Loans and High Yield

Two new high yield deals were announced on Monday with two day roadshows and seven year non-call three year structures that were expected to be priced later in the week. Oil exploration company Tullow Oil will offer a dollar deal while German packaging company ProGroup will sell a euro one.

Four Asian issuers began marketing dollar deals on Monday, as a number of others started testing buy-side appetite through roadshows. But borrowers will have to temper their expectations on size and price, faced with a choppy market backdrop.

A breach of reporting covenants on a €350m 2022 bond of Vieo, the company that owns the low cost mobile telecoms provider Lebara, has left the Nordic high yield bond market soul searching.

Shenzhen Sunway Communications has made a quick switch to Hong Kong dollars for its debut in the offshore loans market to take advantage of recent Hibor weakness.

Taizhou Huaxin Pharmaceutical Investment Co executed a club-style deal on Thursday, raising $150m from a three year bond. It wasn’t the only Chinese firm wooing the buy-side. State-owned Tewoo Group opted for a perpetual deal, while Shimao Property Holdings tapped the offshore renminbi (CNH) market for the first time.

Zhejiang Hengyi Group Co, a Chinese petrochemical company, was the second issuer to fall short in the international debt market this week, pulling its planned debut dollar bond on Thursday.

The low rates in Europe are making the euro high yield market an attractive option for US issuers like Belden, a St Louis-based manufacturer of telecoms equipment, which is launching a new euro bond to buy back old deals in euros and dollars. More US issuers are coming to euros, say bankers and investors.

Demand for speculative grade debt took different directions in the European leveraged finance markets this week. The primary high yield bond market may be showing signs of investor stress, but leveraged loan investors are gulping down big deals at tight margins.

Debt holders of two insolvent UK speculative grade borrowers, fashion retailer New Look and restaurant chain Prezzo, are considering company voluntary arrangements (CVAs) to allow new property agreements. The result may offer the whole European retail sector a template to stave off what market experts a say risks being a spate of defaults. Victor Jimenez reports.

Tata Sons is poised to end a decade-long absence from the syndicated loan market when it launches a $1.5bn transaction later this month.

Investors this week showered orders on to the first bond issue from Teva Pharmaceuticals since a recent downgrade to high yield ratings. The hook? A 50bp-100bp premium over its old bonds in the secondary market.

State Bank of India’s latest $750m loan is set to move into the retail phase within the next couple of weeks, according to bankers.