The INTER-AMERICAN DEVELOPMENT BANK followed
WITHûAû!MûINCREASEûTOûITSûû+ANGAROOû
DUEû*UNEû ûBRINGINGûTHEûTOTALûTOû!M
4HEûTRANSACTIONûHASûAûREOFFERûPRICEûOFûû
TOûYIELDûûSEMI
ANNUALLY ûEQUATINGûTOûAû
REOFFERûLEVELûOFûBPûOVERûSEMI
QUARTERLYûASSETû
SWAPS ûINûLINEûWITHûEARLIERûGUIDANCE ûORûBPû
OVERûTHEû!PRILûû!#'"
Nomura and RBC Capital Markets were lead
managers.
CORPORATES
US DOLLARS
RISE IN EVENT RISK COULD LIMIT M&A
DEBT FUNDING
4HEûAVAILABILITYûOFûDEBTûTOûFUNDûAûGROWINGû
PIPELINEûOFûLARGEûJUMBOû-!SûCOULDûBECOMEû
MOREûCHALLENGINGûWITHûAûSHARPûINCREASEûINûEVENTû
RISKûINûRECENTûWEEKS ûSAIDûBANKERSûANDûANALYSTS
!ûRECORDû53BNûOFûBRIDGEûLOANSûWEREû
ARRANGEDûINûTHEûlRSTûHALFûOFûTHEûYEAR ûAûû
increase from US$56.6bn in the same half
LASTûYEAR ûACCORDINGûTOû4HOMSONû2EUTERSû,0#
4HISûWASûTHEûHIGHESTûHALF
YEARûTALLYûEVER û
TOPPLINGûTHEûPRIORûPEAKûOFû53BNûINûTHEû
SECONDûHALFûOFûûBYûNEARLYû
But as worries increase about an
ECONOMICûCYCLEûATûITSûPEAK ûRISINGûINTERESTû
RATESûANDûAûGLOBALûTRADEûWAR ûDOUBTSûABOUTû
bond markets being as amenable to bridge
LOANûTAKE
OUTSûASûTHEYûHAVEûBEENûINûTHEûPASTû
could start eating into lending appetite.
Lenders arranging these bridge loans that
SUPPORTû-!ûTRANSACTIONSûhAREûDOINGûITûTOû
GETûTHEûBONDûDEALS ûNOTûTOûSITûONûTHEûLOANSv û
said one senior banker.
)FûBONDûINVESTORSûRESIST ûTHISûCOULDûHAVEû
RIPPLEûEFFECTSûONûTHEûPACEûOFû-!ûLENDING û
bankers said.
h)NVESTMENT
GRADEûBONDûSPREADSûAREû
WIDER ûANDûIFûTHATûPERSISTSûTHATûCOULDûGIVEû
potential lenders some concern –
particularly if they are dependent on that
market for taking out loan commitments in
ANûENVIRONMENTûWHEREûTHEREûISûVOLATILITYû
ANDûAûLOTûOFû-!
RELATEDûSUPPLYûCOMING vû
another senior banker said.
!VERAGEûINVESTMENT
GRADEûSPREADSûHAVEû
gapped out by 19bp since the start of the
YEAR ûACCORDINGûTOû)#%û"!-,ûDATA
-!ûBONDûDEALSûAREûALSOûUNDERûMOREû
INVESTORûSCRUTINYûTHANKSûTOûINCREASEDûCONCERNû
ABOUTûTHEûAMOUNTûOFûLEVERAGEûINûTHEûSYSTEMû
as the credit cycle gets longer in the tooth.
!Tû53TRN ûTHEûHIGH
GRADEûCORPORATEû
bond market has nearly tripled in size in the
PASTûûYEARSû!NDûHALFûOFûTHATûDEBTûSITSûINû
THEû4RIPLEû"ûBRACKET ûORûJUSTûABOVEûJUNK
!ûSIZEABLEûPROPORTIONûOFûTHEû4RIPLEû"û
bracket contains companies that loaded up
ONûDEBTûANDûSACRIlCEDûRATINGSûTOûMAKEû
ACQUISITIONSûINûTHEûPASTûCOUPLEûOFûYEARS ûANDû
THENûDIDûNOTûDELIVERûONûPROMISESûTOûBRINGû
LEVERAGEûBACKûDOWN
h4HEREûISûANûINVESTORûFOCUSûONûHOWûLATEûWEû
AREûINûTHEûCYCLEûFROMûAûCREDITûSTANDPOINT vûAû
third senior banker said.
h#OMPANIESûWITHûAGGRESSIVEûDELEVERAGINGû
STORIESûWILLûHAVEûTOûSUBSTANTIATEûTHOSEû!NDû
as far as those stories don’t add up for
INVESTORS ûTHEYûWILLûREQUIREûMOREû
CONCESSIONSûTOûGETûDONEvHOLDING ON
!DDINGûTOûALLûTHISûNERVOUSNESSûISûTHEûRISKû
THATûREGULATORYûAPPROVALûFORû-!ûDEALSûMAYû
not be as forthcoming as it has been.
4HEûREGULATORYûCLIMATEû
ûINCLUDINGûLONG û
DRAGGED
OUTûREVIEWûPERIODS ûASûWELLûASû
heightened international and security
concerns – is already hurting deal-making.
