossover index had tightened 9bp on Wednesday and there was a firm tone in other risk assets. Italian construction group Webuild launched a €150m tap of its 2025 note, launched in December, while Balkan telco United Group reopened its 2027s for €100m.
21 Jan 2021 -
Santander pins corporate finance strategy on ESG
Santander reckons it can harness the power of hydrogen to boost its standing in corporate and investment banking, building on its ESG credentials in similar way to how rivals built supremacy during the internet boom, writes David Rothnie.
21 Jan 2021 -
Acea and United Utilities lifted by sea of green demand
Utilities Acea and United Utilities Water romped home with ESG-themed bonds in euros and sterling on Thursday. Bankers said investor demand for socially conscious assets was swelling.
21 Jan 2021 -
Unifin launches exchange, plots new deal
Mexican non-bank lender Unifin Financiera is planning an eight year bond issue of up to $500m, with up to $200m set to come via an exchange offer for existing bonds. But bondholders participating in the exchange are unlikely to receive much by way of increased returns for pushing out their maturities.
21 Jan 2021 -
Panama, Paraguay pay limited concession as 10 year emerges as sweet spot
Bond markets continue to offer Latin American sovereigns tight pricing down the dollar curve, with Panama and Paraguay on Wednesday becoming the latest pair to price dual tranche deals. But with rates curves having steepened this month amid the expectation of higher rates in the long term, bankers are sensing that the 10 year is becoming the sweet spot on the maturity curve.
21 Jan 2021 -
Everything rally boosts Europe's blocks market
Stocks have hit new all-time highs in the wake of Joe Biden’s inauguration as US president on Wednesday. Barring any shocks, the bullishness in equity markets is expected to translate into a strong blocks market over the coming weeks and months.
21 Jan 2021 -
RBC promotes from within as Uden retires
RBC Capital Markets has reorganised its European equity capital markets and corporate broking business following the decision of Darrell Uden to step down at the end of this month.
21 Jan 2021 -
Capital trades the focus for Aussies in 2021
Westpac kicked off 2021’s Australian financials market on Thursday by launching a new tier two bond. Aussie borrowers are expected to focus on capital trades this year in order to meet their total loss-absorbing capacity (TLAC) requirements with tier two debt.
21 Jan 2021 -
Gold rush: Russian miners prep IPO plans
Two Russian gold miners are among a number of Russian companies looking at listing possibilities in 2021 capitalising on a strong 2020 for the precious metal.
21 Jan 2021 -
HSBC team to target MENAT ESG activity
HSBC has created a dedicated sustainable and transition finance team for the Middle East, North Africa and Turkey, as the region tries to make its economies more sustainable.
21 Jan 2021 -
EIB reboots €STR FRN market with curve extension
The Europe Investment Bank extended the euro short term rate (€STR) floating rate note curve on Wednesday with 2021’s first deal in the format.
21 Jan 2021 -
Perfect chemistry as investors cheer Ineos’s €4.6bn BP integration package
Investors have enthusiastically backed a €4.6bn financing package for Ineos Quattro, funding the integration of BP’s aromatics and acetyls business into the chemicals conglomerate. Strong demand allowed the company to raise more secured debt than expected, cutting funding costs, and strip out a bank-targeted term loan ‘A’ in favour of a bigger, cheaper, institutional term loan ‘B’.
21 Jan 2021 -
Investment banks report full pipelines after excellent 2020
Top US bankers are optimistic about their investment banking businesses for the start of 2021, after a stellar 2020 during which their clients rushed to financing markets to help them get through the Covid-19 crisis, and government and central banks provided essential support.
21 Jan 2021 -
Drop in covered bond supply questioned
The covered bond market is set to experience one of the steepest declines in issuance on record this January. Yet, despite a poor start, bankers still expect a resurgence in the primary market, although extended lockdown restrictions are creating uncertainty.
21 Jan 2021 -
Hipgnosis Songs Fund returns for more financing
Hipgnosis Songs Fund, the London-listed investment fund focused on music royalties, is embarking on yet another share sale to finance its bulging pipeline of acquisitions.
21 Jan 2021 -
Goldman lands €1.75bn as bank senior spreads recover
Goldman Sachs won strong demand for a chunky €1.75bn deal in the euro market on Thursday, becoming the first US bank to visit the currency after posting full year results.
