Loans and High Yield

Debt-laden beauty retailer Douglas is on course to refinance its capital structure at par, an almost unthinkable outcome this time last year, when its unsecured debt was trading in the 30s. Owen Sanderson reports.

Shipping company Hapag-Lloyd on Thursday priced the second sustainability-linked bond to hit the euro high yield market, with the new issue’s coupon tied to cuts to the carbon intensity of its fleet. Proceeds refinance an old bond, but the firm will carry on its longstanding programme of replacing older, dirtier ships over the lifetime of the new issue.

Lufthansa is in talks with a number of banks to raise three year money in a Schuldschein deal, according to several sources familiar with the situation.

Aluminium company Novelis, a subsidiary of Indian conglomerate Aditya Birla, has issued its debut green bond, a €500m eight year non-call three to refinance part of its term loans signed in 2017.

Tricor Holdings, owned by investment firm Permira, has brought a rare dividend recapitalisation deal to Asia’s loan market. Pan Yue reports.

Slowing dollar bond supply from Chinese property companies got a further blow this week after Yuzhou Group Holdings was hit with a downgrade, triggering a slump in the secondary market. With more disruptions expected, and as liquidity pressure on real estate firms rises, a repricing of the sector may be on the cards. Morgan Davis reports.

Douglas, the highly levered beauty retailer, is finding the bond market more receptive than loans to its turnaround refinancing. It has restructured its debt package to switch €330m of secured loans to bonds. The comeback deal appears still on track, though the PIK notes are being marketed at a punchy 9% yield.

More than one in 10 European companies had to renegotiate covenant waivers on loans to offset a collapse in earnings from the pandemic, and loans bankers say they are still getting requests from borrowers to amend terms.

China SCE Group Holdings managed to raise $300m from a narrow issuance window on Tuesday, just as sentiment started to sour around the country’s high yield property bond market.

Singapore-listed Manulife US Real Estate Investment Trust has raised a $250m five year sustainability-linked loan from two banks.

Vietnam’s Masan Group Corp, an investment holding company operating in the food and beverage and consumer retail industries, has increased its borrowing to $350m after receiving strong response from 23 banks during syndication.

Organon, a spin-off of US pharmaceuticals company Merck, has launched the first $3bn of a $9.5bn capital raising that will give the soon-to-be independent group its own debt capital structure and fund a one-off special dividend to its parent.