UK race to the bottom spreads to credit safeguards 19 May 2023 German property group Adler has managed to push a restructuring through London courts that violates normal principles of debtholder fairness. That might encourage other companies to follow suit. But as with watering down equity listing standards, it carries a cost.
Capital Calls: BP, Japanese M&A 2 May 2023 Concise views on global finance: The oil giant will buy back $1.8 bln of shares over the next three months, which is less than investors hoped for; Astellas Pharma is making the most of cheap debt for its $5.9 bln pounce on U.S. eye-treatment specialist Iveric Bio.
Only the big will crack the $1 trln LBO code 12 Apr 2023 Buyout barons have a collective 13-digit sum to spend, but little borrowing available to juice returns. As lenders tiptoe back, deals will rely on more upfront cash and extra elbow grease in credit markets. It adds up to slower activity and greater industry concentration.
Trouble lurks in Reliance’s happy crowd of lenders 6 Apr 2023 Some 55 banks are extending a $3 bln loan to the Indian retail-to-energy conglomerate. Mukesh Ambani’s highly-rated behemoth is a catch. Yet the pile-on points to a dearth of big corporate credit mandates. As much of India Inc deleverages apace, lenders can brace for more slack.
Bank health barometer could use own health warning 28 Mar 2023 Stock market investors interpreted last week’s jump in Deutsche Bank’s credit default swaps as a sign of distress. Yet thin trading in parts of the $12 trln market for speculating on creditworthiness can exaggerate moves. Add social media and it can feed self-fulfilling spirals.
Capital Calls: Microsoft/Activision, Subscriptions 24 Mar 2023 Concise views on global finance: The software giant convinced UK regulators to drop one of two major concerns about its $69 bln deal. Meanwhile, the U.S. Federal Trade Commission has picked an easier — and less controversial — fight than its antitrust crackdown.
Zombified Evergrande will haunt for years to come 23 Mar 2023 The Chinese developer’s plan to restructure $20 bln of offshore debt proposes long repayment terms and sweeteners of dubious value. If approved, Evergrande still needs twice the amount in financing to finish building presold homes. The next problem is for onshore borrowers.
Swiss CoCo litigation may have a broader payoff 23 Mar 2023 Holders of Credit Suisse’s $17 bln contingent convertible bonds think authorities were wrong to wipe them out. A legal challenge will take years. Still, Bern might decide to placate angry investors. And a fight will discourage countries considering following the Swiss example.
Credit Suisse rescue sends shockwaves far and wide 23 Mar 2023 The ailing Swiss lender was saved by UBS with a $3 bln takeover. In this Viewsroom podcast, Breakingviews columnists debate why the deal pushes up bank funding costs, how the new mega-lender affects Switzerland’s financial system, and why bank deposits are becoming less reliable.
Swiss CoCo shakeout may yet help bank regulators 22 Mar 2023 The market for quasi-equity bonds is reeling after Credit Suisse wiped out its own ones. The higher cost of issuing the securities means banks may now roll over their maturing debt, rather than replace it as per the market norm. That could actually help financial stability.
India maps a viable next chapter for CoCos 21 Mar 2023 Local issuance of contingent capital froze after Yes Bank wrote down $1 bln in 2020, without wiping out shareholders - similar to Credit Suisse’s rinse. Fast forward: owners of the stuff are still fighting the move, but this niche of the bond market has come back stronger too.
Big bank selloff rests on tiny kernel of truth 10 Mar 2023 Shares in JPMorgan, HSBC and others dropped after Silicon Valley Bank raised equity to cover losses on bond sales. That’s not going to happen to large players with more reliable funding. But it’s a reminder that rising interest rates bring risks as well as rewards for lenders.
Blackstone’s Finnish fiasco adds to property slump 10 Mar 2023 Steve Schwarzman's firm defaulted on a $313 mln securitised loan backed by Nordic offices, after failing to win support from bondholders. More messy workouts are likely as troubled deals come due. It’s an opportunity for savvy players, and another worry for European real estate.
India bond market backstop is nice window-dressing 1 Mar 2023 The Adani mess may have jolted New Delhi to accelerate a $4 bln fund to help avert runs on corporate debt-holding mutual funds. The size could grow but it ignores the broader illiquidity problem. Fixing that means upgrading market infrastructure and letting more foreign money in.
IAG takeoff weighed down by debt dilemma 24 Feb 2023 With net debt above its market value, the $9 bln British Airways owner could use a rights issue. But it’s also back in the black after a painful pandemic, and deals may yield cost savings. Boss Luis Gallego has to work out which path is likely to annoy long-term investors least.
China’s local debt bomb fuse starts offshore 21 Feb 2023 Regional financing vehicles owing $9 trln have tapped offshore bond markets after officials curbed domestic financing. Now that channel is narrowing too, which could topple some into default. Many are rated investment grade, making it a major headache for Beijing.
Vedanta will test limits of Adani contagion risk 16 Feb 2023 Investors are wary of possible funding shortfalls at Anil Agarwal’s convoluted commodities empire. He’s trying to reassure on refinancing plans for $8 bln of net debt as his peer’s problems infect Vedanta bonds. The mess will push weak edges of India Inc towards private lenders.
Telecom Italia breakup can please all its masters 15 Feb 2023 The sickly telco needs to cut its 25.4 bln euro debt pile. Selling its fixed-line grid to KKR offers a fix, provided the government gets a stake in the strategic asset. For major investor Vivendi, the upside would be a chance to sell Telecom Italia’s revamped service business.
Piyush Gupta shines his risk appetite with Adani 13 Feb 2023 The boss of $70 bln DBS, Singapore’s top lender, is one of the first major global bank bosses to speak out largely in favour of the troubled Indian industrialist. His typically candid comments put Gupta’s broader calculation of where Asia’s big opportunities lie into sharper focus.
Debt is poor fix for Italian soccer’s malaise 8 Feb 2023 Having rejected private equity suitors, Italy’s top football league may turn to Wall Street banks to borrow up to 1 bln euros. The cash may give Serie A’s ailing TV rights business extra time. But without a governance shake-up, gorging on debt would extend its losing streak.