Loans and High Yield

The People’s Bank of China has warned that companies such as China Evergrande Group, Fosun International and HNA Group can pose major risks to the country’s financial sector. But even before being singled out by the central bank, these companies have struggled in the offshore capital markets.

France’s central bank representatives will attend a consultation meeting with the Loan Market Association to discuss recent warnings over the lack of financial covenants in new issue leveraged loans.

Hong Kong furniture manufacturer and retailer Man Wah Holdings has launched its debut $100m loan into general syndication.

China Tian Lun Gas Holding is seeking a Hong Kong dollar denominated loan to refinance a $240m dollar facility sealed in 2015.

Shanghai Pharmaceutical Holding is raising a $655m dual-tranche facility to refinance a bridge loan that was used to support the acquisition of Cardinal Health (L).

The euro leveraged loan market appears keen to counter recent criticisms against lack of financial maintenance covenants with yet more cov-lite issuance, including a buyout deal from private schools operator Inspired.

Two Chinese companies, Guodong Network Communications and Bestway Global Holding, have ventured out for their maiden loans, seeking €150m ($170m) and $150m respectively.

Jaguar Land Rover, owned by India’s Tata Motors, has returned for a $1bn loan, just months after closing a smaller £640m ($839m) dual-tranche facility.

China National Bluestar (Group) Co paid a handsome new issue premium for a $300m senior perpetual bond amid weak sentiment for the structure, as its deal caused a widening in the broader Chinese senior perp market.

China Evergrande Group’s $1.8bn return to the bond market this week split opinion. The ultra-high yield deal, which sent the company’s secondary bonds spiralling, was largely sold to Evergrande’s chairman — a move that attracted a mix of outrage and admiration. Morgan Davis reports.

Corporate debt investors have the jitters, with fears over a potential wave of defaults and low levels of recovery expected to materialise following a trend towards covenants that offer them ever less protection spreading from the leveraged finance world to the wider market.

China Evergrande Group raised $1.8bn in an unusual three-tranche deal on Tuesday that saw its chairman purchase $1bn of the notes as a show of support for the company.