2.875% and a US$875m 8NC3 at 4.75%,
standing out from the crowd in a week
dominated by Single B supply with the Ba2/
BB ratings on its euro notes.
While the deal priced a day earlier than
expected, several bankers were puzzled by
THEûSTEEPNESSûOFûTHEûCURVEûBETWEENûITSûlVEû
and eight-year euro tranches. One banker
said around 40bp of the spread between the
two tranches was the result of the swaps
curve, leaving 20bp of credit spread between
the two tranches.
“Double Bs have not been having a 20bp
CREDITûSPREADûBETWEENûlVEûANDûSEVEN
EIGHTû
YEARS ûITSûBEENûPRETTYûmAT vûONEûSAID
Elsewhere, UK debt purchaser LOWELL had
to downsize its €705m-equivalent dual-
trancher backing its takeover of peer
Intrum’s carve-out business to €660m.
The company was set to bring a €530m
LONGûlVE
YEARûNON
CALLûONEûmOATERûATûBPû
over Euribor, and a €130m-equivalent long
lVE
YEARûNON
CALLûTWOû3WEDISHûKRONAûOFFERINGû
at 475bp over Stibor. Despite the downsizing,
pricing was coming in line with talk of mid-
fours on the euros and 25bp back from that
on the Swedish krona tranche. Pricing was
expected as IFR went to the press.
Lowell will see its leverage up to 5.2x after
the acquisition, up from 4.9x when Lowell
brought its last bond deal in September.
“The acquisition will impede Lowell’s
ability to deleverage and improve its
solvency metrics over the next 12-18
months,” Moody’s analysts wrote in a note.
They added that integration risks are
“mitigated by Lowell’s track record of
growing through successive acquisitions in
mature markets, and successfully
completing the integration processes”.
While Crown Holdings and Lowell
brought completely fresh supply, €564m of
3ELECTASûDEALûWILLûRElNANCEûEXISTINGûBONDû
debt in euros and Swiss francs, with the
remainder coming as fresh supply.
Joint global coordinators on Selecta were
Goldman Sachs, Credit Suisse and BNP Paribas.
Citigroup led Crown Holdings. Goldman Sachs
and Credit Suisse are leading Lowell.SUMMIT UPSIZES DEBUT OFFERINGReal estate company SUMMIT GERMANY
managed to increase its seven-year non-call
three senior unsecured offering by €50m to
€300m despite talk of 2% pricing that came
tight versus its comparables.
Pricing came at the tight end of 2.125%
area talk.
Adler and Demire are Summit’s country
peers. Adler’s BB+ rated €300m of long six-
year 2.125% notes, issued in November at a
2.25% yield, were trading at 2% while
Summit’s trade was pricing, according to
Tradeweb data.
Demire’s €270m of 2.875% 2022s (2019
call) from July, rated Ba2/BB+, were yielding
2.20%. Summit has sub-investment-grade
ratings but the notes are rated Ba1/BBB–.
“My view was that this should come
inside Demire because it has the same
portfolio size but better metrics, and wider
than Adler because Adler is a much bigger
portfolio and residential,” said one investor.
A lead said Summit was priced inside
Adler due to its crossover rating.
4HISûISûTHEûYEARSûlRSTûREALûESTATEûDEALûINû
European high-yield after a record year of
issuance 2017 across the high-yield and
investment-grade corporate markets.
Only 12 real estate issuers have ever
tapped the European high-yield market,
according to IFR data, and six of them issued
in 2017, with volume reaching €4.9bn.
“The transaction is credit positive because it
will lengthen Summit Germany’s average
debt maturity to 6.7 years, decrease its average
borrowing costs to approximately 2.6% and
increase its unencumbered asset pool to 65%,”
Moody’s analysts wrote in a note.
The deal was also the highest rated in a
week dominated by Single B supply. The
only other Double B note issue last week
came from Crown Holdings.3UMMITûWILLûUSEûTHEûPROCEEDSûTOûRElNANCEû
loan debt.
The lead said another high-yield real
estate issuer is in the pipeline.
Morgan Stanley (B&D) and Deutsche Bank led
the trade.ASIA-PACIFIC
S&P DOWNGRADES BIS INDUSTRIESS&P downgraded its rating on Australia’s BIS
INDUSTRIES to D from CC before withdrawing
it at the issuer’s request on completion of a
debt restructuring and recapitalisation.
All voting senior lenders and payment-in-
kind noteholders supported the
restructuring proposal, under which debt
was reduced to A$280m (US$223m) from
A$1.2bn. The parties agreed to a debt-to-
equity conversion that gave senior lenders
and noteholders ownership of Bis’s
operational entities.
S&P said it considered the recapitalisation
to be a distressed exchange, but that the
exercise had improved the company’s
capital structure.
The mining logistics company previously
had US$355m of PIK notes outstanding,
according to Tradeweb. The 12% April 1
2019 Yankee notes were issued through
related entity Artsonig.
Funds managed by Carlyle and Varde
Partners are now the majority equity owners
of the new company, Bis Industries
Holdings.STRUCTURED FINANCE
EMEA MBS
PRECISE BENEFITS FROM SUPERCHARGED
STERLING MARKETCHARTER COURT FINANCIAL SERVICES priced a
£254m UK buy-to-let RMBS on Wednesday,
with seniors matching levels on the
previous week’s Finsbury Square and
lNDINGûSIMILARLYûHIGHûMULTIPLESûOFû
oversubscription, although for a smaller
deal.
There were over £1bn of orders in total
for Charter Court’s deal, PRECISE MORTGAGE
FUNDING 2018-1B, with the Triple As printing at
plus 65bp and attracting over £900m
demand for the £222.74m tranche.
“Before announcing the deal it was
unclear to us that there was this ferocious
demand out there,” said Sebastien Maloney,
CFO at Charter Court.ALL ASIAN HIGH-YIELD ISSUERS
1/1/2018 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 Bank of China 3 300.81 6.0
2 BAML 3 281.67 5.6
3 Citigroup 4 274.42 5.5
4 Deutsche Bank 3 243.44 4.8
5 Goldman Sachs 2 238.97 4.8
6 Citic 3 238.61 4.8
7 JP Morgan 1 211.85 4.2
=7 BNP Paribas 1 211.85 4.2
9 Morgan Stanley 2 188.61 3.8
10 SG 1 187.50 3.7
Total 11 5,023.20
Excluding equity-related debt.
Source: Thomson Reuters SDC code: B06d
ALL EUROPEAN HIGH-YIELD ISSUERS
1/1/2018 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 Credit Suisse 3 328.68 13.9
2 ING 2 287.04 12.1
3 BAML 2 270.25 11.4
4 Citigroup 2 257.75 10.9
5 SG 1 187.50 7.9
=5 MUFG 1 187.50 7.9
7 Barclays 2 153.68 6.5
8 RBC 1 99.54 4.2
=8 Jefferies 1 99.54 4.2
10 Banco do Brasil 1 82.75 3.5
Total 5 2,364.89
Excluding equity-related debt.
Source: Thomson Reuters SDC code: B06c