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Anonymous ID: a868d0 Nov. 3, 2020, 6:21 a.m. No.5852   🗄️.is đź”—kun

Ant Group's $37 billion listing suspended in Shanghai and Hong Kong

 

Ant Group’s $37 billion listing has been suspended in both Shanghai and Hong Kong in a dramatic move just two days before what was set to be the world’s largest-ever stock market debut. The Shanghai stock exchange first announced that it had suspended Ant's initial public offering on its STAR market, prompting Ant 6688.HK688688.SS to also freeze the Hong Kong leg of the dual listing. Ant said that its listing had been suspended by Shanghai following a recent interview regulators held with its founder Jack Ma and top executives. It said it may not meet listing qualifications or disclosure requirements, and also cited recent changes in the fintech regulatory environment.

 

Shanghai described Ant’s meeting with Chinese financial regulators as a “major event”. Ant was set to go public in Hong Kong and Shanghai on Thursday after raising about $37 billion, including the greenshoe option of the domestic leg, in a record public sale of shares.

 

“This is a curve ball that has been thrown at us .. I don’t know what to say,” said a banker working on the IPO. Regulators had summoned Ma, Ant’s Executive Chairman Eric Jing and Chief Executive Simon Hu to a meeting on Monday when they were told the company’s lucrative online lending business faced tighter government scrutiny, sources told Reuters. The meeting came as Chinese authorities published new draft rules for online micro-lending.

 

At the end of October, Ma had called financial regulation outdated and badly suited to companies trying to use technology to drive financial innovation. But Beijing has become more uncomfortable with banks heavily using micro-lenders or third-party technology platforms like Ant for underwriting consumer loans, amid fears of rising defaults and deteriorating asset quality in a pandemic-hit economy.

 

Shares in Ant's affiliate Alibaba Group 9988.HKBABA.N fell about 8.6% in premarket trading after news of the Shanghai stock exchange suspension of Ant's A-share IPO.

https://www.reuters.com/article/ant-group-ipo/update-2-ant-groups-37-billion-listing-suspended-in-shanghai-and-hong-kong-idUSL1N2HP155

Anonymous ID: a868d0 Nov. 3, 2020, 6:40 a.m. No.5855   🗄️.is đź”—kun   >>5856 >>5908

Deutsche Bank Wants To "Sever Ties" With Trump By Offloading Business Loans

 

Considering all the airtime that CNN and MSNBC have devoted to speculation about President Trump's alleged ties to shadowy Russian financiers, the New York Times' decision to publish all those details from the president's tax returns has ironically proven that Trump doesn't owe any substantial money to "Russia".

 

Rather, while Trump's company owes millions of dollars in personally-backed loans, the lender isn't some oligarch; it's Deutsche Bank, which, as has been widely reported by now, established a relationship with Trump in the late 1990s, and continued to finance the president's businesses during and after "the Apprentice" era. Late last month, the NYT published a story filling in the details about how Trump managed to strong-arm DB into forgiving hundreds of millions of dollars Trump owed when he was just weeks away from default during the financial crisis. As one can probably imagine, all of the investigations into President Trump's finances have created serious headaches for the bank. And now - on election day, no less - Reuters reports that some of DB's top risk managers are plotting ways to get the Trump loans off the bank's books, a process that could become easier if he fails to secure a second term.

 

If Trump loses and Democrats sweep the Senate, the bank fears that a battle over Trump's tax returns that has stalled in the courts might heat up, as a newly emboldened Sen Elizabeth Warren carries out the financial version of a colonoscopy in the hunt for wrongdoing committed by the president or the bank (during its dealings with the president).

 

But a loss could also make it easier for the bank to dump the loans, presumably since Trump becoming a private citizen again would make it easier for the holder of the loans to collect on his promised collateral if Trump should default.

 

So far, the Trump Org has only had to pay interest on the loans, which are backed by golf courses in Miami and hotels in Washington and Chicago. The entire principal is outstanding, and the loans come due in 2023 and 2024. The advent of the coronavirus outbreak has only increased the risk on the loans (as the properties backing them have now moved deeper into the red), making DB all the more eager to sell. But the most important detail in the report comes at the very end, when the reporters explain how the bank would essentially be forced to extend the term once again if Trump were to win a second term, since executives fear the backlash of trying to seize assets from a sitting president.

