Upload
dinhhanh
View
225
Download
2
Embed Size (px)
Citation preview
Bank and Capital Markets New Issue Review
7 Sep 2015 – 11 Sep 2015
Capital & Debt Advisory
Market Leading Independent Debt Advisory Bank Market | Public Bonds | Private Placements | Ratings | Hedging | Retail Bonds
Contents Section 1 Market backdrop 2
Section 2 Bank loan market 3
Section 3 USD public bond market 5
Section 4 GBP public bond market 9
Section 6 EUR public bond market 11
Contacts
United Kingdom
Luke Reeve
Tel: +44 20 7951 6548 Email: [email protected]
Chris Lowe
Tel: +44 20 7951 0826 Email: [email protected]
Gary Davison
Tel: +44 161 333 2767 Email: [email protected]
Europe
Olivier Catonnet Tel: +33 1 5561 0535 Email: [email protected]
Jonathan H.M. Harfield Tel: +420 731 627 155 Email: [email protected]
Britta Becker Tel: +49 40 36132 20781 Email: [email protected]
Asia
Lynn Tho
Tel: +65 6309 6688 Email: [email protected]
David Chew
Tel: +65 6309 8085 Email: [email protected]
US & Canada
K.C. Brechnitz Tel: +1 704 335 4211 Email: [email protected]
Tony Ianni
Tel: +1 416 943 3476 Email: [email protected]
Australia
Sebastian Paphitis Tel: +61 2 9248 4773 Email: [email protected]
Jason Lowe
Tel: +61 3 8650 7600 Email: [email protected]
Section 7 Private Placement market 13
Section 8 Ratings update 15
@EY_UKI
Section 9 Glossary 16
Section 5 ORB Retail bond market 10
EY Capital and Debt Advisory - New Issue Review 2
Market backdrop
Section 1: Market backdrop
Tenor 3yr 5yr 7yr 10yr 30yr
UK swap rate 1.20 1.50 1.71 1.90 2.13
Gilt rate 0.82 1.26 1.52 1.83 2.50
Tenor 3yr 5yr 7yr 10yr 30yr
US swap rate 1.13 1.52 1.91 2.21 2.69
UST rate 1.02 1.50 1.89 2.19 2.95
Source: Bloomberg
Source: Bloomberg Source: Bloomberg
Source: Bloomberg
► As expected, the Bank of England’s Monetary Policy Committee (MPC) opted to hold interest rates at 0.5% during last week’s committee meeting (vote of 8-1). Meeting minutes cite increased risks to the global economy, particularly from China, and an unchanged outlook for inflation as the rationale for their decision. The bank also reduced its growth forecasts for Q3 of 2015 from 0.7% to 0.6%, off the back of recent disappointing manufacturing and industrial production data.
► The Bank of International Settlements (BIS) reiterated concerns around the Chinese economy and its stock market sell-offs in recent weeks, as it released a report citing that capital outflows from the country represent “the release of pressure that has gradually accumulated over the years along major fault lines”. The BIS argues that emerging markets are particularly at risk of financial vulnerabilities, partly as a result of the low interest rates that have been in place across many major economies since the financial crisis.
► China has unveiled the much awaited guidelines for reform of its state-owned enterprises (SOEs) as the latest official data show its economy continuing to slow. Official news agency, Xinhua, stated “Guidelines suggest that by 2020, the SOE system should be more modernised and market-oriented. It should make for higher economic vitality, higher control, greater influence and SOEs will be more risk-resistant.”
► The Federal Reserve is scheduled to meet in the coming week, deliberating, amongst other things, the interest rate-setting. Due to the conflicting messages from the Fed over the past weeks, traders and analysts alike are split over whether it will tighten monetary policy. The lack of certainty may spark a sharp reaction should the Fed lift rates.
► Institutional investors are lending out more bonds and accepting increasing amounts of non-cash securities, according to a recent report (ISLA, 27 August 2015), which is raising concerns among some investors. The report shows the lending industry continuing to move towards sovereign debt (up 35% on last year), with 72% of these taken in return for non-cash collateral (up 61% on last year).
China unveils guidelines for stabilising and bolstering the economy whilst financiers are split ahead of the Federal Reserve interest rate meeting
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Yie
ld (
%)
10-year Benchmark yields
10yr UST 10yr Gilt 10yr Bund
0.0
1.0
2.0
3.0
4.0
2015 2017 2019 2021 2023 2025
Ra
te (
%)
Three month UK LIBOR forward rates
Current forward 3m UK LIBOR (-1 wk) fwd 3m UK LIBOR
2yr 3yr 4yr
5yr 7yr
10yr
0
1
2
3
4
5
6
7
Ra
te (
bp
s)
Weekly change in UK SWAP
Bank loan market
EY Capital and Debt Advisory - New Issue Review 3
Section 2: EUR/GBP bank loan market
Source: Loan Connector Source: Loan Connector
► German automotive and industrial filter maker Mann+Hummel (NR, NR, NR) has launched a €400 million Schuldschein to back its acquisition of US-based Affinia Group via bookrunners ING Bank and LBBW, and co-lead arrangers are BNP Paribas and Deutsche Bank. The unsecured financing was done across 6 tranches of €67 million each, with 3-, 5-, 6-, 7-, 8- and 10-year maturities and met with a very positive response from investors, reflecting highly liquid market conditions.
