Loans and High Yield

Corporate investors have taken some significant political shocks in their stride this year but Christian Savvides, co-head of European debt advisory at Rothschild Global Advisory, warned the ride might be bumpier in 2017.

It is commitments week in the European leveraged loan market this week, after a busy December packed with deals. Nine transactions are due to be priced, with several, including Morpho’s €2.1bn term loan, having already been completed.

Shandong Ruyi Technology Group issued its debut international bond on Tuesday, continuing the trickle of year end issuance from China ahead of the expiration of regulatory approvals.

Spain’s construction sector has been a sore point in the high yield market this year, with three of its big hitters either in distress, debt restructuring or increasingly surrounded by accounting disputes and corruption. Investor adviser CreditSights this week said major shareholder families behind those companies bear some responsibility.

French e-security and biometrics firm Morpho tightened guidance on its €2.1bn-equivalent buyout term loan this week, as the strength of the leveraged loan bid is still squeezing prices.

US based-Novelis, part of Indian company Aditya Birla Group, has lined up a syndicate of 10 lenders to arrange an Asia loan that refinances a $1.8bn US term loan B from last year.

Shandong Ruyi Technology Group and LR Capital Group are marketing their respective dollar transactions, ahead of a two-day Federal Open Market Committee meeting starting Wednesday.

The head of leveraged finance at M&G Investments, one of the longest serving fund managers in the European levfin market, is to retire at the end of this year after 12 years at the firm and 38 in the wider industry.

Calcium aluminate maker Kerneos has cancelled its proposed €445m term loan ‘B’ refinancing deal, with French industrial minerals maker Imersys set to buy the firm from sponsor Astorg Partners.

Philips is set complete the divestment of its lighting businesses next year, with US private equity firm Apollo Global Management agreeing to acquire its Lumileds LED unit at a $2bn valuation.

Central China Real Estate has hit the market for a $150m syndicated loan that will go towards refinancing outstanding — and more expensive — bonds.

Four local government financing vehicles (LGFVs) ventured into the debt market last Friday, raising a combined $615m. The high yield issuers flocked out to take advantage of regulatory approvals that will expire at the end of the year.