21 Jan 2021 -
Energy firms facing insolvency bank on ABS
Securitization is emerging as the last resort for some US oil and gas companies seeking funding. Banks are deserting the equity and reserve-based lending markets they rely upon. But investors have proved eager to deploy capital in well-structured shale deals that can yield as much as 6%, meaning the ABS market may provide a lifeline for the struggling energy firms, writes Jennifer Kang.
21 Jan 2021 -
IG lines up $906m of financing for Tastytrade buy
IG Group, the UK derivatives trading platform, plans to use $906m-equivalent in debt and equity to finance a $1bn acquisition of US brokerage Tastytrade.
21 Jan 2021 -
InPost sets range on IPO that could reach €3.2bn
InPost, the Polish provider of postal lockers, has set a price range for its IPO on the Amsterdam stock exchange, valuing it at €8bn at the top.
21 Jan 2021 -
What price bonds in the Biden era?
A new era has begun in the US, with the swearing in of Joe Biden as president. For America and the rest of the world it is a sea change in leadership style and political substance.
21 Jan 2021 -
China’s RLX draws in $1.4bn from bigger US IPO
Chinese vape company RLX Technology raised $1.4bn from its US listing this week, pricing the deal above the marketed range after a huge turnout from investors.
21 Jan 2021 -
BYD nabs $3.6bn from new share placement
Chinese car manufacturer BYD has closed Hong Kong’s largest primary share placement in more than half a decade, raising HK$29.9bn ($3.86bn). The issuer tapped the market as the local benchmark Hang Seng Index hit a record high, getting strong demand from mainland investors. Jonathan Breen reports.
21 Jan 2021 -
People news in brief: January 21, 2021
JP Morgan names China JV CEO — Credit Suisse forms Japan ECM unit — MUFG hires markets research lead — Nomura bulks up in wealth management
21 Jan 2021 -
SJM gets $10bn book for $1bn bond debut
Macau casino operator SJM Holdings generated a $10bn-plus book for its $1bn debut bond this week, despite tight pricing and the lack of US investors. Its credit profile, the transaction’s timing and a comprehensive marketing strategy worked in its favour.
21 Jan 2021 -
Investors plug into SK Battery’s $1bn green bond
SK Battery America sold a $1bn green bond this week, overcoming hurdles involving concerns about recent downgrades, and a legal battle with a competitor. Morgan Davis reports.
21 Jan 2021 -
Mphasis to set new record for LBO loan size from India
Asia’s loans bankers are salivating over the prospects of working on the largest ever leveraged buyout loan from India. Blackstone is looking to exit from IT services company Mphasis in a deal that has seen plenty of interest from other private equity firms. Pan Yue reports.
21 Jan 2021 -
Leaving office: The misery of a long handover
There are few unpleasant things that can trump having to watch someone else take your job.
21 Jan 2021 -
Korea Southern Power adds to green market
Government-owned Korea Southern Power Co marketed a green bond to dollar buyers on Wednesday, netting $450m from the trade.
21 Jan 2021 -
Fosun goes offshore for $500m
Chinese conglomerate Fosun International went to the international debt market on Wednesday for a $500m deal.
21 Jan 2021 -
IIF jumps on ESG bandwagon with debut sustainable bond
Indonesia Infrastructure Finance raised $150m from its maiden sustainability bond on Wednesday that proved popular among investors looking to get their hands on the rare southeast Asian credit.
21 Jan 2021 -
Cédulas spreads to tighten as asset quality weakens
The Spanish government’s decision to extend laws that prohibit tenant evictions is a blow for the credit strength of the country's covered bond and mortgage securitizations. But even so, supply scarcity will continue to have more influence on Cédulas valuations and spreads, which have already tightened this year and may well have further to go.
21 Jan 2021 -
Moody’s rates first aircraft ABS in 10 years
Castlelake priced the first aircraft securitization since the pandemic on Wednesday, kindling hopes of revival in a battered sector most severely hit by Covid-19. The deal is also the first aircraft transaction that Moody’s has rated in more than 10 years, following a change in rating methodology by the company.
20 Jan 2021 -
CSAM prices largest CLO in two years
Credit Suisse Asset Management (CSAM) has priced the largest CLO in the past two years, a $850m transaction with a three year reinvestment period called Madison Park Funding XLVIII.
