{"id":19285,"date":"2020-05-17T14:16:52","date_gmt":"2020-05-17T11:16:52","guid":{"rendered":"https:\/\/bestinsurance.gr\/a1\/?p=19285"},"modified":"2020-05-17T14:16:52","modified_gmt":"2020-05-17T11:16:52","slug":"take-the-money-before-things-get-worse-junk-bond-salesmen-say","status":"publish","type":"post","link":"https:\/\/bestinsurance.gr\/a1\/archives\/19285","title":{"rendered":"Take the Money Before Things Get Worse, Junk Bond Salesmen Say"},"content":{"rendered":"
(Bloomberg) —\u00a0<\/section>\n
If there\u2019s one lesson from the great financial crisis that applies to the current market turmoil,\u00a0Todd Rothman\u00a0argues, it\u2019s this: take the money when it\u2019s there.The managing director in JPMorgan & Chase\u2019s high yield and leveraged loan capital markets team in London believes that with the future so uncertain, now is a good time for Europe\u2019s high-yield borrowers to raise cash.<\/p>\n

\u201cCan the market get a little bit better from here?\u201d he said in a phone interview. \u201cSure it can, but the risk is asymmetric right now in terms of things turning and getting much wider quickly.\u201d<\/p>\n

Some clearly agree. Appetite for refinancing the debt from European diagnostics firm Synlab Bondco Plc was so strong this week that the company\u00a0doubled\u00a0its bond issue.<\/p>\n

Meanwhile demand for American IT firm BMC Software Inc.\u2019s euro notes also exceeded the amount it planned to raise, according to people familiar with the matter.<\/p>\n

Even theme park operator Merlin Entertainments, which has\u00a0shut\u00a0most of its 130 attractions, increased its offering and\u00a0priced\u00a0it at the lower end of initial guidance.<\/p>\n

As countries around the world slowly reopen their economies and as support from central banks ramps up, Europe\u2019s high-yield bond market has begun to function again after shutting in February.<\/p>\n

By waiting for better conditions, companies run the risk that a deluge of weak second-quarter results or a resurgence of infections could depress investors\u2019 appetite again.<\/p>\n

In a\u00a0change\u00a0from just a few weeks ago when arrangers were only advising companies with urgent financing needs to tap the market, investors have seen major cash inflows. On the back of this companies are raising funds for liquidity, to refinance existing debt, and also for acquisitions as in the case of BMC.<\/p>\n

\u201cThe market is open,\u201d said\u00a0Diarmuid Toomey, co-head of EMEA leveraged capital markets syndicate at Deutsche Bank. \u201cThere have been encouraging developments, with recent issues well subscribed and the buyside are telling us they are keen to put money to work.\u201d<\/p>\n

Buyer Beware<\/h3>\n

Investors are, however, still focused on quality and want to see more\u00a0lender-friendly terms\u00a0that not all borrowers may agree to. Fallen angels and investment grade bonds trading at depressed levels are also offering buyers alternatives.<\/p>\n

Tatjana Greil Castro, a portfolio manager at Muzinich & Co. Ltd., sympathizes with the argument that conditions could easily deteriorate in future. But, she cautions, buyers may still prove picky.<\/p>\n

\u201cDo we really need to jump into the market now? Investors won\u2019t buy whatever lands in front of them. They have a lot of choice,\u201d she said.<\/p>\n

Paper producer Sappi Ltd offers a cautionary tale. The company\u00a0scrapped plansto issue 250 million euros ($271 million) of senior notes on Friday, citing unsatisfactory pricing.<\/p>\n

Still, if demand remains healthy for now, arrangers may get the chance to sell down some of the M&A financings\u00a0worth more than $13 billion\u00a0that are waiting to come to market. Those deals include the private equity\u00a0buyout\u00a0of Thyssenkrupp AG\u2019s elevator unit, Europe\u2019s largest in a decade.<\/p>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

(Bloomberg) —\u00a0 If there\u2019s one lesson from the great financial crisis that applies to the current market turmoil,\u00a0Todd Rothman\u00a0argues, it\u2019s this: take the money when it\u2019s there.The managing director in JPMorgan & Chase\u2019s high yield and leveraged loan capital markets team in London believes that with the future so uncertain, now is a good time<\/p>\n","protected":false},"author":1,"featured_media":19286,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-19285","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-1"],"jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/19285","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/comments?post=19285"}],"version-history":[{"count":1,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/19285\/revisions"}],"predecessor-version":[{"id":19287,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/19285\/revisions\/19287"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/media\/19286"}],"wp:attachment":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/media?parent=19285"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/categories?post=19285"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/tags?post=19285"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}