Loans and High Yield

The debt restructuring saga at Norwegian paper company Norske Skog took a sharp turn this week wherein a breakthrough with senior investors was quickly waylaid by a group, claiming to represent more than half of the company’s unsecured creditors, rejecting the latest proposal.

High yield bond investors have warned that the market is at risk of a substantial erosion in terms, with some even claiming that a cornerstone of judging a company’s financial health — earnings before interest, tax, depreciation and amortisation (Ebitda) — is in danger of becoming a meaningless number.

Bids came due this week on two leveraged loan portfolios totalling €365m and leveraged finance bankers said that the secondary market managed to absorb the sales without any wobbles.

The debt restructuring saga at Norwegian paper company Norske Skog has taken another sharp turn a day after seemingly reaching a breakthrough with investors, after a group claiming to represent more than half of the company’s unsecured creditors rejected the latest proposal.

ING is planning to bring on a director of leveraged capital markets from Société Générale early next year.

A default from a Chinese local government financing vehicle (LGFV) is looking increasingly likely, showing how fragile the dollar debt market in the region can be. The risk is certainly there, but DCM bankers are sceptical it could cause a repricing in the offshore bond market, writes Addison Gong.

Geo Energy Resources found success on Wednesday with its second attempt to sell a debut dollar bond, after waiting two months for a receptive market window.

Four firms from Asia ex-Japan are taking bids for their dollar bonds, including Lionbridge Capital Co, Nan Hai Corp, Overseas Chinese Town Enterprises Company as well as Malaysia’s Yinson Holdings.

Bruce MacKenzie has joined UBS as a managing director in the bank's EMEA leveraged capital markets business, according to an internal memo seen by GlobalCapital.

Italian technology company Almaviva is marketing a €250m five year non-call two year senior secured high yield bond, the marketing of which has rankled investors because of its treatment of adjusted Ebitda.

Italian telecoms firm Wind is expected to return to the high yield bond and leveraged loan market to refinance debt in the coming weeks, with two investors expecting the combined volume of financing to be about €10bn.

Corporate bond spreads have been on a steady grind tighter for around six months. Despite geopolitical surprises and much debate around interest rate rises and tapering of quantitative easing, the market has rarely been knocked off its path. But is now the time to worry more?