Loans and High Yield

Banks arranging private placements in Europe have started weighing up bringing companies from the financial sector to market, amid a deal drought from the corporate borrowers which are the usual staple fare.

Victoria plc, the UK listed carpet maker, is marketing a new bond with most of the proceeds earmarked for cash on balance sheet, an unusual move in the high yield market, where deals are typically aimed at refinancing or specific corporate actions. The company says it will be on the hunt for acquisition opportunities, funded by the Koch Brothers’ preferred equity injection last year as well as the new debt.

China Aoyuan Group had to pay up to sell a $350m bond on Monday, as investors demanded compensation for the property company’s low rating and the deal’s long tenor.

Online travel agency Hostelworld has signed a five year €30m secured loan facility with HPS Investment Partners, the asset manager headquartered in New York.

Listed real estate firm CPI Property is repaying a portion of its Schuldschein early at par, taking advantage of favourable legal conditions in Germany regarding early prepayments of floating rate loans. Sources say other companies may use this option if funding conditions remain so attractive in public markets.

Indonesian real estate company Modernland Realty is still finding a way to tackle its debt situation, and has asked for another payment moratorium.

A consortium led by CVC Capital Partners is seeking a HK$2bn ($257.9m) loan to support the take private of Hong Kong fashion retailer I.T.

Asia Allied Infrastructure Holdings, a Hong Kong-listed property developer and investor, has returned to the loan market after one year. It has raised HK$1.3bn ($167.6m) from a group of five banks.

Holders of Gategroup’s Swiss franc high yield bonds, thought to be mostly retail investors, look set to be bound by a High Court of England and Wales judgement — handed down on Wednesday — in the restructuring of the in-flight food provider’s debt, despite bond terms giving exclusive jurisdiction to the courts of Zurich.

HSBC Asset Management has partnered with HSBC UK to launch a direct lending platform, targeting smaller and mid-cap corporates.

Chinese delivery company SF Express Co is seeking an up to HK$24bn ($3bn) loan for its acquisition of Kerry Logistics Network, signalling the start of a revival in fundraising for event-driven situations. Pan Yue reports.

A recent bout of volatility in the secondary trading of Chinese high yield bonds means supply from lower-rated credits is expected to remain muted over the next few weeks. While stability has returned to the debt market, investors remain cautious, writes Morgan Davis.