► Hong Kong-listed Asia Satellite Telecommunications Holdings Ltd’s US$240 million five-year dividend recap facility has received eight commitments in limited syndication. The deal, which comprises a US$200 million term loan tranche A and a US$40 million revolving credit tranche B, agree in June, has now been signed.
► Canadian pharmaceuticals company Concordia Healthcare Corp (B2, B, NR) is backing its acquisition of UK-based AMCo with up to US$4.3 billion of term loans and bridge loans. Concordia is acquiring AMCo from private equity owner Cinven. The loans will fully fund the acquisition price and refinance all of AMCo’s existing debt as well as repay all of Concordia’s bank loans, and, if required, repay Concordia’s existing senior bonds. The term loans will be secured, while the bridge loans will be unsecured with the financing initially being provided by Goldman Sachs, Credit Suisse, RBC and Jefferies.
► US power producer Southern Co syndicated its US$8.1 billion bridge loan this week, in a deal lead by Citigroup. Proceeds from the bridge loan will back the company’s US$8 billion acquisition of AGL Resources Inc, which was announced August 24. The facility expires in 2016, and is priced at L+112.5bps. The deal creates the second-largest utility company in the US by customer base, with 11 regulated electric and natural gas distribution companies and about 9 million customers.
0
20
40
60
80
100
120
140
Ma
rgin
(b
ps)
European pricing grid - multiyear drawn
AA A BBB
EUR / GBP completed transactions greater than US$250m
0
50
100
150
200
250
0
50
100
150
200
250
300
350
3Q
11
4Q
11
1Q
12
2Q
12
3Q
12
4Q
12
1Q
13
2Q
13
3Q
13
4Q
13
1Q
14
2Q
14
3Q
14
4Q
14
1Q
15
2Q
15
Nu
mb
er
of
de
als
Vo
lum
e (
US
$b
n)
Western Europe Loan Volumes
Lev - Vol. ($Bils.) IG - Vol. ($Bils.)
Lev - No. of Deals IG - No. of Deals
Issue date
Issuer Tranche rating (M, S&P)
Form Ccy Amount Maturity Margin (+bps)
Sector Ctry Leads
9-Sep Secure Income REIT NR, NR TL GBP 587 2023 - Real Estate UK -
8-Sep Dalian Wanda NR, NR RCF EUR 200 2020 - Real Estate CN -
8-Sep Dalian Wanda NR, NR RCF EUR 200 2020 - Real Estate CN -
7-Sep MANN+HUMMEL NR, NR OTH EUR 67 2018 E+125 Automotive DE ING, LBBW
7-Sep MANN+HUMMEL NR, NR OTH EUR 67 2020 E+150 Automotive DE ING, LBBW
7-Sep MANN+HUMMEL NR, NR OTH EUR 67 2021 E+160 Automotive DE ING, LBBW
7-Sep MANN+HUMMEL NR, NR OTH EUR 67 2022 E+175 Automotive DE ING, LBBW
7-Sep MANN+HUMMEL NR, NR OTH EUR 67 2023 E+185 Automotive DE ING, LBBW
7-Sep MANN+HUMMEL NR, NR OTH EUR 67 2025 E+200 Automotive DE ING, LBBW
Bank loan market
EY Capital and Debt Advisory - New Issue Review 4
Section 2: USD Bank loan market
USD completed transactions greater than US$250m
Issue date
Issuer Tranche rating (M, S&P)
Form Ccy Amount Maturity Margin (+bps)
Sector Ctry Leads
13-Sep Computer Sciences NR, NR RCF USD 500 - - Technology US MUFG Union, RBC
13-Sep Computer Sciences NR, NR OTH USD 3,000 - - Technology US MUFG Union, RBC
9-Sep Asia Satellite Telecommunications
NR, NR RCF USD 40 2020 L+250 Telecommunications HK Various
9-Sep Asia Satellite Telecommunications
NR, NR TL USD 200 2020 - Telecommunications HK Various
9-Sep Asia Satellite Telecommunications
NR, NR TL USD 200 2020 L+250 Telecommunications HK Various
9-Sep Asia Satellite Telecommunications
NR, NR TL USD 296 2020 - Telecommunications HK Various
9-Sep Central Java Independent Power
NR, NR TL USD 1,100 2035 L+210 Power & Utilities ID Various
9-Sep Olin Corp NR, NR TL USD 600 2018 L+150 Chemicals US SUM
9-Sep Sucampo Pharmaceuticals NR, NR TL USD 250 2021 - Life Sciences US JEFF
