Africa Focus: Autumn 2020
Africa in the coronavirus era
Although COVID-19 lockdowns have seen high-profile companies lose their investment grade status, lenders have continued to support these credits
The decline in H1 2020 leveraged finance issuance has seen some lenders intensify their focus on pricing and borrower-friendly loan structures, but lender responses to the impact of COVID-19 have diverged across regions
Leveraged finance defaults are rising as the impact of COVID-19 is felt, but covenant-lite terms, government intervention and support from financial sponsors have mitigated fallout from the pandemic
After COVID-19 concerns brought issuance to a near halt in March, Q2 high yield bond activity climbed in most markets as borrowers sought to boost balance sheets and cash reserves
Latin American loan issuance has felt the effects of COVID-19 disruptions, but lenders have remained open for business as borrowers turn to bilateral loan revolving credit facilities for liquidity
Growing investor appetite for financial products with a positive impact, coupled with a demand for recovery capital post-COVID-19, have lifted the market for social bonds
The disruption to capital markets caused by the COVID-19 pandemic has not shifted the overall timeline of regulators and industry bodies for the replacement of US dollar LIBOR with SOFR by the end of 2021
Investor sentiment has begun to recover, but ratings downgrades and higher pricing continue to keep loan markets on alert
We highlight the key European M&A trends in the first half of 2020, and provide our insights into the outlook for M&A moving forward.
Low prices and excess supply have pushed oil & gas balance sheets to the brink, which means raising traditional debt will remain difficult and restructurings are expected
Remote working, online shopping and telemedicine have shielded the technology sector from the worst effects of COVID-19 lockdowns
COVID-19 has pushed healthcare systems around the world to the limit, but depending on the vertical, certain companies have been less affected than those in other sectors—and the availability of credit to battle the pandemic has helped
Even though COVID-19 has taken a toll on consumer spending and supply chains, the food and beverage industry has shown resilience and continues to tap credit markets
The COVID-19 lockdown forced restaurants, hotels, gyms, theaters and casinos to shut their doors and put balance sheets under extreme strain, but some have tapped debt markets to see them through
Retailers faced a difficult financing market before COVID-19 appeared, but lockdowns have made the situation even tougher
Underwriters are grappling with the need to support clients that are accessing funding, while maintaining disclosure standards and managing their risk when the tools they’ve typically used may be unavailable
The impact of the coronavirus pandemic saw high yield bond issuances grind to a halt at the end of Q1, but markets started to revive in Q2
As the effects of coronavirus on the primary and secondary debt markets continue, there will be ongoing implications for leveraged finance transactions
LIBOR, one of the most significant global benchmarks for calculating interest, is to be phased out by 2021 and replaced by alternative benchmarks in the form of risk-free rates. With LIBOR widely used in the loan, bond and derivatives markets, and in many long-term contracts, the impact of this change cannot be underestimated. The transition to the new replacement rates will not be an easy process, but it is a necessary one, and market participants must start now.
Financial institutions M&A sector trends: banks — H2 2019 and outlook for 2020
Growth in the European leveraged finance market remained steady in 2019, with 2020 set to continue at pace, with enhanced focus on the trade-off of protection from risk versus a higher yield.
We highlight the key European M&A trends in the second half of 2019, and provide our insights into the outlook for M&A moving forward
Our exclusive survey of senior executives who have financed the aviation industry in the past three years reveals that the overall investment outlook for the sector is bright, with one region in particular set for larger growth than its global equivalents
The multiplicity of financing sources such as asset-backed security, insurance and leasing companies has been crucial for the sector. In this section, we reveal the origins and sources of expected funding in 2020
Despite the sector's current strong performance, many survey respondents believe the industry needs even more capital and liquidity. In addition, most expect restructurings and insolvencies to increase in 2020
Economic volatility, political unrest and fierce competition are all seen as major challenges to the sector in the coming 12 to 18 months. Meanwhile, respondents are preparing for rising oil prices and growing industry consolidation
We explore key takeaways from our exclusive survey and what they could mean for the aviation industry and aviation finance
Aviation finance is proving its resilience amid a cooling global economy. Our survey finds that senior executives in the sector are optimistic that global levels of aircraft financing will increase in 2020.
As technology reshapes the banking industry, regulators are rising to the challenge.
The latest consultation paper from ESMA raises some important questions about the market abuse regulation (MAR) but lacks detail in some crucial areas.
The European Courts have handed down first judgments on supervisory measures taken by the ECB, highlighting important issues regarding the application of the law.
Current rules fall short of providing a clear framework for a single European market for fintech companies.
Refinements to the regulatory framework are needed before banks can make widespread use of securitization by European banks.
The Financial Regulatory Observer regularly sets spotlights on selected topics driving the regulatory and technological changes in the financial industry.
How to stay ahead of the curve, minimize future costs of compliance and feed the growing demand from investors for responsible products and services.
Valdis Dombrovskis has a full in-tray that includes securing the EU banking and capital markets union as he begins his term at the European Commission.
Since the 2008 financial crisis, a non-US bank seeking to establish or maintain a US presence has been required to comply with a set of stringent regulatory requirements, but a recently adopted rule (Final Rule) limits their application.
How to structure a real estate joint venture: Eight things you need to know