Wednesday saw the world’s biggest
smartphone chipmaker QUALCOMM abandon
ITSû53BNûBIDûTOûBUYûRIVALû.80 ûAFTERûTHEû
COMPANYûFAILEDûTOûSECUREû#HINESEûAPPROVALûin what is being seen as Chinese retaliation
for US tariffs.
Such decisions are now making bond
INVESTORSûMOREûCAUTIOUSûABOUTûDEALSûTHATû
PRE
FUNDûSUCHûACQUISITIONS ûWHICHûFORû
companies means higher funding costs and
DEALûEXECUTIONûUNCERTAINTY
"ANKERSûBELIEVEûISSUERSûUNSUREûABOUTûTHEû
FATEûOFûTHEIRû-!ûBIDSûMAYûBEûBETTERûADVISEDû
TOûAVOIDûPRE
FUNDINGûTHEMûINûTHISûCLIMATE
!SûSUCH ûCORPORATEûTAXûCUTSûFROMûûTOû
ûHAVEûMADEûDEBTûMOREûEXPENSIVEûFROMû
ANûAFTER
TAXûSTANDPOINT ûWHILEûCOMPANIESûAREû
REWARDEDûMOREûFORûEQUITY
FUNDEDûDEALS ûSAIDû
a Barclays research report.
h4HEûCOMBINATIONûOFûOVERALLûLOWERû
VOLUMESûANDûAûSHIFTûTOWARDSûMOREûEQUITYû
FUNDINGûSHOULDûRESULTûINûDECLININGûISSUANCE vû
Barclays analysts wrote.
4HEû-!ûBONDûPIPELINEûFORûTHEûREMAINDERû
OFûûISûEXPECTEDûTOûBEûINûTHEûAREAûOFûAû
manageable US$50bn - consisting of around
EIGHTûDEALS ûSAIDûONEûBANKER
Deals now in the pipeline include WALT
DISNEYSû53BNûBRIDGEûLOANûFORûITSû
53BNûBIDûTOûACQUIREû4WENTY
&IRSTû
#ENTURYû&OXSûMEDIAûASSETS
%ARLIERûTHISûMONTH ûCONAGRA BRANDS lined up a
term loan of up to US$1.3bn for its US$10.9bn
ACQUISITIONûOFû0INNACLEû&OODS ûREPLACINGûAû
portion of its US$9bn bridge loan for the merger.
!NDûHEALTHûINSURERûCIGNA is set to turn to
THEûBONDûMARKETûSOONûTOûlNANCEûITSû
53BNûACQUISITIONûOFû%XPRESSû3CRIPTSû4HATû
DEALûCOULDûCOMEûASûEARLYûASû!UGUST ûBANKERSû
SAID ûINûORDERûTOûGETûAHEADûOFûTHEû3EPTEMBERû
post-Labor Day rush.EUROS
PROLOGIS BUILDS ON LOW SUPPLYPROLOGIS EURO FINANCE hit the mark last
7EDNESDAYûWITHûAûLONGû
YEAR ûTHEûlRSTû
REVERSEû9ANKEEûINûOVERûAûMONTH ûWHICHûBONDS CORPORATESALL INV-GRADE US CORPORATE BONDS
BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 BAML 44 7,564.07 9.7
2 JP Morgan 42 6,697.77 8.6
3 Morgan Stanley 28 5,616.33 7.2
4 Wells Fargo 42 5,593.96 7.1
5 Citigroup 33 5,407.74 6.9
6 Barclays 27 4,308.19 5.5
7 Mizuho 25 3,820.28 4.9
8 MUFG 20 3,545.22 4.5
9 RBC 21 2,963.42 3.8
10 Goldman Sachs 17 2,933.15 3.7
Total 122 78,250.58
Excluding equity-related debt, ABS/MBS, all foreign issues, global issues and non corporates.
Source: Thomson Reuters SDC code: F6a
ALL US INVESTMENT GRADE CORPORATE DEBT
(EXCLUDING SOLE SELF FUNDED DEALS)
BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 JP Morgan 249 71,143.53 11.2
2 BAML 222 67,751.24 10.6
3 Citigroup 216 59,501.40 9.3
4 Goldman Sachs 137 46,406.76 7.3
5 Barclays 118 43,047.81 6.8
6 Morgan Stanley 171 42,876.16 6.7
7 Wells Fargo 154 39,094.31 6.1
8 RBC 90 25,257.88 4.0
9 HSBC 73 23,790.37 3.7
10 Credit Suisse 77 19,935.04 3.1
Total 567 636,441.09Source: Thomson Reuters SDC code: F09aALL CORPORATE BONDS IN EUROS
BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues €(m) (%)
1 BNP Paribas 103 17,551.08 9.0
2 SG 79 14,810.44 7.6
3 Deutsche Bank 80 13,383.53 6.8
4 JP Morgan 72 11,106.17 5.7
5 Goldman Sachs 42 11,015.74 5.6
6 HSBC 78 10,781.79 5.5
7 UniCredit 58 10,180.56 5.2
8 Credit Agricole 61 9,850.75 5.0
9 Barclays 48 8,655.39 4.4
10 BAML 48 8,089.19 4.1
Total 299 195,577.42
Excluding equity-related debt. FIGs, ABS/MBS.Source: Thomson Reuters SDC code: N8