Loans and High Yield

A joint notice by three Chinese government regulatory bodies limiting new capacity in solar power generation has caused several offshore renewable energy bonds to tank in the secondary market.

The political upheaval in Italy is already making US investors go cold on European risk, which could magnify the market disruption Europe is likely to face in the coming months. The effects are even changing expectations on US monetary policy.

Telecoms firm Lebara this week pushed back a deadline to avoid breaching reporting covenants of its only bond, a high yield note under Norwegian law, leaving some market participants worried about contagion.

China Development Bank has dashed the hopes of bidders for a $1bn loan to the Sri Lankan sovereign, clinching the mandate on a sole basis by offering an eight year facility, writes Pan Yue.

A topsy-turvy market backdrop is pushing a slew of Chinese borrowers, mainly property companies, to raise funds by tapping their existing dollar bonds. Buy side interest remains, but only for the right names, writes Addison Gong.

Jitters over Italy’s political turmoil receded slightly on Thursday, giving Asia’s stock and bond markets a bit of respite, even as talk of a trade war between China and the US reappeared.

Ping An Real Estate Co closed a $250m short-dated bond on Wednesday amid continued market volatility.

Chinese alternative investment firm Citic Capital Holdings has approached the loan market for a new HK$2.5bn ($318m) borrowing.

Investment house Hermes launched a new liquid credit fund this week, catering to clients seeking shelter from market volatility while foraging among new markets about which they know less.

Europe’s corporate bond market is dry. New issuance this week is out of the question, and liquidity is patchy. Spreads are being marked wider as concerns rise about Europe’s political and economic health. But investors have not lost their nerve.

High yield and leveraged loan issuance was almost at a standstill this week amid worries about the eurozone, but some fund managers were calling for borrowers to be braver.

Chinese footwear brand Belle International is returning to the offshore loan market to amend and extend a borrowing signed last year, as well as to raise funds for dividend recapitalisation.