content

European High Yield Bond Funds See €112M Cash Inflow

J.P. Morgan’s weekly analysis of European high-yield funds shows an inflow of €112 million for the week ended Aug. 9. This figure includes a €38 million net inflow to ETFs, and a €54 million net outflow from short duration funds. The reading for the week ending Aug. 2 is unrevised from an inflow of €136 million. Note, the net weekly readings also include flows from long-only managed accounts.

The provisional reading for July is an outflow of €1.18 billion. This follows a €188 million outflow in June, a €296 million inflow in May, and a €548 million outflow in April. There was a €1.55 billion outflow in March, and €517 million and €218 million inflows in February and January. The total fund-flow reading for 2017 (including monthly reporting funds that have not yet released July figures) is an outflow of €2.286 billion.

In the U.S., high-yield funds recorded an inflow of $123 million for the week ended Aug. 9, according to the weekly reporters to Lipper only. This comes on the heels of the prior week’s $195 million inflow into the asset class. ETFs drove the gain, with an inflow of $97 million, while $26 million flowed into mutual funds. The four-week trailing average remains in positive territory for the second consecutive week, rising to positive $630 million from positive $313 million in the prior week.

J.P. Morgan only calculates flows for funds that publish daily or weekly updates of their net asset value and total fund assets. As a result, its weekly analysis looks at around 60 funds, with total assets under management of €50 billion. Its monthly analysis takes in a larger universe of 80 funds, with €70 billion of assets under management. For a full analysis, please see “Europe receives HY fund flow calculation”. — Nina Flitman

Try LCD for Free! News, analysis, data

Follow LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

 

content

Europe: Amid Investor Appetite, Bond Issuance – and Yield – Evaporates

Europe high yield bond issuance

May proved to be a disappointing month for high yield bond issuance in Europe, but this was not a reflection of how strong conditions were for those that made it to market.

Those issuers that did price flew through syndication, achieving tight yields, often after multiple revisions to guidance. From the buyside’s perspective, investors simply keep buying deals despite record-low yields. But with inflows returning and secondary prices near record highs, they have little choice.

Speaking of yields: Did we mention they’re low?

Europe bond yields

Try LCD for Free! News, analysis, data

Follow LCD News on Twitter.

This story is taken from analysis which first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

(EUR) to launch subordinated bonds via DB, Nordea

Hoist Kredit has met with investors across Europe this week with the intention of launching a euro-denominated sub-benchmark offering of subordinated notes. Deutsche Bank and Nordea are joint lead managers on the transaction.

Proceeds from the callable tier-two notes will be used to refinance the issuer’s existing subordinated debt. Hoist Kredit made its debut in the European high-yield bond market last year, with a €250 million offering of 3.125% unsecured notes due 2019.

Moody’s has placed Hoist’s Ba1 debt and issuer ratings on review for upgrade on the prospect of the issuance, noting that dependent on the size of the transaction, the firm’s subordinated debt could exceed the firm’s outstanding junior debt, giving investors a more substantial cushion of protection.

Hoist Kredit is a subsidiary of Hoist Finance, a debt-restructuring partner to international banks. — Nina Flitman

Try LCD for Free! News, analysis, data

Follow LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

Brexit Worries? Europe Poised to Wrap Busiest High Yield Bond Month Ever

The third quarter got underway with the U.K.’s Brexit vote ringing in the ears, and back then few would have forecast that high-yield issuance numbers — and market conditions generally — would be as strong as they are now.

Once all this week’s deals get done September is set to host the largest high-yield monthly volume in the market’s history, at €13 billion, beating April 2014′s total of €12.8 billion, while the third-quarter supply will be the fifth-largest quarterly volume on record, according to LCD.

“The tone since the Brexit vote has been remarkable,” confirms a banker. “We felt like we were going to have a good run provided we didn’t get a Brexit result, and when that happened we all thought supply would be curtailed for some time, but the market rebounded very fast. And we are pleasantly surprised by the volume we have been able to put into the market without moving pricing that much.”

This pick-up in supply also means 2016 has started to catch up with 2015’s issuance numbers. Not including this week’s supply, the market is now running 27% behind last year’s volume, which is a big pick-up on the 48% lag seen at the end of the second quarter, and 72% deficit at the end of the first quarter.

