Loans and High Yield

Netflix’s blockbuster high yield issuance this week shows the love debt investors continue to have for the streaming service, but instead of adding to an already leveraged balance sheet, it should consider issuing new shares.

Chinese local government debt issuance ramped up in the first quarter of 2019, with investors at home and abroad more enthusiastic about offshore bonds from local government financing vehicles (LGFVs). But they continue to be selective over which credits they buy — just as more deals are set to be launched, writes Addison Gong.

The Bank of the Lao PDR (BOL), Laos’s central bank, has relaunched a loan following a failed syndication late last year, but it is not clear how successful it will be second time around. Pan Yue reports.

Xinyuan Real Estate Co tapped its existing 2021 notes on Wednesday, adding $100m to the bonds.

Despite the roadshows crowding high yield bond markets this week, Netflix could not help but draw most attention from investors. Its $2.2bn-equivalent euro and dollar issue on Wednesday was increased and is said to have been three times covered. While the company has $10bn of capital market debt outstanding already, it owes more than $27bn long term to its content providers.

For the first time this year, high yield bond issuance in Europe is putting the corporate investment grade market in the shade.

Indonesia’s Mega Central Finance and Mega Auto Finance have returned to the offshore loan market, jointly seeking a $100m dual currency deal.

Redco Properties Group returned to the market with a two year note on Tuesday, three months after it priced a larger 364-day transaction.

After weeks of thin issuance in European high yield, six deals were announced on Tuesday, of which two were true buyout financings, rather than the double-B refinancings that have dominated the market this year.

Tesco has launched a comprehensive liability management across eight bonds, to be funded by a new issue from its recently updated MTN shelf. The move comes as the UK-based supermarket group teeters on the verge of a full upgrade to investment grade status.

Dual currency high yield bonds to fund EG Group’s purchase of Woolworth’s petrol stations in Australia hit screens on Tuesday morning, the long-anticipated second slug of a financing part-placed in Australian dollars. The all-bond issue flies in the face of recent market trends, which have seen comparably-rated loans price well inside EG’s initial price thoughts.

The Asian debt markets have been hit with a number of defaults from Chinese borrowers. China Minsheng Investment Corp (CMIG) has missed bond payments, as has Kangde Xin Composite Material Group.