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Pills ‘n’ thrills
Biopharmaceutical company AbbVie’s landmark US$18bn bridge financing backing its US$21bn acquisition of cancer drug-maker Pharmacyclics emerged in the first quarter and set the tone for the rest of 2015.
Small but significant
What Trafigura’s US$350m senior secured asset-backed facility lacked in size, it made up for in an innovative hybrid structure that overcame multiple challenges faced by a commodities company seeking long-term money to improve logistics along Colombia’s Magdalena River.
Positive progression
In a difficult and highly competitive year characterised by patchy M&A, subdued refinancing activity and macroeconomic minefields, HSBC was one of the only banks to raise its market profile by continuing to invest in its franchise as competitors fell back. For this reason, HSBC is IFR’s EMEA Loan House of the Year.
A change of gear
German automotive systems supplier ZF Friedrichshafen’s jumbo €12.5bn loan backing its transformational acquisition of US rival TRW Automotive set a new standard for large-scale non-investment grade European M&A loan financing. The deal proved an overwhelming success despite a challenging timeframe and the size of the financing.
Hungry for more
Slowing economic growth dampened activity in the Asian loan markets, but one bank distinguished itself with a focus on event-driven financings and successful distribution. For its bold calls and targeted strategy, Deutsche Bank is IFR’s Asia-Pacific Loan House of the Year.
Textbook landing
When Malaysia Airports Holdings began negotiations on refinancing existing debt at its Turkish unit in October 2014, it was clear that there would be plenty of challenges ahead, but a novel approach to the loan resulted in a gratifying outcome six months later.
A clever animal
When retailer PetSmart went to market in February with a US$4.3bn term loan to back its buyout by BC Partners, the outcome was uncertain at best, but the deal ended up being a success for the issuer and the lenders who put their confidence in the credit.
Raise your glass
The €1.537bn loan backing Apollo Global Management’s acquisition of Saint-Gobain’s glass bottle unit Verallia is the largest new money covenant-lite term loan raised in Europe’s leveraged loan market for a debut issuer.
Back in 1992, IFR’s Duncan Balsbaugh got a ringside seat from his position on Morgan Stanley’s London trading desk to watch George Soros’s attack on sterling. They say you can’t fight central banks, but as Soros showed, you can – and you should!
A plunge in commodity prices has left many energy exploration and production companies locked out of markets and struggling to refinance. Some are starting to get creative in an effort to ensure continued funding for their ongoing businesses.
Guidelines issued by the Fed, designed to limit leverage and reduce systemic risk, have made it harder for banks to compete in the leveraged lending business in the US. But while the leaders in the business have lost market share this year, lending remains healthy, with those borrowers looking for leverage able to find other options.
The central banks were once Olympian gods but have descended to be among men, and in doing so have lost many of their powers.
Low interest rates and rising equity valuations, and an investor base desperate for paper, drove an increase in exchangeable bond issuance in 2015. Corporates hesitated to issue bonds convertible into their own stock but leapt at the chance to use large cross-holdings for cheap financing.
The privatisation plan Narendra Modi touted when he came to power in India 18 months ago has failed to take off quite as the pro-business premier promised. Doubts over his reform agenda are mounting, but are they justified?
If 2015’s banking narrative was supposed to centre on a defensive strategy re-think, replete with slashed assets and diminished headcount, no one told Japan’s ambitious commercial mega-banks.
The dramatic rout that followed the latest bull run in China’s equity markets was a case of history repeating itself. Regulators are still grappling to understand the root cause, but they must realise there is only one solution – and it’s surprisingly simple.
Fast-growing companies seeking to build confidence in their business models and raise financing are increasingly turning towards private fundraising rounds. So far, the trend has been limited but it could become to IPOs what Uber is to public transport.
Securitisation has come a long way since the dark days of the financial crisis, when politicians – and many regulators – laid the blame for much of the chaos squarely at its feet. With both groups now broadly understanding the role it can play in stimulating lending, securitisation is on the march again, with a new and novel type of loan being considered for use in the asset pool.