Loans and High Yield

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.

Lao Viet Joint Venture Bank is seeking its first international loan of up to $100m through sole mandated lead arranger and bookrunner Cathay United Bank.

Financial services firm INTL FCStone pulled a planned $350m senior secured high yield bond offering on Tuesday.

Central banks and international financial institutions have raised a storm over vanishing investor protection covenants in leveraged loans. But most warnings about the market have avoided assigning blame where it is richly deserved — to the private equity industry.

Nothing is scarier than the idea that your risk management is special. Deutsche should look again at its leveraged finance business.

China's Guodong Network Communications is seeking a debut loan of up to €150m ($170m) in syndication.

Oceanwide Holdings Co, a Chinese conglomerate but primarily a homebuilder, bagged a $215m bond on Monday, but not all the firms on the original syndicate team remained on the deal in the end.

The leveraged finance new issue pipeline has slowed down in Europe. Market participants pointed to weak macroeconomic data, but also the recent alarms about weak covenants.

Bonds from Chinese real estate developers were some of the worst performing in Asia last week, dragged down by the global volatility and fears around property companies’ refinancing needs.

Chinese outdoor leisure products developer Bestway Global Holding is tapping the offshore loan market for the first time for an up to $150m borrowing.