Loans and High Yield

High yield issuers have steered clear of the primary Asian bond market in recent weeks, but a tap by Agile Group Holdings at the end of last week showed there is still some demand for lower rated names.

Agile Group Holdings snapped up $400m from a tap on Thursday, with investors’ response sending a strong signal to the high yield market, according to bankers.

Management at Goldman Sachs and Morgan Stanley used second quarter earnings calls to reassure investors about their exposure to leveraged loans, under questioning from RBC Capital Markets’ Gerard Cassidy, as fears grow about leverage levels and weak covenants.

Concerns from some fund managers about the terms of Altice’s new €2.5bn-equivalent bond were swamped by orders from other investors eager to bag single-B paper with a big coupon from a core high yield issuer. After a series of successful investor push-backs on deal terms, the debt laden French telecom proved this week that borrowers still can walk away with loose covenants, writes Victor Jimenez.

A move is under way to broaden the idea of Science-Based Targets — one of the most ambitious wings of the business world’s fight against climate change — to take in other ‘planetary boundaries’ such as fresh water and land.

Natixis will soon embark on an experiment that may be the first of its kind — introducing a green weighting factor to its internal economic capital model, to tilt incentives for its bankers in favour of green loans and away from ‘brown’ ones.

The deal pipeline is growing heavier in the European leveraged finance markets, as borrowers adjust to wider yet not prohibitive pricing. But buyers of speculative grade debt also have their eyes on stronger documentation.

After a tough run for issuers, the euro corporate bond market appears to have headed for its summer holiday early this year. The sterling market, however, kept investors busy last week, and the Bank of England’s monetary policy committee meeting in August is being closely watched.

Singapore dollar issuance has been moving at a snail’s pace over the past few months as nervous investors opt to keep their hands in their pockets. But a generous slew of upcoming redemptions may change that.

Birla Carbon has closed a $1.2bn multi-tranche loan after attracting six participants during senior syndication, according to a banker close to the situation.

Power generation group Contour was in the euro high yield market this week with a two tranche double-B bond refinancing, with the firm looking to join a raft of other issuers that have refinanced despite spreads leaking wider this year.

Huarong Investment Stock Corp has returned to the loan market for a HK$3bn ($382m) dual currency borrowing, offering similar terms as last year.