“Added to the fact that the market has
repriced, that is helping demand for these
deals. SSA names continue to trade tight
whereas covereds have cheapened by
around 10bp.”
KfW’s €4bn September 2023 has only
widened by 5bp since the beginning of the
YEAR ûFORûEXAMPLE ûANDûWASûBIDûATûAROUNDû
30bp over the German benchmark. HSH on
the other hand offered a pick-up in the mid-
70s over OBLs.
“A lot of accounts who buy Pfandbriefe
are rates buyers, so this looks very attractive
INûTHATûCONTEXT vûTHEûLEADûSAID
Recent deals from the likes of Commerzbank
and Landesbank Baden Wuerttemberg also
garnered strong books, helped by their
attractive spreads over Germany.
Investors were not deterred by the mere
3bp of new issue concession offered by HSH,
among the lowest issuers have paid in
recent weeks.
The secured format also meant that
investors were willing to look past the fact
that HSH is still going through a restructuring.
“HSH has had its complications in the past
and are going through quite a bit of a
restructuring and a lot of accounts don’t
have lines,” the lead said.
“However, that’s not the case of everyone.
Most Pfandbriefe in that maturity clear at
less 10bp-12bp, so [plus] 18bp looked very
attractive.”
HSH’s regional government owners
struck a deal to sell the bank to buyout
groups Cerberus and JC Flowers at the end
of February, with investors GoldenTree,
Centaurus Capital and Austrian bank
BAWAG also taking stakes.
The closing of the purchase agreement is
NOWûEXPECTEDûINûTHEûTHIRDûQUARTERûSUBJECTûTOû
a number of factors, including approval
from the European Commission.
The dynamic in the Pfandbrief market did
not really play out in the case of RLB
OBEROESTERREICH, which priced a €500m 10-
year on books of some €680m.It came at 5bp over mid-swaps via
DekaBank, DZ Bank, Erste, RBI and UniCredit.
“It wasn’t a rocket but was soberly
received,” a lead said. “They had no major
DIFlCULTY ûESPECIALLYûGIVENûTHATûTHEûSPREADû
was not as generous as HSH’s.”
He saw fair value at 1bp over, meaning
that the trade offered around 4bp of new
issue premium.HIGH-YIELD
UNITED STATES
CASINO DEAL ON HOLDA junk bond sale backing the development of
a new Hard Rock hotel and casino on Native
American land in California lingered for a
third week after struggling to gain traction.
A source familiar with the offering told
IFR that bookrunner Wells Fargo is now
looking to price the deal in the week of July
9, after the July 4 holiday effectively made
last week a no-go.
0RICINGûONûTHEû53MûlVE
YEARûNON
CALLû
two offering, to be issued by THE ENTERPRISE
DEVELOPMENT AUTHORITY, has already been
sweetened to entice investors.
Price talk was set on June 25 at a coupon
of 10.50% with a new-issue discount of 98
cents on the dollar on June 25, giving the
deal an all-in yield of around 11%. That was
up from whispers of high 9s to 10% that had
circulated the week before.
Gaming issuers from Native American tribes
have often been a tough sell for investors, due
to uncertainties about the enforceability of
creditor claims in a bankruptcy or liquidation.
A different tribe in California was forced
earlier this year to pay a yield of 14.425% -
one of the highest rates ever seen on a
HIGH
YIELDûBONDûSINCEûTHEûlNANCIALûCRISISû
ûTOûlNANCEûAûLONG
DELAYEDûCASINOûDEVELOPMENTû
in a nearby area.
Investors who spoke with IFR said
construction risk, stiff competition in the area
around Sacramento where the casino will be
BUILT ûANDûLOWûEXPECTEDûLIQUIDITYûINûTHEû
secondary market for the bond were among
their key concerns about the EDA offering.
EDA is a vehicle created by the Estom
Yumeka Maidu Tribe of the Enterprise
Rancheria, which has over 1,000 members,
to develop the property.EUROPE/MIDDLE EAST/
AFRICAWIND BLOWN AWAY BY HUTCHISON BUYWIND TRE’s bonds gained as much as 16 points
last Tuesday morning after Russian group
VEON, formerly known as VimpelCom,
announced that it was selling its 50% stake
in the company to Hong Kong partner CK
Hutchison.
CK Hutchison will take ownership of the
Italian telco in a €2.45bn deal.
“It’s a complete surprise reaction. The
idea of VEON selling to CK Hutchison didn’tALL US$ DENOMINATED HIGH-YIELD BONDS
BOOKRUNNERS – 1/1/2018–30/6/2018
Managing No of Total Share
bank or group issues US$(m) (%)
1 JP Morgan 93 13,115.78 10.5
2 Goldman Sachs 75 9,152.70 7.4
3 BAML 83 8,256.84 6.6
4 Barclays 63 8,226.40 6.6
5 Deutsche Bank 70 8,055.24 6.5
6 Credit Suisse 65 7,624.88 6.1
7 Wells Fargo 59 7,539.10 6.1
8 Citigroup 66 7,340.77 5.9
9 Morgan Stanley 60 7,279.18 5.8
10 RBC 43 4,977.54 4.0
Total 242 124,455.70
Including US domestics, Euro, foreign, globals. Excluding equity-related debt.
Source: Thomson Reuters SDC code: B5
ALL NON-DOLLAR DENOMINATED HIGH-YIELD BONDS
1/1/2018–30/6/2018
Managing No of Total Share
bank or group issues €(m) (%)
1 JP Morgan 31 2,901.74 7.7
2 Deutsche Bank 26 2,823.33 7.4
3 BNP Paribas 30 2,470.79 6.5
4 Credit Suisse 23 2,104.59 5.6
5 BAML 18 2,078.14 5.5
6 HSBC 24 2,012.32 5.3
7 Citigroup 15 1,875.14 4.9
8 Goldman Sachs 19 1,787.04 4.7
9 Barclays 18 1,758.25 4.6
10 Credit Agricole 11 1,203.55 3.2
Total 82 37,919.73
Excluding equity-related debt.
Source: Thomson Reuters SDC code: B6ALL ASIAN HIGH-YIELD ISSUERS
1/1/2018–30/6/2018
Managing No of Total Share
bank or group issues US$(m) (%)
1 Haitong Securities 34 1,709.99 7.4
2 Citic 21 1,493.15 6.5
3 Deutsche Bank 16 1,355.03 5.9
4 Guotai Junan Securities 30 1,244.66 5.4
5 Morgan Stanley 11 1,126.84 4.9
6 Bank of China 15 1,098.68 4.7
7 BAML 11 1,006.95 4.4
8 JP Morgan 6 984.70 4.3
9 Credit Suisse 14 914.49 4.0
10 HSBC 17 900.11 3.9
Total 68 23,133.73
Excluding equity-related debt.
Source: Thomson Reuters SDC code: B06dALL EUROPEAN HIGH-YIELD ISSUERS
1/1/2018–30/6/2018
Managing No of Total Share
bank or group issues US$(m) (%)
1 JP Morgan 34 4,561.74 8.7
2 Deutsche Bank 29 3,883.57 7.4
3 BNP Paribas 33 3,243.90 6.2
4 Barclays 23 3,189.49 6.1
5 Citigroup 19 2,777.87 5.3
6 Credit Suisse 23 2,623.36 5.0
7 Goldman Sachs 23 2,620.46 5.0
8 BAML 17 2,471.01 4.7
9 HSBC 23 2,381.35 4.6
10 ING 14 1,810.76 3.5
Total 89 52,310.50
Excluding equity-related debt.
Source: Thomson Reuters SDC code: B06c