Loans and High Yield

Chinese online marketplace 58.com has received a $3.5bn loan from Shanghai Pudong Development Bank to support its take-private.

The strong response from banks to Charoen Pokphand Group’s acquisition-related loan is not a true reflection of conditions in Asia’s syndications market — despite what some may say.

The corporate sector was not at the centre of the 2008-9 financial crisis — banks were. This time, it is companies of all kinds that are first in the financial markets to feel the stress of the coronavirus pandemic. Measures to control the infection have stopped many businesses’ revenues, completely and suddenly, and put others under severe strain. In such a situation, the quality of a company’s financial planning and management are revealed. Tested just as much are the financial networks that surround a company: its banking relationships and ability to finance itself in a variety of markets.

Generals, and financial regulators, are always fighting the last war. So it proved when the coronavirus slammed into international markets in mid-March. Many of the tools developed in the 2008 financial crisis were deployed to great effect by central banks. The corners of the financial markets that propagated weakness in 2008 passed the test of 2020. But new risks were thrown up, forcing a new round of improvisation. What lessons will be drawn from the Covid-19 crisis?

Swedish airline SAS needs Skr12.5bn (€1.2bn) of new funding to get through the coronavirus pandemic. The Swedish and Danish governments have pledged billions more to support it, on top of the revolving credit facility guarantees granted last month, but want “burden sharing” from financial stakeholders in SAS, including holders of its conventional and hybrid bonds.

Cineworld has withdrawn from its proposed acquisition of Canada’s Cineplex, which had been funded by a $1.9bn term loan syndicated in February. With lenders to the transaction sitting on a paper loss of around 30 points, the collapse of the agreement will prove a boon, but break fees, swap costs and litigation could chip away at the chain’s stretched cash resources.

Indofood CBP Sukses Makmur is putting together a shortlist of banks for its $2bn loan, which will fund its acquisition of instant noodle maker Pinehill Co.

Hotel and casino operator Wynn Macau followed its gaming peers into the dollar bond market last Friday, but weaker market sentiment meant the borrower failed to tighten guidance on its $750m deal.

John Hempton, the Australian short seller and self-styled eccentric, believes fraudulent companies will soon become evident in the corporate rubble left by the coronavirus pandemic. Hempton, who has bet against 1,100 companies over the course of his career, explained how his hedge fund Bronte Capital goes about finding rotten eggs in business and finance.

Chinese property developer Sinic Holdings (Group) Co launched a two year dollar bond on Thursday after receiving international credit ratings this week for the first time.

Macau casino operator MGM China Holdings raked in $500m from bond investors on Thursday.

Chinese property developer Yanlord Land Group has returned to the loan market with a dual-tranche refinancing deal of up to $1bn.