Loans and High Yield

Despite the furore around the UK government’s defeat in getting its Brexit deal approved on Tuesday evening, corporate bond investors are yet to join the panic and remain open to buying new issues.

This week’s parliamentary vote in the UK on a withdrawal agreement for its exit from the European Union has emptied the deal pipeline in the euro leveraged finance markets in early January. But after the plan was rejected on Tuesday, any clarity about the near future looks unlikely, and some debt buyers say borrowers have little reason to wait for longer.

The party in Chinese high yield real estate bonds continued this week, with China Aoyuan Group, Zhenro Properties and Yuzhou Properties taking home $1.15bn between them on Tuesday.

Indonesia’s Alam Sutera Realty nabbed $175m from investors on Tuesday, as it attempted to beat the clock on its impending maturities.

Mitsubishi UFJ Financial Group has appointed Jason Mann as European head of financial institutions DCM, a role which will be based in a branch of the bank’s new subsidiary, established to prepare for Brexit.

Private equity sponsors have bankers and lawyers working on deals that will seek more flexibility and borrower-friendly covenants this year. But investors are also likely to offer tougher scrutiny this year.

Future Land Development Holdings got a head start on other high yield issuers gearing up to hit the bond market this week, raising $300m on Monday at a level that was 37.5bp inside initial guidance.

Sub-one year dollar bonds from Chinese issuers are back, but this time they are being used strategically to get reasonable pricing during tough times. Rather than condemn this tenor, it is time to view these notes for what they are — practical and providing flexibility.

ASM Pacific Technology is tapping the offshore loan market for the first time, raising a HK$2.25bn ($287m) five year borrowing to refinance a convertible bond maturing in March.

Issuance in Europe’s high yield bond market should take off after March, participants say, predicting a slow but resilient first quarter, even though new distressed credits may emerge in January.

Shandong Qingyuan Group has closed a $430m one year self-arranged club loan with five participants.

Dollar bond issuance in Asia appears to have got off to a strong start, with a rally both in the primary and secondary markets. But that is not enough for many DCM bankers in the region, who are hoping for a bigger upside.