United States

High yield bonds for auto parts manufacturer Adient slipped more than three points on Thursday as the company tweaked its loan covenants and produced disappointing numbers. The firm’s new management is taking aggressive action to turn the group around and says it needs the financial headroom to do so.

The dollar issuance calendar continued to smoulder with a handful of borrowers enjoying bulging order books and pricing leverage as investors continued to return in force to high-grade credit. With corporate earnings still acting as a handbrake and the Chinese New Year further dampening activity, supply was steady rather than spectacular.

Goldman Sachs has held off from rewarding some retired executives compensation until “more information is available” on the 1Malaysia Development Berhad scandal.

Pacific Gas & Electric has gone bankrupt with $52bn of debt, blaming forest fires that seared California during 2018. Vale, with $11bn, has been downgraded to the bottom edge of investment grade after its horrific dam burst last Friday.

While banks fight shy of big-ticket mergers, a select group of private equity firms are leading the restructuring of the industry in Europe, writes David Rothnie.

Harley Davidson made heavy weather of strong US bond market conditions on Thursday after a dovish Fed and a month-long rally in spreads appeared to set the dollar market up for a strong run of issuance in February.

Chinese electric car company Nio made a splash in the US convertible bond market this week, raising $650m from its debut issuance and using a call spread feature to engineer a tasty premium. Jonathan Breen reports.

Investors have come out in huge numbers to buy the three corporate hybrid deals that have been sold so far in 2019. However, the excess demand is unlikely to be sated as the year unfolds.

S&P Global Ratings, which this week became the first international rating agency permitted to rate Chinese domestic deals, plans to start its business gradually. The firm will initially concentrate on renminbi deals sold by its existing clients.

Nio, the Chinese electric car company, has launched bookbuilding for a convertible bond that will be worth as much as $650m, according to a source close to the deal.

A surprise deal to fund the US government for three weeks, announced last Friday, has given hope to IPO potentials that there will be progress for the large backlog of new listings waiting for the regulator to comment on their filings.

In this round-up, Ping An Bank’s latest convertible bonds broke demand record, state-owned enterprises posted strong growth, and Traiana partnered with Hong Kong Exchange and Clearing to provide OTC clearing.