Loans and High Yield

Qinghai Provincial Investment Group has once again put state support for Chinese local government financing vehicles (LGFVs) under the microscope, after reportedly missing a coupon payment at the end of last week.

Taishin Financial Leasing (China) is making its debut in the offshore loan market with an $80m borrowing helmed by Bank Sinopac.

Former Bank of China syndicate head Sebastian Ha has joined SPDB International as its head of fixed income.

Property companies in Greater China raised more than $6bn from the bond market this week, sparking fears of indigestion.

China Fortune Land Development tapped the bond market with a $530m two year deal, generating a final order book that was almost 10 times covered as it attempts to draw a line under a difficult 2018.

Lease accounting changes known as IFRS 16 are rolling out through capital markets, with companies keen to reassure investors that, despite the new way of presenting their balance sheets, little has changed. But that’s not true for every firm and for some high yield issuers, the change represents a big loosening in covenant terms.

Troubled French pipeline technology maker Vallourec unveiled a turnaround plan alongside its fourth quarter numbers on Wednesday evening, as well as an extension of its bank facilities that soothed some of the refi worries that have plagued the company.

Second lien loan structures are substituting in for unsecured high yield issues, as a strong bid from direct lending funds pushes prices for the product tighter. Despite wariness from many banks about the product, Goldman Sachs has been seen actively competing with private debt funds to offer second lien finance, adding to the product’s advantages for sponsors.

UK gambling software firm Playtech has raised its revolving credit facility to €272m, having agreed its first deal of that type since printing its debut bond in the last quarter of 2018.

Shriram Transport Finance Co raised $400m from first dollar bond on Wednesday, becoming the first Indian high yield borrower to tap the offshore market in just over a year.

China’s Fujian Yango Group Co this week set out a dramatic rise in the coupon on an outstanding bond, in a bid to avoid an investor put in April. The move left market participants confused, with one calling it ‘very odd’.

Chinese high yield borrowers have come to the market in droves this week. That continued on Wednesday, when three deals raised a total of $1.275bn.