Loans and High Yield

JP Morgan, Citi and Goldman Sachs kicked off the third quarter results season for investment banks on Tuesday. While debt and equity underwriting revenues grew substantially at JP Morgan compared with the equivalent quarter of last year, they fell at Goldman.

High yield issuer Kunming Municipal Urban Construction Investment & Development Co priced its inaugural dollar bond on Monday, raising $300m at a yield that was comparable to some higher rated local government financing vehicles (LGFVs).

Covenant erosion and the lack of disclosure worried market participants at Afme’s Annual European High Yield Conference in London on Wednesday. While investors are ever better educated and organised, the hunt for yield is driving them to accept aggressive documentation.

S&P Global Ratings has downgraded Jain Irrigation Systems to selective default, following a similar move by two domestic rating agencies last week.

Shanghai Sinooil Energy Holding Hong Kong, a subsidiary of state-owned China Energy Reserve and Chemical Group, has defaulted on a $400m offshore loan.

China Grand Automotive Services Group Co has launched an offer to exchange two dollar bonds in part, leading to a sell-off in its existing curve in the days following the announcement.

Chinese homebuilder Jiayuan International Group dipped into the market again on Friday, selling a $200m bond.

Dutch chemicals company OCI is issuing almost $1.4bn of senior secured notes to repay outstanding debt, with a long term aim of simplifying its capital structure and deleveraging.

E-House (China) Enterprise Holdings returned to the dollar market for the third time this year, raising $200m from its latest deal.

Yancheng Oriental Investment & Development Group Co raised $360m from a bond on Thursday, while another Chinese government-owned issuer, Shandong Shipping Corp, priced a $200m three year deal.

The buyout bonds for Merlin Entertainments and Kantar, backed by Blackstone and Bain, will set new standards for European issuers. If the investors strike down the "net short" clauses — as they did in an earlier Inmarsat deal — the sponsors may give up on the controversial strategy to battle hedge funds with large CDS positions.

UBS has appointed Sarah Mackey as head of leveraged finance for Europe, the Middle East and Africa.