Search results for

Lloyds TSB may build its own asset-backed commercial paper conduit to help its corporate banking clients raise off-balance sheet debt. David Brealey, London-based head of securitization and corporate finance, says that at present the firm uses third-party asset-backed CP conduits, but creating its own, which would be $5 billion in size, could be cost-effective. Lloyds uses two CP conduits structured by other firms, and Brealey declined to name the outside firms or the amount of assets allocated to them. To head up the development of conduit capabilities, Lloyds has hired Mark Escott as director of securitization. He joins from Bank Gesellschaft, where he held a similar role. Brealey says that if the firm decides to go forward with the CP conduit, more hires will be made in the new year. Lloyds' securitization team currently has 18 members.

A loophole in Securities & Exchange Commission tender rules has opened the door to a breed of bond tender offers that various bond market buy-siders are calling "predatory" and "exploitative." The practice, alternately called "mini-" or "trashy-" tenders, takes advantage of an SEC rule enabling any firm to tender for up to 5% of a company's bonds (or stock) without registering their activity. With increasing frequency, this has given rise to firms which send banks, money managers and mutual funds--both large and small--official looking tender offers for a company's bonds at up to 15 points below market price. One veteran buy-side trader, Jim Claire of Evergreen Investment Management, calls these companies "shady operators," arguing that they try to exploit bond managers' fiduciary obligation to pass on tenders to clients. Claire continues, "I hope someone gets around to shutting these [crooks] down."

ABN Amro is shopping two collateralized loan obligations to European investors--Amstel Synthetic CLO 2001 and Smile CLO 2001. The Smile 2001, a E5 billion deal, is a balance sheet cash flow deal comprising small and medium-sized loans of companies based in the Netherlands whereby the firm has transferred risk by selling loans to a special purpose vehicle.

Allied Waste's levels are getting a boost on a 20% paydown after the company's bond deal was completed in mid-November. Last Monday the bank debt traded at 99 1/8 from 98 1/2. Allied Waste officials have declared their industry "recession-resistant" but have also responded to a widespread economic downturn by reducing debt and generating cash flow. The company has a target of generating $400 million in free cash flow by 2001 and paying down debt, which currently stands around $9.3 billion. The trash-hauling company is based in Scottsdale, Ariz. Mike Burnett, head of investor relations, declined to comment on trading levels. Of Allied Waste's paydown, Burnett said, "The point is this industry is not recession-proof. Recession-resistant means you feel some impact. We're predicting at the end of year our EBITDA will be off 7%, but at the same time, we're not losing 20 or 30 percent of revenue."

Fixed-income investors are questioning whether Providian Financial's bonds are worth buying, and wonder if the new ceo, Joseph Saunders, can keep the company afloat long enough to make the remaining 31/2 months of interest and principal payments on its 6.75% notes of '02. There were no bids on the notes last week, according to one high-yield trader, who reasons that the low 80s would be an appropriate price for the bonds, given that Providian's 6.70% notes of '03 are bid at 78. This trader continues that the last trade he saw in these bonds was nearly a month ago, which was at 80. Those levels caused an East Coast buy-side analyst to wonder whether the bonds might be worth a gamble. He reasons that Saunders, a credit-card industry veteran, presumably did his due diligence prior to joining the company. Still, the analyst believes it is not worth the risk. Of Providian's bonds, he says, "I didn't own them on the way down, and I'm not going to step in at this point."

The Isle of Capri Black Hawk has secured a $90 million credit facility with CIBC World Markets to refinance $75 million in mortgage notes due in 2004, allowing the company to obtain a much cheaper form of financing. "Black Hawk wanted to pay off the notes because of the very low rates, getting cheaper capital with a more flexible structure," said Rex Yeisley, senior v.p., and cfo."CIBC is leading because of relationship, price and credibility--we believed they could get it done," he added. CIBC is the senior lender to Isle of Capri and so amid other alternatives, it seemed right, Yeisley stated. Isle of Capri owns 57% of the venture and Nevada Gold & Casinos owns the rest. Funding of the facility is contingent on Black Hawk granting a security interest to CIBC.

Investors have applauded the region's most stable companies in our 10th Best-Managed Companies poll. Where once telcos dominated, now we see raw materials, department stores and shopping mall operators at the top of the tree. By Olivia Chow and Robert Law.

For all its economic successes, few would suggest that Malaysia has been a champion of transparency and corporate governance in recent years. But half a year on from Daim Zainuddin's departure, there are signs of something different at Renong and other Malaysian corporates. Is this real change? Matthew Montagu-Pollock, normally our resident cynic on such things, believes so.

For all its economic successes, few would suggest that Malaysia has been a champion of transparency and corporate governance in recent years. But half a year on from Daim Zainuddin's departure, there are signs of something different at Renong and other Malaysian corporates. Is this real change? Matthew Montagu-Pollock, normally our resident cynic on such things, believes so.

Aluminium Corporation of China (Chalco) completed a US$457.9 million IPO in mid-December in an extremely positive sign for the equity markets in Asia – and China in particular. The issue, led by Morgan Stanley and CICC, traded up about 4% in New York on its first day of pricing, a modest rise that the leads and issuer felt was ideal. (Its flat first-day performance in Hong Kong was less impressive.) It was unclear as Asiamoney went to press whether a greenshoe would be exercised.

An interesting trade in early November resolved DBS's capital ratio concerns and put Deutsche back in to the equity league tables after a long, arduous absence. On November 6 DBS placed S$2.2 billion (US$1.2 billion) in shares through two distinct tranches. Half of the total came in private placements to two major California-based investors, Brandes Investment Partners and Capital Group International, while the other half was sold in an accelerated bookbuild at a price of S$9.60 – a 4.95% to the November 2 close of S$10.10.

The move was hardly noticed except by the local business media. With China's entry to the World Trade Organization and the battle in Afghanistan dominating headlines, Taiwan's issuance of the first interest-rate swap (IRS) licence to a domestic securities house barely rated a mention in the regional financial press. But to the global and domestic financial institutions hit by the move, the licence given to Grand Cathay, the leading underwriter of NT$ corporate and supranational bonds since 1992, last month was a deafening shout. The door has now been thrown wide open to an industry worth an estimated NT$300 billion a year and which is projected to grow at the rate of 15% a year over the next five years. IRS business had been restricted to banks (domestic banks can conduct inter-bank IRS without a specific licence) and foreign institutions.