Morgan Stanley

Warehouse construction firm and lessor ESR Cayman relaunched a bigger Hong Kong IPO this week, four months after pulling its first listing attempt because of volatility. But a revamped syndicate team and positive momentum in the local IPO market have given the new deal some impetus, writes Jonathan Breen.

Chinese state-owned commodity chemicals producer Shanghai Huayi (Group) Co has sold an almost 10 times covered five year bond, while Yuzhou Properties Co raised $500m to fund a tender offer. Two local government financing vehicles also made their offshore debuts.

China’s FangDD Network Group has kicked off a roadshow for the listing of American Depository Shares (ADS) on the Nasdaq.

Bain Capital-backed market research business Kantar showed this week that investors still have some bite in the high yield market. Buyers forced the issuer to flex numerous covenants, tinker with the tranches, delay the issue and consent to unusually juicy coupons. The deal may not be a sign of things to come, however, as Crown waltzed through its bond launch, setting a new low coupon record for a fixed rate bond.

Investors have taken to Chinese education platform Youdao, covering its $101m IPO multiple times over days before the end of bookbuilding, according to a source close to the deal.

Genius Auto Finance has taken home Rmb4bn ($565m) from its third auto loan ABS of the year, scrapping the mezzanine tranche and boosting the size of the subordinated portion. The issuer achieved slightly tighter yields on both senior tranches compared to its previous trade.

Bain Capital has given in to a laundry list of demands from investors as they snubbed bonds for Kantar, resulting in a delay to the deal's schedule. In a rare case of aggressive investor push-back, covenants have now been flexed to the extreme and initial price thoughts look surprisingly high, given the exceptionally favourable market for new issuers.

The stars aligned for French drink company Pernod Ricard’s return to the bond market, with the issuer printing flat to its curve, or even through it by some estimates, in its first outing since being upgraded by two credit rating agencies.

Streaming giant Netflix is in the market for $2bn with a 10.5-year bond issue split between euros and dollars. The unsecured senior notes come with a non-call life clause, offered to investors as a carrot.

France’s Pernod Ricard is in the market on Monday for a €1.5bn trade, with the drinks company striking while the iron is hot to print debt after being upgraded by two agencies last week.

ESR Cayman, a warehouse construction firm and lessor, has boldly returned with a bigger IPO target after delaying its first go at listing earlier this year.

Small appliance maker JS Global Lifestyle Co has opened the books for a Hong Kong IPO. It hopes to raise up to HK$3.6bn ($462.1m), according to a source close to the deal.