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GC Asia
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Covid-19: sovereign borrowing response
The Covid-19 pandemic is forcing many governments to expand their borrowing programmes. The table below details the impact of the outbreak on the funding requirements of major sovereign bond issuers.
30 Sep 2020 -
Zambia pleads for debt standstill in ‘disappointing’ call, promises IMF engagement
During an investor call on Tuesday, Zambia laid out a timeframe for the consent solicitation request it issued for its Eurobonds last week. While the country's finance minister signalled an intent to engage with the International Monetary Fund, which is a contentious point that creditors have been inflexible on, bondholders were disappointed at the lack of clarity and detail about Zambia's plans with them.
29 Sep 2020 -
Sri Lanka rating cut to Caa1 amid uncertainty
Sri Lanka is facing serious fiscal pressure, a result of the dire economic impact of the coronavirus. That led to a downgrade from Moody’s this week, which lowered its rating by two notches. All three major rating agencies have now downgraded the country this year.
29 Sep 2020 -
Suriname starts on path to restructuring
Suriname has tabled an amendment to its debt act that includes a request to the finance minister to submit a debt restructuring plan.
28 Sep 2020 -
Colombia becomes first to draw IMF FCL, could shun bonds
Colombia will become the first country to draw down on an International Monetary Fund flexible credit line (FCL), its instrument for top quality borrowers. The government is likely to use the loan — rather than bond markets — to complete its external funding needs.
28 Sep 2020 -
Morocco makes rare euro appearance with EM volatility predicted
The Kingdom of Morocco raised a €1bn bond on Thursday, which was priced wider than some analysts' fair value estimates. Market conditions, bankers said, are deteriorating ahead of expected volatility in coming months.
25 Sep 2020 -
Everest Medicines cracks open $451m Hong Kong IPO
Biopharmaceutical firm Everest Medicines has hit the road for its up to HK$3.5bn ($451m) Hong Kong IPO.
25 Sep 2020 -
EM catches volatility virus to throw LatAm pipe into uncertainty
After a second Latin American borrower in a week pulled plans to issue a bond, bankers are suddenly concerned that the region’s idyllic issuance conditions may be over. But with two infrequent corporates, a Colombian bank and a debut high yield name preparing deals, the extent of the deterioration should be clear soon.
24 Sep 2020 -
RMBS unemployment impact delayed but not stopped, data shows
Data from DBRS Morningstar and Bank of America shows that government support measures across Europe have delayed the impact of rising unemployment on RMBS deals, though not indefinitely. The news comes as the UK government announces further support for struggling workers.
24 Sep 2020 -
Covid spikes to force equity raisers to come back for more
Equity capital markets investors are likely to face a stream of companies asking them for fresh capital to get them through the second wave of the Covid-19 pandemic, as cases spike again in continental Europe and the UK, writes Sam Kerr. Some will be asking for the second time — or very late.
24 Sep 2020 -
Funding Circle lifts lid on struggles in UK SME lending
Funding Circle underlined the strain felt by UK small and medium sized enterprises in its half year results on Thursday, as the marketplace lender swung into a loss caused by heavy writedowns of subordinated portions of its SBOLT securitizations. But the lender also achieved strong volumes in government-guaranteed loans, which it sells off balance sheet to Chenavari Investment Management.
24 Sep 2020 -
Covid dries up Schuldschein debuts
New research from analysts at Helaba points to a flight to safety in the Schuldschein market over the course of 2020. Rated issuers are making up a bigger share of deals than they have for a decade, and there have been next to no debuts. Schuldschein arrangers hope this conservative trend does not continue into 2021.
24 Sep 2020 -
Zambia on track for default with investors set to concede
Zambia has requested to defer payments on $3bn of its dollar Eurobonds, in what could be the first default by an African sovereign during the coronavirus crisis. Bondholders said they were resigning themselves to accepting the deferral request.
24 Sep 2020 -
IPO pricing continues but Covid darkens skies over market
The European IPO market is continuing to churn out deals, but a return of volatility in secondary equity markets is starting to cause discomfort among syndicate bankers, who say they must proceed with caution in the weeks ahead.
24 Sep 2020 -
Debt purchasers dip into market to prep for NPL rush
Debt purchasing firms are repeatedly hitting the high yield market to prepare their capital structures for the likely wave of portfolio sales as pandemic support schemes roll off, with France’s iQera the latest in the market. But some companies in the sector are in no position to refinance, such as Lowell which is effectively shut out of the market with its own credit concerns, raising questions about whether these companies can compete for post-Covid loan sales.
24 Sep 2020 -
Norway to tighten mortgage lending after pandemic easing
Norway’s Ministry of Finance has said it will apply tighter mortgage lending standards from next week after temporarily loosening them to support the economy. The move, which was not unexpected in light of the resilient state of the economy and stubbornly high house price inflation, will minimise mortgage defaults.
23 Sep 2020 -
ZTO Express, Zai Lab wrap up HK secondary listings
Chinese logistics company ZTO Express (Cayman) and biopharmaceutical firm Zai Lab wrapped up their secondary listings in Hong Kong on Tuesday.
