Loans and High Yield

A Chinese company’s decision to pay an extra 300bp in coupon to defer payments on its onshore perpetual notes has not only shocked the domestic bond market, but also inevitably raised concerns offshore. Bankers and investors are now paying much closer attention to the onshore/offshore dynamics.

Greetings card company American Greetings, which owns brands such as Papyrus and Carlton Cards, has obtained financing from a consortium of banks to finance Clayton, Dubilier & Rice’s acquisition of a 60% stake in the privately owned firm.

Sources have said 3i plans to follow a buy-and-build approach with the newly acquired Royal Sanders, the Anglo-Dutch personal care product manufacturer. The strategy would mirror its successful expansion of drinks bottling company Refresco, which sparked a bounty of deals in the high yield and leveraged loan markets.

Chinese smartphone and laptop maker Lenovo Group has approached lenders in the offshore loan market for a $1bn fundraising.

Ronshine China Holdings became the only Asian issuer to sell a dollar bond this week in the run-up to Chinese New Year. But the company ended up bagging a mere $100m from its tap, despite rumours it was eyeing as much as $225m.

Europe’s speculative grade debt markets began cautiously weighing the impact of a recent surge of US-driven volatility this week. While high yield issuers remain circumspect, leveraged loan borrowers led by French calibration specialist Trescal are charging on, confident that investor demand remains strong.

Those bankers and investors who hoped for a small burst of activity before Chinese New Year were left disappointed on Monday, when Ronshine China Holdings became the only issuer from Asia ex-Japan to launch a dollar bond.

Chinese department store operator Golden Eagle International Trading is back in the overseas loan market after a gap of three years for a $500m financing.

Indonesia’s Golden Energy and Resources nabbed $150m from a visit to the bond market but the market volatility cost the company, forcing it to pay the highest coupon for a dollar bond in the region so far this year.

Fantasia Holdings Group Co managed to take advantage of a stock market rebound that proved to be short-lived on Thursday, raising $300m from a 364-day trade. The company has around $1.6bn of onshore and offshore bonds maturing in the coming months, but managed to convince investors it has a plan to deal with this looming maturity risk.

UK media company Entertainment One has tapped its outstanding 6.875% bonds due 2022 for £70m ($97.6m), as the company looks to snap up the remaining stake in the television studio Mark Gordon Company that it does not already own.

Hurtigruten, the Norwegian cruise operator owned by TDR Capital, has agreed on final pricing on a €660m leveraged loan facility, raising enough debt to repay all its high yield bonds.