Loans and High Yield

Debt-strapped Wuzhou International Holdings will be unable to make payments on its $300m bond this week, adding to a spate of other non-payment situations, including failing to redeem a $100m convertible bond as well as defaulting on a renminbi note and on some of its loan obligations.

China’s Health and Happiness (H&H) International Holdings has cancelled an exchange offer as well as a concurrent new money issuance, becoming one of three issuers to pull deals this week, as bankers blame the recent explosive supply on weaker investor demand.

Leveraged finance investors in the US and Europe have scrambled for the bonds and loans backing leveraged buyouts of Thomson Reuters’ Financial & Risk business and Dutch chemical company AkzoNobel this week, with demand driving pricing tighter despite aggressive covenant packages. David Bell and Victor Jimenez report.

Outstanding bonds issued by supermarket Casino Guichard-Perrachon, and three construction credits, Astaldi, CMC Ravenna and Aldesa, were in the spotlight this week, after dropping to their lowest price yet in September.

US department store Neiman Marcus’s unsecured bonds and term loan have dipped in trading this week after the company said it was moving its fastest growing online business, MyTheresa, out of the reach of lenders.

Four Chinese high yield issuers sealed bonds on Wednesday, when a total of nine deals were priced in the primary market in Asia ex-Japan, making it the busiest day in the region in months.

According to a report by asset manager BlackRock, global exchange traded products saw a consistent inflow into fixed income funds in the first eight months of 2018. Within fixed income products, investment grade corporate bonds saw equally consistent flows, while high yield corporate bonds saw two consecutive months of inflows after six months of outflows. The inflows extend to high yield markets too, which is doing nothing to aid the fight against looser covenants.

Private equity firms and corporates are unloading speculative grade debt deals with loose terms, but investors still pocket them this week, suggesting that their recent resolve for discipline may be short-lived.

China National Building Material (CNBM) is considering changing the guarantor of its $160m debut offshore borrowing in a bid to cut pricing.

Loomis Sayles’ senior loan portfolio manager Kevin Perry will retire in March 2019 after 17 years with the company and 37 years in the industry, the firm said on Tuesday.

Investment manager Michael Scott will join Man GLG in December from Schroders, where he was responsible for three funds active in the high yield market.

MCS Groupe opened a roadshow for a new 2024 floating rate bond this week, as it seeks funding for the acquisition of DSO Group to create a leading player in the debt repurchase industry in France.