CORONAVIRUS IMPACT ANALYSIS - 17 MARCH 2020 EUROPE & NORTH AMERICA - PARR GLOBAL
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17 March 2020 Europe & North America Coronavirus Impact Analysis acuris.com
Acuris Coronavirus Impact Analysis
Introduction Coronavirus Coverage by the Numbers 03
Top Coronavirus Intelligence 04
The rapid spread of coronavirus around the world, coupled with Saudi Arabia’s decision to increase the supply of oil, led to a
Market Activity 05
market panic last week that sent prices of stocks, bonds and asset-backed securities plunging in Europe and North America.
Primary Debt Markets 10
Instead of stabilizing markets, the US Federal Reserve’s emergency action on Sunday to cut interest rates to near zero and
revive a USD 700bn quantitative easing program pushed stocks down over 10% on Monday as countries closed borders. Mergers & Acquisitions 11
Companies, investors and advisors confront widening yield spreads on debt, heightened volatility in equity markets and great Equity Capital Markets 12
uncertainty over the severity of the pandemic. Global GDP is expected to contract in the first quarter and some analysts are
Sector Impacts 13
projecting what JPMorgan has called a “novel global recession” for the first half of the year.
Asset-Backed Securities 15
These macro themes are directly impacting markets that Acuris products cover from high-yield new issuance to middle market
M&A and CLO formation. Below is a compilation of data, intelligence and insights from Creditflux, Credit Rubric, Dealreporter, Contributors & Contact 16
Debtwire and Mergermarket editors and analysts.
acuris.comAcuris Coronavirus Impact Analysis 3
Coronavirus Coverage by the Numbers
over
940 40
translated articles
Actionable intelligence opportunities
across
244 232
Americas EU
51% 144
Acuris proprietary content countries
442 15
Asia Middle East
Acuris.com
acuris.comAcuris Coronavirus Impact Analysis 4
Top Coronavirus Intelligence More from Acuris companies
This section requires an internet
connection
9 March 11 March 12 March 12 March
Carlson Wagonlit renews Navy contract Amex GBT puts MAC speculation Coronavirus throws cold water on
Private equity seeks solutions to
but 1Q20 revenue down on coronavirus to bed as travel and leisure selloff Brazil’s promising year for IPOs
uncertainty as coronavirus derails
impact continues
buyouts Mergermarket
Debtwire Debtwire
Mergermarket
13 March 13 March 13 March 13 March
US deal making curtailed but not EC to ask companies to hold off on Pockets of healthcare offer solace Social distancing worries travel and
derailed by coronavirus pandemic notifying mergers for ‘time being’ to investors amid market calamity leisure creditors as virus outbreak
spreads
Mergermarket Dealreporter Debtwire
Debtwire
acuris.comAcuris Coronavirus Impact Analysis 5
Market Activity
Over the past few weeks, high-yield bond
HY bond yields climb sharply
yields have jumped to 8.15% from 5.02% on 21
February, according to the ICE BofA US High
16
Yield index.
Leveraged loans have also suffered a dramatic
14 drop in secondary market prices and are down
550bps last week alone to the 88 area. They
are now off 800bps since 21 February.
12
10
Yield (%)
8
6
4
2
0
Overall Index BB rated B rated CCC and lower rated
acuris.comAcuris Coronavirus Impact Analysis 6
Market Activity
Secondary loan market prices drop by 475bps since Feb. 21 Debtwire’s Distressed Bond Index increased
to 316 borrowers, up from 280 borrowers in
80%
February. The index Yield-to-Worst (YTW)
99
increased 877bps to 39% from 30% last
month.