23 Sep 2020 -
Genor Biopharma targets $371m from Hong Kong IPO
JHBP (CY) Holdings, a holding company for China’s Genor Biopharma, hit the road for its Hong Kong IPO on Wednesday. It is aiming to raise up to HK$2.9bn ($371.2m).
23 Sep 2020 -
Covid raises hedging question as markets plot path forward
The violent sell-off across financial markets this spring turned many investors’ positions upside down. Those without proper hedges in place were at best left embarrassed and at worst forced to shut up shop. Despite central banks once again intervening, plenty are finding reason to be cautious. Ross Lancaster investigates what lessons, if any, market participants have learnt from the meltdown.
23 Sep 2020 -
London bankers prepare for new office working guidelines
London's investment bankers are getting to grips once more with the UK government's guidance on coronavirus, after it said on Tuesday that office workers should work from home, if possible. Banks had slowly been inviting more staff back into London offices in recent months while the government had also been urging people to get back to the office.
22 Sep 2020 -
UK government virus switcheroo risks City's long-term health
The UK government’s sudden volte face this week about working from home may slow coronavirus infections but it betrayed a fundamental lack of strategic thinking and stability over the most pressing concerns. That should worry the City, which is in a fight for its future as a leading financial centre, as a result of Brexit.
22 Sep 2020 -
JD Health eyes $3bn from Hong Kong spin-off
JD Health International, the healthcare arm of Chinese e-commerce firm JD.com, is set to list on Hong Kong’s stock exchange by the end of the year.
22 Sep 2020 -
Mercuria opens $980m loan with Covid premium
Commodities company Mercuria has returned for its annual borrowing of $980m. This time, it is enticing banks with a 10bp Covid-19 premium on the loan margin and fees.
22 Sep 2020 -
Fresenius braves plunging markets with €1bn trade
Fresenius, the German healthcare company, pushed ahead with a €1bn dual tranche no-grow trade on Monday, despite an issuer in another sector pulling its deal as wider markets plummeted.
21 Sep 2020 -
Pharma is ‘rising star’ in SSDs
German hospital operator Asklepios Kliniken launched a Schuldschein on Monday with an initial target of €200m. Investors have doubled down on their interest in pharmaceutical firms this year and throughout the pandemic, prompting a substantial increase in the market’s exposure to the sector.
21 Sep 2020 -
Equity market prepares for ‘difficult’ Rolls-Royce raise
Rolls-Royce, the UK maker of aircraft engines, has confirmed it is considering holding a £2.5bn ($3.19bn) equity raise, but buy-side sources were struggling to make the investment case for the company given the uncertainty over its future. Its stock fell 10% on Monday on the announcement and fears that the UK will return to a lockdown to stop the dramatic rise in Covid-19 cases.
21 Sep 2020 -
Julius Baer pulls AT1 after closing in on new record
Julius Baer was forced to postpone a new transaction amid 'worsening market conditions' on Monday, after coming close to setting a new record for the lowest ever additional tier one (AT1) coupon in dollars from a European bank.
21 Sep 2020 -
Job loss fears rampant as pandemic pummels corporate debt volumes
Despite the financing that two jumbo acquisitions revealed this week would require, loans bankers fear that with no end to the coronavirus pandemic in sight and entire industries reeling from the fallout of lockdown, their jobs will soon be on the line. Mariam Meskin and Mike Turner report.
17 Sep 2020 -
Unibail-Rodamco-Westfield launches plan to reset business
Unibail-Rodamco-Westfield, one of the world's largest owners of shopping malls, launched a €9bn-plus turnaround plan on Thursday, which includes a €3.5bn rights issue. The aim of is to reduce its leverage to help it withstand the Covid-19 pandemic.
17 Sep 2020 -
Currency measures send Argentine corporates tumbling
Argentine corporate bonds sold off sharply on Wednesday after the central bank sought to dictate how the issuers could refinance their dollar debt as part of an escalation of currency controls.
17 Sep 2020 -
Payments climb back but new Italian NPL wave looms
Debtors are paying off their mortgages in Italy at the same rate as they were before the pandemic, according to Banca IFIS, after the country suffered one of the worst declines in collections following the coronavirus lockdowns.
16 Sep 2020 -
Has IFFIm blazed a trail for others?
Cyrus Ardalan, chair of the board of directors at the International Finance Facility for Immunisation (IFFIm), discussed whether others could follow his organisation's model to finance solutions to social challenges at the GlobalCapital Sustainable and Responsible Capital Markets Virtual Forum 2020 on Wednesday.
16 Sep 2020 -
White Oak signs CBILS securitization
Specialist lender White Oak has sponsored the first securitization of Coronavirus Business Interruption Loan Scheme (CBILS) loans, a £150m private transaction with Barclays, enabling it to recycle capital into the final 15 days of the government-backed lending programme.
