Loans and High Yield

Investors are keeping pace with heavy issuance in the European leveraged loan market, with ticket sizes increasing in response to a rush of jumbo sized loans this week, including a $2.4bn equivalent deal from Paysafe.

Investors are keeping a close eye on the widening of corporate bond spreads that started in the second half of last week and has continued this week. And for the first time in many weeks, issuers are having to pay more for their new debt.

Fixed-line telecom operator WTT HK priced a $670m bond on Tuesday, with the rare Hong Kong high yield name attracting robust investor interest. Despite a choppy market, the issuer tightened pricing by 37.5bp, and the notes held up well in secondary.

Two green issuers from China are wooing buy-side accounts for new bonds, with Concord New Energy Group and Bank of China collecting investor orders from Wednesday morning.

Chinese issuers Xinyuan Real Estate Co and Hong Yang Group Company are attracting bids for new dollar transactions, while Oceanwide Holdings Co is set to hold a two-day roadshow in Hong Kong.

The US high yield market suffered another casualty on Monday with a third energy deal pulled in as many days, but other issuers have braved the turmoil to price new deals and there is a healthy line of borrowers keen to follow them.

Swiss telecom group Salt Mobile printed a high yield fixed rate issue on Tuesday, its second deal this year, as it replaced floating rate notes with new bonds. They were priced at the wide end of guidance.

CVC and Ardian charged up the leveraged loan deal pipeline with new buyouts of European businesses in Ireland, Greece and Spain this week. A strengthening European economy is likely to attract more, said market participants.

Guangzhou R&F secured a $500m 2023 bond on Monday, leveraging on a heavy anchor order book to seal the deal.

Sawit Sumbermas Sarana (SSMS), a high yield Indonesian palm oil producer, was forced to pull its debut dollar bond on Monday, failing to gain traction against a weak market backdrop.

China South City Holdings and Wuhan Dangdai Science & Technology Industries (Group) Co grabbed a total of $600m from bonds on Monday, navigating a weak market backdrop to close their deals.

Chinese companies Tianqi Lithium Corp and Yankuang Group Company have set the stage for their offshore transactions, with both hitting the road this week. Qingdao Hengshun Zhongsheng Group Co, meanwhile, has received the green light from regulators for an up to $200m bond.