Loans and High Yield

The response to a refinancing loan for KKR-owned MMI International, a hard disk drive developer, has disappointed amid concerns around a Chinese consortium’s planned acquisition of the Singapore-based firm. What lies ahead for the borrower? Pan Yue finds out.

The Bank of England recently warned that it would take a close look at the fast-growing sterling leveraged loan market, but there is both less and more to the story than meets the eye.

Investors in sub-investment grade markets had little new issuance to look at this week but were still bemoaning a decline in covenant protection this year.

Corporate bond investors appear are casting about for ways to deploy cash despite clear signs of growing caution. But in the leveraged finance markets, everybody prefers to wait and see.

Xinyi Glass has dropped a non-financial covenant on its HK$750m ($96m) borrowing, which was launched into general syndication in August.

Distribuidora Internacional de Alimentación, a recently downgraded Spanish discount food retailer that issued a profits warning last week, saw its outstanding bonds fall further in the secondary market despite providing a glimmer of good news.

Tritax EuroBox has signed a €200m revolving credit facility, its first outing in the debt markets after the continental European arm of the UK’s large logistics warehouse investor was launched over the summer.

Indian electricity utility firm Tata Power has launched a $245m refinancing loan into general syndication after mandating five banks last month.

China Singyes Solar Technologies Holdings’ defaults last week have pressured the secondary performance of other new energy names as well as the overall Chinese high yield industrial sector, as the market braces itself for more non-payment situations.

Taiwan-listed agro-chemical maker Rotam Global Agrosciences has attracted three participants to its $90m refinancing loan.

Ride-share firm Uber saw sufficient demand from investors this week to increase the size of its debut private high yield bond from an initial $1.5bn to $2bn across two tenors.

It was a good week for Netflix as its stock jumped by almost 10% after it released its third quarter results, but the company’s business model and overvalued stock makes it seem like a bubble trade.