International Financing Review September 8 2018 43BONDS HIGH-YIELD
the issuer to meet this test in order to pay
dividends to equity or repurchase equity.”
Covenant Review also slammed what it
called excessively liberal pro forma
adjustments to earnings definitions, “the
continuing sponsor trend of inflating Ebitda
to nonsensical levels”.
An investor roadshow for the Refinitiv bonds
began on September 5 and will continue this
week in Europe and the US. The bond is not
expected to price until September 18.
It remains to be seen how investors react
to Covenant Review’s risk assessment, but of
late investors have had success in forcing
issuers to change covenants.
Just last month, private equity firm KKR
made its covenants less issuer-friendly on a
buyout financing for IT operations
management company BMC Software.EUROPE/MIDDLE EAST/
AFRICAEUROPEAN HIGH-YIELD PRIMARY
KICKS OFFThe European high-yield primary market is
back to business after the summer break,with the bonds backing the buyout of
Thomson Reuters’ Financial and Risk unit
kicking off roadshows.
Thomson Reuters’ Financial and Risk unit,
which includes IFR and will be renamed
REFINITIV when its acquisition by Blackstone
closes, is out with a US$5.5bn-equivalent
bond.
Akzo Nobel’s speciality chemicals
business followed, announcing the bond
portion of the financing backing its
takeover by The Carlyle Group and
Singaporean sovereign wealth fund GIC on
Friday.
Issuers STARFRUIT US HOLDCO and STARFRUIT
FINCO announced a €1.385bn eight-year non-
call three senior unsecured dual-trancher
comprising €900m-equivalent and €485m
tranches. IPTs on the dollar are 9% area, with
the euros at high sixes to 7%.
Barclays (B&D on the dollar), HSBC (B&D on
the euro) and JP Morgan are global
coordinators. Another 16 banks are involved
in the deal.
Refinitiv’s deal in particular is among the
longest underwriting holds the market has
seen, a leveraged finance lawyer said,
following the announcement of
Blackstone’s intended acquisition onJanuary 30. But Akzo has also been waiting
for a while, after the buyout was announced
in late March and the loans were announced
last week.
Market participants are waiting to see
what impact the time lag between the
underwriting and pricing will have on the
terms and pricing sponsors will be able to
achieve.
Several bond deals backing LBOs had to
widen pricing and amend documentation
before the summer to get over the line.
Those watching Akzo Nobel in particular
have been worried about the impact of the
time lag, given the cap levels to which
underwriting banks agreed.PIPELINE
Other LBO announcements are expected to
follow.
Italian drugmaker RECORDATI is expected
to launch around €1bn in bonds to back
its takeover by CVC, a source with
knowledge of the matter said. Deutsche
Bank, Credit Suisse, Jefferies and UniCredit are
leading the financing and other banks are
involved.
The financing will also include a revolving
credit facility and Term Loan A, the source
said. That is typical for Italian borrowers,
which refrain from issuing Term Loan Bs
and opt for the high-yield market instead.
Chemical firm ITALMATCH is also
understood to be looking at a €400m bond
to back its takeover by Bain Capital, bankers
said.
Turning to mergers, Italian gaming
company GAMENET could refinance a bridge
loan taken out from UniCredit and
Nomura for its €265m acquisition of peer
GoldBet with a high-yield bond, it said in
August. UniCredit sent a save-the-date
announcement on Friday for a FRN from a
high-yield gaming issuer, without
elaborating.
Hearing-aid maker SIVANTOS is expected to
launch a bond of €600m-€700m as part of
the financing for its merger with Danish
peer Widex. The bonds are expected in late
September, but most likely in October.
UK gambling technology firm PLAYTECH is
also expected to bring a bond, after taking
out a bridge loan of around €1bn to back its
acquisition of Snaitech. Santander, NatWest
Markets, UBS and UniCredit led the loan.
In April, the company estimated that it
could issue bonds with a coupon of around
3%, Thomson Reuters LPC reported at the
time, although market conditions have
changed starkly since.
Besides buyouts, another bridge loan for
EL CORTE INGLES is also expected to be
refinanced. The €1.2bn bridge was issued as
part of a larger loan financing that
refinanced loan debt.ALL US$ DENOMINATED HIGH-YIELD BONDS
BOOKRUNNERS – 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 JP Morgan 112 18,376.19 12. 0
2 Goldman Sachs 85 11,330.28 7 .4
3 Credit Suisse 81 10,455.51 6.8
4 Barclays 76 9,790.04 6. 4
5 BAML 97 9,654.41 6.3
6 Wells Fargo 72 9,421.09 6. 1
7 Deutsche Bank 84 9,417.58 6. 1
8 Morgan Stanley 71 8,622.84 5.6
9 Citigroup 77 8,467.58 5.5
10 RBC 50 5,712.01 3. 7
Total 293 153,644.02
Including US domestics, Euro, foreign, globals. Excluding equity-related debt.
Source: Thomson Reuters SDC code: B5ALL NON-DOLLAR DENOMINATED HIGH-YIELD BONDS
1/1/2018 TO DATE
Managing No of Total Share
bank or group issues €(m) (%)
1 Deutsche Bank 32 3,453.92 7 .9
2 JP Morgan 35 3,408.38 7 .8
3 BNP Paribas 37 2,884.13 6.6
4 Credit Suisse 28 2,355. 46 5. 4
5 Citigroup 20 2,290.38 5.3
6 HSBC 28 2,265.39 5. 2
7 BAML 20 2,249.84 5. 2
8 Goldman Sachs 24 2,123.31 4 .9
9 Barclays 21 2,010.25 4 .6
10 Morgan Stanley 12 1,463.43 3. 4
Total 101 4 3,591.42
Excluding equity-related debt.
Source: Thomson Reuters SDC code: B6ALL ASIAN HIGH-YIELD ISSUERS
1/1/2018 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 Haitong Securities 36 1,793.47 6. 7
2 Citic 23 1,565.3 7 5.9
3 Guotai Junan Securities 35 1,456.68 5.5
4 Bank of China 19 1,394.25 5. 2
5 Deutsche Bank 20 1,370.87 5. 1
6 JP Morgan 7 1,275. 24 4 .8
7 Credit Suisse 18 1,191.81 4 .5
8 HSBC 22 1,080.19 4 .0
9 Morgan Stanley 13 1,058.98 4 .0
10 BAML 13 960 .99 3.6
Total 81 26,725.58
Excluding equity-related debt.
Source: Thomson Reuters SDC code: B06dALL EUROPEAN HIGH-YIELD ISSUERS
1/1/2018 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 JP Morgan 40 5,993.29 9 .2
2 Deutsche Bank 36 4,894.29 7 .5
3 Goldman Sachs 30 4,416.70 6.8
4 Credit Suisse 29 4,176.72 6. 4
5 BNP Paribas 40 3,858.53 5.9
6 Barclays 26 3,710.51 5. 7
7 Citigroup 24 3,394.91 5. 2
8 Morgan Stanley 18 2,898.09 4 .4
9 BAML 19 2,803.62 4 .3
10 HSBC 27 2,676.64 4 .1
Total 109 65,290.00
Excluding equity-related debt.
Source: Thomson Reuters SDC code: B06c6 Bonds 2250 p25-55.indd 43 07/09/2018 19:30:00