Top stories
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Leverage in high yield hits 2007 highs, says SEB
Record numbers of speculative grade bonds have exceeded the limits of the European Central Bank's leveraged lending guidelines, research from SEB showed this week.
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Dia denies endorsing LetterOne’s debt restructuring plan, but mulls rights issue
Spanish supermarket group Distribuidora Internacional de Alimentación revealed a new scheme to solve its financial troubles on Wednesday, away from the potential debt cut and cash injection recently suggested by its largest single shareholder LetterOne.
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High yield faces ‘worst scenario’ for returns
Investors in leveraged debt in Europe were hoping for stable new issue spreads, calm secondary markets and receding fund outflows. But as the year ends, they are finding out that dreams do not come true, but nightmares might.
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Dia's backer LetterOne shops debt restructuring plan
LetterOne, the private equity firm that is the largest shareholder in Distribuidora Internacional de Alimentación, the Spanish supermarket chain, has drafted a debt restructuring plan for the troubled company that echoes the latest attempt of renewable energy group Abengoa to survive by cutting its leverage.
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EQT fund for DL four times bigger
Private equity firm EQT closed its largest direct lending fund this week, as market participants forecast a busy year for the market in 2019.
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Corp defaults to rise, says Moody’s
Defaults among borrowers with speculative grade ratings are set to dive at the start of next year, but only for a while, Moody’s said in an outlook report for non-financial corporates this week.
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Brexit anxiety kills refi loan from Vue
Cinema operator Vue International cancelled its £833m-equivalent leveraged loan offering amid increasing investor aversion to sterling risk, as the UK government and Parliament descended into a full-blown clash over the conditions for separation from the European Union.
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Fund outflows bring levfin to standstill
Investors in European leveraged debt seem to be giving up for the year. Funds and financial vehicles that buy high yield bonds and leveraged loans have seen large volumes of cash outflows, leaving borrowers with no other option but to step back this week.
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Distressed CMC Ravenna stokes HY’s Italian fears
The risk appetite of high yield bond investors in Europe continues to pall, as Italian construction firm Cooperativa Muratori e Cementisti di Ravenna filed for creditor protection this week.
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Element seeks add-on with flexible covs
Element Materials Technology, the UK materials testing company owned by Bridgepoint, was looking for a small loan extension this week, and seeking consent from its investors for higher leverage ratios under the loan covenants.
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Successful Stada deal soothes HY’s rocky month
Triple-C rated high yield bond issues had disparate fates this week. While UK private schools group Cognita was pulling its new notes, adding to November’s list of failed deals, German pharma company Stada priced its bonds in line with guidance.
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Thomas Cook no canary in the Brexit mine
Shares and bonds of UK holidays operator Thomas Cook took a beating this week, after it reported low earnings and high net debt, which it blamed on weak local demand and currency effects. But investors saw the company as a victim of poor management, rather than domestic Brexit turbulence.
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Central banks raise levfin risks with industry
Several European central banks have contacted the Loan Market Association (LMA), raising concerns about the risks of the leveraged finance market. But following a round of private meetings in London, the authorities are not expected to bring forward new regulations.
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Euro CLO docs to weaken in 2019, warns Moody’s
Moody's expects the supply of euro CLOs in 2019 to match 2018 levels, constrained by leveraged loan issuance, with no near term performance worries. However, the rating agency expects that collateral quality and transaction structures will weaken and notes that the European Central Bank’s guidelines to limit excessive leverage have had little impact.
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It’s defaults, not the covs
Leveraged debt fund managers seem resigned to a low-rated deal pipeline and aggressive documentation this week, with the market likely to accept these conditions, despite a sell-off which saw the iTraxx Crossover at its widest so far this year, 340bp, on Wednesday.
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Stada seeks €1.5bn of debt to finish LBO
Private equity firms Bain Capital and Cinven are financing their purchase of a further 28.3% stake in Stada Arzneimittel, the German pharmaceutical group, in the euro leveraged finance markets this week, and are having to contend with investors who are in a risk-averse mood.
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Cognita breaks HY bond leg for Jacobs’ £2bn LBO
Private school operator Cognita was the first borrower in a week to attempt an issue in the euro high yield market with a sub-benchmark size deal. It sought funding for its acquisition by Jacobs Holding, the Swiss investment and charitable firm, but pulled the bond deal after weak demand.
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ADB Safegate bolts on for acquisition
Belgium’s ADB Safegate has raised €59m in the leveraged loan market through a bolt-on transaction, with the airport services provider set for its acquisition of the UK’s Ultra Electronics Airport Systems.
