Bonds

ISS bondholders may get a reprieve

7 Apr 2005

The Danish group s bond prices plunged after it received a leveraged buyout approach. But LBO lending banks may not want ISS s shorterdated bonds to remain outstanding. The company may have to tender for them.

Cablecom replaces bank loan with new bond

29 Mar 2005

The Swiss cable group has sold a E800m bond that resembles a bank loan dressed up in capital markets camouflage. Here is further evidence of hedge funds disintermediating banks from the credit market.

Bonds race from conundrum to contagion

18 Mar 2005

Last month the Fed was worried that yields were too low. Now credit spreads have ballooned in response to GM s profit warning. This shows how hard it is to manage an overleveraged financial system and to predict whether credit will crunch or recover again.

Citi bond trade brings back eerie memories

1 Feb 2005

A memo from just before last year's controversial trade spoke about turning the European market into something more like the US bond market. This has echoes of the 1991 cornering of the US Treasury note market. The guilty party then was Salomon Brothers now part of Citi.

Securitisation may advance tropical drugs funding

26 Jan 2005

Using sophisticated financial engineering to help the poor pay for drugs may seem like a crazy investment idea. But it isn t. Tropical drugs have been overlooked by mainstream investors. That creates an inefficiency that can be exploited.

Europe more vulnerable than US if GM junked

21 Jan 2005

The US carmaker has so many bonds outstanding that highyield investors would be swamped with paper. Although most of this debt is in dollars, European investors would have the bigger indigestion problem. The US market is much deeper.

KfW sells Deutsche Post bond to Japanese

13 Jan 2005

By selling an exchangeable bond to retail investors in Japan, the German state agency sidesteps a lockup on potentially attractive terms. It s a clever move. The snag is that it may not work.

Deutsche Telekom plans E3bn bond

11 Jan 2005

The German telecoms group is tapping the market on extremely favourable terms, in stark contrast to its position a few years ago. However, the new issue is forcing DT's existing credit spreads wider a sign that the telecoms credit revival has already peaked.

Cap Gemini junked by S&P

7 Jan 2005

The French IT services group needs to stop customers defecting on worries about its financial strength. CapGem may need to raise equity sooner or later. But the longer it can leave this, the better.

IFRS puts kibosh on convertibles

5 Jan 2005

Publicis is refinancing a E690m convertible bond that would have looked much more costly under new IFRS accounting standards. Other companies may follow so long as the options embedded in their convertibles are not in the money.

Tiscali receives unsolicited CCC+ rating

22 Dec 2004

It isn t clear why credit ratings agency Fitch has taken the unusual step of rating the Italian ISP without being asked to do so. All the same, the very low credit rating is a blow for Tiscali, which badly needs to raise fresh funds.

MyTravel agrees restructuring with bondholders

20 Dec 2004

Both sides have decided that it's in their interests to come to a compromise rather than engage in further litigation. That's understandable. Yet it is a fudge that leaves the legal status of subordinated debt unclear.

Parmalat moves closer to debt-for-equity swap

17 Dec 2004

The inclusion of almost all the claims against the group in the creditors' list will accelerate the restructuring. Parmalat's bond prices continue their steady ascent. That suggests payday is coming from all the lawsuits it is spraying around.

Alitalia reaches deal to split itself in two

24 Sep 2004

This looks like a case of sneakily injecting state aid into Alitalia. The EU should be on guard. A deal with the unions has cleared the way for the airline to split its flight and ground service units, leaving its debts with the latter.

Fight over Parmalat’s lost billions gets messy

20 Aug 2004

The administrator has fired off lawsuits at banks and auditors. Someone may get stung, if Parmalat s bond prices are any guide. Enrico Bondi s charge sheet references some familiar trades. Breakingviews recaps its analysis of them.

Frustrated hedge funds try a new strategy

11 Aug 2004

It s called longshort credit. At its most basic, you just buy good credits and shortsell bum ones. But then it gets trickier. And it is questionable whether every startup adopting the strategy has the right skills for it.

Parmalat bondholders lose out

15 Jul 2004

Banks owed money by some Parmalat operating companies will swap their loans for equity of the same value. That leaves less for bondholders. But there s little danger of the plan getting blocked. The voting procedure makes that difficult.

Italian companies face bond squeeze

15 Jun 2004

Companies that issued unrated bonds are in trouble, now that they can t refinance using the same securities. Bondholders, banks and investors are realising the consequences of their folly. That s a healthy dose of realism for corporate Italy.

Retailers’ bondholders risk a mugging by LBOs

28 May 2004

As Philip Green s bid for M&S shows, onetime investmentgrade bondholders risk being subordinated to new highyield debt structures. The problem is inadequate covenants. Bondholders should negotiate better ones. A bid as big as Green s may spur them into action.

Junk bonds the latest victim of rising rates

17 May 2004

That prices are finally falling is hardly surprising. A correction was long overdue. The correction will affect opportunistic refinancings and private equity deals.