 

If Trump is not in office, Deutsche Bank executives feel that it would be easier for them to demand repayment, foreclose if he is not able to pay it off or refinance, or try to sell the loans, according to two of the three bank officials.

 

Since Trump has personally guaranteed all the loans, Deutsche Bank could also seize the president’s assets if he is unable to repay, two of the three bank officials said. If Trump wins a second term, Deutsche Bank executives feel their options would be fewer, the three bank officials said. The bank wouldn’t want the negative publicity inherent with seizing assets from a sitting president and would likely extend the loans until he is out of office, two of the bank officials said. The bottom line, the three bank officials said, is that the matter won’t be resolved until well after the election.

 

Trump is probably worried about the financial fallout should he lose. But a defeat wouldn't exactly set him on the road to ruin. After all, Trump made hundreds of millions of dollars in deals for endorsements and licensing just off the strength of 'the Apprentice'. We imagine plenty of business opportunities will be waiting if Trump does leave the Oval Office. We have just one question though: If Russian backers buy the loans, would that finally make Trump a 'Russia-backed' president?

https://www.zerohedge.com/markets/deutsche-bank-wants-sever-ties-trump-offloading-business-loans

Anonymous ID: a868d0 Nov. 3, 2020, 9:36 a.m. No.5902   🗄️.is đź”—kun   >>5908

CLO Sales Reach $14 Billion in Busiest Month Since Early 2019

 

Sales of collateralized loan obligations rebounded in October as managers raced to get ahead of the U.S. presidential election and yield-hungry investors bought into a sector that’s lagged a broad rally in credit markets.

 

U.S. CLO volume reached $13.8 billion last month, a 20% increase over September and the most since $15.7 billion was issued in April 2019, according to data compiled by Bloomberg. Overall, 2020 sales stand at about $72 billion, down 30% compared to the same point last year.

 

“The explosion in CLO deal flow this autumn is greater than what we originally hoped for,” said Larry Berkovich, a partner at Allen & Overy, who represents CLO managers. “There’s a sense of current optimism.”

 

New sales shut down for nearly a month back in March as the pandemic rocked markets. Transactions started picking up steam in mid to late April, buoyed by improving economics for the deals in which portfolio managers package and sell leveraged loans into chunks of varying risk and return. Liability spreads on AAA slices have nearly retraced to pre-Covid levels, and currently stand at 135 basis points to 140 basis points over Libor for top-tier managers. That’s a vast improvement from the early days of the pandemic, when CLO AAA spreads widened to as much as 230 to 250 basis points, depending on the manager.

 

Spread tightening has been key in improving the so-called arbitrage – the gap between the interest earned from the underlying leveraged loans and the cost of borrowing to purchase the assets. A healthier arbitrage enhances the economics of the transactions, which makes it easier to attract CLO equity capital to sponsor new deals.

 

The recovery in securitized credit has generally lagged that of corporate bonds, making the sector an appealing source of relative value for investors. Structural protections embedded at the AAA ratings tier, combined with leveraged-loan prices that have rallied from March lows and remain stable, are also helping fuel investor interest.

 

The month-over-month spike in issuance “contradicts election-year supply trends,” JPMorgan Chase & Co. analysts led by Rishad Ahluwalia wrote in a Monday research note. “In the previous five election years since 2000, supply decreased from September to October by an average negative 32%, with the exception being 2016, when it was flattish.”

 

Of course, there was no pandemic to contend with during those years, and hence no pent-up demand spurring a late-year return to normality.

 

“Looking at current trends and how quickly spreads have tightened, there’s no indication that CLO issuance shouldn’t go up next year,” said Allen & Overy’s Berkovich. “But that could very quickly be qualified by the election results, as well as what kind of further support comes from Congress and from the Federal Reserve to prop up the economy.”

https://www.bloomberg.com/news/articles/2020-11-03/clo-sales-reach-14-billion-in-busiest-month-since-early-2019