STRUCTURED FINANCEAlthough the deal came on the back of a
ONE
NOTCHûUPGRADEûBYû30 ûTOû""n ûWHICHû
cited Cabot’s deleveraging efforts, it is still
paying a good premium on top of its
outstanding notes.
!ûaMûûSENIORûSECUREDû/CTOBERû
2023 note, less than a year shorter than the
new issue, was trading at a level equivalent
to about 560bp over Euribor when the deal
PRICEDûONû4HURSDAY ûACCORDINGûTOû2ElNITIVû
Eikon data.
“Cabot has delevered a lot just by easing
its debt purchases, although it takes quite a
bit of cash to grow. But if they stop
purchasing [debt], it becomes quite cash
generative, which is what has happened,”
said an investor.
30ûANALYSTSûSAIDûTHEYûEXPECTû#ABOTûWILLû
be able to bring leverage below four times in
û-OODYSûRATESûTHEûCOMPANYû" ûHAVINGû
assigned a stable outlook in April. Net
leverage is 3.9 times, according to an
investor presentation.
“But I think most people are seeing
through that and recognising that there is
sector weakness,” said the investor.
7HILEû#ABOTûHASûPERFORMEDûWELL ûTHEûDEBTû
collection space has been unloved among
high-yield investors after an issuance spree
in 2017.
Cabot, Britain’s leading debt collector,
ITSELFûHADûTOûPULLûANû)0/ûINûLATEû û
blaming market conditions, although
investors had questioned valuations in the
sector, according to news reports.
The new notes also have a non-call one
structure, whereas the notes being
RElNANCEDûHADûOFFEREDûAûRAREûNON
CALLûTHREEû
structure.
CreditSights analysts said this made the
new notes, which will be callable at 101 in a
year’s time, less attractive than the 2023s,
on which the redemption price will remain
higher than 101 until September 2021.
BNP PARIBAS SENDS SAVE-THE-DATEBNP Paribas sent a save-the-date notice on
&RIDAYûAFTERNOONûFORûAûEUROûmOATERûFROMûAû
pharmaceutical sector issuer.
&ULLûDETAILSûWILLûBEûRELEASEDûONû-ONDAYû
morning.
ASIA-PACIFIC
NEXTDC TAPS NOTES IV FOR A$200m5NRATEDû!38
LISTEDûDATA
CENTREûPROVIDERû
NEXTDC raised the maximum A$200m
53M ûITûWASûSEEKINGûFROMûTWOûTAPSûOFû
its dual-tranche Notes IV.
.%84$#ûADDEDû!MûTOûITSû*UNEûûû
mOATING
RATEû.OTESû)6 ûTAKINGûTHEûISSUEûSIZEû
up to A$370m, and A$30m to its 6% June 9
ûlXED
RATEû.OTESû)6ûWHICHûNOWûTOTALû
A$130m.
4HEûINCREASEûTOûTHEûlXED
RATEûTRANCHEûWASû
PRICEDûINûLINEûWITHûGUIDANCEûATûûORûAû
REOFFERûYIELDûOFû
4HEû&2.ûREOPENINGûWASûPRICEDûATûPAR ûINû
LINEûWITHûTHREE
MONTHû""37ûPLUSûPûAREAû
guidance.
NAB was arranger and sole bookrunner for
last Tuesday’s transaction.
4HEû.OTESû)6û&2.SûWEREûISSUEDûONû*ULYûû
LASTûYEARûATûAûSPREADûOFûTHREE
MONTHû""37û
PLUSûBP ûALONGSIDEûTHEûûlXED
RATEûNOTEû
issue which was priced at par.
.OTESû)6ûAREûCOMPLEMENTARYûTOû.%84$#Sû
A$300m 6.25% June 2021s, known as Notes
))) ûWHICHûWEREûISSUEDûINû-AYûûTOû
redeem the A$60m of Notes I and A$100m
of Notes II at the optional call date of June 16
2017.
.OTESû)ûWEREûISSUEDûINû*UNEûûWITHûAû
lVE
YEARûNON
CALLûTWO
AND
HALFûSTRUCTUREûANDû
paid a coupon of 8.0%. Notes II, with an
identical maturity date of June 16 2019,
were issued in November 2015 and paid a 7%
coupon.
