An aircraft engine manufacturer and a construction company ventured out into the high-grade euro market on Wednesday, treading where others dare not go as a poorer market tone put more established borrowers on the sidelines.

Covid-19 flare ups in Europe and the US have severely dented the momentum in what was an already heavily supplied euro corporate market. However, the fact that deals from higher beta names crept into the market and found traction took some by surprise.

"The market is super weird," said a syndicate banker.

"Iren came close to having to pull its deal [yesterday]. Worldline came on a day where Wirecard was everywhere in the news and then you got the unrated Symrise who got the deal of day done."

On Wednesday only two new issues hit screens, single-tranche deals from MTU Aero Engines (Baa3/BBB) and Eiffage (unrated), giving the market a chance to take a breather having seen nearly €30bn of IG corporate issuance since June 15. Both trades...

WeWork has asked to skip millions of pounds of rent payments owed to Spelthorne Borough Council, creating a major headache for the tiny local authority that has borrowed more than £1bn to bet on commercial property.

The request offers a glimpse into both the impact of the coronavirus pandemic and resulting lockdown on the council's finances and the struggles of WeWork as it wrestles with the same issues.

The beleaguered shared-workspace operator is one of Spelthorne council's biggest tenants, occupying three floors at 12 Hammersmith Grove, an office building in West London that the council bought two years ago from Aberdeen Standard Investments for £170m. It is one of the authority's biggest investments.

WeWork has asked the council to waive the next 18 months of rent in exchange for a five-year extension on its lease, according to documents seen by IFR. It is seeking to weather the hit to its business from the pandemic, which has led to a collapse in...

Commerzbank has appointed Tony Zhang as sole country chief executive for China and general manager in Shanghai, in addition to his role as head of China corporates coverage.

Zhang will report to Nick Johnston, regional board member for Asia. Zhang joined the German lender in April 2019 as joint country CEO for China, general manager of its Beijing bank and head of China corporates coverage.

He has worked for numerous banks, including Commonwealth Bank of Australia, Deutsche Bank, Bank of America and Lehman Brothers, in China, Hong Kong and the US.

Wirecard’s directors were locked in discussions with its lending banks on Monday about whether a €1.75bn revolving credit facility might be extended, sources said, a critical step to prevent the German payments company from filing for bankruptcy protection.

Wirecard’s shares fell 44% on Monday to €14.44 and have dropped nearly 86% since Thursday morning when the company said its auditor EY could not verify whether €1.9bn of its cash existed and refused to sign off the company’s 2019 accounts.

The banks now have the right to terminate the loan agreement since the accounts have not been produced.

Wirecard issued €500m of 0.5% five-year bonds in September through Credit Agricole, Deutsche Bank and ING as global coordinators, and Citigroup and Credit Suisse as bookrunners. Those have also collapsed in price since Thursday from 80 cents in the euro to just 26.5 cents. The 2024 bonds are considered more junior creditors than the bank lenders. Law firm Kirkland &...

A less hectic start to the week for the investment-grade primary, but it is active nonetheless, with at least five deals coming to market.

The high-yield primary has trimmed its sails after last week's volume record. Three deals were announced today, with one expected to price later.

The IG primary last saw action on Thursday when two deals were priced totaling US$4.6bn, according to IFR data.

Weekly supply totaled US$56.555bn.

Bank of America says it sees IG supply for this week ranging between US$20bn and $40bn. Other syndicate desks predicted supply in the US$30bn area for the week.

Monthly issuance is already over US$132bn, which is just US$45.4bn off from becoming the fourth largest month on record, according to IFR data.

BofA also says it sees tighter credit spreads ahead as economic data is coming in better than expected.

"It appears we are now in the V-phase of the recovery after an ultra-short two-month recession," the bank...

Updates with Engineering Group

Just under three months after the global credit markets went into meltdown caused by the spread of the coronavirus, European high-yield bankers and investors have switched their dials back to risk-on.