8-Sep Concordia Healthcare B2, B TL USD 4,000 - - Life Sciences CA Various
8-Sep Concordia Healthcare B2, B OTH USD 300 - - Life Sciences CA Various
8-Sep Rostelecom NR, BB+ TL USD 600 - - Telecommunications RU CDB, Huawei International
8-Sep Southern Co Baa1, A- OTH USD 8,100 2016 L+112.5 Power & Utilities US Citi
8-Sep Steiner Leisure NR, NR TL USD 600 - - Business Services US GSO Capital
7-Sep Saudi Arabian Mining Co NR, NR OTH USD 3,000 - - Mining & Metals ZA -
7-Sep Saudi Aramco Mobil Refinery
NR, NR OTH USD 5,000 - - Oil & Gas ZA -
USD public bond market
EY Capital and Debt Advisory - New Issue Review 5
Domestic
Section 3: USD public bond market
Source: Reuters Source: Reuters
► US investment grade corporate bond markets were reinvigorated this week after Monday’s Labor Day holiday with borrowers exploiting demand ahead of the US Federal Reserve meeting. High-yield bankers, meanwhile, although currently subdued, remain optimistic for the remainder of the year.
► One large high-yield transaction was that of Frontier Communications (Ba3, NR, NR), the US-based telecoms provider which issued a US$6.6 billion three tranche bond to fund the acquisition of certain Verizon assets.
► In the investment grade space, US-based biotech company Gilead Sciences printed the biggest deal in two months as it led 11 corporate issuers in printing more than US$21 billion of deals, ranging from two year floaters to 100 year bonds, in the space of two days.
► Retailer Lowes (A3, A-, NR) followed its higher-rated rival Home Depot into the market with a three-part US$1.75 billion offering of fixed and floating rate notes. Lowes, sold a US$750 million 10-year fixed rate tranche at 125bps over Treasuries and a US$750 million 30-year tranche at 155bps over. It also sold a US$250 million three-year floater at 60bps over Libor, after dropping a fixed rate tranche of a similar duration.
► John Deere (A2, A, NR) issued a US$1.5 billion four part offering that racked up US$3.7 billion of demand and printed with a new issue concession of 3bps-8bps.
0
20
40
60
80
0
10
20
30
40
50
Nu
mb
er
issu
ed
Vo
lum
e (
US
$b
n)
Monthy US$ bond volumes
Domestic volume (US$) Cross-border volume (US$)
Cross-border number issued Domestic number issued
0
50
100
150
200
250
Sp
rea
d (
bp
s)
USD secondary public bond spread 10-year
Avg. AA USD 10yr spreads Avg. A USD 10yr spreads
Avg. BBB USD 10yr spreads
Issue date
Issuer Tranche rating (M,S&P,F)
Form Amount (US$m)
Coupon Maturity Spread (T+bps)
Sector Ctry Leads
11-Sep Frontier Communications
Ba3, NR, NR SN 1,000 8.875% 2020 +736 Telecommunications US JPM, BAML, Citi
11-Sep Frontier Communications
Ba3, NR, NR SN 2,000 10.500% 2022 +861 Telecommunications US JPM, BAML, Citi
11-Sep Frontier Communications
Ba3, NR, NR SN 3,600 11.000% 2025 +881 Telecommunications US JPM, BAML, Citi
10-Sep American Airlines Baa3, NR, NR SN 239 4.400% 2023 +285 Industrials US Various
10-Sep American Airlines A2,NR, NR SN 239 4.000% 2027 +178 Transport US Various
10-Sep American Airlines Aa3, NR, NR SN 583 3.600% 2027 +138 Transport US Various
10-Sep Biogen Idec Baa1, NR, NR SN 1,500 2.900% 2020 +140 Life Sciences US BAML, GS
10-Sep Biogen Idec Baa1, NR, NR SN 1,000 3.625% 2022 +170 Healthcare US BAML, GS
10-Sep Biogen Idec Baa1, NR, NR SN 1,750 4.050% 2025 +185 Life Sciences US BAML, GS
10-Sep Biogen Idec Baa1, NR, NR SN 1,750 5.200% 2045 +225 Life Sciences US BAML, GS
USD public bond market
EY Capital and Debt Advisory - New Issue Review 6
Section 3: USD public bond market
