Loans and High Yield

Property company China Fortune Land Development has missed payments on Rmb5.255bn ($813m) of onshore debt, adding to concerns about its liquidity condition and access to funding.

Mongolian Mortgage Corp (MIK), which was forced to pull its dollar bond last month after sudden political upheaval in the country, returned to the market on Monday to raise $250m.

Singapore’s ride hailing start-up Grab Holding has further increased the size of its term loan B to $2bn following solid traction in the US market.

Hong Kong’s personal loan provider United Asia Finance has increased the size of its loan to HK$2.55bn ($328m) after receiving strong response during syndication.

A blistering pace of supply in Asia’s dollar bond market in January is set to continue, with more borrowers preparing to print deals this week ahead of the Chinese New Year holidays. But DCM bankers say there are some signs of rising pressure.

Corporate default rates are expected to decline towards the end of this year after peaking in the next few months, but the number of borrowers facing a plunge into junk ratings is near a record high. Lenders say that they are taking a pragmatic view on the companies in their loan portfolios to try and prevent defaults.

Taiwan’s GaleMed Corp is tapping the loan market for a $70m-equivalent dual-currency deal for refinancing debt and dividend recapitalisation.

Plastics packaging firm Klöckner Pentaplast (KP) has included an ESG margin ratchet in the loan leg of a refinancing, the first time this has been added to a dollar-denominated loan, though the structure is becoming increasingly common in euros.

UK broadband company TalkTalk sold an add-on to its existing high yield notes this week, raising new term debt to pay down its revolver. The company is subject to a takeover bid from Toscafund and Penta Capital, which will leave its existing bonds in place, but grant them security, as well as layering in extra leverage with a PIK toggle from Ares.

Hellman & Friedman refinanced the capital structure of portfolio company TeamSystem this week as it moved ownership between funds. H&F recently completed a similar transfer of its Verisure holding but, unlike that switch, this move isn’t accompanied by a monster dividend payment to the new fund, although the TeamSystem deal still boosts leverage.

Biogroup’s debut in the high yield bond market has become one of the tightest ever triple-C rated issues, validating the former loan-only company’s decision to turn to public markets to add subordination to the refinancing of its capital structure.

A bond for French jewellery store operator Thom Group showed that investors can digest debt from lesser loved sectors like retail, though the decision to opt for bonds to refinance its existing loan capital structure might have been prompted by the greater taste for adventure typically seen in the public market.