Loans and High Yield

Is demand in Europe’s leveraged finance market so strong that a single-B rated borrower could raise €3.5bn of high yield bonds and loans, and use some of the cash to fund the largest dividend recapitalisation of the year? Verisure began marketing such deal this week, and many investors appear to like it.

The European high yield bond pipeline was stuffed with an array of mainly sub-benchmark deals this week, after issuance volume hit a historic high.

Leveraged loan issuance is set to outpace sales of new high yield bonds with a surge this year, pushed by a varied array of borrowers seeking not just tighter margins on old debt, such as US chemical group Angus this week, but also funding for acquisitions, as with Nordic travel operator Etraveli.

Indonesia’s Kawasan Industri Jababeka returned to the market on Wednesday, adding nearly $111m to its existing 2023s in an opportunistic tap.

Slowing corporate demand for loans in Asia is increasingly pushing banks to clinch bilateral deals rather than execute syndications. While no one is calling the end of the loan syndications market, bilaterals have quickly risen in popularity — and for now, are offering a win-win solution to lenders and borrowers. Shruti Chaturvedi reports.

China’s Concord New Energy Group is pursuing its debut green dollar bond.

Redco Properties Group managed to tighten pricing on its 364-day bond by a hefty 50bp on Wednesday, bagging $250m from the issuance. But the yield still appealed to the buy-side, with investors pumping in $1.6bn in orders at its peak.

Property developers Yango Group Co and Jiayuan International Group are marketing new dollar bonds on Thursday. The former has opted for a three year, while the latter is choosing to go short with a 364-day deal.

Excelitas and Axilone have added to the list of leveraged buyouts catching the attention of the European market amid a busy stream of loan repricings.

A chequered history of debt restructurings and shareholder rebellions meant that B- rated Petropavlovsk was always going to be a tough sell. But a chunky 8.125% yield helped the issuer scrape together $500m to pay back more expensive bank loans, according to lead managers, despite the year end fast approaching.

Corporate bond spreads may be agonisingly tight, and getting tighter by the week, but investors still think they can squeeze value out of the market.

China Eastern Airlines Corp has nabbed S$500m ($366.69m) from its first foreign currency transaction as it makes an attempt to diversify its funding base.