98
70%
97
60%
96
Share of loans bid >=100 (%)
50%
95
40%
94
30%
93
20%
92
10%
91
90 0%
Weighted Avg. Bid Share of loans bid >=100
acuris.comAcuris Coronavirus Impact Analysis 7
Market Activity
In Europe, the iTraxx Crossover index that tracks the 75 most liquid high-yield credits has
Large Uptick in European Stressed and Distressed HY Bonds
widened as much as 380bps since 21 February and was close to 600bps early on Friday 13
March before tightening back to 496bps-mid. As a result, the portion of high yield bonds trading
above par has nearly halved from 804 (or 83% of the total) to 439 (45% of the total). The EU
market selloff over the past two weeks pushed EUR 22.7bn-equivalent of high yield bonds into
stressed and distressed territory during the week of 9 March, according to Credit Rubric data.
Out of a universe of 967 notes, the share of bonds quoted below 80-mid more than doubled 40
to 8.7% on 10 March from 3.8% on 21 February. Oil & gas was the hardest-hit sector, with some
names collapsing by as much as 40 points and one in every three bonds in stressed (defined as
price below 80) or distressed levels (price below 60). 35
The sharp decline in valuations come as high yield bond and leveraged loan mutual funds & ETFs
have seen large outflows. In the week ending 11 March, high yield bond funds suffered outflows of 30
USD 4.9bn, taking the total over the last three weeks to USD 14bn, according to Lipper.
The Federal Reserve’s rate cuts have further dented the attractiveness of loan funds, which
primarily buy floating rate debt. In turn, loan funds saw USD 2.1bn exit in the most recent week, 25
taking outflows to USD 5.3bn in the last three weeks.
Value (EUR )
20
15
10
5
0
21 Feb 10 Mar
Distressed Stressed
acuris.com *In EUR-equivalent bn; Source: Credit RubricAcuris Coronavirus Impact Analysis 8
Market Activity
Early Signs of Slowing M&A Activity 500
800 5,000
400
700
600 4,000
300
Value (USD bn)
500
Value (USD bn)
Deal count
400 3,000
200
300
200 2,000
100
100
0 1,000 0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Deal value YTD Deal count YTD Americas Asia Europe
M&A markets were already showing declines ahead of the virus spreading. YTD global deal 9.8% on 12 March. Europe saw an even more dramatic expansion from 0.23% to 6.2% on average,
values and counts stand at the lowest level since 2014, according to Mergermarket data. The taking into account positive and negative spreads. The widening shows that markets are pricing
trend holds across all regions except Europe, which early last week saw a USD 35bn insurance in higher chances that some deals will not be completed or will close on revised terms. There
brokerage transaction announced just as markets started to collapse. Coronavirus’ full impact on may also be temporary dislocation as investors sell positions to reduce overall risk.
deals may not show for some time as M&A transactions take months to come together.
Completed deal values for 2020 will no doubt come in below the headline announced figures
as some transactions are terminated. Spreads on public company deals have blown out over the
past month with spreads on airline and movie theater transactions exceeding 50%, according to
Dealreporter data. Average spreads for North America deals jumped from 3% on 6 February to
acuris.comAcuris Coronavirus Impact Analysis 9
Stock Spreads on Deals Widen
10
8
6
Average spread (%)
4
2
0
6-Feb 13-Feb 20-Feb 27-Feb 5-Mar 10-Mar 12-Mar
Asia Europe North America
acuris.com Source: Dealreporter. Averages include negative spreads. Calculations based on closing prices.Acuris Coronavirus Impact Analysis 10
Primary Market Overview
North America disruption. Ultimately, Del Monte elected to The busy February followed the best January The one company that attempted to brave
postpone the offering, according to Debtwire. since 2017. the market since late February, Netherlands-
The spread of the coronavirus, combined with
based geotechnical and survey group Fugro,
the oil price war, has put primary issuance The primary market for CLO funds—major Deals in January and February priced at some
postponed a debut EUR 500m offering.
in the high yield bond and leveraged loan buyers of leveraged loans—has not gone of the tightest points in market memory with
markets on hold. It is unclear when the primary completely quiet. Five managers have BB rated names coming in at Euribor+ 231.8bps US ATM manufacturer Diebold Nixdorf had
market will open up again. appeared on the radar with hopes of bringing and B rated names at 384.6bps on average looked to meet investors in February ahead
new CLOs in the coming weeks, according to over the two months according to Debtwire of a potential European high yield issuance,
It has become challenging for leveraged
Creditflux. Par data, so finding the new normal amid the though no official transaction or bond
finance bankers and investors to price new
uncertainty is not obvious. structure emerged.