.!"ûARRANGEDûEACHûPREVIOUSû.%84$#û
transaction.STRUCTURED FINANCE
EMEA MBS
LENDINVEST PRICES DEBUT BTL
WIDE OF TALKIn a sign that oversupply might be taking
ITSûTOLLûONûTHEû5+ûSPECIALISTûLENDERû2-"3û
sector, LENDINVESTSûDEBUTûBUY
TO
LETû2-"3û
MORTIMER BTL 2019-1 last week sold its Triple
A tranche 10bp wide of initial price
thoughts.
!FTERû)04SûATû3ONIAûPLUSûBPûAREAûONû
-ONDAY ûLEADSûMOVEDûGUIDANCEûFORûTHEû
aMûTHREE
YEARûSENIORSûTOûBPn
130bp on Thursday. The tranche was only
ûTIMESûCOVEREDûATûTHOSEû)04S
4HEûDEALûWASûPRICEDûONû&RIDAYûAFTERNOON û
with the seniors pricing at par with a
BPûCOUPONûANDûTHEûMEZZANINEûBONDSû
coming below par.
4HEûaMû!A!!nû-OODYS&ITCH û
Class B came at a discount margin of
BP ûTHEûaMû!!nû#LASSû#ûATûBPû
ANDûTHEûaMû"AA"""nû#LASSû$ûATûBPû
4HEûDEALSûaMû""ûCAMEûATûBP
BNP Paribas, Citigroup and HSBC were
joint leads.
The previous week syndicate bankers
TOLDû)&2ûTHEYûSAWûAûSUBSTANTIALûPIPELINE û
not least from the UK’s specialist lenders.They also recalled the sharp spread
widening that hit the market after the
Barcelona conference last year when a
SERIESûOFûBACKED
UPû5+û2-"3ûPRICEDûWIDEû
OFû)04SBANK OF IRELAND (UK) BRINGS
BOWBELLBANK OF IRELAND (UK)ûPRICEDûITSûlRSTûPUBLICû5+û
2-"3ûLASTûWEEK ûSELLINGûAûaMûPORTIONûOFû
2.5-year Triple As off BOWBELL NO.2. It
RETAINEDûTHEûRESTûOFûTHEûaBNûTRANCHEû
as collateral for central bank repo.
Although not itself a familiar name on
the UK high street, the originator does
have an extensive presence there thanks
TOûITSûPARTNERSHIPûWITHûTHEû5+û0OSTû/FlCEû
It also has a partnership with the AA
!UTOMOBILEû!SSOCIATION
And Bowbell is expected to become a
MOREûFAMILIARûNAMEûTOû2-"3ûINVESTORS û
with BOIUK’s intention to become a
programmatic public issuer.
However its debut was seen paying a
lRST
TIMEûISSUERûCONCESSIONûOVERûTHEûMOSTû
RECENTûHIGHûSTREETû5+û2-"3 û#LYDESDALEû
"ANKSû,ANARKû
ûWHICHûSOLDûaMû
three-year seniors at Sonia plus 77bp last
month.
Initial price thoughts for Bowbell were
Sonia plus mid 80s, which were tightened
to 83bp–85bp guidance before printing
AROUNDûûTIMESûCOVEREDûATûBP
!LTHOUGHûTHEû2-"3ûISûTHEûSECONDûTOû
CARRYûTHEû"OWBELLûNAMEûTHEûlRST ûWHICHû
closed in November 2010, was retained. It
was called in 2018.
The new deal securitises 100% owner-
OCCUPIEDûlRSTûLIENûMORTGAGESûWITHû
seasoning of 2.28 years. The average
MORTGAGEûBALANCEûISûaKûANDûTHEû
weighted average unindexed current LTV
ISûAûRELATIVELYûHIGHûû4HEû7!ûINTERESTû
RATEûISûû.OûLOANSûAREûINûARREARS
Lloyds was arranger, and was joint lead
manager with Bank of America Merrill Lynch.PEPPER PREPS POLARISPEPPER MONEY ûPARTûOFûTHEû0EPPERû'ROUP ûHASû
mandated Citigroup and National
Australia Bank as co-arrangers, and
Citigroup, Commonwealth Bank of Australia
and National Australia Bank as joint leads for
POLARIS 2019-1.
4HEûDEALûISûTHEûlRSTû2-"3ûOFFûAûNEWû
programme backed by UK non-conforming
mortgage loans. It will offer senior and
MEZZANINEûTRANCHES
A London and Europe roadshow
started on Thursday and ends on
-ONDAYû-EETINGSûAREûALSOûAVAILABLEû
during the Barcelona ABS conference
this week.