That's good news for banks with M&A financing risk to shift. On Monday, Austrian sensor company AMS announced four days of investor calls for a €1bn-equivalent dual-currency five-year non-call two, to help fund its acquisition of German lighting group Osram - a deal signed before the pandemic took hold.

Global co-ordinators and physical bookrunners are HSBC and UBS.

The company had already partly derisked its €4bn bridge loan with a €1.65bn rights issue in April. It held a non-deal roadshow with investors in mid-May.

And the Engineering Group (B2/B/B+) announced a dual-tranche €640m bond split between a €240m senior secured floating-rate 6NC1 note and a €400m senior senior secured fixed-rate 6NC2 bond. Proceeds from...

With a £350m senior bond maturing in June 2021, a £330m perpetual coming up for call in September this year and a sterling market desperate for yieldy assets, it was perhaps no surprise to see Bupa Finance emerge with a dual-tranche deal on Thursday.

UK insurance companies have been prolific issuers of subordinated capital in recent weeks as they have sought to take advantage of market conditions to bolster their capital at historically attractive levels, and Bupa was no different.

"We've retraced a lot of the widening seen since Covid and issuers are concerned about the economic scarring we will likely see from the second half onwards," said a banker on the deal.

"You put that against a market where investors are flush with cash and happy to support deals in primary that are coming with little or no concession, why not come now?"

UK insurers have raised £2.56bn in Tier 2 and Restricted Tier 1 since the start of the year, just short of the £2.85bn raised...

A €1bn green bond for Banco Santander proved a popular hit with investors on Thursday, somewhat stealing the thunder from newcomer Hypo Noe, which was raising its inaugural trade in the senior preferred format.

While some financial institutions' recent focus has been on raising funds to help tackle the Covid-19 pandemic, other banks remain focused on bolstering their credentials in the green format.

"Sometimes you get some greenwashing with some of these green bonds, but Santander is so straightforward, so transparent, investors really like it," said a syndicate banker. "This is basically solar panels, it's very clear what it's going to."

Another banker noted that Santander had committed to allocated 50% of the bonds proceeds to new projects.

"That's significantly higher than a lot of other borrowers," he said. "And while they can't do what Enel did in terms of KPIs, they have made a reputational promise."

Leads ABN AMRO, Barclays, Nomura,...

The SSA euro market remains in rude health, with a 15-year green bond from the European Investment Bank heavily oversubscribed and the Federal State of Brandenburg launching eight-year paper in negative spread territory.

"They look pretty impressive and they've gone well," said a banker away from the deals. "Both should give some comfort to the market after the last couple of days where there's been a slight widening."

A syndicate banker attributed the success of the deals in part to the ECB's asset purchase programme - for which both are eligible - which is expected to buy over €1trn of bonds this year.

"Everyone is still playing the same game in trying to buy as much as they can and then afterwards sell it to the central bank," said the syndicate banker.

The launch of the €1bn 2035 Climate Awareness Bond from EIB marks its second longest maturity for green euro debt and its first new issuance of green paper this year following a couple of highly...

The impact of coronavirus lockdowns on the retail and hotel sectors is making itself felt in the CMBS sector. An event of default has occurred on an Italian retail deal priced late last year, while the sponsor of an even more recent UK hotels CMBS has injected equity into the deal.

The Italian CMBS is Emerald Italy 2019, a €105.8m transaction brought by JP Morgan in October and sponsored by private equity fund Kildare.

Pricing at the time was not smooth - the deal came wide of price talk and some notes were retained by JP Morgan. It is backed by a single loan on three retail properties in Northern Italy where, even before the Covid-19 outbreak, investors were already growing wary of retail exposure.

A deal notice on Wednesday reported that the borrower did not pay accrued interest in full on its June 15 interest payment date and also missed an amortisation payment and a commitment fee.

In March DBRS put all tranches on an negative trend, but noted there...

There was strong backing for UK fashion retailer Ted Baker's fundraising as it restructures following a torrid time made worse by the coronavirus pandemic.