deals amid the volatility and uncertainty. When A New York based CLO arranger
the market does reopen, the high yield bond acknowledged there are much greater Underwriting in these uncertain times has Three other new issuance candidates – Italian
market will likely open up first since companies hurdles, but said the primary market pipeline become a sport not for the faint-hearted, producer and distributor of frozen patisserie
are able to pursue drive-by deals that allow is unlikely to dry up completely. “These are as pricing deals correctly has become tricky products Pasticceria Bindi, Italian IT services
an issuer to price an offering in a single day, tough conditions to showcase a CLO,” said the business, while those who recently underwrote business Engineering Group, and Italian luxury
which lowers execution risk. official, “but managers are keen to bring new deals during more benign times may have a trainers maker Golden Goose – have not
deals to market to build up AUM and placing battle to offload the paper at the expected moved forward.
The loan market, where deals take at least a
bets on future loan prices.” price.
week to price, will likely need a longer period
of relative stability before borrowers can In times of volatility, CLO managers look to “The repricing window has officially shut. All
return. ‘print and sprint’ strategies in which deals are of the pulled deals so far have just been
priced without a warehouse in place with the opportunistic repricings done on a ‘best
With funding markets closed, investors are
intention of buying assets post pricing. efforts’ basis,” said one underwriter.
closely monitoring companies that have near-
term maturities they need to refinance, to EU “Best efforts” deals can be put aside but those
assess whether they will be able to address that were already underwritten are not so
With the onset of coronavirus, there have now
those maturities. easily shelved in the same way. As margins in
been four consecutive weeks with no new
primary start to widen, banks are facing flexes
As the only company with an active deal in the issuance pricing in Europe. This marks the first
in pricing before they even begin, which bodes
high yield market last week, this put Del Monte time in ten years that there have been no new
badly for underwriting.
Foods in an interesting catch-22. It was trying deals in the first week of March, according
to refinance near-term maturities and could to Debtwire Par data. “I’d say that if we have to step out and
struggle to do so amid the volatility; at the underwrite, it needs to be a very coronavirus-
The abrupt halt to deal activity came just after
same time, its earnings are likely to improve as safe credit,” said a second underwriter. “Pricing
the market saw the busiest February ever
demand for canned foods increases because etc has moved as well. We’ll be selective and
despite no new issuance in the last week of
of work from home policies and supply chain be super careful. There’s no point being brave.”
the month, according to the Debtwire Par data.
acuris.comAcuris Coronavirus Impact Analysis 11
Mergers & Acquisitions
M&A activity has not ground to a halt, though rights, amended drop-dead dates and sellers
sale processes are expected to slow down and retaining stakes.
some sellers may delay auctions, according
Cash bids may find favor over offers that
to surveys of deal makers by Mergermarket
contain stock since sellers cannot properly
in Europe and the US. There will no doubt be
assess a bidders’ future share price
a further hit if the primary market for debt
performance amid high volatility and do not
remains closed.
want the risk that a seller’s shareholders may
Coronavirus has impacted the basic logistics vote down a bid. Look for a return of collars
of running a sale as countries close borders, that increase the share exchange ratio if a
companies ban staff from traveling and buyer’s stock price falls below a certain level.
industry conferences are cancelled. Where “Best efforts,” rather than fully committed,
there is cultural fit (both corporate and financing could also reappear.
national), dealmakers believe in-person
For already announced transactions,
meeting limitations may be overcome.
buyers and sellers may have to live with
Likewise, agreements between buyers and pre-coronavirus terms. Most agreements
sellers on valuation will be tough to reach do not allow for deal termination if there is
when dealmakers cannot make accurate a general decline in share prices and the
predictions on future earnings. Public markets broadly syndicated debt financing becomes
have declined over 20% and it will take sellers unavailable. Instead, expect deal parties to
some time to adjust to the new reality. slow peddle closes as they hope conditions
improve by summer.
