UK

The UK Treasury’s decision to raise the cost of borrowing for local authorities has caused quite a stir in private placement markets, as players realise institutional investors are prepared to offer debt at more attractive rates than the Public Works Loan Board (PWLB). But the more adventurous local authorities may find capital markets a tougher pitch to play on, writes Silas Brown.

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The University of Nottingham is looking to sell US private placements, according to market sources, becoming the third UK university to enter the private debt market this year.

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.

Investec has hired two analysts to join its industrials equity research team in London.

A group of shareholders in M&G have sold £117m ($150.3m) of stock in the company, following its demerger from its former parent Prudential, via an accelerated bookbuild.

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.

Royal Bank of Canada was able to raise £400m of senior funding as though it was on 'autopilot' in the sterling market this week. It is the third Canadian issuer in a month to seek funding in this currency counting as total loss-absorbing capacity (TLAC).

UK motion picture visual effects company DNEG is pushing ahead with its IPO on the London Stock Exchange, having formally confirmed its intention to float on Tuesday.

Celia Murray has been appointed as head of M&A and corporate finance for the UK at JP Morgan.

Canadian Imperial Bank of Commerce was quick to take advantage of a favourable swing in the sterling-dollar basis swap, to issue its debut Sonia-linked covered bond on Monday, pricing the deal flat to fair value and tighter than where it could have printed in dollars or euros. The scale of demand would have allowed for a much larger deal, suggesting good potential for follow-on supply.

Capital markets have long been unattractive funding routes for UK local authorities as the Public Works Loan Board — a government body that provides loans to public bodies — has offered lending levels that public and private markets could not compete with. But a recent Treasury announcement may have tipped the scales in PP players' favour.