En avril, le fabricant de matériaux de couverture a obtenu
de ses créanciers un rallongement de ses échéances bancaires, mais avec la
promesse d'un remboursement via une émission obligataire. Il devait émettre 250
millions d'euros à 7 ans à un rendement d'environ 10%.
High-yield:
down but not out
Whether the
blame lies with nervous investors, poorly managed deals or simply bad timing,
Europe’s high-yield market has suffered a significant setback that risks
locking out all but the top-tier issuers in the next few weeks.
A pulled
deal from German roofing materials supplier Monier and other deals from
Europcar and Schmolz & Bickenbach that struggled to get over the line have
raised fears that the market is not as robust as the unexpected strong start to
the year had suggested.
“There is
definitely an underlying concern,” said one high-yield syndicate banker. “Effectively,
the market in Europe has infinite demand for Double B and high-quality Single B
credits, but not much for what we call traditional high-yield with more subordinated
capital structures.”
“The
majority of investors just don’t have the mindset for that right now. They are
being driven by fear.”
Nonetheless,
bankers say it is far too early to write off the market, which has come a long
way in the past three years. Some pinned the blame on the lead managers, saying
that Monier should have been marketed more heavily in the US, while existing
FRN investors in Europcar should have been lent on more heavily to roll over
into the new issue.
Either way,
both deals were seen in isolation to a certain extent, and for now at least,
the market is still poised for a clutch of deals later this quarter, with
supply likely to emerge from the auctions of companies, including BSN Medical
and Birds Eye Iglo.
“This
doesn’t stop us from underwriting deals or stop the auctions going ahead, and
it certainly doesn’t mean we’ve taken our foot off the high-yield accelerator
in favour of loans in terms of acquisition financing,” said one high-yield
banker. “It just means it’s a bit more finely balanced going to either market.”
Reckless
timing
The
sellside also did itself no favours with the timing of the deals that
struggled. Bankers picked one of the most volatile periods since the start of
the year to swamp the market with five transactions as they rushed to push
issuers out before full-year earnings went stale. Monier, for example, pulled
its bond on Wednesday as yields on Spanish 10-year bonds jumped above 6%.
Not only
were many buyside managers taking advantage of the May Day holiday, but
elections in France and Greece had already brought a widespread pullback across
all asset classes.
The
cyclical nature of all the deals also sparked criticism from investors, who can
afford to sit back after enjoying returns of more than 12% since the start of
the year.
“When
primary deals are pulled, there is a tendency for the sellside to blame the
European high-yield fund community for being overly skittish,” said Peter
Aspbury, head of European credit research at JP Morgan Asset Management. “It’s
easy to forget that a lot of fund managers are subject to retail investor flows
that can be highly reactive to equity market sell-offs.”
Back to the
US
But some
bankers warned that issuers might increasingly turn to other alternative
sources of financing such as mezzanine loans, even though this remains a very
niche market.
Europcar’s
owner Eurazeo had little choice to price its downsized deal to yield 14%,
despite a €110m cash injection, but a company such as Monier has greater
flexibility because its bank debt does not mature until 2015.
In the
short term, European issuers may also lean more heavily on the US dollar
market. Companies such as Ineos, for example, completely bypassed the European
bond market last month after it achieved cheaper refinancing costs across the
pond.
“Issuers are having to adjust, but they
are only slowly weaning themselves off cheap bank debt”
An
US$853m-equivalent bond from B1/B+ rated business travel operator Carlson
Wagonlit this week also demonstrated the benefits of doing a dual-tranche
dollar/euro issue.
“It
definitely helps to create a better dynamic. If European investors see that the
deal is getting support in the US – it helps give more conviction. With a sole
euro deal, you don’t get that interplay,” said one of the bankers involved in
the deal.
On a more
positive note, the fact that Monier’s book was covered was seen as a positive by
some players.
“If a
company wants to walk away from 10.5% term money, that’s someone making a call
on the cost of capital, and something that I find great solace in. Issuers are
having to adjust, but they are only slowly weaning themselves off cheap bank
debt,” said Jacques McChesney, a high-yield partner at Shearman & Sterling.
Source
International Financing Review par Natalie Harrison
Aucun commentaire:
Enregistrer un commentaire