Friendship has limits

◆ Gulf private placements bite back ◆Price to issue bonds rises ◆ CLOs catch a break 

Gulf sovereigns and banks have raised billions with large, privately placed bonds since the US-Iran war began. Now the friendly, accommodating investors that bought them are starting to sell.

Gulf issuers were glad to raise cash quietly in these private deals and paid handsomely to do so. Now these bonds are causing them headaches. 

The issuers, especially banks, want to come back to the public market and raise fresh money. With their paper hardly scarce, it looks like they might have to pay up all over again.

For Europe’s bank and corporate issuers, spreads have been incredibly stable and tight, even as interest rates seesawed all over the place.

Now new issues are feeling the pinch a little. Over the last three weeks, there has been a decided increase in new issue premiums. We explore the drivers and whether it matters.

For years, CLOs have subsisted on a diet of yesterday’s mashed potatoes. Fresh leveraged loans were rare — instead they had to buy warmed-up repricings and refinancings of old deals. Equity returns have withered. 

At last, there is some good news for CLO managers — a raft of new loans is heading to market, including InPost and Nestlé Water.