Bonds

Indian syndicate’s sprawl smells of desperation

20 Jul 2020

A $42 bln housing lender, HDFC, hired a record 19 banks to raise $1.9 bln, says IFR. It suggests the well-capitalised issuer is worried liquidity flows might dry up soon as India’s pandemic keeps burning. The fee-starved advisers are settling for scraps. Neither is a good sign.

China’s jobless recovery risks debt indigestion

16 Jul 2020

Output rose 3.2% last quarter, as a record $1.7 trln in loans kicked in. But investment is tepid, employers are shedding jobs, and retail remains anaemic. Beijing is also running low on distressed credit buyers. With bad debt set to rise, pressure to find alternatives will build.

Corona Capital: Mets star bidders, Robot slayers

10 Jul 2020

Concise views on the pandemic’s corporate and financial fallout: Power couple J. Lo and A-Rod are giving hedge fund manager Steve Cohen competition for the New York Mets baseball team; Covid-19 is accelerating automation of the meat industry.

Review: Poking China’s ironclad asset bubbles

10 Jul 2020

Sceptics have predicted the financial implosion of the People’s Republic for years. In “China: The Bubble that Never Pops”, Tom Orlik argues it may never happen. It’s a useful antidote to free-market complacency. Beijing’s competitive threat will not go away on its own.

Indonesia cautiously crosses central bank rubicon

9 Jul 2020

Bank Indonesia will buy $28 bln of bonds directly from the government, breaking a long-held taboo. It will refund interest gains, and the securities will be tradeable, providing price transparency. That’s about as credible as an emerging market monetary authority can hope to be.

BBVA’s green bond is the lightest shade possible

8 Jul 2020

The Spanish bank issued 1 bln euros of contingent convertible hybrid debt, with an environmentally friendly label. The perpetual and fungible nature of bank capital muddies the link to sustainable projects. Demand for such debt gives bankers reason to keep pushing the envelope.

Japanese bond market shift spells stronger yen

7 Jul 2020

Central bank boss Haruhiko Kuroda has kept yields on 10-year debt near zero but let those on longer-dated ones rise. Now most of Japan’s yield curve is above that of France. Dwindling returns on overseas bonds could reduce local demand for foreign currency, sparking a yen rally.

German lift LBO hits ceiling on lax lending

29 Jun 2020

Advent and Cinven, who paid $19 bln for Thyssenkrupp’s elevator unit, had to tweak terms for the deal’s funding after an investor revolt. Rock-bottom interest rates give buyout groups a strong hand with creditors. After the Covid-19 crisis, however, lenders’ tolerance has limits.

Central banks have a way to spur greener recovery

24 Jun 2020

Fed chief Jerome Powell and ECB boss Christine Lagarde are purchasing bonds without taking account of whether they are supporting the carbon-intensive status quo. There are good reasons for that. But they can at least demand more disclosure of climate risks before buying.

BP’s funky debt charts end of credit’s lockdown

18 Jun 2020

The oil major issued $12 bln of bonds that count as equity, its first such deal. Investors’ hunger for esoteric securities from a tricky sector illustrates their enduring need for yield, thanks to central bank largesse. A weak economy and risk-hungry markets are a dangerous mix.

Corona Capital: Next crisis, Overvalued markets

16 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: Deutsche Bank analysts sound a warning about future catastrophes, while investors try to square overpriced stocks with their hopes of a recovery.

Italy gives sovereign debt revolution a nudge

12 Jun 2020

The country will sell bonds whose payout is linked to how GDP evolves. It’s a first step that only targets domestic savers. But cultivating an international market for such securities could help countries, particularly ones locked into the euro, to better weather economic shocks.

McLaren dares bondholders to debt game of chicken

9 Jun 2020

The supercar maker wants to raise $348 mln by mortgaging its HQ and racing cars. Creditors say they already have a claim on them. If neither backs down, the company could crash. Loose lending terms before the Covid-19 crisis give McLaren reason to keep its foot on the pedal.

Wall Street takes bond-market largesse to the bank

8 Jun 2020

Companies have issued almost as much debt so far this year as in all of 2019. Thank falling rates, firms making up for dwindling income, and investors’ excess cash. But it leaves buyers and sellers exposed to a slow recovery. Investment bankers, though, have never had it so good.

Corona Capital: Marijuana

5 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: Cannabis retailers in California miss out on pandemic surge in vices.

Corona Capital: ZoomInfo IPO, U.S. trade

4 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: ZoomInfo goes public with a big pop despite Covid-19; and America’s goods-trade deficit with Europe will test Washington’s mood.

Curbing German exceptionalism has political price

11 May 2020

A national court’s ruling on ECB asset buying has challenged the primacy of EU law. If politicians can’t defuse the stand-off, Brussels will have to take legal action against Europe’s paymaster. The fiasco is likely to give Euroscepticism across the continent a boost.

Andrew Bailey will have the UK bond market’s back

7 May 2020

The Bank of England boss expects a big drop in GDP this year. His asset purchases have pushed down gilt yields despite surging public debt issuance. Investors can count on Bailey to ramp up the buying programme given how long the economy will take to recover from the virus.

Corona Capital: Tepid earnings, red-hot bonds

30 Apr 2020

Concise views on the pandemic’s corporate and financial fallout. Halfway through earnings season, things are going from mediocre to bad at big U.S. companies. Meanwhile, Boeing’s $25 billion bond issue shows the Fed has cast a spell on the corporate debt market.

Just Eat puts convertibles at top of bankers’ menu

23 Apr 2020

Dutch food delivery group Just Eat Takeaway.com sold 300 million euros of funky debt that converts into equity. It’s a cheap way to raise funds when stock markets are volatile. The products’ stable performance during the coronavirus crisis means investors should stay hungry.