Buyers and sellers will need to take additional
steps to share deal completion risk. Already
some announced deals have contained
clauses specifically carving out coronavirus as
not a rationale for deal termination.
Expect additional scrutiny of material adverse
change and material adverse effect clauses in
both M&A and financing agreements. Going
forward, there may be more emphasis on earn-
outs, deferred considerations/contingent value
acuris.comAcuris Coronavirus Impact Analysis 12
Equity Capital Markets
The past few weeks market turmoil has Spinoffs involve no bookbuild, but it will be
Global Public Listings Sharply Down
hammered ECM activity in both Europe and tough for companies’ boards to argue for
North America, with major public listings unlocking conglomerate discounts when even
including AirBnB, Springer Nature and Jacobs decent companies look like falling knives.
Douwe Egberts expected to be postponed. United Technologies will test the market this
spring as the US industrial major is scheduled
IPO activity globally YTD is at the lowest level 400
to spin off its air conditioner and elevator 50
since 2009, though by offering size it is only
businesses into independent companies.
the fourth slowest year since 2008, according
350
to Mergermarket data. So far this year 170 Rights issue and private placement activity
listings have been withdrawn or postponed may suffer as exposure to the turbulent 40
compared to 109 in the same period of 2019. markets makes rescue cash calls challenging. 300
The decline has been most notable in Asia, the Nevertheless, the potential impact on
first region hit by coronavirus. companies’ balance sheets mean some could
250
require equity injections. Listed companies
Key to a successful IPO is low market volatility,
Offering size (USD bn)
30
in the hard-hit leisure and logistics sectors
IPO count
which provides greater certainty about the
may have to seek minority investments or 200
pricing environment and valuation expectations.
put themselves on the block rather than tap
ECM bankers like to place stock in a CBOE
shareholders for cash. As for convertible bond
Volatility Index sweet spot of 15 to 20. 20
150
issuance, boards are unlikely to sign off on
In trading on Monday, the VIX hit 82, exceeding
dilutive equity linked paper issuance in the
levels hit during the financial crisis. In such
middle of a correction. 100
conditions it is tough to see how IPOs can
10
move forward absent significant pre-placing
with cornerstone investors. Listings by 50
introduction might be possible but few may
want to send new stocks into the current storm.
0 0
The market rout comes as investors were YTD YTD YTD YTD YTD YTD YTD YTD YTD YTD YTD YTD YTD
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
already showing skepticism about unprofitable
growth companies with 2019 bellwethers Uber
and Lyft trading down and WeWork abandoning
plans to list. Growth companies now will have to
look at funding options beyond IPOs, such as Offering size IPO count
debt financing, minority stake sales or M&A.
acuris.comAcuris Coronavirus Impact Analysis 13
Sector Impact
Consumer: Canned goods producers such Financial Services: As things stand, bank in government reimbursements, face even prices caused by coronavirus and Saudi
as Campbell Soup Company and Kraft collapses seem unlikely: Basel III capital more uncertainty over liabilities connected to Arabia’s decision to increase output. US
Heinz have traded relatively well rules mean balance sheets are more robust; coronavirus spreading in facilities. producers have largely used high-yield bonds
as traders hope hoarding and prolonged there are countercyclical buffers that can and equity issuance to fund massive capital
Leisure: Casinos, restaurants and movie
quarantines lead to higher sales after years be relaxed, easing capital requirements and investments over the past decade. The market
theaters are facing immediate challenges as
of canned products being out of favor with allowing greater lending in times of need, at is now showing little faith in the companies as
consumers avoid public gatherings
consumers. Food startups that attracted the discretion of macroprudential supervisors. output exceeds demand and product costs
across the world. Debt from movie
technology-company valuations as investors The exception is Italy – where even reasonable are above the price of oil. The S&P U.S. High
theater groups Cineworld and AMC
looked to capitalize on the “better-for-you” forbearance may dent a long damaged and Yield Corporate Bond Energy Index is down
Entertainment have fallen dramatically in the
food trend, meanwhile, may be in for a rude over-banked market: rescues and emergency 28.4% MTD compared to the S&P 500 10+
past few weeks with AMC’s bonds losing 30
awakening as consumers shy away from their consolidation cannot be ruled out. Generally, Year High Yield Corporate Bond Index, which is
points. UK-based Cineworld has been trying
products in a recession. This may lead to however, central banks are more aware of the down 10.3% for the same period.
to close the acquisition of its Canadian peer
a major reduction in deal valuations. liquidity role they can play to insulate banks.