Domestic (Cont)
Issue date
Issuer Tranche rating (M,S&P,F)
Form Amount (US$m)
Coupon Maturity Spread (T+bps)
Sector Ctry Leads
10-Sep Danaher A2, NR, NR SN 500 1.650% 2018 +65 Industrials US Various
10-Sep Danaher NR, NR, NR SN 500 2.400% 2020 +90 Industrials US Various
10-Sep Danaher NR, NR, NR SN 500 3.350% 2025 +115 Industrials US Various
10-Sep Danaher A2, NR, NR SN 500 4.375% 2045 +140 Industrials US Various
10-Sep Wyndham Worldwide Baa3, BBB-, BBB SN 350 5.100% 2025 +288 Hospitality & Leisure US BAML, GS, JPM
9-Sep Allina Health Systems Aa3, NR, AA- SN 250 4.805% 2045 +185 Life Sciences US Various
9-Sep Gilead Sciences NR, A-, NR SN 1,000 1.850% 2018 +80 Life Sciences US BAML, JPM
9-Sep Gilead Sciences NR, A-, NR SN 2,000 2.550% 2020 +105 Life Sciences US BAML, JPM
9-Sep Gilead Sciences NR, A-, NR SN 1,000 3.250% 2022 +135 Life Sciences US BAML, JPM
9-Sep Gilead Sciences NR, A-, NR SN 2,750 3.650% 2026 +150 Life Sciences US BAML, JPM
9-Sep Gilead Sciences NR, A-, NR SN 1,000 4.600% 2035 +165 Life Sciences US BAML, JPM
9-Sep Gilead Sciences NR, A-, NR SN 2,250 4.750% 2046 +180 Life Sciences US BAML, JPM
9-Sep Halcon Resources NR, CCC, NR SN 500 13.000% 2022 - Oil & Gas US -
9-Sep Kilroy Realty Baa2, BBB, NR SN 400 4.375% 2025 +225 Real Estate US Various
9-Sep Lowe's Cos I A3, NR, NR SN 250 Float 2018 - Consumer Products US BAML, JPM, SunTrust
9-Sep Lowe's Cos I A3, A-, NR SN 750 3.375% 2025 +125 Consumer Products US BAML, JPM, SunTrust
9-Sep Lowe's Cos I A3, A-, NR SN 750 4.375% 2045 +155 Consumer Products US BAML, JPM, SunTrust
9-Sep Marriott International Baa2, BBB, NR SN 450 2.875% 2021 +140 Hospitality & Leisure US JPM, US Bancorp, Wells
9-Sep Marriott International Baa2, BBB, NR SN 350 3.750% 2025 +170 Hospitality & Leisure US JPM, US Bancorp, Wells
9-Sep Marsh & McLennan Cos Baa1, A-, NR SN 600 3.750% 2026 +158 Business Services US Various
9-Sep Piedmont Natural Gas A2, A, NR SN 150 3.600% 2025 +138 Power & Utilities US BB&T, US Bancorp
9-Sep Targa Resources Partners
Ba2, BB+, NR SN 600 6.750% 2024 +464 Power & Utilities US Various
8-Sep Automatic Data Processing
Aa3, AA, NR SN 1,000 2.250% 2020 +75 Technology US Various
8-Sep Automatic Data Processing
Aa3, AA, NR SN 1,000 3.375% 2025 +120 Technology US Various
8-Sep Home Depot NR, A, A SN 500 Float 2017 - Consumer Products US Various
8-Sep Home Depot A2, A, A SN 1,000 3.350% 2025 +117 Consumer Products US Various
8-Sep Indianapolis Power & Light
A2, BBB+, BBB+ SN 260 4.700% 2045 +175 Power & Utilities US BAMl, US Bancorp
USD public bond market
EY Capital and Debt Advisory - New Issue Review 7
Section 3: USD public bond market
Domestic (Cont)
Issue date
Issuer Tranche rating (M,S&P,F)
Form Amount (US$m)
Coupon Maturity Spread (T+bps)
Sector Ctry Leads
8-Sep John Deere Capital A2, NR, NR SN 350 Float 2017 - Automotive US Citi, GS, HSBC
8-Sep John Deere Capital A2, NR, NR SN 500 1.750% 2018 +75 Automotive US Citi, GS, HSBC
8-Sep John Deere Capital A2, NR, NR SN 325 2.450% 2020 +95 Automotive US Citi, GS, HSBC
8-Sep John Deere Capital A2, NR, NR SN 325 3.400% 2025 +125 Automotive US Citi, GS, HSBC
USD public bond market
EY Capital and Debt Advisory - New Issue Review 8
Section 3: USD public bond market
Cross Border
Issue date
Issuer Tranche rating (M,S&P,F)
Form Amount (US$m)
Coupon Maturity Spread (T+bps)
Sector Ctry Leads
9-Sep Codelco A1, AA-, A+ SN 2,000 4.500% 2025 +250 Mining & metals CL BAML, HSBC, JPM
9-Sep Mallinckrodt B1, BB-, NR SN 750 5.625% 2023 +360 Life Sciences LU Various
9-Sep Pentair Baa3, BBB, NR SN 500 2.900% 2018 +188 Industrials LU Various
