Loans and High Yield

CVC and other owners are putting in €220m of new equity to Douglas, the German beauty chain, ahead of a long-awaited refinancing which will see existing subordinated debt made whole — a nice trade for any buyers that bought in at its lows of 33 last year.

Indonesian garment company Pan Brothers has been downgraded by Fitch Ratings for the third time this year owing to defaults on a dollar loan.

Chinese textile company Victory City International Holdings’ financial predicament has taken a turn for the worse as it revealed previously undisclosed outstanding debt at its subsidiaries this week.

Companies unveiled three dividend recap deals this week in a sign that the leveraged loan market remains well bid, thanks to strong CLO formation and a technical shortage of paper so far this year.

Greece’s Public Power Corporation has issued the first euro high yield sustainability-linked bond, which is to fund the power utility’s planned transition from lignite power generation to renewables over the next two years, and offering a hefty 50bp coupon kicker if it misses the goal.

Etrading Software has launched a system to ramp up the efficiency of loan trading, enabling dealers to strip out the motley collection of spreadsheets, emails, instant messages still used in the market and centralise crucial information ahead of executing loan trades.

Asia’s leveraged buyout loan market is facing a setback after a planned financing to back the acquisition of Mphasis, an Indian IT services firm, was scrapped as discussions between the buyer and seller fell through.

Tricor Holdings is planning a return to the loan market to refinance a HK$2.8bn ($360m) borrowing it sealed in 2016 for a leveraged buyout by investment firm Permira.

China Hongqiao Group and Guangdong Lingyi iTech Manufacturing Co are seeking loans worth a total of $350m.

Chilean cable company VTR brought life to the Latin America primary bond market on Wednesday, but the company was unable to tighten its new senior-secured eight-year deal beyond guidance as markets are remaining functional but cautious in the face of rising US Treasury yields, said bankers.

In one of the first pieces of public research on the nascent direct lending asset class in Europe, a report from Oxford University’s Saïd Business School has found that it could grow assets under management by as much as 50% in the medium term, owing to banks retreating from the mid-market and investors looking for higher yields from credit.

WH Smith, the UK high street retailer, has extended its bank term credit lines and cancelled a crisis liquidity facility, as the borrower posted better than expected trading figures since the start of the year.