Loans and High Yield

Sunac China Holdings made an opportunistic buyback of some of its outstanding dollar bonds on Thursday, in a move that bankers said can add some liquidity into the debt market while instilling confidence in the real estate company’s cash reserves.

Corporate funding markets have been thrown into turmoil faster than anyone can remember by the aggressive onslaught of the coronavirus and government measures to put society in emergency shutdown. Borrowing costs have soared for all firms, but markets are not closed. As Jon Hay, David Rothnie and Silas Brown report, the coming weeks will sort those that can still raise cash from those that need rescuing.

Banks financing KKR’s £4.2bn purchase of waste management firm Viridor from Pennon were able to demonstrate certainty and deliverability of the financing for the deal to the Pennon board, despite chaotic markets which have seen rapid plunges in the prices of leveraged loans and high yield bonds.

Firms across Europe are clamouring for crisis funding but while debt advisory bankers have joined the frontline in finding solutions some admit they may struggle to cope with the sheer scale of the challenge, writes David Rothnie.

Bankers trying to arrange finance for companies during the coronavirus crisis are being hindered by competition rules that control when and how they can talk to other banks.

Humanwell Healthcare Group Co, a pharmaceuticals company based in the epicentre of the Covid-19 pandemic, has launched a $150m loan into general syndication.

GlobalCapital has compiled a short list of companies known to have drawn their revolvers or arranged new loans since the coronavirus crisis engulfed markets.

HPS Investment Partners is providing a super senior loan of £70m to troubled UK casual dining chain Pizza Express, paying back borrowing from owner Hony Capital and bank creditors, but pushing the bondholders' 6.625% £465m secured bonds down the recovery waterfall.

CapVest has cancelled the planned sale of Curium Pharma, as market conditions wrecked the investment appetite of the three final round bidders and banks cut financing commitments. It was one of the larger M&A financings slated for syndication in the second quarter, but with the Crossover index now trading over 650bp, compared with close to 200bp when first round bids were due, the three sponsors in the final round would have struggled to get a deal away.

Cambodia’s Prasac Microfinance Institution has returned to the loan market for a $75m deal amid an ownership change.

China Huiyuan Juice Group is contemplating a restructuring to improve its liquidity position, after failing to avoid a bond default due to the Covid-19 outbreak. The company is also facing a delisting from the Hong Kong Stock Exchange.

Intesa Sanpaolo will provide Italian companies with €5bn worth of new one to 1.5 year loans, and offer an additional €10bn of debt to customers through existing credit lines, to help steer the nation's economy through the Coronavirus crisis.