20 Jan 2021 -
Dollar market hot for SSAs across curve as CPPIB looks long
CPPIB Capital hit screens on Wednesday for a 10 year benchmark, confident that there is demand at that tenor despite a recent rush of similar deals.
20 Jan 2021 -
Cades brings first ever SSA sterling social bond
Caisse d’Amortissement de la Dette Sociale (Cades), the agency responsible for financing and amortising French social security debt, printed a £1.5bn social bond on Wednesday — the first ever deal in that currency and format from a public sector borrower.
20 Jan 2021 -
Brandenburg undersubscribed for 25 year deal as Land NRW hits screens
The State of Brandenburg failed to reach full subscription for a new 25 year trade on Wednesday as it priced at an exceptionally tight level to its secondary curve.
20 Jan 2021 -
Vonovia tests demand for long dated corporate debt
Vonovia, the German property company, brought a 20 year bond on Wednesday which gave further proof that corporate issuers looking to offer duration will find a willing audience.
20 Jan 2021 -
New year brings relief to international Schuldschein arrangers
The decline in international and debut Schuldschein issuance last year had a disproportionate impact on non-German bank arrangers. But this year’s bright start has given them a new lease of life.
20 Jan 2021 -
Acea and Bruxelles Lambert ready deals for ECB day
Deals are lining up in Europe’s high grade corporate bond market and bankers say even Thursday's European Central Bank meeting will not put a dent in primary demand on the day.
20 Jan 2021 -
Huge demand for SLB from ambitiously green Tesco
Tesco, the UK grocer, made a storming debut in the sustainability-linked bond market on Wednesday, encouraging bankers who already expect corporate issuance using the novel structure to rocket this year.
20 Jan 2021 -
Anchorage taps European CLO market after year-long break
Anchorage Capital has mandated Goldman Sachs for its fourth European CLO, a €411.1m transaction offering eight tranches including minority equity.
20 Jan 2021 -
Gazprom drills for dollar bond, concerns remain over NS2 sanctions
Gazprom, the Russian state oil and gas company, this week sold a dollar bond amid growing concerns about US sanctions on the controversial Nord Stream 2 pipeline project, a wholly-owned subsidiary of Gazprom.
20 Jan 2021 -
CEE and Dutch covered bonds offer pockets of value
A double-digit spread over mid-swaps is still possible in covered bonds from Poland, Slovakia and Dutch conditional pass-though deals, suggesting scope for performance is strongest in these markets, said bankers on Wednesday.
20 Jan 2021 -
Turkey leaves 'a bit on the table' to take a third of annual funding need
Turkey raised approximately a third of its total financing requirements for the year on Tuesday in a single bond issue. Though the deal included a new issue premium, market participants were impressed with the borrower's execution.
20 Jan 2021 -
Higher rates and execution certainty aid Yankee bank issuance
Higher rates and execution certainty in the dollar bond market have given investors something to get excited about, with supply from financials in the currency outstripping that in euros so far this year.
20 Jan 2021 -
Deutsche Pbb readies debut green senior bond
Deutsche Pfandbriefbank could take advantage of a quiet backdrop in the euro FIG market to launch the first deal from its green bond framework.
20 Jan 2021 -
Italian bonds rally as government avoids snap election
Italian prime minister Giuseppe Conte won a vote of confidence in the country's senate last night, removing the immediate threat of the government he leads collapsing. Relieved investors flocked back to Italian assets in the aftermath but Italy’s political troubles are unlikely to be over.
20 Jan 2021 -
Bahrain sells triple-trancher, following fellow HY Gulf sovereign Oman
The Kingdom of Bahrain launched a $2bn triple-tranche bond on Wednesday, the second sovereign trade from the Gulf region this year. Both trades have, somewhat unexpectedly, been done by junk-rated governments.
20 Jan 2021 -
Apax Global Alpha tweaks revolver as amend and extend trend grows
Apax Global Alpha, a UK investment trust, has amended the terms on its €140m revolving credit facility. The deal reflects what is expected to be a big theme in the loan market this year of borrowers tinkering with existing facilities rather than doing full refinancings.