9-Sep Pentair Baa3, BBB, NR SN 400 3.625% 2020 +213 Industrials LU Various
9-Sep Pentair Baa3, BBB, NR SN 250 4.650% 2025 +250 Industrials LU Various
9-Sep Tyco A3, BBB+, A- SN 750 3.900% 2026 +180 Industrials LU GS, DB, MS
9-Sep Tyco A3, BBB+, A- SN 750 5.125% 2045 +220 Industrials LU GS, DB, MS
8-Sep Canadian Pacific Railway Baa1, NR, NR SN 300 4.800% 2035 +185 Transport CA Various
8-Sep Canadian Pacific Railway Baa1, NR, NR SN 900 6.125% 2115 +314 Transport CA Various
Issue date
Issuer Tranche rating (M,S&P,F)
Form Amount (GBPm)
Coupon Maturity Spread (G+bps)
Sector Ctry Leads
No significant transactions in the week
GBP public bond market
EY Capital and Debt Advisory - New Issue Review 9
Section 4: GBP public bond market
Source: Reuters Source: Reuters
Domestic
Cross-border
► No new issuance of note this week.
Issue date
Issuer Tranche rating (M,S&P,F)
Form Amount (GBPm)
Coupon Maturity Spread (G+bps)
Sector Ctry Leads
No significant transactions in the week
0
1
2
3
4
5
6
0
1
2
Nu
mb
er
issu
ed
Vo
lum
e (
GB
Pb
n)
Monthy GBP bond volumes
Volume (GBP) Number issued
0
50
100
150
200
Sp
rea
d (
bp
s)
GBP secondary public bond spread 10-year
Avg. AA GBP 10yr spreads Avg. A GBP 10yr spreads
Avg. BBB GBP 10yr spreads
ORB retail bond market
EY Capital and Debt Advisory - New Issue Review 10
In the market
Recent Issues
Date Issuer Ratings (M,S&P,F) Form Amount (GBPm)
Coupon Maturity Sector Country
Aug-15 Paragon Group of Companies
NR, NR, BBB- SSN 112.5 6.00% 2024 Finance UK
May-15 Wasps Rugby Club NR, NR, NR SSN 35 6.50% 2022 Sport & Leisure UK
May-15 Retail Charity Bonds NR, NR, NR SN 27 4.40% 2025 Real Estate UK
Apr-15 Provident NR, NR, BBB SN 50 5.13% 2023 Finance UK
Mar-15 Intermediate Capital Group
NR, BBB-, BBB- SN 160 5.00% 2023 Finance UK
Oct-14 Eros International NR, NR, NR SN 50 6.50% 2021 Media & Entertainment UK
Oct-14 A2D Funding NR, NR, NR SSN 150 4.50% 2026 Real Estate UK
Aug-14 Burford Capital NR, NR, NR SN 90 6.50% 2022 Finance UK
Jul-14 Golden Lane Charity NR, NR, NR SN 11 4.47% 2021 Real Estate UK
Jun-14 Ladbrokes NR, BB, BB SN 100 5.13% 2022 Leisure UK
Jan-14 Paragon NR, NR, NR SN 125 6.13% 2022 Finance UK
Dec-13 Premier Oil NR, NR, NR SN 150 5.00% 2020 Oil & Gas UK
Oct-13 A2Dominion NR, NR, AA- SN 150 4.75% 2022 Real Estate UK
Jul-13 Bruntwood NR, NR, NR SSN 50 6.00% 2020 Real Estate UK
Jun-13 Helical Bar NR, NR, NR SN 80 6.00% 2020 Real Estate UK
May-13 International Personal Finance
NR, NR, BB+ SN 70 6.13% 2020 Finance UK
Mar-13 Provident NR, NR, BBB SN 65 6.00% 2021 Finance UK
Mar-13 Paragon NR, NR, NR SN 60 6.00% 2020 Finance UK
Feb-13 EnQuest NR, NR, NR SN 145 5.50% 2022 Oil & Gas UK
Dec-12 Alpha Plus NR, NR, NR SSN 49 5.75% 2019 Education UK
Dec-12 UNITE NR, NR, NR SN 90 6.13% 2020 Real Estate UK
Section 5: ORB retail bond market
Date Issuer Ratings (M,S&P,F) Form Amount (GBPm)
Coupon Maturity Sector Country
No issues in the market
EUR public bond market
EY Capital and Debt Advisory - New Issue Review 11
► BMW followed a string of automotive issuers including American Honda and Toyota the previous week. The Company issued a fixed rate note of €1 billion and a floater of €500 million. Crédit Agricole, ING, JP Morgan, LBBW and MUFG gave initial price thoughts for the 3.5-year floater at 45bps-50bps over quarterly Euribor, along with initial thoughts of 75bps-80bps over mid-swaps for the 6-year fixed rate paper. The leads were able to revise those levels to guidance of 40bps area over quarterly Euribor and 65bps-70bps over mid-swaps.
