Loans and High Yield

Bankers and investors were upbeat on upcoming deal flow in the leveraged loan market — despite corporate loan volumes being down almost by a third this year compared to last. The experts gathered at LMA’s Syndicated Loan Conference in London on Tuesday to debate the state of the loan market.

Investors and banks are pledging right, left and centre to fight climate change. Good for them — but the economy must get to carbon neutrality as soon as possible. This cannot be done until banks and funds refuse to fund more fossil fuels.

French laundry firm Elis launched a dual tranche bond issue on Tuesday, achieving a coupon of just 1% for a high yield-rated issue, and stacking up a book of over €2bn.

Metro Bank’s failed senior non-preferred bond is rated BB+, squarely in high yield territory. But while corporates with this rating print at ever tighter yields, Metro couldn’t get its deal away even at 7.5%. Nobody expects the rating agencies to be in line with the market, but sometimes the gulf is yawningly wide.

Shares in EQT, the Swedish private equity firm, popped 25% on day one after its IPO was priced on the Nasdaq Stockholm on Tuesday — after what sources called a “targeted” IPO process.

Natixis has become the first bank to introduce a green weighting factor to its internal capital model, so that the way it prices loans is skewed to favour environmentally sound assets and disadvantage polluting ones. The ground-breaking move brings to fruition an 18 month project and anticipates what some believe may one day be demanded by regulators.

Two Chinese companies tapped dollar bond investors on Monday. One of the most active issuers this year, Zhenro Properties Group, came out with an aggressively priced $300m transaction, while a district-level government financing vehicle sold its debut offshore deal.

Ronshine China Holdings, a Hong Kong-listed company, has teamed up with a syndicate of banks for a HK$815.5m ($104m) three year loan.

UK tour operator Thomas Cook’s default could come close to annihilating the bondholders’ positions, leaving them only with a few cents on the euro, the liquidation analysis shows. The 178-year-old company tried feverishly to secure a £1.1bn rescue package over the weekend but collapsed on Monday.

SMBC has made two additions to its London desk for syndication origination in structured finance.

A range of Chinese issuers, including two property developers and a local government financing vehicle, have raised funds from the dollar bond market.

The private equity consortium behind the $3.4bn leveraged buyout of UK satellite company Inmarsat is testing the limits of investor patience with exceptionally aggressive terms for $1.125bn of senior notes, potentially leading the high yield market down a slippery slope.