IFR 08 22 2020 PDF room

AUGUST 22 2020 ISSUE 2347 www.ifre.com Rusal gears up to issue more sustainable debt after interest costs slashed on US$1bn loan Ant Group prepares listing that might raise US$30bn and become the biggest IPO ever More ‘Covid claws’ expected in high-yield as PE shops hope for UK government support EQUITIES BONDS BONDS EQUITIES Two China-UK listings set to brave political tension 03 Happy returns for Aussie duo: ANZ and NAB back for Tier 06 Redemption clause plea falls on deaf ears in US bond market 08 Sabre double-dips with US$550m equity combo and US$850m bond 09 2020 Refinitiv LPC Middle Market and Large Corporate Loans Virtual Conference September 15 and 16, 2020 This special virtual event will help attendees formulate their outlook for the Investment Grade, Leveraged, and Middle Market Lending arenas Sessions will be broadcast live, then made available on-demand shortly afterwards Access is free – register now! http://solutions.refinitiv.com/LPCVirtualConference Upfront Ant to elephant A nt Group is lining up its elephant-sized public listing in the midst of a political circus Keeping all parties happy will require some serious acrobatics 4HEû#HINESEûlNTECHûGIANTûISûMARCHINGûTOWARDSûAûDUALû listing in October, having formally started its IPO tutorial process in Shanghai last week A Hong Kong listing application is days away Assuming regulators play ball, that timetable puts it on track to complete the giant fundraising ahead of the US ELECTIONSûONû.OVEMBERûûANDûAFlLIATEû!LIBABASûû shopping festival eight days later) )TSûEASYûTOûSEEûWHYû!NTSûOWNERSûAREûSOûKEENûTOûGETûTHINGSû moving Equity markets are racing higher, fuelled by storming tech stocks, and its own earnings have never been better (its lRST QUARTERûPROlTûGAINEDûûONûTHEûPREVIOUSûYEARûTOûSURPASSû 53BN ûACCORDINGûTOû!LIBABASûLATESTûlLINGS  With ample liquidity out there right now, Ant has a chance of commanding a handsome valuation and could even beat 3AUDIû!RAMCOSû53BNû)0/ûRECORDû7AITINGûANYûLONGERû risks missing that opportunity "UTûTHISûTIMELINEûALSOûBRINGSûTHEûCOMPANYûANDûITSûAFlLIATESûINTOû the crosshairs of US politicians, with both main presidential candidates campaigning on an anti-China platform And based ONûPREVIOUSûEXAMPLES ûNOTHINGûGETSû0RESIDENTû$ONALDû4RUMPSû attention like a successful Chinese technology company !NTSûBUSINESSûISûNOTûASûEXPOSEDûTOû53ûPOLITICSûAS ûSAY û Bytedance, which is under intense pressure to sell its TikTok UNITû4HEû53ûMOVEûAGAINSTû4ENCENTSû7E#HATûPLATFORM û HOWEVER ûSUGGESTSûTHATû!NTSûMOBILEûPAYMENTSûBUSINESSûCOULDû WELLûCOMEûUNDERûSCRUTINYû!LIBABASû53ûLISTINGûISûANOTHERû TOUCHPOINT ûANDû!NTSûPROSPECTUSûWILLûMAKEûITûCLEARûHOWûFARûITSû !LIPAYûNETWORKûOVERLAPSûWITHûTHEû53ûlNANCIALûSYSTEM !NTûMAYûALSOûlNDûITûHARDERûTOûATTRACTû53ûINSTITUTIONALû investors to its Hong Kong leg if the current US administration continues to ramp up the pressure on federal savings funds *UGGLINGûAûDEALûOFû!NTSûSIZEûWOULDûBEûDIFlCULTûATûTHEûBESTûOFû TIMESû#OMPLETINGûTHEûWORLDSûBIGGESTûLISTINGûINûSUCHûANû environment would be a real circus trick Covenant controversy I TSûAûONE SIDEDûBATTLEûINûTHEû53ûCORPORATEûBONDûMARKETû.OTû only are issuers able to price record amounts of debt, at coupons that are grinding ever tighter But they are also able to