► Citycon (Baa2, BBB, NR), the Finnish property company issued a €300 million bond of seven years with a final spread of 175 bps over mid-swaps. The proceeds will be used to partially fund the acquisition of Norwegian shopping centre operator Sektor. Citycon agreed to buy the company for €1.5 billion in May.
► Estonian power company, Eesti Energia (Baa2, BBB, NR) priced a €500 million rated deal at 160 bps. The Company, which is wholly owned by the Republic of Estonia was able to print at the upper end of its target range without moving the spread.
► ITV (Baa3, BBB-, NR) also joined the “pre-Fed rush”, raising €600 million for general corporate purposes, including refinancing a loan facility used to fund ITV’s acquisition of Dutch company Talpa Media. ITV acquired Talpa for €1.1 billion in March and used a €500 million 12 month bridge loan to help finance the deal.
Section 6: EUR public bond market
Source: Reuters Source: Reuters
Domestic
Issue date
Issuer Tranche rating (M,S&P,F)
Form Amount (EURm)
Coupon Maturity Spread (T+bps)
Sector Ctry Leads
11-Sep Eni A3, NR, NR SN 750 1.750% 2024 MS+105 Oil & Gas IT Various
10-Sep Carmila NR, NR, NR SN 600 2.375% 2023 MS+170 Real Estate FR Various
10-Sep EDP Ba2, NR, BB SUB 750 5.375% 2075 MS+544 Power & Utilities PT Various
10-Sep Eesti Energia Baa2, NR, NR SN 500 2.384% 2023 MS+160 Power & Utilities EA BAR, DB, Nordea
9-Sep Daimler A3, NR, A- SN 500 Float 2017 - Automotive DE BAR, DB
9-Sep BMW A2, NR, NR SN 500 Float 2019 - Automotive DE Various
9-Sep BMW A2, NR, NR SN 1,000 1.125% 2021 MS+65 Automotive DE Various
8-Sep Citycon Treasury Baa2, BBB, NR SN 300 2.375% 2022 MS+175 Real Estate NL Various
7-Sep Iberdrola International Baa1, NR, BBB+ SN 500 1.750% 2023 MS+100 Power & Utilities NL Various
7-Sep Telefonica Emisiones Baa2, BBB, BBB+ SN 1,000 1.477% 2021 MS+98 Telecommunications ES Various
0
10
20
30
40
50
60
70
80
90
0
5
10
15
20
25
30
35
40
Nu
mb
er
issu
ed
Vo
lum
e (
EU
Rb
n)
Monthy EUR bond volumes
Volume (EUR) Number issued
0
50
100
150
200
Sp
rea
d (
bp
s)
EUR secondary public bond spread 10-year
Avg. AA EUR 10yr spreads Avg. A EUR 10yr spreads
Avg. BBB EUR 10yr spreads
EUR public bond market
EY Capital and Debt Advisory - New Issue Review 12
Section 6: EUR public bond market
Cross Border
Issue date
Issuer Tranche rating (M,S&P,F)
Form Amount (EURm)
Coupon Maturity Spread (T+bps)
Sector Ctry Leads
11-Sep ITV Baa3, NR, NR SN 600 2.125% 2022 MS+162 Media & Entertainment UK BAR, JPM
10-Sep America Movil A2, A-, A SN 750 5.500% 2018 - Telecommunications MX DB
10-Sep Apple Aa1, NR, NR SN 1,000 1.375% 2024 MS+60 Technology US GS, DB
10-Sep Apple Aa1, NR, NR SN 1,000 2.000% 2027 MS+85 Technology US GS, DB
10-Sep Shell International Aa1, NR, NR SN 1,200 Floats 2019 - Oil & Gas UK HSBC, SG, DB
10-Sep Shell International Aa1, NR, NR SN 1,250 1.250% 2022 MS+67 Oil & Gas UK HSBC, SG, DB
10-Sep Shell International Aa1, NR, NR SN 1,000 1.875% 2025 MS+90 Oil & Gas UK HSBC, SG, DB
9-Sep DS Smith NR, NR, NR SN 500 2.250% 2022 MS+172 Consumer Products UK Various
Private Placement market
EY Capital and Debt Advisory - New Issue Review 13
► U.S. EcoGen Polk LLC (NAIC-2) raised funds this week with a transaction of US$150 million of senior secured notes, due in 2042, with pricing expected to be in the 4.50%-5.00% region. The deal is to fund a biomass project to be built in Florida.
