Loans and High Yield

Companies usually park their reserves of cash in staid, low-yielding liquid assets. But asset managers are trying to persuade them to invest some of that money differently, in a way that could help them live up to their environmental commitments.

Spanish political risk is set to spike in 2019 as the country goes to the polls in local, regional, European and possibly national elections during the next six months. But Spanish companies may be ill prepared to work out more flexible funding plans to cope with this, investors and bankers warned this week. Victor Jimenez and Nigel Owen report.

Several Chinese borrowers ventured into the bond market at the end of December, locking up last-minute deals that were mainly supported by anchor orders.

Two troubled Spanish high yield credits, supermarket firm Distribuidora Internacional de Alimentación (Dia) and energy group Abengoa, have started the year with new schemes to reassure investors. More Spanish companies may want to follow suit, sources said, as the country faces a surge in political risk in 2019.

The 2019 loans market is raring to go, but lending officials say that the leveraged loan market needs some strong deals right away to ease the hangover lingering from last year.

Bank of the Lao PDR is taking commitments for a $100m four year borrowing in general syndication, offering lenders terms that are identical to its last offshore facility from 2015.

The global high yield bond market has produced $320bn of new issues in 2018, up to December 21, 43% down on last year’s total of $563bn, according to Dealogic. Sentiment has turned progressively more bearish as the year has worn on, with concerns about US-China trade hostility and overvaluation of US equities biting.

Leveraged finance markets are set for a fresh stream of buyout deals in the software industry next year, with Europe becoming a busier playground for US private equity firms.

The European high yield bond market is storing December’s pipeline for January, but several investors warned that demand may still be thin in the new year and that borrowers should pace their plans for issuance.

Europe’s leveraged finance market has survived another year without a downturn — indeed, spirits are remarkably buoyant going into 2019. The market is priced for perfection, however, and with rates starting to rise, issuers and investors have some serious forward planning to do. Victor Jimenez reports.

Chinese property companies are pushing their fund-raising for 2018 to the bitter end – with sometimes surprising results. Cifi Holdings scored with a larger-than-expected $400m bond on Monday, while Redsun Properties Group sold a $200m tap.

Wuhan Financial Holdings Group Co made its dollar market debut on Monday, raising $142m from a three year club-style deal.