Cineplex using already-placed leveraged
Solvency II rules on insurers are comparatively European issuers in the oil and gas space have
The global fashion supply chain has been loan financing, but equity markets have been
less tested – and corona impact remains an lost an average of ten points. The sector has
deeply affected by China’s lockdown. Not only skeptical the deal will close.
unknown. The trend towards asset manager around EUR 26.2bn-equivalent of European
are many clothes made in the country, but one
consolidation seems likely to be pursued once high yield bonds and accounts for nearly
third of luxury purchases are made by Chinese Buysiders are closely watching if casino
the dust settles as mangers stand to collect 5.2% of Credit Rubric’s high yield universe of
consumers. Now as China reopens, the operator Eldorado Resorts brings USD 7bn in
even fewer fees and investors exit debt and 967 notes. EnQuest led the losses. The UK-
production of luxury goods in Italy will likely debt financing to market to fund its purchase
equity funds. headquartered oil company’s USD 650m 7%
decline in response to the coronavirus crisis. of rival Caesars Entertainment. Shares of
senior unsecured 2022 bonds collapsed 43
Healthcare/pharma: Major pharma companies both companies have dropped dramatically
Events: Companies that organize concerts points to 49-mid, while peer Tullow Oil’s USD
have not been immune (pardon the pun) to over the past month. The debt was expected
and sporting events have been hit as countries 800m 7% senior unsecured 2025s dived 39
stock falls. However, niche segments are well to launch towards the end of March.
ban mass gatherings. Debt issued by European points to 37-mid.
placed to benefit. China’s digital healthcare
concert ticket group Viagogo and US
sector will have increasing government Over in Europe, Spain-headquartered gaming
concert promoter Live Nation are trading On the M&A front, already-announced
support, we have reported. Just one company Codere’s lost 30 points to 56-
down. NEP Group, which provides deals will likely take longer to close as
example: Ping An Health and Technology saw mid and German gaming group Loewen Play
production equipment for events like the vendors and bidders wait for some measure
a 10x increase in users over 22 Jan-6 Feb. US paper shed 20 points. UK-headquartered pizza
Olympics and the Oscars, has also seen of stability, and subsequent readjustment
healthcare IT companies could also attract restaurant chain PizzaExpress and Greek
its debt fall. Nevertheless, UK live theater of valuations. Ongoing transactions that
attention. Vaccine developers would seem gaming company Intralot bonds dived deeper
venue operator Ambassador Theatre will likely be impacted include the buyout
hot, but the effort will be commoditized once into distressed territory.
Group recently hired financial advisors to of Tallgrass Energy, Premier Oil’s acquisitions,
a viable drug is released. US nursing home
prepare for a sale. Coronavirus may delay the Oil & gas: Oil and gas companies have faced debt restructuring and equity raise, the
operators, already under pressure due to cuts
launch of the process. a direct hit from the dramatic decline in oil ongoing sales of Siccar Point and Zennor
acuris.comAcuris Coronavirus Impact Analysis 14
Sector Impact
Petroleum, and the sale of Shell’s Western that facilitate remote work and learning. Cruises’ stock price has collapsed from over
Desert assets in Egypt. Wintershall US distance learning group 2U is in the USD 130 in January to just over USD 32 on
DEA, Neptune Energy and Ithaca late stages of exploring a sale, according Friday. The company has suspended all cruises
Energy were all tentatively expected to go to Mergermarket, and may offer an indication until mid-April.
public this year, but crude below USD 50/ on whether buyers are willing to pay up to
Online booking service AirBnb has reportedly
bbl makes these look dicey. The expected capitalize on the trend.
suspended plans for its initial public offering
North Sea sales of Centrica’s Spirit Energy
Video game producers have been resilient, but amid volatility. The startup is under pressure
joint venture and Exxon’s UK portfolio will
supply issues and major industry conference to go public due to terms of the equity
undoubtedly take longer now to launch.
cancellations may limit game rollout. compensation offered to employees.
