Loans and High Yield

The gap between default rates for OECD and emerging market project finance bank loans has narrowed to almost nothing. However, on average, banks can expect to wait longer after a default to recover money owed outside the world’s most developed economies, according to S&P Global.

The US Federal Reserve has been raising rates for nearly three years now and was tapering its quantitative easing for two years before that. Meanwhile the European Central Bank was still cutting its rates and only in 2018 did it start tapering its quantitative easing. However, the change in the ECB’s policy may mean we see growth converging rather than diverging and it is something investors are already considering.

Huachen Energy Co’s dollar bonds recovered slightly after the Chinese company said it will not default on its $500m notes, despite skipping a coupon payment and failing to repay an onshore loan.

Sands China has closed a $2bn five year borrowing with participation from around 10 banks.

Atlantica Yield, the UK-based energy yieldco that was formerly Abengoa Yield, abandoned a $300m eight year high yield bond issue on Tuesday, as yields in the market reached their highest for over two years.

Spreads on Chinese property dollar bonds felt the impact of heavy supply on Monday when three companies, Times China Holdings, Greenland Holding Group and China Evergrande Group, brought new issues to the market.

Shanghai Industrial Holdings is talking to relationship lenders for a refinancing of HK$2bn-HK$3bn ($255.4m-$383mm).

Nemera, the French maker of drug delivery devices, and UK school operator Cognita are funding their new ownerships in a euro leveraged loan market dominated by acquisition deals.

A flurry of Asian bond issuers have ventured out in a bid to wrap up deals ahead of the Thanksgiving holiday in the US on Thursday, even as markets remain on shaky ground.

Chinese conglomerate HNA Group’s Hong Kong Airlines is in talks with lenders for a new borrowing, two loans bankers have told GlobalCapital Asia.

Property developer Agile Group Holdings raised $400m from a two year bond at a generous level on Thursday. But the Chinese company is still faced with heavy near-term debt maturities.

A slide in the price of oil has put pressure on energy-related bonds in the US high yield market, which contains a large proportion of energy issuers.