Is r/wallstreetbets a populist revolution?

This week in Keeping Tabs: optimum bank capital ratios, and also that other story everyone's been talking about.

29 Jan 2021

Science-Based Targets prove their worth as emissions come down

The power of Science-Based Targets as a sustainable finance tool was highlighted this week by research which showed for the first time that companies with SBTs are succeeding in cutting greenhouse gas emissions much faster than the wider economy. Many are even ahead of their own targets.

29 Jan 2021

Demand grows for equity-linked deals to offset bubble risk

Europe’s convertible bond market has got off to a relatively slow start to the year, with €1.6bn of issuance in January, according to Dealogic data. However, the asset class remains popular with investors looking to gain equity upside but mitigate against valuation risk.

29 Jan 2021

Dr. Martens trades up despite volatility

Shares in Dr. Martens, the UK bootmaker, rose above their IPO price on Friday morning despite volatility driving losses in the stock market more broadly.

29 Jan 2021

More fallen angels expected but also a drop in default rates

Corporate default rates are expected to decline towards the end of this year after peaking in the next few months, but the number of borrowers facing a plunge into junk ratings is near a record high. Lenders say that they are taking a pragmatic view on the companies in their loan portfolios to try and prevent defaults.

29 Jan 2021

Liberty Mutual opens new funding route for fixed-for-life product

Liberty Mutual gave US institutional investors their first chance to pick up subordinated paper with a fixed-for-life coupon in the 144A market this week. Bankers say the issuer may have found a new pool of demand for the product, which has traditionally been reserved for retail channels.

29 Jan 2021

Delay in IMF funding may push Ukraine into bond markets

Ukraine is facing delays in securing funding disbursements from the IMF, as questions around the authenticity of its anti-corruption drive cloud discussions between the country and the Fund. That may push Ukraine to tap the bond markets again, which last year welcomed it a number of times.

29 Jan 2021

‘We’ve moved on from this rather archaic view of sustainability as a cost to viewing it now as an opportunity’

Jason Channell, Head of Sustainable Finance, Citi Global Insights examines the broad understanding of environmental, social and governance factors, how these have become a mainstream economic concern, and how sustainability policy is impacting supply chain finance.

29 Jan 2021

RBI’s ESG issuance and capital markets services – helping meet clients’ sustainability goals

RBI follows a “profit-with-purpose” business model with explicit alignment of its activities with social, environmental and economic responsibility. We help develop sustainable economies and support our customers’ transition to zero carbon activities.

29 Jan 2021

UK names syndicate for long-dated linker

The UK Debt Management Office has picked the banks to lead the launch of a new long-dated index-linked Gilt, which will be the final syndicated transaction of its 2020/21 financial year.

29 Jan 2021

Moonpig shuts books early as funds pile in

Moonpig, the UK online greetings card company, is increasing the size of its IPO and pricing the deal early after a deluge of orders for stock from investors.

29 Jan 2021

China policy and markets round-up: Xi warns against ‘new cold war’, CSRC, CBIRC set 2021 goals, Allianz gets nod for fully owned insurance AMC

In this round-up, Chinese president Xi Jinping warns of international confrontations from a ‘new cold war’, regulators plan deeper capital market reforms and increased oversight of internet finance platforms, and European insurance giant Allianz receives approval for China’s first fully foreign-owned insurance asset management company.

29 Jan 2021

Amended German Pfandbrief legislation takes shape

Amendments to the German covered bond law, which are expected to be signed off within the next few months, contain key details on how soft bullet extensions will be triggered, the interest rate that is applied in such an event and the size of the liquidity buffer required.

29 Jan 2021

Hong Kong Airport Authority flies into 144A market

Hong Kong's Airport Authority used a 144A format to expand its investor base and find a new pocket of liquidity this week. It got a strong reception from the US for its $1.5bn bond.

29 Jan 2021

BOC debuts Yulan bonds through Hong Kong branch

Bank of China Hong Kong has sold the first Yulan bond, a new asset class that was only launched in December, raising $500m from the market. But the deal saw limited interest as investors come to grips with the product.

