Debt markets are awaiting a wave of mergers and acquisition financings in the second quarter and later this year, as the boom in deals sparked by confidence that the economy is recovering from the coronavirus gathers steam. But the eagerness to lend will create tension between loan and bond markets, and deals are likely to get more challenging later in the year, write Mike Turner and Jon Hay.
Deutsche Telekom dialled in to the Aussie dollar market after an almost two year absence this week, extending its curve to 2041.
Obi, the German DIY store, has launched a Schuldschen across three, five and seven years, according to market sources. The spread differential between three and five years is steeper-than-usual, to coax investors further along the maturity curve.
KPN, the Dutch telecoms company, saw its bond spreads swing out on Thursday, on renewed reports that private equity firms are lining up to buy the company.
A group of BNP Paribas bankers in Spain have jumped ship to join boutique firm Beka Finance, according to market sources. One person familiar with the situation said that the French bank will refill these roles in due course.
HSBC is relocating the regional head of its leveraged and acquisition finance (LAF) business from Hong Kong to London to help implement its UK strategy.
Marvell Technology, the Bermuda-registered US chipmaker, jumped into the dollar bond market this week with a $2bn trade linked to a $10bn acquisition, after clinching the deal more quickly than expected.
The short Easter week saw a timid showing of new high grade corporate issuance in the European market but investors snapped up the trades that were on screens.
TI Fluid Systems, an auto parts company, is marketing its first unsecured debt, a €600m eight year non-call three, which it plans to use to repay part of its secured debt. It has also launched repricing on this loan, looking to cut margins and reset Euribor floors to market standard levels.
A group of BNP Paribas bankers in Spain have jumped ship to join boutique firm Beka Finance, according to market sources. One person familiar with the situation said that the French bank will refill these roles in due course.
HSBC is relocating the regional head of its leveraged and acquisition finance (LAF) business from Hong Kong to London to help implement its UK strategy.
Singapore Telecommunications (Singtel) sold a subordinated perpetual bond in the Singapore dollar market this week, marking its return to the currency after more than a decade, as well as its first perp.
Redco Properties Group raised $220m on Wednesday from its first sustainability bond.
German retailer TEDi has launched a Schuldschein, in the first deal to hit the market since the Easter break.
Europe’s high grade corporate bond market was populated with well rated issuers on Wednesday, as triple-B borrowers took a cautious approach and stayed away after the Easter weekend.
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The G20’s Financial Stability Board is cranking up its action on climate change again now that Donald Trump is no longer US president. This will feed the hopes of some sustainable finance supporters who want the FSB to drive progress on issues including environmental accounting.
Defaulted bond issuer Kangde Xin Composite Material Co is expected to be delisted from the stock exchange of Shenzhen next month, a move that will end an over two year probe by Chinese regulators into the company.
Europe’s high grade corporate issuers are expected to sit on the sidelines of the primary bond market for the coming weeks, as wide spreads and an impending earnings reporting season remove any sense of urgency among issuers to print new debt.
NatWest Markets has made another change to its debt financing management structure, with a new role for Roland Plan.
Professional services firm Alvarez & Marsal has hired a seasoned advisor to bolster its Middle East advisory team, as it seeks to be an integral part of the region's diversification transformation.
Credit Suisse has begun an overhaul of its leadership following the collapse of Archegos Capital, as well as losses from the bank’s ties to Greensill Capital. The Swiss lender has cut dividend payments by two thirds, and slashed bonuses for senior executives.
The equity markets have ploughed nine times more capital into fossil fuels than green energy in the past decade, and lost $120bn as a result. The tide is turning, but the amounts going into clean power are still pitifully small compared with the needs, according to research by Carbon Tracker this week.
The Danish cooperative farming company has sold €125m of Schuldschein, the largest placement in its three visits to the market.
Chinese property developer Logan Group Co has returned to the dollar bond for the second time this year. It was forced to navigate a much more difficult market this time – and ended up paying around 20bp over fair value.
ReNew Power, a regular issuer from India's renewable energy sector, raised $585m this week from another green bond – and another complex structure.
Chengdu Jiaozi Financial Holding Group Co priced an ultra-tight $200m bond on Wednesday, turning to a group of largely Chinese banks for a club-style transaction.
Deliveroo and its shareholders raised £1.5bn this week. The IPO was a dog, priced at the bottom of its range and falling 20% on its debut. But it’s hard to feel sympathy for the investors.
Borrowers packed deals into the US corporate bond market this week before the Easter holiday weekend. Among them, BMW enjoyed a strong order book for its first dollar issue for a year.
