Halister News

(Bloomberg) -- Despite a heated first quarter that saw leveraged finance volumes reach $283b, surpassing 2013 highs, only a “modest uptick” is expected in 2017 because of fiscal uncertainty and rate volatility, S&P Global Ratings analysts led by Olen Honeyman wrote in an April 17 report.

• The analysts didn’t provide a forecast, saying it remains to be seen “where leveraged loan volumes will land in 2017”
  • 1Q saw $201b in loan issuance and $82b in HY bond issuance
• Positives for issuance
  • Stabilizing commodity prices; more lenient energy policies may lead companies to ramp up capital spending
  • Opportunistic refinancing activity expected ahead of further interest rate hikes
• Negative for issuance
  • Likely corporate tax cuts leaving companies with more cash and higher after-tax debt
  • Possible easing on foreign cash repatriation
  • Cross-border M&A discouraged
  • Recent refinancing activity has shrunk potential volume
• Increasing risk appetite as volume remains strong for now
  • B-rated issuances increased to 37% of LTM loan volume in 1Q of 2017
  • 1Q B-rated volume of $72b was the highest level since 1Q of 2014
  • Dividend recapitalization surged 260% to a LTM volume of about $65b at March 31, 2017
  • Spreads falling; average new issue yield to maturity (YTM) for BB- rated issuances down to 3.6% at end of 1Q from 4.59% in same period 2016; for B-rated issuances, down to 5.12% from 6.47%
  • 2L volume boosted to $71b in 1Q compared to a total of $10b for the full year 2016
  • LBO activity increased 35% to LTM volume of $89b over the prior year

--Washington Newsroom (202) 624-1820

(Bloomberg) -- The negative outlook on the U.K.’s sovereign rating indicates that its future path will be mainly driven by the outcome of Brexit negotiations, Moody’s lead U.K. sovereign analyst Kathrin Muehlbronner says in emailed comments.

• Fiscal developments, given the U.K.’s “comparatively weak” public finances will also likely have an impact
• Will assess implications of proposed election, including whether election proves to be a distraction from Brexit negotiations, given “limited time frame” available
• NOTE: Nov. 2, Moody’s said the U.K.’s Aa1 sovereign rating would be downgraded if it was unable to conclude an agreement with the EU that protected core elements of its access to the single market

Orihuela (Bloomberg) -- Talks about a combination are at an early stage and may not lead to a deal, people familiar with the matter said.

• Atlantia is discussing a cash-and-share offer, as well as the structure of a potential deal
• A representative for Atlantia declined to comment. Abertis didn’t have an immediate comment