29 Jan 2021

CMB Leasing juggles price and size for bond

CMB Financial Leasing Co had to navigate hurdles around structure, timing and pricing for its dual-tranche bond outing this week, managing to bag $800m from a $2.7bn order book.

29 Jan 2021

PE-backed GaleMed turns to loan market

Taiwan’s GaleMed Corp is tapping the loan market for a $70m-equivalent dual-currency deal for refinancing debt and dividend recapitalisation.

29 Jan 2021

PNB Housing adds QIP to fundraising plan

PNB Housing Finance has expanded its funding avenues for a planned deal of up to Rp1.8bn ($246.6m) to include a qualified institutional placement.

29 Jan 2021

CDH trims position in Topsports through block

CDH Investments has pocketed HK$1.81bn ($232.m) after offloading a chunk of shares in Topsports International Holdings, a Chinese sportswear retailer.

29 Jan 2021

Brookfield readies Rp38bn Indian Reit IPO

Brookfield Asset Management is set to launch India’s third real estate investment trust IPO next week, as it aims to raise Rp38bn ($520.8m) from a mix of new and existing stock.

29 Jan 2021

Movida tightens SLB, Hidrovias plots refi

Car rental company Movida became the third Brazilian company this year to sell a sustainability-linked bond when it raised $500m of 10-year debt with a coupon step-up linked to carbon emissions on Thursday.

28 Jan 2021

YPF ups offer but Arg investors fear more of the same

Argentine oil and gas company YPF triggered a rally in its bonds this week by improving the terms of a proposed debt exchange that bondholders had initially rejected. Yet if the amendment was a sign of pragmatism from the government owned issuer, investors hardly saw it a reason for cheer, and yet another government related default is still on the cards.

28 Jan 2021

CAF attracts new buyers to biggest euro deal

Latin American development bank Corporación Andina de Fomento (CAF) offered the ideal combination of a safe haven on a volatile day and a positive yield in a low rates environment to notch its largest ever euro benchmark on Thursday.

28 Jan 2021

7-Eleven empties shelves in $11bn US bond debut

7-Eleven capitalised on huge investor demand to issue its first dollar bond this week, printing the largest US corporate deal of the year so far.

28 Jan 2021

Spotlight shifts to Natixis, SG on Ecuador oil finance as banks pull out

In a rare sign that environmental campaigners are having an impact on the financial industry, the burden of financing the Ecuadorian Amazon oil trade has shifted between banks in the past six months. But it is clear the banking industry is supporting the trade in more ways than have yet been uncovered.

28 Jan 2021

Green finance to boom, led by US and LatAm

Sustainable bond issuance has made its strongest start to the year ever, thrusting the market towards what most observers believe will be a year when many records will be broken — especially in north and south America, where environmental and social consciousness is rising. Jon Hay, Mike Turner and Oliver West report.

28 Jan 2021

Social RMBS, and not before time

Kensington is marketing the first ever RMBS 'social bond', which could mean investors accepting a lower spread for their mortgage bonds thanks to the label. But Kensington’s lending approach will be little changed by the new issue, raising the question of what the new issue changes.

28 Jan 2021

CLO specialist fired by Penn Mutual

CLO specialist at Penn Mutual Asset Management Jason Merrill was fired on January 7 after eight years with the firm, according to people familiar with the matter.

28 Jan 2021

Will Germany reapply the debt brake?

German politicians are planting their flags, preparing for the leadership tussle that is set to follow chancellor Angela Merkel's departure from the post later this year. Low rates have increased debt's popularity as the means to fund economic stimulus but Germany’s frugality is legendary and now a fight is brewing over relaxing its famous debt brake, writes Lewis McLellan.

28 Jan 2021

Long attacks are here to stay

Andrea Orcel, the new CEO of UniCredit, may be annoyed to be upstaged by Avalon Penrose, an actor whose hilarious and heart-tugging Twitter video about the GameStop share maelstrom has captured the insanity of stock markets. But these are the frothy markets we live in now.

28 Jan 2021

Brexit: EU could look to 'squeeze harder and tighter'

Banks and other financial services firms continue to adapt to Brexit, with more than 400 firms estimated to have moved some part of their business to the EU.