Follow LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

Investors Pour €319M into European High Yield Funds

J.P. Morgan’s weekly analysis of European high-yield funds shows a €319 million inflow for the week ended Aug. 10. The reading includes a €49 million inflow to ETFs, and an €87 million inflow for short-duration funds. The reading for the week ended Aug. 3 is revised from a €265 million outflow to a €274 million outflow. Note, the net weekly reading also includes flows from long-only managed accounts.

The provisional reading for July is a €221 million outflow. This is the third-consecutive monthly outflow, following a €1.83 million outflow in June. It is also the fifth monthly outflow this year, with January and February seeing outflows of €1.3 billion and €824 million, respectively. None of these readings though surpass the €3.3 billion and €2.1 billion inflows recorded in March and April, respectively.

Fund flows for 2016 now stand at a €788 million inflow, down from a 2016-high of €3.2 billion in April, and well below the €8.8 billion inflow tracked at this stage last year.

U.S. high-yield funds recorded an inflow of $1.65 billion for the week ended Aug. 10, according to the weekly reporters to Lipper only. This follows two straight weeks of outflows that totalled $2.6 billion over that period. ETFs led the way with $1.26 billion of inflows, or roughly 76% of the total. The year-to-date total inflow is now $8.7 billion, with 31% ETF-related. A year ago at this juncture, the measure was an outflow of $1.6 billion, with 83% ETF-related.

J.P. Morgan only calculates flows for funds that publish daily or weekly updates of their net asset value and total fund assets. As a result, its weekly analysis looks at around 60 funds, with total assets under management of €50 billion. Its monthly analysis takes in a larger universe of 90 funds, with €70 billion of assets under management. For a full analysis, please see “Europe receives HY fund flow calculation.” — Nina Flitman

Follow LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

S&P: 107 Global Corporate Defaults so far in 2016

defaults by region

The global corporate default tally has grown to 107 as of yesterday, compared to 68 at this point in 2015, according to S&P Global Fixed Income Research. The last time the corporate default count was this high? In 2009, when there were a whopping 194.

The bulk of the 2016 defaults – 72 – come from the U.S., according to S&P. – Staff reports

This analysis is part of S&P Global Fixed Income’s weekly default analysis, which also details default by sector, a list/xls of 2016 defaults, and other analysis. It is available to S&P Global Credit Portal subscribers here.

Follow LCD News on Twitter. LCD is a an offering of S&P Global Market Intelligence

content

European High Yield Bond Issuance Down 50% from 2015

european high yield bond issuance

High yield bond issuance in Europe is down some 50% from this point last year.

Through July, there has been €27.5 billion of issuance in 2016, compared to €54.4 billion through July 2015, according to LCD, an offering of S&P Global Market Intelligence. – Staff reports

Follow LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

European High Yield Funds See €93M Investor Cash Inflow

J.P. Morgan’s weekly analysis of European high-yield funds shows a €93 million inflow for the week ended July 27. The reading includes a €145 million inflow to ETFs, and a €190 million inflow for short-duration funds. The reading for the week ended July 20 is revised from a €27 million inflow to a €31 million inflow. Note, the net weekly reading also includes flows from long-only managed accounts.

The provisional reading for June is a €1.83 billion outflow. This is the second-consecutive monthly outflow, following the €366 million outflow in May. It is also the fourth monthly outflow this year, with January and February seeing outflows of €1.3 billion and €824 million, respectively. None of these readings though surpass the €3.3 billion and €2.1 billion outflows recorded in March and April, respectively.

Fund flows for 2016 now stand at a €1.01 billion inflow, down from a 2016-high of €3.2 billion in April, and well below the €8.7 billion inflow tracked at this stage last year.

The picture has been broadly the same throughout July, with inflows into ETFs and short-duration funds supporting the overall weekly number. This pattern continued with the latest reading, as the combined ETF and short-duration inflow totalled €335 million — meaning there must again have been an outflow from long-only managed accounts to bring the total weekly inflow down to €93 million. That said, fund managers continue to say flows are benign, and they still have plenty of cash to put to work.

Meanwhile, U.S. high-yield funds recorded an outflow of $175 million for the week ended July 27, according to the weekly reporters to Lipper only. This was the first net outflow after three weeks of inflows totalling $6.5 billion. The year-to-date total inflow is now $9.5 billion, with 39% ETF-related. A year ago at this juncture, the inflow was just $849 million, with 39% ETF-related.