The company raised the maximum £105m from a firm placing, placing and open offer and offer for subscription. The 4-for-7 open offer comprising 25.47m shares at 75p had 71% take-up, with oversubscription for 68.19m shares covering the balance and requiring scaling back. As a result all shares allocated in the placing were clawed back.

An offer for subscription of 13.33m shares, the only part of the transaction not underwritten, had demand for more than 40m shares.

Ted Baker shares were down more than 4% at 112.8p around midday in London on Thursday.

Shareholders approved the capital increase and the sale and leaseback of the group's head office at an EGM on Thursday.

There is a 3% fee for the firm placing and placing and open offer and 4% for the offer for subscription. Goldman Sachs and Liberum...

HSBC has revived plans to axe about 35,000 jobs globally as chief executive Noel Quinn pushes ahead with his revamp announced earlier this year, having paused the majority of job losses following the outbreak of Covid-19.

Quinn, who only got the CEO job permanently in March having announced his restructuring plan a month earlier, said in a memo sent to all staff today that the bank was aiming to reduce headcount to around 200,0000 versus 235,0000 currently.

He did not provide a timetable for when the job cuts would take place other than mentioning it would occur over the "medium-term" and that it would hinge on the employment laws of each country where the cuts were made.

Quinn struck a regretful tone in the 800 word memo, although he said that the changes were inevitable, especially given the economic damage brought about by the virus and the impact it has had on HSBC as illustrated by its first quarter results in which its profit fell by almost a half due to...

Ardent Financial is launching as a global securities dealer specialising in the high-yield credit space, making it the latest independent trading firm to take on investment banks in areas they have traditionally dominated.

It will be regulated by the FCA and headquartered in London focusing on the US dollar, euro and sterling markets.

The business is independent and capitalised - it will start with seven senior professionals, including two dedicated traders.

It is led by chief executive Peter Chung, a 20-year veteran of the credit industry, who was last a senior trader in SC Lowy’s European, US and EM event-driven/special situations business. Before that, he was head of European distressed, HY and loan trading at Nomura. He started off as a portfolio manager in the US.

"We operate under most of the same regulations that the larger investment banks do. However, without large legacy assets, NPLs, internal conflicts and a smaller footprint, we are in a...

Grieg Seafood landed only the second bond seen in the nascent green bond aquaculture sector on Tuesday, a NKr1bn (€92m) five-year floating-rate note.

The company received enough investor demand to upsize the deal from an initially telegraphed NKr750m.

Green bond advisors and joint lead managers DNB Markets and Nordea kicked off marketing at IPTs of 350bp-375bp over the three-month Norwegian Interbank Offered Rate (Nibor).

The spread was later set at 340bp and the deal upsized to NKr1bn.

Grieg said the transaction was "significantly oversubscribed". Leads said they had received "well above NKr1bn in [orders]" by early morning Tuesday.

Grieg's senior unsecured five-year Norwegian krone note makes it only the second borrower in the aquaculture sector to issue a green bond, according to IFR data.

It follows fellow Norwegian seafood producer Mowi, which joined the ranks of corporate borrowers issuing green bonds that burnish their ESG...

BP looks set to renew the supply of subordinated debt from European corporates with its first ever outing in the format, looking to shore up its balance sheet and credit ratings with a multi-currency five-tranche deal.

BP's mandate announcement appears perfectly timed with the mood swinging back to buying risk assets after the US Federal Reserve said it will start purchasing corporate bonds in secondary markets.

Although the Fed statement clearly acts as positive catalyst for BP it was not the decisive factor in announcing the euro, sterling and US dollar deal on Tuesday, said leads.

"BP doing a hybrid is a big story. When issuers decide to do hybrids, it’s quite a big decision and you don’t get that many new issuers," said a banker away from the deal.

"If it makes sense for an issuer like BP to do a hybrid, then it makes sense for others. Whether it’s issuers that are under pressure from a ratings perspective or from a dividend perspective, or...

