JP Morgan

Dollar high yield and convertible bond buyers dived straight into the riskiest possible end of the market on Wednesday, snapping up rescue issues for cruise operator Carnival Corporation, a firm at the centre of the coronavirus storm. Carnival pledged nearly all its ships to back bondholders’ investments, while convert investors spied a chance to double their money — if the cruise industry can bounce back. Aidan Gregory, Jon Hay, Sam Kerr and Owen Sanderson report.

The MTN market is picking up as issuers (particularly corporates and SSAs) and investors find opportunities for attractive deals.

Dollar high yield buyers showed up in force for the largest priming debt opportunity provided so far by the coronavirus crisis, Carnival Corporation’s $4bn rescue offering, priced alongside a convertible and an equity capital raising on Wednesday. The package provides funds for the stricken cruise operator until November, but even if the company can’t start sailing again this year or next, investors in the new issue are first in line for the firm’s $38bn of assets.

Turkey’s Akbank has refinanced a syndicated loan with tighter margins than its existing facility, as lenders demonstrate unwavering appetite for Turkish debt.

In spite of an equity sell-off on Wednesday morning, Portugal was warmly received when it hit the market on Wednesday, printing its largest ever single tranche deal and generating more orders than ever before. The deal should provide confidence for Ireland, which is also planning a syndication.

The high yield bond leg of the rescue package for cruise company Carnival is flying off the shelves in the dollar market, leading the company to increase it from $3bn to $4bn, cut pricing, and drop the planned euro tranche entirely — but the equity capital raising is proving tougher and has been shrunk by $500m.

The power of central bank buying and fund redemptions are evident this week in the European investment grade corporate bond market, where issuers have been squeezed into a narrow range of maturities as they search for cash.

L-Bank mandated banks on Wednesday for a second attempt at a two year dollar benchmark after it had to pull a deal in the same currency and maturity two weeks ago following a lack of demand. This time, it has opted for a more conventional approach of a traditional syndication and will follow a string of well received trades in the short end of the dollar curve.

Extraordinary times call for extraordinary capital markets activity. The North American corporate bond market funded a staggering record $194bn of investment grade issues in March while Europe has also been busy — shaking up the league tables and yielding a surprise windfall for the very largest investment banks.

Emerging market bonds are trying to catch the same bid that has gripped investment grade markets, particularly in the US. Now, Latin America borrowers are scavenging once more for chances to print new issues.

The euro market for SSAs has returned to life in impressive style, but borrowers outside the ECB’s asset purchase programme are meeting with a chillier reception than their European counterparts.

The dollar market had looked sluggish, particularly in comparison to the volumes churned out in euros, but Tuesday's $4.5bn two year from Asian Development Bank indicates the market is back in working order.