28 Jan 2021

People moves in brief — January 29, 2021

HSBC appoints two within AIBC — Credit Suisse Asset Management hires head of origination in direct lending — Richard Luddington joins Rothschild

28 Jan 2021

FAB lands first Swissie green bond from MENA

First Abu Dhabi Bank issued a Sfr260m ($293m) six year bond this week, the first Swiss franc green bond from the Middle East.

28 Jan 2021

EU EUR10bn 0% Jun 28 social bond, EU EUR4bn 0.3% Nov 50 social bond tap

28 Jan 2021

OeKB USD1.5bn 0.5% Feb 26

28 Jan 2021

Austria EUR4bn 0% Feb 31

28 Jan 2021

Sovs soak up big demand on back of EU jumbo

Austria, Greece and Iceland all received huge order books for their first syndicated bonds of the year, coming hot on the heels of a European Union jumbo dual-tranche sale earlier in the week.

28 Jan 2021

EU impresses with first SURE deal of 2021

The European Union continued where it left off last year as it returned to the bond market this week with another jumbo deal that attracted a huge order book for the first deal of the year under its Support to Mitigate Unemployment Risks in an Emergency (SURE) funding programme.

28 Jan 2021

EU questions ‘feasibility’ of MREL for small banks

Small and medium-sized European banks could be looking at adjustments to their minimum requirements for own funds and eligible liabilities (MREL), or longer transition periods, following a review of the EU crisis management framework this year.

28 Jan 2021

GreatAmerica returns with first small ticket equipment ABS of the year

Small ticket equipment lender GreatAmerica is preparing a $630m transaction, returning to a sector still weighed down by a small business-heavy borrower base impacted by government-mandated shutdowns.

28 Jan 2021

Patchy hybrid response will not put off more subordinated trades

Europe’s corporate bond investors had the chance to pick up some paper from the riskier end of their credit spectrum as the week began, with Portuguese power company Energias de Portugal (EDP) and Swedish housing firm Heimstaden Bostad out with hybrid capital issues.

28 Jan 2021

Klöckner Pentaplast takes ESG ratchet to dollar mart

Plastics packaging firm Klöckner Pentaplast (KP) has included an ESG margin ratchet in the loan leg of a refinancing, the first time this has been added to a dollar-denominated loan, though the structure is becoming increasingly common in euros.

28 Jan 2021

TalkTalk and Thames tap in sterling

UK broadband company TalkTalk sold an add-on to its existing high yield notes this week, raising new term debt to pay down its revolver. The company is subject to a takeover bid from Toscafund and Penta Capital, which will leave its existing bonds in place, but grant them security, as well as layering in extra leverage with a PIK toggle from Ares.

28 Jan 2021

Equity investors wobble as value fears rise despite Reddit rocket

US equity markets suffered their worst single day since October on Wednesday, as equity investors reacted to growing concerns over stock valuations and fears of Covid-19 vaccine disappointment. Equity capital markets bankers hope that investor sentiment will hold for new deals, even if global markets take a turn for the worse. Sam Kerr reports.

28 Jan 2021

Kensington brings landmark ‘social RMBS’ to Europe

Kensington Mortgages is bringing the first labelled social RMBS in Europe, a landmark transaction set to be followed by others, as the securitization market catches up to other capital markets which have more readily adopted ethical frameworks. By Tom Brown.

28 Jan 2021

TeamSystem sells bond for second fund-switch deal

Hellman & Friedman refinanced the capital structure of portfolio company TeamSystem this week as it moved ownership between funds. H&F recently completed a similar transfer of its Verisure holding but, unlike that switch, this move isn’t accompanied by a monster dividend payment to the new fund, although the TeamSystem deal still boosts leverage.

28 Jan 2021

Biogroup bond debut shines in unsecured

Biogroup’s debut in the high yield bond market has become one of the tightest ever triple-C rated issues, validating the former loan-only company’s decision to turn to public markets to add subordination to the refinancing of its capital structure.

