Corporate Debt

Capital Calls: NatWest’s guilty-plea logic

7 October 2021

Concise views on global finance: The UK lender could receive a lower money-laundering fine for accepting culpability.

Evergrande crisis inspires shrewd bottom-feeding

7 October 2021

Tycoon Joseph Lau offered just $250 mln for the 25% of Chinese Estates his family doesn’t own. Shares were hit by its long backing of its ailing peer, whose boss plays poker with Lau. As with a rival’s mooted deal for an Evergrande unit stake, current owners may have to fold.

China’s bad loan markets will pad property crash

5 October 2021

The real estate crisis is rich pickings for distressed debt investors, as new exchanges and special courts have become more efficient at resolving duff loans. President Xi Jinping is no capitalist, but when it comes to popping bubbles, he’s allowed room for market forces.

Evergrande restructuring is well-balanced so far

29 September 2021

Local officials are helping suppliers get paid and consumers receive flats bought in advance, soothing buyer anxieties. Bigger investors in the struggling Chinese developer will therefore shoulder bigger losses. It’s a tolerable mix of political expedience and financial sense.

Credit markets will withstand Evergrande shocks

23 September 2021

The global corporate bond market has barely flinched at the crisis at the Chinese property developer, which is a big issuer of junk debt. Loose monetary policy, healthy company balance sheets, and a hunt for yield explain the nonchalance. This will encourage more risk taking.

Viewsroom: Evergrande is a mostly domestic crisis

23 September 2021

Global investors have woken up to the potential financial risks that the heavily indebted Chinese property developer poses. Breakingviews Asia columnists explain, though, that even in a worst-case scenario its effects beyond the country’s borders should be limited.

Wall Street will learn to love Evergrande’s crash

21 September 2021

New York woke up to the developer’s problems on Monday, moving stocks and bond prices. Offshore exposure to Evergrande debt is opaque; a Chinese real estate crisis would be painful. But contagion risk is limited, and a housing correction has upsides for frustrated foreign banks.

Capital Calls: Lagarde channels Thatcher

9 September 2021

Concise views on global finance: The ECB boss will buy fewer bonds but tells markets: “The lady isn’t tapering.” A tough decision on whether to scale back bond purchases more decisively will come later.

Betting minnow turns high roller with $3 bln wager

9 September 2021

London-listed 888 is paying more than its current market value for William Hill’s non-U.S. assets. It’s a quick way to gain scale but pushes debt to a hairy 5 times EBITDA. Ample savings and the chance to diversify into licensed online games and sport make it a calculated punt.

Chancellor: Beware financial repression’s return

2 September 2021

The debt binge by governments and corporations following the financial crisis and Covid epidemic requires an economic and political preference for permanently low interest rates. It worked, to a degree after World War Two, but this time will be different, and more painful.

Huarong’s shareholders brace for more beatings

30 August 2021

The Chinese asset manager lost $16 bln last year and its indebted offshore subsidiary is still bleeding. A planned state-led restructuring will give creditors relief but dilute equity investors. The stock, down 75% in three years before being halted, is due further correction.

Italy’s bank rescue has side order of moral hazard

10 August 2021

UniCredit may buy most of sickly Monte dei Paschi, with government help. It’s unclear if that means taking on its junior debt, which would be a windfall for creditors at the expense of Italian taxpayers and EU rules. Yet bond markets are starting to hope for something juicy.

Chancellor: U.S. credit cycle close to overheating

30 July 2021

Home prices and private-sector borrowing have taken off and credit standards continue to deteriorate. The end may not be nigh, but overvalued stocks and a massive lending boom, especially to corporations, make U.S. financial markets a particularly dangerous place for investors.

Capital Calls: Chinese hacking, Tencent

19 July 2021

Concise views on global finance: When the only response to China hacks is harsh words, companies will pay the price; the $680 billion technology giant places a heavyweight bet on UK gaming group Sumo.

How to turn a software firm into a bitcoin wallet

9 June 2021

MicroStrategy’s holdings of the digital currency already make up over half of its $6 bln enterprise value. Now the business-analytics software group has sold $500 mln in junk bonds specifically to buy more. With crypto accounting wacky, it could make for a crazy ride.

FirstGroup rebels may rue waiting for the next bus

25 May 2021

Two shareholders of the UK transport operator may vote against a $4.6 bln sale of its U.S. businesses to EQT. While no knockout, the price looks fair given the lack of other certain offers. A delay could destabilise the company when it needs to focus on opportunities at home.

Drahi paints debt masterpiece with Sotheby’s bond

13 May 2021

The auction house owned by Patrick Drahi is raising $300 mln to fund a dividend. The tycoon may soon have recouped one-third of the cost of a 2019 acquisition by debt-funded payouts. The boom in such deals even for leveraged, cyclical businesses shows how desperate lenders are.

Capital Calls: Uber, Roblox

11 May 2021

Concise views on global finance: Free rides for Covid jabs won’t help the ride-hailing app’s labor battle with Washington; the online games platform’s year-on-year growth decelerated sharply in April.

Capital Calls: Pfizer, ConocoPhillips

4 May 2021

Concise views on global finance: About $6 bln of additional earnings from Covid vaccines at the U.S. drug giant should mean more capital returned to investors; the independent oil group is offloading stock in Canada-based Cenovus it collected as part of a deal four years ago.

Capital Calls: Endeavor’s Hollywood ending

29 April 2021

Concise views on global finance: The entertainment conglomerate’s IPO flipped the script on opening day.