Loans and High Yield

For many years, corporate debt investors have scratched their heads and wondered: will anything, ever, cause the returns on bonds to go back to normal again?

Centerview Partners has appointed ex-Lazard rainmaker Matthieu Pigasse as head of its new French operation, as the boutique advisory firm expands in continental Europe with a 15-strong team.

Some fear a sorry fate for European private debt funds, as small and medium-sized businesses across the continent struggle to stay afloat amid the devastation caused by Covid-19. Symon Drake-Brockman, founder and managing partner of Pemberton Capital Advisers, one such private debt fund, spoke to GlobalCapital’s Silas Brown about the pandemic and the prospects for private credit in its wake.

Dr Peng Telecom & Media Group Co, a Chinese company with an international bond that falls due in two months, has told domestic investors it might not be able to redeem a Rmb1bn ($141.7m) onshore bond, after investors decided to put the deal.

Outrage has erupted among US progressives at efforts from the private equity industry to ensure their portfolio companies get a piece of government support for corporates. The buyout barons don’t do much to endear themselves to the public, but sponsor funds are just another legal vehicle for owning equity — and there’s no point punishing a company for its owners.

Some M&A bankers said they plan to pull the trigger on deals after the summer if the coronavirus pandemic continues to be contained, though lenders warned that internal credit analysis has become more stringent.

Several of Europe's biggest corporate bond issuers have yet to fund in the market this year, despite the flood of deals as companies hoover up cash to see them through the coronavirus crisis. Vodafone, Electricité de France, Enel and Bayer are among firms yet to issue. However, more of the gaps are being filled up every day.

Schuldschein bankers are working out what pricing is fair during the Covid-19 crisis, as investors observe sharp widening in euro bond spreads.

Zhejiang Geely Holding Group, a Chinese auto company, is in talks with banks for a new loan to support a planned restructuring.

Investors see the rapid wave of downgrades in response to the coronavirus crisis as evidence that rating agencies are “doing their jobs”, compared to their responses during the 2008 financial crisis.

The UK government has moved to bridge the gap between its two financial support schemes for businesses hampered by the coronavirus: one aimed at investment grade firms and one for small companies with revenue less than £45m.

Investment banking revenue in March was lower than normal as the coronavirus pandemic sapped risk appetite — but it was far from a total wipeout.