28 Jan 2021

Trafigura returns to euros after long wait

Trafigura returned to the bond market in euros this week, having been absent since 2015. The commodities trading giant is diversifying its access to funding and is also producing its debut Schuldschein issue alongside the €400m bond.

28 Jan 2021

Will ESG-linked debt prosper in private debt?

European and US direct lending’s insatiable rise to relevance has so far not brought with it a push towards sustainable finance. But this year may be different, as certain private debt funds are setting out ESG blueprints for others to follow.

28 Jan 2021

HSBC gives positions to Wirth and Hoffmann within AIBC

Steven Wirth is joining HSBC to head real asset fund coverage, and Giulio Hoffmann is to jointly lead power, utilities and renewables (PURE) for Europe, the Middle East and Africa.

28 Jan 2021

Thom tests retail appetite

A bond for French jewellery store operator Thom Group showed that investors can digest debt from lesser loved sectors like retail, though the decision to opt for bonds to refinance its existing loan capital structure might have been prompted by the greater taste for adventure typically seen in the public market.

28 Jan 2021

IG corporate market predicts March correction

Europe’s investment grade corporate bond bankers and investors are looking to the end of this earnings season for a “needed” correction to trading levels, though some warn it will be shortlived.

28 Jan 2021

Real estate names pile into debt markets as M&A tipped to soar

Real estate companies are some of the biggest borrowers in Europe this year, with loans for Valor Real Estate and QuadReal Property, a UK/Canadian property joint venture, and Supermarket Income Reit adding to the pile this week.

28 Jan 2021

Iceland prints biggest euro bond since 2014 as Joint Laender falls flat

Iceland was awash with demand in the euro market on Thursday, allowing it to comfortably sell its biggest bond in euros since 2014. But it was a far different outcome for the Joint Laender, which failed to achieve full subscription.

28 Jan 2021

Ambu raises equity after stock surges

Ambu, the Danish medical equipment company, has raised Dkr1.3bn ($212m) via the sale of new stock to fund a deleveraging of its balance sheet.

28 Jan 2021

La Banque Postale EUR750m 0.75% Aug 32 tier two

28 Jan 2021

Deutsche Pfandbriefbank EUR500m 0.1% Feb 26 green

28 Jan 2021

Austria ‘analysing’ issuance of green bonds

Austria is looking into issuing green bonds, joining a growing list of European sovereigns that have already issued bonds in the format or laid out plans to do so in the near future.

28 Jan 2021

UK DMO appoints structuring advisers for debut green Gilt

The UK Debt Management Office has appointed two banks as structuring advisers for the sale of its inaugural green Gilt, due to be issued this year.

28 Jan 2021

Swedish covered bond liquidity buffer under the spotlight

Swedish bankers have argued that proposed amendments to the country's covered bond law, which bring it into line with the EU's Covered Bond Directive (CBD), must demand that liquidity buffers in soft bullet bonds cover interest payments during any 12 month extension period, as opposed to covering interest and principal for 180 days — a standard more commonly seen in hard bullet maturities.

28 Jan 2021

Will sustainability-linked debt prosper in private credit?

European and US direct lending’s insatiable rise to relevance has so far not brought with it a push towards sustainable finance. But this year may be different, as certain private debt funds are setting out ESG blueprints for others to follow.

28 Jan 2021

UniCredit hires Orcel: is Italian consolidation on the cards?

FIG rainmaker Andrea Orcel is stepping back into the limelight as UniCredit chief executive, just as momentum is building for large-scale banking consolidation. He has an array of M&A options, but will he be shy in pulling the trigger? David Rothnie reports.

28 Jan 2021

‘Premature’ to criticise Basel buffer flexibility, says ECB

The European Central Bank has said it is too soon to tell if banks will use the flexibility embedded in the Basel capital buffer framework because the credit impact of the coronavirus pandemic is still unclear.

28 Jan 2021

Americas Derivatives Awards 2021: nominees revealed

GlobalCapital is delighted to announce the nominees for this year’s Americas Derivatives Awards.

28 Jan 2021

Euro FIG spreads widen despite low supply volumes

Bank bond spreads widened on the back of negative sentiment this week, but a handful of lenders were still able to take advantage of a constructive backdrop in the new issue market.