► Gator Power II Holdings LLC tapped the market via MUFG. The issue, viewed as an NAIC-2 (BBB-), involves a hydroelectric project in Louisiana. The deal was done as US$250 million of 5-year senior secured bullets, priced with a 4.08% coupon.
► Brookfield Utilities UK Ltd NAIC-2 (Baa2) came to market via Barclays/Citi/HSBC/NAB. The deal, which is only being offered to existing lenders, is for £100 million of senior secured notes, split into 12-, 15- and 20-year bullets. The notes are secured by capital stock in subsidiaries. In April 2014 the company last tapped the USPP market. That transaction was launched as £100 million of senior secured notes, split into 10- and 30-year bullets. That deal was three-times oversubscribed, and done as £100 million of senior secured 15-year bullets in two parts: £41 million of 15-year bullets, with a 4.61% coupon at G+145bps; and £59 million of 15-year bullets, swapped from dollars to sterling by the investors, with a 4.51% coupon, at G+135bps.
Section 7: US Private Placement market
Source: Private Placement Monitor Source: Bloomberg
Source: Private Placement Monitor Source: Private Placement Monitor
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
Am
ou
nt
(US
$b
)
US Private Placement volumes
2011 2012 2013 2014 2015
0
50
100
150
200
250
300
350
400
450
500
Sp
rea
d t
o U
S T
rea
sury
/bp
s
NAIC-1 US Private Placement spreads (bps)
10yr High 10yr Low
0
50
100
150
200
250
300
350
400
450
500
Sp
rea
d t
o U
S T
rea
sury
/bp
s
NAIC-2 US Private Placement spreads (bps)
10yr High 10yr Low
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Yie
ld (
%)
US Treasury benchmark yields
5yr UST 7yr UST 10yr UST 30yr UST
Date Issuer Ratings Form Amount (US$m) Coupon Maturity Spread (T+bps)
Sector Ctry
Sep-15 Gator Power II NAIC-2 (BBB-)
SSN 250 4.08% 5yr - Power & Utilities
US
Sep-15 Major League Baseball NAIC-1 (A-)
SSN
55.3 5.3
22.1 35.1
3.13% 3.45% 3.55% 3.75%
7yr 10yr 12yr 15yr
+130 +135 +145 +165
Media & Entertainment
US
Sep-15 Coram California Development
NAIC-2 (BBB-)
SSN 105 4.52% 17yr/13.47 avg - Power & Utilities
US
Aug-15 ClearBridge Energy NAIC-1 (Aaa)
SN 10 10 5
3.33% 3.60% 3.76%
7yr 9yr
11yr - Oil & Gas US
Private Placement market
EY Capital and Debt Advisory - New Issue Review 14
Section 7: US Private Placement market
Date Issuer Ratings Form Amount (US$m)
Coupon Maturity Spread (T+bps)
Sector Ctry
Sep-15 U.S. EcoGen Polk NAIC-2 SSN 150 4.50%-5.00%
27yr - Power & Utilities
US
Sep-15 GSA NAIC-1 CTL 100 - 22yr, 13.5yr avg +150 Infrastructure US
Sep-15 Hudson Pacific Properties Inc
NAIC-2 (Baa3/BBB-)
SN 150 - 10yr, 12yr - Real Estate US
Domestic: In the market
Domestic: Issued
Cross Border: In the market
Cross Border: Issued
Date Issuer Ratings Form Amount (US$m) Coupon Maturity Spread (T+bps)
Sector Ctry
No significant transactions in the week
Date Issuer Ratings Form Amount (US$m) Coupon Maturity Spread (T+bps)
Sector Ctry
Sep-15 Brookfield Utilities NAIC-2 (Baa2)
SSN 100 - 12yr, 15yr, 20yr - Power & Utilities
UK
► Elli Investments Limited (Four Seasons Health Care, provider of health and social care services in the UK) downgraded to Caa3/negative from Caa1 by Moody’s
► Voith GmbH (Germany based mechanical engineering products manufacturer) lowered to Ba1/stable from Baa3 by Moody’s
► Crown Agents Bank Ltd (UK based bank) downgraded to BBB from BBB+ by Fitch
► Landshypotek Bank AB (French bank) lowered to A/stable from A+ by Fitch
Ratings Update
New and notable from rating agencies
EY Capital and Debt Advisory - New Issue Review 15
The above list highlights ratings developments that we believe are interesting or noteworthy. This list is not exhaustive.