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Barings poised to price third euro CLO in 2018, First Citizen back with Irish auto ABS
The €400m CLO deal, managed by Barings (UK) Limited, is set to price on Friday with spread talk on lower rated tranches indicative of a widening in CLO liability costs potentially pinching equity returns. Meanwhile, Magnetar Capital’s First Citizen Finance is marketing its second auto ABS deal backed by Irish loans.
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TDC squashes euro TLB margin
Denmark’s TDC is seeking to reprice its euro-denominated term loan ‘B’, as the telecoms company continues to slash at its debt costs and size in the wake of selling Norwegian cable firm Get.
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Brexit’s DCM brain drain begins as banks get moving
The next few months in the run-up to Brexit will bring upheaval for debt capital markets and syndicate teams at London’s investment banks, as they work out which roles will have to be done from the European Union and which staff to move. But the pressure will not cease on March 29, as national regulators have considerable scope to compel banks to relocate jobs. Jon Hay reports.
Go to GlobalCapital's Leveraged Finance data pages for the latest bookrunner league tables and information on priced deals.
Latest levfin people & markets news
High Yield priced deals database
| Date | Issuer | Maturity | Cur. | Size | Coupon |
|---|---|---|---|---|---|
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| 05-Oct-18 | Playtech plc | 12-Oct-23 | € | 530 | 3.75% |
| 02-Oct-18 | WMG Acquisition Corp | 15-Oct-26 | € | 250 | 3.625% |
| 28-Sep-18 | El Corte Ingles SA | 15-Mar-24 | € | 600 | 3% |
| 27-Sep-18 | Avis Budget Finance plc | 30-Jan-26 | € | 350 | 4.75% |
| 26-Sep-18 | Guala Closures SpA | 15-Apr-24 | € | 455 | 3-mth Euribor +350bp |
Latest high yield bond news
Latest leveraged loan news
Latest CLO news
Bookrunners of European Leveraged Loans
| Rank | Lead Manager | Amount $m | No of issues | Share % |
|---|---|---|---|---|
| 1 | BNP Paribas | 19,416.85 | 91 | 7.59% |
| 2 | JPMorgan | 16,386.55 | 57 | 6.40% |
| 3 | Deutsche Bank | 15,760.57 | 59 | 6.16% |
| 4 | Credit Agricole CIB | 14,532.27 | 68 | 5.68% |
| 5 | Goldman Sachs | 14,155.41 | 61 | 5.53% |
Bookrunners of European HY Bonds
| Rank | Lead Manager | Amount €m | No of issues | Share % |
|---|---|---|---|---|
| 1 | Goldman Sachs | 5,527.11 | 43 | 7.80% |
| 2 | BNP Paribas | 4,918.81 | 57 | 6.94% |
| 3 | Deutsche Bank | 4,372.15 | 44 | 6.17% |
| 4 | JPMorgan | 4,226.28 | 46 | 5.96% |
| 5 | Credit Suisse | 3,757.05 | 40 | 5.30% |
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Latest news by market and league table performance
Bookrunners of European Leveraged Loans
| Rank | Lead Manager | Amount $m | No of issues | Share % |
|---|---|---|---|---|
| 1 | BNP Paribas | 19,416.85 | 91 | 7.59% |
| 2 | JPMorgan | 16,386.55 | 57 | 6.40% |
| 3 | Deutsche Bank | 15,760.57 | 59 | 6.16% |
| 4 | Credit Agricole CIB | 14,532.27 | 68 | 5.68% |
| 5 | Goldman Sachs | 14,155.41 | 61 | 5.53% |
Bookrunners of European HY Bonds
| Rank | Lead Manager | Amount €m | No of issues | Share % |
|---|---|---|---|---|
| 1 | Goldman Sachs | 5,527.11 | 43 | 7.80% |
| 2 | BNP Paribas | 4,918.81 | 57 | 6.94% |
| 3 | Deutsche Bank | 4,372.15 | 44 | 6.17% |
| 4 | JPMorgan | 4,226.28 | 46 | 5.96% |
| 5 | Credit Suisse | 3,757.05 | 40 | 5.30% |
Bookrunners of Dollar Denominated HY Bonds
| Rank | Lead Manager | Amount $m | No of issues | Share % |
|---|---|---|---|---|
| 1 | JPMorgan | 19,901.51 | 153 | 10.02% |
| 2 | Goldman Sachs | 14,830.49 | 106 | 7.47% |
| 3 | Credit Suisse | 13,745.94 | 98 | 6.92% |
| 4 | Bank of America Merrill Lynch | 13,267.41 | 122 | 6.68% |
| 5 | Morgan Stanley | 12,977.13 | 92 | 6.53% |