Institutional private credit is emerging as a competitive substitute for bank lending in Europe, but companies need to remember that alternative lenders define what they are looking for more narrowly than banks.
A seemingly endless supply of real estate companies coming to the high grade bond market continued this week, with Deutsche Wohnen and debut deals from Canary Wharf and VGP giving investors another chance to load up on the sector.
Canary Wharf made its debut in the corporate bond market on Tuesday, with a green triple-tranche bond in euros and sterling that found plenty of demand, despite the rocky future for office space.
Gatwick Airport brought its debut subordinated bond to market this week, a high yield issue raised from its holding company that found investor demand for more than three times the deal size, and that was priced at the tight end of talk.
Swiss technology firm Comet served up a niche sub-investment grade bond to high net worth investors this week, issuing a 1.3% Sfr60m ($64m) five year.
Leads tightened pricing and increased the size of an opportunistic maturity-pushing loan and bond refinancing for French supermarket Casino this week, with investors keen to buy the company’s turnaround story and look past the troubles of its holding company, Rallye, which needs a slug of cash to pay bondholders in 2023.
VGP, the Belgian logistics real estate company, has made its debut in the bond markets with green trade that found chunky demand. The deal was the second debut benchmark from a European real estate credit in as many days.
Vaibhav Piplapure, widely known as VP, has signed on for a second stint in KKR’s credit business, returning to the firm as a London-based managing director sourcing asset-based finance and speciality lending opportunities.
Hong Kong conglomerate Jardine Matheson Holdings made its entrance to the dollar market with a dual tranche transaction on Tuesday, part of the group's efforts to delist one of its units.
Property company China Jinmao Holdings Group sold its second dollar bond of 2021 on Tuesday, raising $600m from a five year note.
Five Chinese regulators have drafted new guidelines for domestic credit rating agencies, attempting to reform an industry that has faced renewed criticism in recent months. Addison Gong reports.
The fact that a large US insurance company could offer the English Football League better lending terms than UK banks or other investors is revealing. UK lenders are shying away from deals, which has opened the doors to institutional investors. The speed with which a tailor-made EFL deal was done shows how quickly they can replace traditional creditors.
London’s Heathrow Airport flew into the investment grade bond markets again on Tuesday, while its rival Gatwick Airport was marketing a high yield issue.
Canary Wharf made its debut in the bond markets in its present form on Tuesday, with a green triple tranche bond in euros and sterling that found plenty of demand, despite the rocky future for office space.
US institutional investor MetLife has offered a more attractive loan package to the English Football League — England's second, third and fourth professional football divisions — than the UK government and bank lenders.
An environmental activist institute has argued that the bookrunners of a Korea National Oil Corp $700m bond priced on Tuesday are being inconsistent with their own climate policies, and might even be taking legal risks, because of the issuer's exposure to tar sands oil production in Canada.
As the first quarter draws to a close, Primary Market Monitor investigates how issuance conditions have changed for SSA and corporate borrowers since the coronavirus pandemic first struck, with notably more demand for high grade paper.
Leads have tightened pricing and increased the size of Casino’s maturity-pushing loan and bond refi, with investors keen to buy the company’s turnaround story and looking past the troubles of holding company Rallye, which needs to find a big slug of cash to pay bondholders in 2023.
Jiangsu Zhongnan Construction Group Co raised $250m from a new money and exchange offer on Monday.
A group of BNP Paribas bankers in Spain have jumped ship to join boutique firm Beka Finance, according to market sources. One person familiar with the situation said that the French bank will refill these roles in due course.
Climate change will become much more prevalent in the International Monetary Fund’s work this year, including its assessments of countries’ financial stability, after sustained complaints that it has not paid enough attention to global warming. Ways to link debt relief to climate action will take longer to implement.
Organon, the spin-off from US pharma company Merck, has launched a bond leg of its financing, which will establish the unit as a separate firm with its own capital structure, while funding a $9bn dividend to its former parent. The firm was initially offering $4.5bn-equivalent across secured and unsecured bonds, with a bias to the deeper dollar market, but scaled this up during syndication to allow it to strip out bank debt.
Deutsche Telekom dialled in to the Aussie dollar market after an almost two year absence this week, extending its curve to 2041.
Wendel, the French private equity firm, has amended a €750m revolving credit facility to add ESG elements, including one for higher female representation in leadership positions, as more investment houses make social equality a focus.
Repsol, the Spanish oil company, brought a junk rated hybrid capital bond on Monday, but orders fell away towards the end of the execution process as debt bankers say investors are becoming more price sensitive.
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