cling on to terms that enable them to stiff investors even AFTERûTHEYVEûHANDEDûOVERûTHEIRûCASH The latest controversy, which sparked heated debate between syndicates and investors in deals for ICE and Roper Technologies last week, is over special mandatory redemption language in bonds used to pre-fund M&A transactions „ OPINION INTERNATIONAL FINANCING REVIEW These once obscure clauses are triggers designed to protect the buyside and return cash to investors in the event that a merger does not go through Lately, it is the issuers using these clauses to their full advantage In July, Waste Management delayed its merger with Advanced Disposal, thus triggering a special redemption at a CASHûPRICEûOFûûFORûBONDSûTHATûWEREûISSUEDûINû-AYûû4HEû BONDSûHADûBEENûTRADINGûATûAûPRICEûOFûnûINûTHEû SECONDARYûMARKETûnûSTINGINGûINVESTORSûWITHûAûnûDROPû in value overnight Buyside groups have made noble efforts to try to remedy what they see as an unfair loophole for issuers, and a middle ground is possible The Credit Roundtable suggests a spreadBASEDûREDEMPTIONûPRICE ûFROMû MûATûTHEûENDûOFûû4HEûVALUEûOFûTHEû Value of holdings end-2019 J Value of holdings end June *BofA holding as of August 19, after he increased stake in July and August Source: Berkshire Hathaway filings, IFR calculations International Financing Review August 22 2020 SHARESûINû!PPLE ûWORTHûABOUTû53BN 3TILL ûSIXûOFû"ERKSHIRESûTOPûûPUBLICû HOLDINGSûAREûINûlNANCIALûSTOCKS ûANDûNINEûOFû ITSûTOPûûAREûlNANCIALS "UFFETT ûDUBBEDûTHEû3AGEûOFû/MAHA ûHASû ANûARMYûOFûFOLLOWERSûTHANKSûTOûHISûSTRONGû TRACKûRECORDûOFûPICKINGûGOODûINVESTMENTSû BASEDûONûTHEûCONCEPTûOFûVALUEûINVESTING (EûTYPICALLYûMAKESûBIGûBETSûONûSPECIlCû lRMSûORûINDUSTRIES ûANDûUSUALLYûSTAYSûINûFORû AûLONGûPERIODû(EûWASûONCEûQUOTEDûASû SAYINGûh7EûSIMPLYûATTEMPTûTOûBEûFEARFULû WHENûOTHERSûAREûGREEDYûANDûTOûBEûGREEDYû ONLYûWHENûOTHERSûAREûFEARFULv REGIONAL BANKS "ERKSHIREûALSOûREDUCEDûHOLDINGSûINûSOMEû REGIONALû53ûBANKS ûINCLUDINGûPNCûITûOWNEDû MûSHARESûWORTHû53MûATûEND *UNEûVSû MûWORTHû53BNûATûEND $ECEMBER û ANDûM&T BANKûMûSHARESûWORTHû53Mû ATûEND *UNEûVSûMûWORTHû53M  "ERKSHIREûALSOûOWNEDûMûSHARESûINûUS BANCORPûATûTHEûENDûOFû*UNE ûTHEûSAMEû AMOUNTûASûATûTHEûENDûOFûLASTûYEAR ûALTHOUGHû THEIRûVALUEûDROPPEDûTOû53BNûFROMû 53BN )TûSTILLûHELDûANûûSTAKEûINûAMERICAN EXPRESSûATûTHEûENDûOFû*UNE ûWORTHû 53BN ûANDûBIGûHOLDINGSûINûBNY MELLON, MASTERCARD, VISAûANDûSYNCHRONY FINANCIAL )TSûMOSTûSUCCESSFULûlNANCIALûHOLDINGûTHISû YEARûHASûBEENûITSûûSTAKEûINûRATINGSû AGENCYûMOODY’S CORP ûWHICHûWASûWORTHû 53BNûATûTHEûENDûOFû*UNE ûUPûFROMû 53BNûATûTHEûENDûOFû$ECEMBER "ERKSHIREûHASûALSOûSOLDûDOWNûHOLDINGSûINû AIRLINESûTHISûYEAR ûBUTûRAMPEDûUPûITSûSTAKEûINû #ANADIANûMINERû"ARRICKû'OLD ... ones that are steering [private equity] International Financing Review August 22 2020 For daily news stories visit www.ifre.com CEO of PrimaryBid “Soft pre-emption should be adhered to, and it should... advertising and sponsorship opportunities available within IFR, email: cmi.advertising:@tr.com International Financing Review August 22 2020 Top news Redemption clause plea to fall on deaf ears... IPO of Hong Kong-listed Chinese chipmaker Semiconductor International Financing Review August 22 2020 Manufacturing International in July It took SMIC around 70 days to complete its Star IPO