Bonds

Carlos Slim’s KPN cash call includes buyout cover

24 Feb 2021

The Mexican mogul raised 2.1 bln euros from negative-yield bonds that can flip into a 16% stake in the Dutch telecom operator. If KPN treads water, Slim can keep his stock and repay less than he borrowed. If it’s snapped up by a predator, he still gets some of the upside.

Bond markets will be new climate vigilantes

27 Jan 2021

Booming demand for sustainable funds and new EU rules will make debt investors more wary of buying securities issued by polluters. There are already signs that is happening in the oil and gas sector. Higher funding costs should be a powerful spur for companies to get serious.

Buyout captains’ animal spirits will trump reason

13 Jan 2021

Last year marked a record number of LBOs and $580 billion in total value. Warning shots are ringing: leverage levels are high, bankruptcies are rising and aggressive tactics recently took a hit in U.S. courts. But with coffers filled and low borrowing costs, signs flash go.

Corona Capital: Bond bonanza, Albertsons

12 Jan 2021

Concise views on the pandemic’s corporate and financial fallout: U.S. companies' bond issuance in 2020 hits records across the board; and America’s No. 3 grocer continues to take advantage of the shopping habits created by Covid-19 lockdowns.

Latin America debt will hit post-crisis sweet spot

22 Dec 2020

Corporate defaults in the region have jumped during the pandemic and political concerns persist. But ultra-low global interest rates and expectations that richer countries could spend more on infrastructure will be enough to entice yield-hungry investors to these markets.

Funky debt bonanza is breeding complacency

8 Dec 2020

Companies from BP to Gazprom are issuing more bonds that count as equity than ever before. Low rates and investors’ thirst for yield explain why, yet the benefits of such hybrids are modest. To avoid future strife, companies should sell debt that is better at absorbing losses.

Blackstone upends bond history with Ancestry.com

3 Dec 2020

The genealogy provider is disenfranchising large creditors in a $1.2 bln debt deal helping to fund the private equity shop’s buyout. Bondholders could push back in the future, but they can’t afford to sit out in a liquidity-drenched market. Issuers will keep their upper hand.

Corona Capital: Chevron, Boeing, OPEC, Orange

3 Dec 2020

Concise views on the pandemic’s corporate and financial fallout: Chevron cuts spending, prudently; Boeing orders are a solid step; OPEC makes up its mind; and Orange’s Belgian deal has some juice.

Corona Capital: Merck sells Moderna stake

2 Dec 2020

Concise views on the pandemic’s corporate and financial fallout: The U.S. drugmaker is banking its winnings on an investment in Covid-19 vaccine producer Moderna that dates back to 2015.

Bond defaults hand Beijing a timely oversight test

19 Nov 2020

A surprise default by a state-owned coal miner has undermined confidence in the $2.7 trln triple-A market. Without tougher supervision of credit agencies, local officials, and company executives, President Xi Jinping’s fight against excessive leverage will pile on systemic risk.

Argentina’s creditors made two silly mistakes

28 Oct 2020

Some investors say their newly restructured bonds have tanked due to President Fernandez’s lousy policies. They’re right. But they’re shouting in the wind, because they agreed to a debt rejig based on unenforceable promises, and gave up what leverage they had in the process.

Corona Capital: NYC

30 Sep 2020

Concise views on the pandemic’s corporate and financial fallout: New York City’s economic reboot comes up against a new outbreak.

Some of China’s best reformers are indexes

25 Sep 2020

Officials changed key rules to get FTSE Russell’s global fixed income index to include local bonds, potentially pulling $140 bln into the market. They made similar liberalisations to woo MSCI. There’s still work to do, but foreign money retains clout in Beijing.

Angst-ridden end to 2020 is written into options

23 Sep 2020

As if Covid-19 hadn’t sparked enough market gyrations, the next three months bring U.S. elections, tense UK-EU trade talks, and more. Central bankers are keeping bonds on a tight leash so jitters will be channelled into currencies. That is already showing up in FX option prices.

Moutai ladles out value from its punch bowl

18 Sep 2020

China’s liquor titan is issuing $2.2 bln of bonds to help buy a highway operator from a struggling local government. The ludicrous diversification erased $10 bln from its enormous market cap. It’s a sobering reminder of how the country’s listed companies can be called to serve.

Green bonds could slide into irrelevance

17 Sep 2020

Securities used to finance environmentally friendly investments are thriving, with everyone from JPMorgan to Germany charging in. Yet the $800 bln market does not necessarily mean greener issuers. As investors get better at differentiating, green bonds could become redundant.

Italy is fumbling as striker and referee on Borsa

11 Sep 2020

Rome is tipping the scales for Euronext’s Milan bourse bid via its sovereign fund, frustrating other bidders. LSE will struggle to freely pick a winner in a race including Deutsche Boerse and SIX. State meddling isn’t new, but this deal may further raise Italy’s cost of capital.

EU banks’ sovereign-debt relapse brings new risks

24 Aug 2020

Lenders from Italy’s Intesa Sanpaolo to Spain’s BBVA have boosted holdings of domestic government bonds, helped by cheap ECB funds. The exposure leaves them vulnerable if euro zone breakup fears return. And it makes completing Europe’s banking union and cross-border M&A harder.

Corona Capital: Nvidia, Air conditioners

20 Aug 2020

Concise views on the pandemic’s corporate and financial fallout: Nvidia goes gangbusters, HVAC units have their moment in the sun.

Corona Capital: Vroom, Estonia WFH, Johnny Rockets

13 Aug 2020

Concise views on the pandemic’s corporate and financial fallout: How Vroom can power through the pandemic; Estonia tries to lure those with wanderlust; Casual dining puts on the Covid-19.