Spanish wireless company Cellnex capitalised on a buoyant primary market to refinance debt ahead of expected M&A financing for the company's purchase of Arqiva's telecom sites business.

The crossover credit, rated BB+/BBB- (S&P/Fitch), landed an upsized €750m nine-year bond and a €165m tap of its 2.875% April 2025s. Books peaked at €5.4bn and fell away to €4.3bn at launch (pre-rec).

"Cellnex sits in line with other Double B type crossover credits which have been coming to market with no impediment in recent weeks," said one London-based high-yield bond investor.

The most recent crossover deal in the euro bond market came from packaging company SIG Combibloc, which saw €3bn of demand for its €1bn dual-trancher on June 11.

Telecoms companies have seen plenty of demand from investors thanks to their coronavirus-resistant "fortress" balance sheets, said BAML analysts in a recent report.

Cellnex is likely to bring even more supply.

The...

Foreigners recorded their biggest purchase of US corporate bonds in seven months in April as companies began their borrowing binge, US Treasury Department data showed.

Private and overseas accounts bought a net US$10.9bn in corporate debt in April, their biggest monthly total since their $14.9bn net purchase in September, according to Treasury figures released on Monday.

In March, when the effects of the Covid-19 pandemic began to hit the US and markets, they purchased US$3.2bn in corporate bonds.

Bank of America analysts said foreign purchases of corporate paper may be more than the levels that the Treasury International Capital data capture.

"Note that the TIC data tends to significantly underestimate the actual amount of foreign buying," they wrote in a research note on Tuesday.

Foreign demand has supported the corporate stampede to raise capital, resulting to US high-grade bond issuance to top US$1trn since the beginning of the year....

PG&E Corp has set initial price thoughts on a US$3.75bn three-part, high-yield issue set for sale later this week and part of a multi-billion dollar funding package for its exit from bankruptcy.

The holding company of the California-based utility is talking 5.5-5.75% on a new five-year non-call two, 5.75%-6% on an eight-year non-call three, and 6-6.25% a 10-year non-call five.

The senior secured SEC registered notes are rated B1/BB-/BB. Bank of America, Barclays, Citigroup and Goldman Sachs are acting as leads.

Leads announced on Monday that investor calls would take place on Wednesday ahead of expected pricing on Friday.

The deal is being done alongside a high-grade offering, which is expected to price on Tuesday. nL1N2DT0PY

Another major gathering for the US asset-backed securities industry has been postponed because of the Covid-19 pandemic.

The 26th annual ABS East conference will now take place on December 1-2 at the Fontainebleau Miami Beach resort in Miami Beach, Florida, organizer IMN said on Monday.

The annual industry conference, which draws more than 4,000 attendees, typically happens in late September or early October.

IMN said the upcoming ABS conference is a "hybrid event format" that features online and in-person elements. This will allow "the potential to go entirely digital, should conditions dictate."

The conference postponement is the latest for the ABS industry.

The Global ABS 2020 securitization conference will be held online in September. In the past, structured finance participants had flocked to Barcelona every June for this annual event. nL8N2DH4H0

The Structured Finance Association will hold its next ABS gathering in Las Vegas on May 2 to...

The developer of resorts under the Trump brand in Indonesia is in talks to restructure its offshore bonds for the second time in two years.

Holding company MNC Investama is talking to holders of its US$231m 9% senior secured notes due May 11 2021 to discuss a possible change in the terms.

The group is best known for MNC Media, which has the largest television audience in Indonesia, but it also has property development and financial services divisions. MNC Land is developing Trump International resorts, golf courses and residential properties in Bali and Lido, with apartments set to sell for up to Rp15bn (US$1.1m) each and villas for Rp30bn–Rp80bn, according to a May research note by Mirae Asset Sekuritas.

Based on current performance, dividends flowing from these subsidiaries will not be enough to repay the dollar bonds when they fall due next year.

On May 8 MNC Investama filed in Singapore under Section 211B of the Companies Act for a scheme of...