“Given the lucrative nature of the transactions the system
at Goldman proved easy enough to circumvent”
US INDICTMENT CHARGING GOLDMAN BANKERS OVER 1MDB, P15
Capital markets week ahead: Mid-terms,
Ljubljanska Banka, Victoria
PAUSE FOR THOUGHT With the US mid-term
elections on Tuesday and a Federal Reserve
meeting pencilled in for Wednesday and
Thursday, primary markets look set for a
quiet week, as issuers opt to wait and avoid
any potential volatility. That should give
bankers a chance to digest where they are in
terms of their annual targets, with just six
full weeks of business to go before the year
is out.
For most, the numbers won’t make for
happy reading: investment banking fees at
US$85bn in the year to-date are down 5% on
this point last year, driven mainly by a
lacklustre year for bond and loan issuance.
3OMEûBANKS ûSUCHûASû$EUTSCHEû"ANKûANDû
Citigroup are down 10%. Out of the top ten,
only the top three – JP Morgan, Goldman
Sachs and Morgan Stanley – have seen both
fees and market share increase.
BANKING ON IT Slovenia will have a second
go on Thursday to sell down its stake in
Ljubljanska Banka, the lender it bailed out
seven years ago. It tried and failed to do a
deal in mid-2017, and is now in the market
seeking to sell up to €900m of shares. It
needs to sell at least half of the bank before
the end of the year to meet European state-
AIDûRULESû7HATûHAPPENSûIFûTHISûDEALûmOPSû
too? No pressure, then.
FINDING A FLOOR UK carpet-maker Victoria
HOPESûTOûlNALLYûPRICEûAûDEBUTûõMûHIGH
yield bond, after the company delayed
pricing at the end of last week. The
announcement of the deal last Monday sent
shares in Victoria tumbling, with investors
confused as to why the acquisitive company
WASûRElNANCINGûAûLOW
INTERESTûBANKûLOANû
that it had agreed just three months earlier.
PUTTING ON ITS BEST FACE Botox-maker
Allergan meets with investors to market a
proposed euro bond. The deal comes as the
PHARMACEUTICALûMAKERûlGHTSûTOûKEEPûITSû
investment-grade rating following its
buyout by Actavis that saddled it with
billions of extra debt. Allergan is just one of
a worryingly long list of IG borrowers with
US$2.6trn of debt that are precariously close
to falling into junk territory.
IN MINSK CONDITION Belorussian
supermarket chain Eurotorg hopes to raise
53MûFROMûITSû'$2ûLISTINGûINû,ONDONûONû
Wednesday. About US$200m of new shares
are being sold, with the grocer planning to
use proceeds to pay off its debts.
Shareholders will sell up to US$50m of
existing stock, some of which will be used to
buy StatusBank, a lender that is being spun
off from the supermarket chain.MAKING A CLAIM Bids are due on Monday to
participate in a US$2.3bn loan backing
Carlyle Group’s acquisition of a majority
stake in insurance technology provider
Sedgwick. KKR, which is selling a US$6.7bn
stake in the company to rival Carlyle, is
playing an interesting role in the
transaction: not only is it the seller, but it is
also one of four loan arrangers along with
Bank of America, Morgan Stanley and
SunTrust.PLANE SAILING? Sirius Aircraft Leasing Fund
is targeting US$250m from its IPO in London
ONû-ONDAYû(OWARDû-ILLAR ûAûFORMERû#&/ûATû
Ryanair, is heading up the fund that plans to
buy older single-aisle aircraft from big
carriers keen to bring down the age of the
AVERAGEûmEETûANDûLENDûTHEMûONûTOûOTHERû
operators. The fund plans to use Millar’s
market contacts to gain access to attractive
aircraft portfolios.DEBUTANTE BALL Kazakhstan is set to make
its debut in euros, with the country
expected to launch a 10-year bond deal
following positive feedback from investors
on a roadshow last week. Astana was last in
the market in 2015, when it raised US$4bn
through a dual-tranche transaction. Bankers
are hopeful that a successful trade could
LEADûTOûAûmOODûOFûDEALSûFROMûCORPORATESûINû
the country.BAILOUT MONEY The European Financial
Stability Facility is expected to launch its
lRSTûTRADEûSINCEû*ULY ûWITHûTHEûBAILOUTûFUNDû
widely expected to go for all €4bn of thelNANCINGûITûWANTSûTOûRAISEûBEFOREûTHEûENDûOFû
the year. The deal comes against a trickier
backdrop than it had during July, with
tensions between Italy and Brussels rising
OVERû)TALYSûPROPOSEDûBUDGET ûWHICHûmOUTSû
%UROPEANûRULESûONûlSCALûDElCITSIN ARREARS The impact of the Italian
stand-off on its country’s banks should
become slightly clearer this week, with
UniCredit, Intesa Sanpaolo and Banco
BPM among those releasing earnings.
Banks have been shut out of markets for
over two months, with concerns
mounting over their mammoth exposures
to sovereign debt and a lack of progress in
dealing with the €260bn of bad debts on
their books.HEALTH CHECK Friday is the deadline to
participate in a US$3.4bn covenant-lite term
loan supporting Apollo Global Management
leveraged buyout of hospital operator
,IFE0OINTû(EALTHû0RIVATEûEQUITYûGROUPû
!POLLOûISûALSOûlNANCINGûTHEûDEALûWITHû
US$1bn of equity. Citigroup is leading the
loan component, with Barclays, Royal Bank
OFû#ANADA û#REDITû3UISSE û$EUTSCHEû"ANKûANDû
UBS.LAST WEEK IN NUMBERS
US$1bn – Amount of Evergrande’s
US$1.8bn bond deal bought by the
developer’s chairman
37% – Three-day fall in Victoria shares
AFTERûITûANNOUNCEDûPLANSûTOûRElNANCEû
debt in bond markets
€12bnûnû$EMANDûFORû+F7SûõBNûlVE
year Global bond that printed at 20bp
through swaps
3 – Number of US high-yield bond deal
pulled following the worst monthly
returns in two years