Loans and High Yield

The European high yield bond market was built on telecoms companies, but in the last month their share has shrunk, as several have shored up their capital structures ahead of the heavy financial lifting set to be required for 5G infrastructure. More than €10bn of high yield bonds are likely to be repaid, leaving investors sitting on piles of cash going into September.

Swedish private equity firm EQT is likely to bring its IPO to market before the end of the year, joining a host of high quality European listings.

Korean Air Lines Co returned to the policy bank-guarantee structure for its latest offshore bond this week, raising $300m at a favourable price.

The local government has thrown a lifeline to Qinghai Provincial Investment Group Co, helping it pay off a dollar bond coupon a week after it was due. But more looming payment deadlines are set to cause the company a headache. Addison Gong reports.

Finnish nuclear power company Teollisuuden Voima (TVO) got a warm reception from the investors on Wednesday, when it sold €550m of senior unsecured notes after a 20bp tightening from initial price thoughts.

A flight to safety is underway leaving little support for the riskier bits of leveraged finance. A Finnish nuclear power company is, however, marketing a deal in the high yield bond market and one investor told GlobalCapital he expects to see others follow suit rather than tap the loan market.

Alteri Investors, backed by Apollo Global Management, is launching a second investment vehicle focused on the European retail sector, as it sees opportunities to invest in that troubled industry.

US toymaker Hasbro is to take up on $3.6bn new debt to buy media company Entertainment One, acquiring porcine superstar Peppa Pig, among other brands, if rival bidders don’t scupper the deal. Hasbro may choose to pay a make-whole price to Entertainment One’s bondholders, who bought the company's issue less than three months ago, a research company predicts.

The liquidity situation at China’s Qinghai Provincial Investment Group Co has taken a turn for the worse after the company missed a dollar bond coupon last week. A treasurer at the government-owned issuer denied media reports that it made the overdue payment last Friday.

China’s Joy City Property has returned to the loan market for an up to $800m facility.

European companies are facing a downhill slide from the best credit quality conditions in a decade, rating agency S&P predicts. Lending conditions remain exceptionally generous but fears of a downturn and uncertainty over new monetary stimulus have kept many new issuers at bay.

Banks like Goldman Sachs have positioned corporate broking as part of a wider, integrated offering to clients — a strategy that appears to be the future of this traditional UK line of business, writes David Rothnie.