Loans and High Yield

Europe’s high grade bond investors are set to be offered new bonds from both ends of the ratings spectrum this week, as A2 rated air traffic controller Nats (En Route) and fallen angel car parts company ZF Friedrichshafen planned deals.

Another heavy primary week in European leveraged finance swung into action on Monday, with the bond leg of the buy-out financing for Bain and Cinven’s Sfr4.2bn purchase of Lonza Specialty Ingredients among the highlights.

French frozen food maker Picard pulled its planned €1.7bn sustainability-linked dividend deal on Friday, citing ‘unsatisfactory market conditions’, and its flexible redemption schedule, with no maturities until 2023. Conditions were so unsatisfactory that last week was one of the busiest of the year in high yield primary, while Monday has opened with another six deals announced — suggesting that for most issuers and arrangers, conditions continue to be very satisfactory indeed.

Thailand’s Gulf Energy Development Public Co is in talks with a large group of banks for a bridge loan of about Bt170bn ($5.3bn) to support its acquisition of Intouch Holdings. Pan Yue reports.

Indonesian property developer Pakuwon Jati returned to the offshore debt market this week after a four year hiatus, selling investors a $300m seven year bond.

Dalian Wanda Commercial Management Group Co sold a sub-one year bond on Thursday, raising $325m.

Investors appeared happy to tolerate soaring leverage in favoured sectors, such as tech or pharma, on Thursday, while Covid-19 recovery candidates are beginning to look expensive, as much of the rally that began in November has played out.

Commodity trader Trafigura has sold US private placements, according to market sources, in its sixth issuance in the market.

The detailed rules for the EU Taxonomy of Sustainable Economic Activities look set to come into force, as the European Commission published them on Wednesday, after weeks of intense lobbying and negotiation that had raised the prospect of them being delayed again. Gas will not enter the Taxonomy for now and will be dealt with in separate legislation, but nuclear power could enter the Taxonomy later this year, alarming greens.

US security firm Allied Universal has launched term loan Bs in euros and dollars, the first leg of the financing for its acquisition of UK rival G4S.

Kaisa Group Holdings paid a new issue concession of about 10bp for a $200m tap of one of its existing deals, appealing to investors amid recent pressure on Chinese bonds in the secondary market.

UK gym chain Virgin Active’s restructuring could set a precedent for restructurings of UK retailers. Dozens of retailers have used ‘CVA’ processes to cut their debt burdens, which typically hits their landlords hard but leaves other creditors unscathed. Virgin Active is instead using the new UK ‘super scheme’ restructuring law introduced last year to try to bind landlords and other creditors alike into accepting writedowns.