Farmer Mac cultivates securitisation programme

There are few areas of finance that attract quite as much controversy and criticism as the US$9trn market for credit default swaps. That is perhaps inevitable for any product with such close links to the excesses that led to the financial crisis of 2007–08. But, love it or hate it, the past decade or so has shown that the CDS instrument is here to stay and will remain an invaluable hedging (and, let’s face it, trading) tool for participants across financial markets. That is why the declining membership of the Credit Derivatives Determinations...

Energy infrastructure company Plains All American Pipeline has amended and extended credit agreements signed in August 2021. The loans comprise a revolving credit facility borrowed by PAAP and a senior secured hedged inventory facility borrowed by Plains Marketing. The size of both facilities was US$1.35bn when agreed last year. The maturity of both loans has been extended by one year, and their Eurocurrency reference rates switched to term SOFR and CDOR from Libor. The RCF borrowed by PAAP will now mature on August 20 2027, and the Plains...

In a bit of fine-tuning in the equity compartment, Carnival on Monday closed an agreement with convertible bondholders to extend by 18 months the bulk of a 5.75% CB due to mature in early 2023. The exchange agreement improves the cruise ship operator’s liquidity and gives CB holders more time to participate in a hoped-for rebound in the underlying stock. PJT Partners advised on the exchange, which saw US$339m of principal exchange bonds due to mature in April 2023 swapped for identical bonds maturing in October 2024. The exchange leaves US$183m...

Modestly improving a difficult situation, speciality drugmaker Assertio turned to the CB market overnight on Monday for US$60m to repay high-cost debt, shifting the funding burden onto shareholders but significantly reducing its borrowing costs in the process. Sole bookrunner SVB Securities priced the CB at 6.5%, up 12.5%, the investor-friendly terms relative to the 5.5%–6.5% coupon and 12.5%–17.5% conversion premium marketed overnight. Assertio shares plunged 24.7% to US$2.74 in the aftermath on Tuesday, cutting the drug seller’s market...

When the G20 agreed a common framework in the wake of the Covid-19 pandemic to deal with the debts of the 73 poorest countries there was much rejoicing. The proposals were seen as a way of binding China, the largest bilateral creditor to these countries, into such debt restructurings. China is not a member of the Paris Club of creditor nations, which has a tested method of restructuring, but is a member of the grouping of the world’s 20 largest economies. Nearly three years after the agreement was struck, no country has managed to agree a...

Third Harmonic Bio, an Atlas Venture-backed biotech, filed on Tuesday for a Nasdaq IPO, putting it on track to go public in the post-Labor Day window and potentially become one of the first new US listings in nearly two months. Morgan Stanley, Jefferies and Cowen are acting as joint bookrunners on an all-primary offering that was first filed confidentially in May. Third Harmonic's move marks only the third US$50m-plus IPO filing since April, the other two being South African platinum miner Sedibelo Resources (still in registration) and Robert...

Who you gonna call? When companies are facing hostile shareholder actions – from demands to sell the company to requests for board seats – the first call still goes to Goldman Sachs, according to Refinitiv data. Nearly 350 activist campaigns were launched in the first half of 2022, up 6% compared with the same period last year, Refinitiv data showed. It was the most active first half in more than a decade, signalling that activists are fully engaged after a brief period of calm, and bankers expect the rest of the year to remain lively....

Cementos Argos laid the foundation for a US IPO of its North American business by inking a new US$750m five-year loan agreement on Tuesday. The cement producer is temporary guarantor on the loan with Argos North America taking over upon a successful listing on the NYSE. BNP Paribas, JP Morgan, Sumitomo Mitsui and Bank of Nova Scotia led the loan, giving them an inside track on the Argos NA IPO mandate. The new loan, whose borrowing rate is tied to carbon emissions, is being used to refinance near-term maturities of US-dollar denominated debt,...

A crucial part of infrastructure underpinning the US$9trn credit default swap market has become shakier this year as the industry body that rules on CDS events has shrunk further in size, raising questions over whether it remains fit for purpose at a pivotal juncture for the market. The Credit Derivatives Determinations Committee has not found a replacement for Cyrus Capital Partners following the New York-based hedge fund’s departure in April, leaving the decision-making panel of banks and investors two firms short of its required quota of 15...

US ECM closed a predictably quiet week that brought no IPO or secondary activity of note as investors (and bankers) took a summer break. The first week of the traditional two-week seasonal hiatus at this time of year saw deal flow limited to two CBs (Chinese package delivery company ZTO Express raising US$870m and biotech Assertio pulling in US$60m). A sprinkling of micro-cap IPOs have priced in recent weeks (including the US$20m Nasdaq IPO of Malaysian payments app Starbox on August 23 and the US$25m Nasdaq IPO of Chinese online learning...

While other markets suffered, issuers congregated in the serene covered bond space last week. With order books multiple times oversubscribed, issuers were variously able to target larger sizes and push the envelope on spreads while also venturing away from the belly of the curve. While short of the €6.25bn raised in the previous week, last week's €4.75bn of euro benchmark covered bond supply was still unseasonably high for late August. Issuers piled in to take advantage of the one sector of the FIG market that has enjoyed consistently strong...

Peter Zink Secher has joined BNP Paribas as head of ESG ratings advisory for EMEA, a new role. BNPP said it is one of the first major banks to build a dedicated department for ESG ratings advisory, which has become an important tool for investors and corporate customers. Zink Secher joined from Danish bank Nykredit and will be based in Denmark. He reports to Joe Weaver, head of credit and ESG ratings advisory in London, and Ulrik Ross, CEO in Denmark. Citigroup co-head of global foreign exchange Itay Tuchman is leaving the bank after more...