This year's IFR Top 250 Borrowers report comes in the aftermath of the most serious dislocation in credit markets for years. The GM/Ford downgrades to junk spooked a market that had seen one-way traffic for years in terms of credit spreads.
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The low level of long bond yields continues to puzzle even the Federal Reserve Chairman Alan Greenspan. As he recently pointed out, 10-year US Treasury yields are around 80bp lower than they were last year despite a 200bp increase in the Federal Funds Rate. Could the increase in “structural” demand for bonds have more to do with these low yields than he thinks? By Phyllis Reed.
Credit markets suffered a period of extreme volatility in April and May following the downgrade of GM and Ford to sub investment-grade status. But primary market confidence was restored in early June, with sentiment stronger than ever, suggesting that the auto sector has had less impact on the market than some had originally thought. Helen Bartholomew and Andrew Stein report.
So while it appears that concessions are available across the board from prefs, through fixed-rate, to CMS, the results are not as onerous as the alternative, which is to say not being able to raise the capital. All sectors remain open: it is just a matter of price. By Philip Wright.
Liquid benchmarks from agency issuers at the long end are few and far between, whatever the currency of issuance. This is despite the fact that demand for high-quality long-dated assets has been an ongoing theme in recent months. Helene Durand examines the reasons why agency issuers have mostly kept away from the longer tenors.
The international securitisation market has reached an interesting point in its cycle. The trend to ever-tightening spreads looks to have run aground and the regulatory environment is set to undergo a significant change. How is the market likely to respond to these issues? Joti Mangat and David Bentley report.
All of the themes that made the European loan market tough for loan bankers over the previous 18 month have continued to plague the market this year. Pricing has kept falling, structures have kept loosening, and M&A activity – despite showing signs of improvement – has remained muted. Nachum Kaplan reports.
The European leveraged loan and high-yield markets started 2005 where they left off – riding a wave of exuberance driven by ample liquidity. But that all changed as a turbulent start to the second quarter sent speculative investors running for cover. As the recovery gets underway, a two-track market has emerged, meaning weaker credits could still face a tough time. Adrian Simpson and Kate Haywood report.
Conditions in the equity-linked markets remain very patchy. European activity has registered a small pick-up over 2004 while even the usually robust US market has been hit by the poor performance of hedge funds and the prospect of massive redemptions. One bright spot has been new markets in Asia, such as India. By Jasper Moiseiwitsch, Stephen Lacey, Owen Wild and Brad Frischkorn.
Agence France Tresor has never been one to shy away from innovative transactions. The year 2005 was a particularly fruitful year for the borrower as it priced the first ever 50-year transaction from a sovereign issuer. By using the syndication route, AFT printed an issue exceeding market expectations on all counts. By Helene Durand.
Ameriquest Mortgage's growth on the Street has clearly been in the spirit of its high-profile advertising campaign in the United States. In 2000 it brought US$1.5bn to the securitisation market. Last year it sold approximately US$51bn, coming in only slightly behind home equity leader Countrywide. By Chris DeReza.
After issuing publicly and privately in 11 currencies across Asia-Pacific, Europe and US, the Australia and New Zealand Banking Group plans to cap a big funding year by tapping the Japanese uridashi market for the first time, as Shankar Ramakrishnan reports.
With some US$600m left in 2005 funding to go, the Federative Republic of Brazil has demonstrated an increasing maturity and care in the way it handles its deals and investors this year. Anthony Dovkants reports.
From a borrowing programme averaging €4bn–€5bn per year, Caisse d'Amortissement de la Dette Sociale was propelled into new spheres when its funding needs grew almost tenfold. The issuer, more used to selling itself as a rare gem, was suddenly pricing large benchmarks and needed to learn fast how to handle investors. Helene Durand assesses how far the borrower has come in the last year.
With year-to-date borrowing of US$19.1bn equivalent, public sector investment bank DePfa ranks as the 27th largest issuer in IFR's Top 250 borrower list. The borrower's total funding needs this year is about €20bn, of which a minimum €8bn is earmarked for its benchmark programme that focuses on the Irish ACS asset class. By William Thornhill.
The decision to sell a 10.74% shareholding in Gazprom to the government was enough to bring the oil and gas giant’s 2005 new borrowing programme to an end. After raising around half of the budgeted target of Rbs110bn (US$3.85bn), the company will receive around US$7.15bn from the government, limiting its desire for anything other than refinancing. Richard Jory reports.
While JP Morgan has not dramatically shifted its overall borrowing levels, the company has raised its profile in the unsecured market through the issuance of more liquid securities, combined with a touch of innovation. Meanwhile, the completion of its US$60bn Bank One acquisition has further solidified its securitisation presence. By Andrew Stein.
The last 18 months has been the busiest on record for the Export Import Bank of Korea. Close to US$4bn has been raised across a range of maturities and currencies. Most of these deals too have had their own soundbites and the borrower's stock has never been as high. It is quite a turnaround story, as James Griffiths reports.
Petroleos Mexicanos (Pemex), Mexico's state-owned oil and gas company, has swiftly transformed itself into the savviest Latin American issuer. It all but wrapped up its US$8.5bn 2005 financing programme in the first five months of the year with a series of well timed and aggressively priced international and local bonds and a jumbo loan. James Crombie reports.
As one of the new EU entrants with the largest borrowing needs, the Republic of Poland has been the most active benchmark issuer in foreign currencies. Added to this is the fact that the borrower set out in 2005 to try and repay its Paris Club Debt. Helene Durand looks at how Poland has been tackling the markets since January.
Telecom Italia began 2005 with moderate funding requirements, having already issued US$8bn equivalent in 2004 with particular successes in US dollars and sterling. But its venture into the uncharted 50-year euro territory represented a turning point in the credit bull market as investors questioned the validity of a risk premium that had all but disappeared. Helen Bartholomew reports.
Despite its chequered past and ongoing legal battles, Tenet Healthcare has successfully tapped the high-yield market over the past year and paid off a significant amount of debt. With the next round of maturities not due until 2011, the company is focused on improving its performance as well as preserving cash for its impending settlements. By Joy Ferguson.