Bonds

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.

Argentina overplays hand in bond pain déjà vu

20 Apr 2020

BlackRock and other creditors have come out against the serial defaulter’s plan to restructure some $66 bln in debt. New legal protections should help their cause, and a messy default could attract holdouts. But time is their biggest advantage: Argentina needs money.

Corona Capital: LVMH, L’Oréal, Pandemic bonds

16 Apr 2020

Concise views on the pandemic’s corporate and financial fallout. LVMH holds onto the luxury of cash, cutting its dividend; L’Oréal makes the best of lockdowns with more than 50% growth in e-commerce sales in the first quarter; and even Covid-19 fails to trigger pandemic bonds.

Amadeus ups the bar for travel-sector crisis prep

3 Apr 2020

The $20 bln Spanish IT group is raising $1.6 bln in debt and equity to bolster its balance sheet. The financial terms are fairly beneficial for Amadeus, implying that it’s not exactly desperate for cash. Still, with steep declines in air traffic it’s wise to plan for the worst.

Bond market throws Carnival a costly lifeline

1 Apr 2020

The virus-stricken cruise operator is finalising a $4 bln bond issue, secured against its ships, at an eye-watering 12% yield. That reflects fears the industry may be permanently submerged. Still, it shows that even the most troubled companies still have access to emergency cash.

Bond ETF turmoil exposes credit’s faulty wiring

27 Mar 2020

The share price of some of these funds plummeted below the value of the less liquid assets underpinning them, upping selloff fears. But ETFs aren’t really to blame; rather it’s the corporate debt market’s opaque pricing. Uncle Sam’s new role as a buyer could spur change.

Corona Capital: Ackman’s hedge, Oil stockpiles

26 Mar 2020

Concise views on the pandemic’s corporate and financial fallout, including investor Bill Ackman’s surprise reversal of fortune, and the U.S. shale oil bailout that wasn’t.

Corona Capital: Dining bonds

20 Mar 2020

Concise views on the pandemic’s corporate and financial fallout: Restaurant industry cooks up a unique form of funding to help alleviate revenue wipeout.

Bond market minor casualty of Macron’s war footing

17 Mar 2020

Yields on French debt rose after the French president announced 45 billion euros in crisis spending to help business. Like Italy, France is bending fiscal rules to mobilise against Covid-19. Opening state coffers makes sense, even if it worsens longer-term debt to GDP outlook.

Christine Lagarde makes hard ECB job even harder

13 Mar 2020

A blunt remark by the European Central Bank chief drove up Italian bond yields - the last thing she wanted. She could get away with not knowing what pushes traders’ buttons when markets were placid. But that lacuna means she’s facing a crisis saddled with a credibility deficit.

Virus pain may leave CoCos with lasting infection

10 Mar 2020

Monday’s selloff was the worst ever for bank contingent convertible bonds. More could lie ahead if losses caused by the coronavirus and oil collapse allow lenders to stop paying coupons. The more banks that trigger hybrids, the less they will worry about spooking bond markets.

Pandemic bonds are the sick man of finance

26 Feb 2020

They’re supposed to harness market power to help in a health crisis. Yet pandemic bonds are ill-suited to the task. Complex restrictions and the need to lure buyers mean creditors tend to get the upper hand – and recipients of the funds may benefit little even if they win.