The AOFM last visited the syndicated
market on May 15 with a A$1.7bn tap of its
3.25% June 21 2039s.
On January 15 the AOFM drew a record
order book of A$21.2bn for the A$9.6bn
issue of 2.75% November 21 2029 bonds.
CORPORATES
US DOLLARS
DELL BONDHOLDERS GIVE THUMBS UP TO
VMWARE EXCHANGE
DELL’s announcement that it would buy
software company VMware’s tracking stock
got a positive reaction from the bond
market last week.
Spreads of Dell’s 6.020% June 2026s
tightened as much as 14bp Monday
morning to trade at 225bp over Treasuries.
By Thursday, spreads had inched out by 2bp
Thursday to trade at plus 228bp.
The company’s 8.350% July 2046 bonds
tightened by up to 9bp in Monday morning
trading. By Thursday, they had tightened by
another 6bp.
Dell said it will pay US$21.7bn to
purchase the stock that tracks its majority
interest in VMware in a move that will allow
the company to return to the public markets
WITHOUTûANû)0/ûSEEû4OPû.EWSûFORûMORE
4HEûCOMPANYûISûEXCHANGINGû6-WAREû
tracking stock for its Class C common stock.
The Class C shares will be listed on the New
9ORKû3TOCKû%XCHANGE ûANDûTHEûDEALûWILLû
eliminate the tracking stock.
The transaction is being seen as a credit
positive because it will simplify Dell’s
COMPLEXûOWNERSHIPûSTRUCTUREûWITHOUTû
adding debt to the company’s US$50bn
stack.
Dell is paying for the deal by issuing new
shares and a US$9bn dividend from VMware.
“There was some concern in the market
THATû$ELLûWOULDûTAKEûONûDEBTûTOûlNANCEûAû
potential transaction...although our base
case has been that Dell wants to delever,”
CreditSights analysts wrote on Monday.
Still, while Moody’s called the move a
credit positive, the ratings agency warned
that it might not all be smooth sailing for
bondholders, pointing to Dell’s ownership
structure.
Following the deal, Michael Dell will own
47% to 54% of the combined company, while
Silver Lake will own between 16% and 18%,
according to a Reuters report.
“Silver Lake’s continuing ownership of
Dell common stock [and] the potential for
Dell to purchase all or a portion of the public
mOATûOFû6-WAREûCOMMONûEQUITYûATûAûFUTUREû
date creates some risk of a leveraging
event,” Moody’s analysts wrote.
h3IGNIlCANTûKEYûMANûRISKûASSOCIATEDûWITHû
Michael Dell’s still controlling stake will also
remain.”
Dell reiterated its long-term commitment
to achieving investment-grade metrics on
-ONDAY ûACCORDINGûTOûRESEARCHûlRMû
CreditSights. The company carries a Ba1rating from Moody’s and BB+ ratings from
S&P and Fitch.
“Dell is highly leveraged, though we
EXPECTûLEVERAGEûTOûDECLINEûTOûABOUTûXûOVERû
THEûNEXTûYEARûTHROUGHûAûCOMBINATIONûOFûDEBTû
repayment, low single-digit revenue growth
ANDûIMPROVINGûPROlTûMARGINS vû-OODYSû
analysts wrote.
Dell last tapped the US dollar bond
market in 2016, when it sold a US$20bn
investment-grade M&A bond. The company
was junk-rated at the time, but sold a
secured bond that carried investment-grade
ratings.
VMware bond spreads inched wider in
secondary. The company’s 2.30% August
2020s widened by 4bp Monday morning.EUROS
INFORMA DEBUT HITS THE MARKINFORMA commanded investor attention with
its debut last Monday, mindful of having to
offer generous starting spreads to get a deal
over the line in the current market.