28 Jan 2021

Supermarket Income REIT keeps real estate debt binge going

Supermarket Income REIT, a UK grocery property investment trust, has signed an £80m revolving credit facility, as the real estate sector continues to pile on debt.

28 Jan 2021

GameStop short squeeze: so much for efficient markets

The GameStop short squeeze has cost institutional investors billions. I’ll feel more sympathy if they’d occasionally pay for their drinks.

28 Jan 2021

Kuaishou steals the show with bumper Hong Kong listing

Chinese video-sharing platform Kuaishou Technology is generating huge demand for its IPO, which could be worth as much as HK$42bn ($5.4bn). The deal, set to be the largest primary listing globally since 2019, shows the growing interest around short video companies. Jonathan Breen reports.

28 Jan 2021

Cathay Pacific takes off with bigger HK$6.74bn CB

Cathay Pacific Airways has sold the largest convertible bond by a Hong Kong issuer in over a decade, raising HK$6.74bn ($869.4m).

28 Jan 2021

China addresses bank capital headache with new-style perps

China is allowing banks to issue perpetual bonds with an equity conversion provision, an attempt to balance the need to help smaller lenders shore up their capital with a desire to protect investors. Addison Gong reports.

28 Jan 2021

Yuexiu Transport nabs Rmb1bn from Panda

Red chip issuer Yuexiu Transport Infrastructure ditched its usual bullet bond structure in favour of a five year puttable Panda outing this week.

28 Jan 2021

Investors flock to Hong Kong green bond

Hong Kong’s government returned to the green bond market with a $2.5bn triple-tranche deal this week, making the most of growing investor demand for sustainable investment opportunities. Morgan Davis reports.

28 Jan 2021

Tencent’s tight loan price forces banks to balance return against relationship

Tencent Holdings is testing bank appetite for a jumbo loan of $6bn as it gets ready to once again shun syndication in favour of a club deal. But the razor-thin pricing on offer is likely to pose a challenge — as will a recent crackdown on some of China’s largest technology companies. Pan Yue reports.

28 Jan 2021

Genting NY cashes in on bond

Casino operator Genting New York priced a $525m bond on Wednesday.

28 Jan 2021

Laos postpones dollar bond again

The Lao People's Democratic Republic has postponed its dollar bond sale for the second time in as many months, this time to provide investors with more information.

28 Jan 2021

Hainan SOE bags $300m from debut

Hainan State Farms Investment Holdings Group Co debuted in the dollar market on Wednesday with a three year bond.

28 Jan 2021

Kaisa adds $200m from bond tap

Chinese property company Kaisa Group Holdings raised $200m from a rapid return to the debt market this week.

28 Jan 2021

Ecopet to drill for debt, equity financing if ISA bid accepted

Colombian state-owned oil and gas company Ecopetrol said it would issue new debt and equity to fund a proposed takeover of the government’s 51.41% stake in conglomerate ISA (Interconexión Eléctria), should the finance ministry accept its offer.

28 Jan 2021

KKR picks partner for European private credit team

KKR has appointed a new partner to help manage its private credit business.

27 Jan 2021

M&A wave to strengthen PACE securitization

Property Assessed Clean Energy (PACE) lenders are starting to hear rumblings of consolidation, a sign of a maturing industry. The mergers and acquisitions are expected to leave a smaller number of stronger national players to roam the market.

27 Jan 2021

Ziraat Bank USD600m 5.375% March 26

27 Jan 2021

Armenia USD750m 3.6% Feb 31

27 Jan 2021

Slovenia EUR500m 0.6875% March 81

27 Jan 2021

CSAM hires direct lending origination head following Qatar tie-up

Credit Suisse Asset Management (CSAM) has hired a head of origination in its direct lending group, following the firm's multi-billion push into private credit in partnership with Qatar Investment Authority.

27 Jan 2021

Austria and Greece take €3.5bn each in hectic euro market

A pair of sovereign borrowers hit the crowded euro bond market on Wednesday, pulling down a combined €7bn. Public sector issuance is showing no signs of slowing: Wednesday’s borrowers received huge orders.