20 Jan 2021 -
Rhône Capital sells Fluidra stock after profits surge
Rhône Capital has reduced its stake in Fluidra, the Spanish swimming pool company, through an accelerated bookbuild.
20 Jan 2021 -
‘Spoons returns to equity market as lockdown bites
JD Wetherspoon, the UK pub chain, tapped equity investors for £93.7m ($128m) on Tuesday to help see it through the country’s third Covid-19 lockdown. The company is likely to be the first of a number of issuers that seek to raise primary equity capital in the next few months in order to manage the disruption, according to senior equity market sources.
20 Jan 2021 -
Flender financing to set ESG precedent for lagging levfin market
Financing for Carlyle’s purchase of Flender, a turbine gearbox manufacturer, could set a precedent for leveraged finance, which has lagged behind other debt markets in adopting instruments linked to environmental, social and governance conditions. Other issuers are sure to follow, but the market may have to solve other challenges before this can become a market standard.
20 Jan 2021 -
Biogroup plans full refi after acquisition spree
Biogroup LCD is planning to refinance its full capital structure and tap the bond market for the first time after a string of recent debt-funded acquisitions. The French lab testing company was a notable casualty of the first wave of Covid-induced market chaos, forced to postpone its plans for a loan in March and then having to pay up when it returned for the financing in June.
20 Jan 2021 -
Jefferies banker joins Baird for consumer coverage
Robert Foster, previously European head of consumer and retail investment banking at Jefferies, has joined financial firm Baird's middle market investment bank.
20 Jan 2021 -
Chile's green-social combo breaks yield, maturity records
Chile tapped bond markets for $4.25bn-equivalent of funding on Tuesday, starting with a 10 year green tap and new long-dated social bond in euros, and then following a similar playbook in US dollars.
20 Jan 2021 -
CICC pulls in $1.5bn from bonds
China International Capital Corp (CICC) raised a larger-than-planned $1.5bn from the bond market on Tuesday in a deal driven by Asian accounts.
20 Jan 2021 -
Apollo Hospitals nets $160m from hot QIP
Apollo Hospitals Enterprise has raised around Rp11.7bn ($160m) from a qualified institutional placement, drawing a swell of demand that pushed pricing above the floor.
20 Jan 2021 -
LatAm bankers in a rush as Guatemalan lender joins pipe
Debt capital markets bankers covering Latin America continue to be impressed by the pace and variety of new issuance in January, with Guatemalan lender Banco Industrial the latest to join the primary pipeline.
20 Jan 2021 -
SK Battery jolts market with $1bn green bond
SK Battery America, a subsidiary of South Korea's SK Innovation Co, found outstanding response for its green dollar bond on Tuesday. The firm was able to tighten pricing by 45bp, with the notes trading even tighter in the secondary market.
20 Jan 2021 -
US banks face impossible questions on China
The relationship between the US and China, which has faced immense strain during Donald Trump’s presidency, is unlikely to get too much relief under the Biden administration. The biggest losers will be US banks and their capital markets business in Asia.
20 Jan 2021 -
China Modern Dairy pockets HK$1.56bn from share sale
China Modern Dairy Holdings has raised HK$1.56bn ($201.2m) after selling a block of new shares to fund growth and M&A.
20 Jan 2021 -
Lenders rush to Grab loan, size gets boost to $1.75bn
Singaporean ride-hailing company Grab Holdings has boosted the size of its term loan B after receiving a strong response from the market, setting the stage for more Asian start-up firms to head to the US for financing.
20 Jan 2021 -
Kaisa, BOC Aviation go for taps
Kaisa Group Holdings and BOC Aviation used swift taps to add more money to their coffers on Tuesday.
20 Jan 2021 -
Chinese firms Adagene, Cloopen eye US listings
Cloopen Group Holding, a cloud-based communication provider, is planning to raise at least $100m from a US IPO of American depositary shares (ADS).
20 Jan 2021 -
JPM names CEO for China securities JV
JP Morgan has made new appointments to its China-related businesses, including picking the chief executive for its majority-owned onshore securities joint venture.
20 Jan 2021 -
LendingClub becomes first fintech-turned-bank
Online lender LendingClub successfully passed all the regulatory hoops required to acquire Radius Bank, the company said on Tuesday morning, making it the first public US neobank. The deal will officially close on February 1.
19 Jan 2021