J.P. Morgan only calculates flows for funds that publish daily or weekly updates of their net asset value and total fund assets. As a result, its weekly analysis looks at around 60 funds, with total assets under management of €50 billion. Its monthly analysis takes in a larger universe of 90 funds, with €70 billion of assets under management. For a full analysis, please see “Europe receives HY fund flow calculation.” — Luke Millar

Follow Luke and LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

Europe: Adient Launches $2B Cross-Border Bond Offering

Adient Global Holdings has launched an offering of cross-border senior unsecured notes, sized at up to $2 billion, to support its spin-off from Johnson Controls. The offering is split into euro-denominated eight-year (non-call life) notes, and dollar-denominated 10-year (non-call five) notes.

Citi is the global coordinator on the transaction, and also lead left on the dollar-denominated notes. Bank of America Merrill Lynch, Goldman Sachs, J.P. Morgan, MUFJ, USB, and Wells Fargo are also bookrunners on the dollars. Barclays (B&D and active), Credit Agricole CIB (active), UniCredit (active), Banca IMI, Commerzbank, ING, and Citi are bookrunners on the euro notes.

Roadshows will be held in Europe and the U.S. on Aug. 1–4, with pricing expected thereafter.

The euro notes will have no equity clawback, while the dollar notes have up to 40% at par plus the coupon within the first three years.

The issue is expected to be rated BB/Ba3, according to sources, with corporate ratings of BB+/Ba2.

Adient is an automotive seating and interiors business being spun off from Johnson Controls in a new publicly traded company to be listed later this year. The issuer recently launched a $3 billion pro rata credit facility to support the spin-off.

Earlier this year, Tyco International obtained a $4 billion, 3.5-year A term loan that was used in connection with the company’s merger with Johnson Controls. The merged JCI/TYC entity is expected to have roughly $32 billion of pro forma revenue and $4.5 billion of EBITDA on an annual basis, before synergies. The Adient spin-off will result in a distribution to JCI of $2.5–3.5 billion, with JCI and TYC shareholders expected to receive shares of Adient after the merger. — Nina Flitman/Richard Kellerhals

Follow LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

Mydentist Wraps 1st Sterling High Yield Bond Deal Since Brexit Vote

Mydentist on Friday placed bonds via Credit Suisse (B&D) and J.P. Morgan as global coordinators and joint physical bookrunners on the deal, with Goldman Sachs, ING, Lloyds, Mizuho, Societe Generale CIB, and Royal Bank of Scotland as bookrunners. Pricing was accelerated, with the deal originally due to roadshow through Monday. The fixed-rate notes came at the tight end of guidance, while the OID on the FRNs was reduced. The company has also privately placed £130 million of second-lien notes due 2023. Proceeds will be used to refinance the borrower’s outstanding notes and revolver drawings. As reported, the deal includes two unusual features — a new element to portability and the listing of the bonds on the Channel Islands Securities Exchange. Note, these will be the first new sterling bonds since the U.K. voted to leave the European Union last month. IDH rebranded to Mydentist in 2015. It operates a 600-plus network of practices in the U.K. Carlyle bought a majority interest in 2011. Terms:

Issuer IDH Finance
Ratings B/B2/B+
Amount £275 million
Issue Secured
Coupon 6.25%
Price 100
Yield 6.25%
Spread B+575
Maturity Aug. 15, 2022
Call nc2 (50%/25%/par)
Trade July 22, 2016
Settle Aug. 5, 2016 (T+10)
GloCos CS (B&D), JPM
Jt books GS, ING, Lloyds, Mizuho, SG, RBS
Px talk 6.25–6.5%
Notes Cut NC period from NC2.5
Issuer IDH Finance
Ratings B/B2/B+
Amount £150 million
Issue Secured
Coupon L+600
Price 99.5
Floor 0%
Maturity Aug. 15, 2022
Call nc1 (101/par)
Trade July 22, 2016
Settle Aug. 5, 2016 (T+10)
GloCos CS (B&D), JPM
Jt books GS, ING, Lloyds, Mizuho, SG, RBS
Px talk L+600 at 99

Follow Luke and LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.