27 Jan 2021

ADB matches OeKB’s spread with five year dollar

The Asian Development Bank took advantage of strong investor appetite in the dollar bond market on Wednesday to make a deal that matched the spread Oesterreichische Kontrollbank paid on a five year dollar issue on Tuesday.

27 Jan 2021

Deutsche Bahn turns screws on sterling spread

Deutsche Bahn, the German state railway company, launched a £300m bond at a wafer thin spread on Wednesday, but investor demand still more than twice covered the deal.

27 Jan 2021

Smurfit Kappa seals five green promises with loan

Smurfit Kappa, the Irish paper and cardboard packaging company, has signed its first sustainability-linked loan for €1.35bn, at the same time as setting new targets to reduce its carbon footprint and water use and employ more women.

27 Jan 2021

NewDay sets up master issuer structure

NewDay has streamlined its credit card ABS offering by setting up a master issuer within its existing master trust vehicle, to smooth out deal execution.

27 Jan 2021

Dilosk brings RMBS with owner loans after resilient 2020

Dilosk, the Irish mortgage lender, has launched its first RMBS deal that includes owner-occupier loans, branching out from the buy-to-let offering it has stuck to for the past five years.

27 Jan 2021

TUI rights offer attracts high take-up from shareholders

Anglo-German travel and tourism group TUI has completed its heavily discounted €544m rights issue, which is part of a bailout of the company.

27 Jan 2021

Twists and turns of CEE central bank policy

At this year’s Central & Eastern European Forum, Société Générale hosted the workshop titled ‘CEE central banks’ balance sheet expansion: a necessity or a risk?’. The speakers were Radoslaw Cholewinski (deputy head of fixed income at Pekao TFI), Martin Dolejs (portfolio manager, pension fund and insurance portfolios at Allianz), and Zoltan Aroksallasi (FX and rate strategist at Erste Bank), and I thank them for their insight, their knowledge, and their time. By Marek Drimal, EMEA Strategist, moderator of the workshop.

27 Jan 2021

ANZ prints sophomore sustainable tier two in euros

ANZ returned to the euro market with a tier twovlinked to the UN’s sustainable development goals (SDG) this week — going on to print a deal that was over three times covered at guidance.

27 Jan 2021

Unclear rates, tight spreads muddy covered outlook

Covered bond spreads are so tight that asset managers with strict mandates to invest only in this asset class, such as Union Investment in Germany, have limited room to extract relative value and post a better performance than the main indices. And unlike last year, when falling interest rates boosted absolute returns, the rates outlook is less certain.

27 Jan 2021

Oman Electricity Transmission Company follows sov steps, goes for dollars

Oman Electricity Transmission Company, a partially state-owned utility company, entered the market on Wednesday for a dollar bond, just two weeks after the high yielding sovereign raised a dollar offering.

27 Jan 2021

InPost soars on first morning of trading

The IPO of InPost, the Polish provider of postal lockers, soared on its first day of trading on Euronext Amsterdam.

27 Jan 2021

Armenia nips in with ‘expensive’ dollar bond

The Republic of Armenia sold a $750m 10 year bond on Tuesday, which market participants said was “expensive” for investors, with a negative new issue premium of 10bp.

27 Jan 2021

Slovenia draws over €4bn of investor interest into longest deal

The Republic of Slovenia sold its longest ever bond issue on Wednesday, just three weeks after it sold a €2bn deal. The bid for duration was evident as investors piled in with more than €4bn of orders.

27 Jan 2021

Big demand for Huuuge IPO as books open

Huuuge, the Polish social and mobile gambling company, has set a price range for its listing on the Warsaw stock exchange valuing it at up to $1.2bn.

27 Jan 2021

BIL makes Scandie debut as MTN desks chase unusual deals

Banque Internationale à Luxembourg (BIL) ventured into the Swedish and Norwegian markets for the first time this week. With many of Europe's big banks absent from the MTN market this year, dealers are instead chasing more unusual deals from rarer names.

27 Jan 2021