Out with a dual-trancher, the UK
publishing and events company found moreBONDS CORPORATESALL SOVEREIGN BONDS IN EUROS
BOOKRUNNERS: 1/1/2018–30/6/2018
Managing No of Total Share
bank or group issues €(m) (%)
1 Barclays 14 11,302.98 11.8
2 Citigroup 16 9,560.05 10.0
3 JP Morgan 13 9,541.35 10.0
4 BNP Paribas 12 7,660.47 8.0
5 HSBC 11 7,339.59 7.7
6 NatWest Markets 6 6,826.39 7.1
7 SG 10 5,694.88 5.9
8 Santander Global 5 4,589.15 4.8
9 BBVA 3 3,813.65 4.0
10 Goldman Sachs 7 3,723.50 3.9
Total 32 95,852.30
Excluding ABS/MBS.
Source: Thomson Reuters SDC code: N4ALL INTERNATIONAL US$ BONDS
BOOKRUNNERS: 1/1/2018–30/6/2018
Managing No of Total Share
bank or group issues US$(m) (%)
1 Citigroup 407 111,741.32 9.8
2 JP Morgan 389 107,605.52 9.4
3 BAML 339 90,007.05 7.9
4 Barclays 244 81,513.05 7.1
5 Goldman Sachs 230 70,991.18 6.2
6 HSBC 237 66,776.78 5.8
7 Morgan Stanley 226 59,084.08 5.2
8 Wells Fargo 211 54,488.36 4.8
9 Deutsche Bank 216 50,427.18 4.4
10 Credit Suisse 203 40,574.31 3.6
Total 1,320 1,142,745.01
Including Euro, foreign and global issues. Excluding equity-related debt,
US Global ABS/MBS.
Source: Thomson Reuters SDC code: O1
ALL SUPRANATIONAL BONDS IN EUROS
BOOKRUNNERS: 1/1/2018–30/6/2018
Managing No of Total Share
bank or group issues €(m) (%)
1 Credit Agricole 14 5,703.28 11.1
2 Commerzbank 9 4,973.53 9.7
3 UniCredit 6 3,795.35 7.4
4 JP Morgan 7 3,735.22 7.3
5 Barclays 6 3,706.15 7.2
6 Deutsche Bank 8 3,664.82 7.1
7 HSBC 9 3,312.65 6.4
8 Goldman Sachs 6 3,120.03 6.1
9 SG 6 2,743.96 5.3
10 Citigroup 7 2,583.25 5.0
Total 46 51,517.77
Excluding ABS/MBS.
Source: Thomson Reuters SDC code: N5
ALL AGENCY BONDS IN EUROS
BOOKRUNNERS: 1/1/2018–30/6/2018
Managing No of Total Share
bank or group issues €(m) (%)
1 JP Morgan 16 5,918.60 9.4
2 Credit Agricole 16 5,702.71 9.0
3 Goldman Sachs 10 5,465.28 8.7
4 Commerzbank 12 4,973.10 7.9
5 HSBC 17 4,404.50 7.0
6 Deutsche Bank 12 4,015.39 6.4
7 SG 14 3,717.51 5.9
8 UniCredit 8 3,584.41 5.7
9 BNP Paribas 8 3,154.32 5.0
10 LBBW 9 2,787.38 4.4
Total 80 63,172.72
Excluding equity-related debt. Including publicly owned institutions.
Source: Thomson Reuters SDC code: N6MUNICIPAL, CITY, STATE, PROVINCE ISSUES IN EUROS
BOOKRUNNERS: 1/1/2018–30/6/2018
Managing No of Total Share
bank or group issues €(m) (%)
1 UniCredit 25 3,139.44 12.2
2 DGZ-DekaBank 19 2,955.60 11.5
3 HSBC 18 2,790.69 10.9
4 LBBW 16 2,037.03 7.9
5 Nord/LB 15 1,590.09 6.2
6 JP Morgan 9 1,569.03 6.1
7 Deutsche Bank 12 1,547.79 6.0
8 Credit Agricole 5 1,084.44 4.2
9 BBVA 5 950.36 3.7
10 DZ Bank 9 862.73 3.4
Total 70 25,646.32
Excluding ABS/MBS.
Source: Thomson Reuters SDC code: N7