With the exception of highly cyclical commodities businesses or an occasional instance of fraud, secured lenders of revolvers and asset-backed loans have largely experienced full recoveries in bankruptcy proceedings over the past nine years, as detailed in a new report by Fitch Ratings.
According to Markit, three existing loans and a notes issue that are being refinanced took a major pricing leap after the company outlined plans in a Sept. 23 registration filing to issue new term loans of up to $1.025 billion in addition to a new $350 million revolver tranche.
An increasing share of corporate bond trades are taking place on electronic venues, and the Financial Industry Regulatory Authority (Finra) wants them to start disclosing more information. The push for more disclosure comes as electronic trading platforms siphon off an increasing share of trading activity.
Several European CLOs have garnered attention this year as the first breed of self-professed Volcker-compliant issues from Europe, designed to attract U.S. bank investments or meet the regulatory requirements of a U.S.-based parent bank.
Credit Suisse,which is the top bookrunner for loans backing LBOs this year, has reportedly received a warning from the Federal Reserve about exceeding guidelines on the amount of debt it will finance for corporate borrowers.
Scientific Games is stretching its balance sheet to buy rival slot machine maker Bally Technologies for $5.1 billion, betting that the cost savings will help it compete in a market hit by weaker consumer spending and competition from online gaming.
Covenants of healthcare company junk bonds have been in declining health this year. Covenant quality for these companies is declining at a faster rate than the industry as a whole. Lower default rates are partly to blame.
Some new players are breaking into high yield bookrunning.Bulge-bracket investment banks still dominate the underwriting league tables for larger deals. But they are ceding some ground on smaller deals, particularly those in the $100 million to $250 million range.
A judge has ruled that the involuntary bankruptcy of FMB Bancshares in Lakeland, Ga., may proceed, a decision that could embolden more trust-preferred creditors to pursue a similar strategy. Involuntary bankruptcy has emerged in recent months as a tactic for trust-preferred holders seeking repayment.
Refinancing is not the driver of high yield bond and leveraged loan issuance that it was over the last two years, and thats not necessarily a good thing. So far this year, 54% of the proceeds of leveraged loans and 59% of high yield bond proceeds went toward refinancing. But thats down from this point in 2013.
The primary junk bond market, which has resembled a ghost town for the past two weeks, is poised to come back to life in September, with new issues totaling more than $42 billion on tap. Larger deals may hold the most appeal for some buyers.
Constellation Brands fast growth in the beer business is diversifying what has been a traditional wine and spirits operationand also leading the way for plans to reduce $6.8 billion in net debt obligations, which include a $990 million term loan repricing that hit the market last week.
Retail investors are fleeing high yield bonds funds at a record pace of $7.1 billion this week, forcing fund managers to tap their cash reserves and sell some of their most liquid holdings to fund redemptions, even if they feel that the correction is a technical one.
Verso Paper pulled off a debt exchange it needs to complete its $1.4 billion merger with NewPage Holdings after sweetening the terms for subordinated bondholders a second time and lowering the percentage of acceptances required.
The entrance of new equity investors, including business development corporations and CLO equity funds, willing to contribute the first-loss piece has led to a return of warehouse bridge funding lines that dried up after the financial crisis.