10 Sep 2020 -
Arg provinces line up to restructure as PBA expected to up offer
At least 12 Argentine provinces are either deep in restructuring talks with bondholders or are preparing to begin negotiations. But as Argentina’s finance minister Martín Guzmán calls for regional governments to renegotiate their debts in line with the federal government’s sustainability guidelines, investors are unlikely to grant the same level of debt relief they agreed with the sovereign.
10 Sep 2020 -
IAG launches rights issue with focus on flexibility
IAG, the airline holding company that owns British Airways, has launched its €2.75bn rights issue to help fund it through the coronavirus pandemic. The company does not expect a return to normal operations until 2023, but is hoping its ability to be flexible in offering flights to areas that are recovering more quickly will be enough to persuade investors to take part in the cash call.
10 Sep 2020 -
Tui bondholders agree to KfW rescue loan
German travel company Tui’s bondholders have agreed to suspend limits on the debt the company can incur, opening the door to a rescue loan from KfW and a convertible bond injection from the German government's economic stability fund.
10 Sep 2020 -
Market split over Africa credit risk amid domino downgrades
The coronavirus pandemic has ramped up African sovereigns’ need to spend, resulting in a wave of credit rating downgrades. But market participants are split over the perception of credit risk in the region and how that will affect future issuance.
09 Sep 2020 -
Arcos Dorados markets tap to refi Covid debt, puts exchange on the menu
The world’s largest independent McDonald’s franchisee, Arcos Dorados, is planning to tap its senior unsecured bonds due 2027 as it looks to refinance debt raised to tackle the Covid-19 crisis.
09 Sep 2020 -
Transmantaro to reopen bond after rare Covid upgrade
Consorcio Transmantaro, the Peruvian transmission company and one of the few Latin American issuers to have improved its credit profile this year, is turning to bond markets for the first time since April 2019 to finance investments.
09 Sep 2020 -
Argentine lender bets on debt swap to beat looming maturity
Banco Hipotecario, the Argentine bank focussed on mortgage and consumer loans, is asking holders of a dollar bond maturing in less than three months to swap their paper for a new 2025 bond and cash. If bondholders do not accept the terms, default is likely, says Moody’s.
09 Sep 2020 -
Schuldschein reverts to roots after Covid panic
The Schuldschein market, which has spent the last few years growing increasingly international compared to its domestic origins in Germany, has lost its adventurous streak due to the coronavirus pandemic. Forays into unknown territories with borrowers from new industries are being treated with trepidation and lenders are heading back to what they know best.
08 Sep 2020 -
Europcar restructuring puts state-backed loan in firing line
Europcar will be a test case for the treatment of government-guaranteed loans during a restructuring, as the French car rental company was among the earliest and largest users of the French state’s corporate support scheme.
08 Sep 2020 -
Ryanair lands inside fair value to reopen European airline bonds
Ryanair left parts of the corporate bond market ‘gobsmacked’ on Tuesday, as the first benchmark-sized new issue from an airline since lockdowns from Covid-19 battered the sector managed to reprice the issuer’s curve.
08 Sep 2020 -
Messe Frankfurt celebrates convention restarts with new loan
Messe Frankfurt, the German trade fair company, has signed a €150m loan facility, as it begins holding physical events again after they ground to a halt in the first half of 2020.
08 Sep 2020 -
Provinces promise higher recoveries in Argentina’s next restructuring frontier
At least 12 Argentine provinces are either deep in restructuring talks with bondholders or are preparing to begin negotiations. But as Argentina’s finance minister Martín Guzmán calls for regional governments to renegotiate their debts in line with the federal government’s sustainability guidelines, investors are unlikely to grant the same level of debt relief they agreed with the sovereign.
08 Sep 2020 -
Alireza Zaimi of the Public Investment Fund on navigating calamity
Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), which holds almost $400bn of assets under management, has played a critical role in maintaining financial stability during the coronavirus pandemic. Alireza Zaimi, head of corporate finance at the PIF, tells GlobalCapital how the fund weathered a commodity shock of unprecedented proportions, how the crisis has shaped its investment choices, and how its funding strategy has held up.
07 Sep 2020 -
Icelandair gets final approval for vital loan
Icelandair, the flag carrier airline of Iceland, has gained the final major approval it needs for a government-backed loan, setting up the company for an imminent share sale and loan funding totalling about $247m-equivalent.
07 Sep 2020 -
Center Parcs launches refi after holiday villages reopen
Center Parcs has launched a refinancing of its class ‘B’ debt, taking advantage of better sentiment and a resumption of holiday bookings in its UK locations to push out a 2022 maturity in its subordinated debt.
07 Sep 2020 -
Chinese LGFVs in good shape despite Covid
Chinese government-related entities (GREs) and local government finance vehicles (LGFVs) received more rating upgrades than downgrades from Fitch Ratings in the first half of 2020, but the pricing differences between bonds from quality names and weaker credits remain stark, said DCM bankers.
07 Sep 2020 -
New Argentina bonds erratic in grey
Argentina’s foreign law exchange bonds will go free to trade this week and offer early clues as to how markets are likely to value the newly restructured credit, after some promising but inconsistent signs emerged from grey market trading last week.
07 Sep 2020
