Coronavirus

The most vulnerable emerging market sovereigns won a lifeline on Wednesday as the World Bank and International Monetary Fund called for relief on their debt burdens.

The volume of new euro senior debt sold by banks has hit €10bn this week, following deals from Barclays, Credit Suisse and NatWest Markets on Thursday. Yield and spread levels remain high, but market participants have been delighted to see investors throwing their confidence behind new transactions in the middle of the coronavirus crisis.

Circuit breakers were triggered on stock exchanges across Asia this week as the coronavirus pandemic caused extreme volatility. But following the shocks, the effectiveness of circuit breakers has been called into question. Jonathan Breen reports.

Asian borrowers should ready themselves for tighter covenants on their loans once the Covid-19 outbreak is brought under control, multiple senior loans bankers told GlobalCapital Asia this week. A much-needed price correction may also be coming, writes Rashmi Kumar.

Chinese bond issuers are confronting a chaotic market at the moment: onshore yields for state-owned enterprises have fallen to historic lows, offshore yields have ballooned and more than 50 issuers have been forced to cancel deals this month. Rebecca Feng and Addison Gong report.

Latin America bonds may not be immune to the generalised improvement in tone in credit markets this week, but that secondary markets remains dysfunctional and a return to primary market action could be some way away.

The MTN market is expecting a wave of corporate issuance in the coming weeks, as companies seek to tap all available sources of funding to shore up their resources to survive the coronavirus crisis. Investors are open to doing deals, particularly Japanese accounts eager to buy paper at the start of their new fiscal year, which begins this week.

The Republic of Austria and the African Development Bank announced new bond transactions on Wednesday which will be used to provide emergency financing in response to the coronavirus outbreak.

Banks took advantage of a huge rally in UK equities on Tuesday to launch a placing in SSP, a UK food outlet operator, in order to give it the cash required to strengthen its balance sheet, working capital and liquidity position because of disruption caused by Covid-19.

Private equity funds are considering how to support their portfolio companies with cash injections or rescue financings, with some sponsors turning to a select group of specialist buyers still willing to lend money against the right structure.

Pest control firm Rentokil and building products supplier Epwin Group have become the latest companies in the UK to draw down fully on their revolving credit facilities, as British companies continue to build up their cash piles despite an unprecedented financial support package from the government.

New senior bank bonds are proving attractive to investors at about 40bp-50bp or more over secondary levels, with UK issuers Lloyds and HSBC joining US peers in returning to the new issue market this week.