Section 8: Ratings Update
► Ephios Holdco II PLC (European Laboratory Operator) gets S&P B+ with stable outlook, extended from PE firm Cinven after acquisition
► Conwert Immobilien Invest SE (Austria based property investment company) gets S&P BBB- with stable outlook
► Andorra (small, wealthy and politically stable country) gets Fitch BBB with stable outlook
► Elering AS (Estonia based electricity transmission co) upgraded to A2/stable from Baa1 by S&P
► Tightening EU regulation through 2020-2021 to push automakers to continue to innovate and change their product mix to include more alternative-fuel vehicles and optimize thermal combustion engines (S&P)
► European real estate companies to continue to benefit from low interest rates in the next couple of years, based on economists' forecasts for European Central Bank and Bank of England base rates, combined with good level of interest rate hedging practiced by these cos (S&P)
► European auto parts suppliers to offset slowing growth rates in China as benefits from geographic diversification and an improved product mix to allow many to outperform the global light vehicle production by more than 2.0% for 2015
► Shifting political winds are disrupting some plans for U.S. infrastructure projects (PPP), even though it is known that increased spending is needed to build and repair the country's roads, bridges, and tunnels (S&P)
► Global property and casualty (P/C) reinsurance sector got an "intermediate" insurance industry and country risk assessment (IICRA) score. It is based on assessment of weighted average views of "low" country risk and "moderate" industry risk for the sector (S&P)
Key
New ratings
Negative rating actions
7 September – 13 September 2015
Positive rating actions
Trends in financial markets and industry sectors
Asset-backed securitization ABS Not rated NR
Commercial mortgage-backed securitization CMBS Other loan OTH
Deep discount bond DDB Revolving credit facility RCF
Energy savings performance contract ESPC Senior note SN
First mortgage bonds FMB Senior secured note SSN
London interbank offered rate LIBOR Subordinated note SUB
Medium-term note MTN Term loan TL
ABN Amro ABN Jefferies & Co. JEF
Bank of America Merrill Lynch BAML JP Morgan JPM
BBVA Securities BBVA KBC Capital Markets KBC
Bank of Tokyo Mitsubishi UFJ BOTM Landesbank Hessen-Thueringen LBHT
Banco Santander SA SANT Lloyds Capital Services Ltd LCS
Bank of New York BNY Lloyds Banking Group LBG
Bank of Egypt BoE Banca March MAR
Bank of Nova Scotia BNS Mega International Commercial Bank Co Ltd MICBC
Bank of the West BoW Mitsubishi UFJ Financial MIS
Barclays Bank BAR Mizuho Financial Group Inc MIZ
BayernLB BLB Morgan Stanley MS
BMO Capital Markets BMO Natixis NAT
BNP Paribas Group BNP Norddeutsche Landesbank GZ NLB
Capital One Bank COB Nomura NOM
Calyon CAL PNC Capital Markets PNC
CIBC World Markets CIBC Rabobank RAB
Citi Citi RBC Capital Markets RBC
Commonwealth Bank of Australia CBA Raiffeisen Bank International RBI
Commerzbank AG CZB RBS RBS
Crédit Agricole CA Société Générale SG
Credit Suisse CS Scotia Capital Inc SCA
Deutsche Bank DB Standard Bank Plc SB
DnB NORD DnB Standard Chartered Bank STA
European Investment Group EIG National Bank of Egypt STET
Fortis Securities Inc FOR SRM Robinson Humphrey SRH
Goldman Sachs & Co GS Sumitomo SUM
HSBC HSBC UBS UBS
Itau BBA IBBA UniCredit Group UNI
ING Groep NV ING U.S. Bancorp USB
Intesa Sanpaolo SA ISP Wells Fargo Wells
Incapital LLC INC WestLB WLB
Banca IMI IMI WestPac WP
Glossary Technical abbreviations
Financial institution abbreviations
EY Capital and Debt Advisory - New Issue Review 16
Section 9: Glossary
EY | Assurance | Tax | Transactions | Advisory
Ernst & Young LLP
© Ernst & Young LLP. Published in the UK. All Rights Reserved.
The UK firm Ernst & Young LLP is a limited liability partnership registered in England and Wales with registered number OC300001 and is a member firm of Ernst & Young Global Limited.
Ernst & Young LLP, 1 More London Place, London, SE1 2AF.
Information in this publication is intended to provide only a general outline of the subjects covered. It should neither be regarded as comprehensive nor sufficient for making decisions, nor should it be used in place of professional advice. Ernst & Young LLP accepts no responsibility for any loss arising from any action taken or not taken by anyone using this material.
ey.com