Loans and High Yield

Softer markets caught Central China Real Estate off guard this week, with the leads forced to increase pricing after launch to get its deal away. The deal highlights a shift in pricing for high yield property developers at a time when supply is set to increase, writes Addison Gong.

Chinese property issuers have stormed the international debt market recently, making a big comeback after months of relying on domestic bond fundraisings. But with the offshore market softening and the outlook around the sector cooling, high yield issuers should be prepared for a bumpy ride.

French trade fair organiser Comexposium on Wednesday joined the recent wave of refinancing offerings in the euro leveraged loan market with its own €394m offering.

Italy’s bottle top maker Guala Closures on Tuesday began roadshowing for a new deal to refinance all of its high yield bond debt as the market’s pipeline accelerates before the US elections.

Four banks have teamed up with law firm Simmons & Simmons to introduce market standard documentation for use in listed and unlisted repackaging transactions, in a move that they hope will ease hedging counterparty concerns for investors and help drive activity in this part of the market.

On Wednesday, UK financial software firm Misys pulled the $1.5bn refinancing it had been marketing as part of its planned IPO, having dropped the share sale last week.

Banks are preparing finance packages for the leveraged buyout of Romanian retail chain Profi, with the loans likely to price almost as tightly as deals from western Europes, according to one banker.

Central China Real Estate wrapped up an unconventional two-day bookbuilding for its new bond on Tuesday. Investors had turned their backs to the original aggressive pricing, forcing the leads to price the deal 75bp higher than the initial guidance.

The hype in the European leveraged finance markets runs that the European Central Bank and Bank of England have made riskier assets irresistible to investors, and that fund managers are beginning to embrace even aggressive dividend deals and payment-in-kind bonds. Don’t believe it.

Wuhan Metro Group and Jiangsu Zhongguancun Science Park Holding Group added their names to the growing list of Chinese local government financing vehicles (LGFVs) sealing inaugural dollar bonds in the international market this year.

A subsidiary of Chinese electro-acoustic product maker Goertek has approached banks for a $150m three year borrowing.

Private equity firm Ardian has turned to the leveraged loan market to fund its acquisition of German lighting provider SLV Holding from Cinven.