Retail: European retailers and Advertising groups will feel the pinch as global
Even Boeing, already struggling due to the 737
supermarkets have seen debt trade off growth prospects dim.
Max fiasco, has seen its IG debt come under
with Dutch retailer Hema, UK frozen food
Travel: Stocks, loans and bonds from airlines, stress with bonds trading below par. A dividend
supermarket Iceland Foods, UK value clothing
rental car companies and cruise cut and capital raise to boost liquidity cannot
firm Matalan, Spanish discount chain DIA,
operators are plunging as consumers and be ruled out.
French retailer Casino and German perfume
businesses cancel travel plans. Regional UK
and jewellery Douglas bonds all falling to
airline group FlyBe has already gone under
stressed levels. On average, retailers’ high yield
and airlines are forecast to lose over USD
names were seven and three-quarter points
100bn in revenue. The pain may worsen over
lower last week.
the course of the month following the US’s
TMT/Software: Telecom media and decision to bar Europeans from entering the
technology companies have not seen their country and many European countries likewise
debt and equity drop as much as other closing their borders.
sectors. However, investors are keeping a close
Additional restructurings and distressed capital
eye on any companies that have to do with
raises seem inevitable.
gathering such as dating app operators Match
Group and Magiclab. Supply chain worries American Express Global Business Travel,
from China have likewise impacted some major which just two weeks ago overcame virus
tech companies. concerns to raise USD 1.1bn of loans to
refinance debt and fund an acquisition, will
If a recession hits, software companies
be an interesting test case of how travel
that produce “nice to have” B2B
companies treat acquisition plans given the
products may take a hit as customers
disruption.
look to cut spending. Unprofitable SaaS
companies owned by PE with HY debt are Norwegian cruise business Hurtigruten
particularly at risk as they have limited cushion Group’s EUR 300m senior secured 2025
if revenue growth comes to a halt. notes plunged 21.5 points to 80-mid versus
Dealmakers are starting to look at companies par reoffer on 30 January. Royal Caribbean
acuris.comAcuris Coronavirus Impact Analysis 15
Asset Backed Securities
Asset backed securities have not been immune cancellations. Big names in the sector including timing. Widening market spreads will change
to market turmoil. Spreads have widened on Xenia Hotels & Resorts, Ryman Hospitality the economics of securitization, particularly for
residential and commercial mortgage bonds Properties, Pebblebrook Hotel Trust and legacy assets with limited excess spread. In the
and new issuance has been delayed. Sunstone Hotel Investors have pulled guidance. longer term, an uptick in non-performing loans
And they aren’t alone — companies from all will likely lead to a new round of portfolio sales/
In the US, MFA Financial last week put a hold
corners of the hospitality industry are beginning securitizations, subject to any extraordinary
on its debut non-qualifying RMBs as fears of a
to rethink their 2020 forecasts, including Hyatt relief from regulators, as seen in China.
prolonged US economic slump turned investors
Hotels and Vail Resorts.
away from risky assets including the residential Like with M&A auctions, coronavirus has
loans they were enamored of just a few weeks Spreads in the secondary whole business ABS prevented commercial real estate buyers and
earlier. Many investors who have been sanguine market have finally stopped tightening. WBS sellers from transaction.
or bullish on residential real estate have bonds had been trading at their tightest levels
“Some deals are likely being delayed as there
suddenly chosen to back off from the sector for in two years in late January and early February,
is a lot of uncertainty and selling property is
fear of being immediately underwater on their but spreads have begun to widen.
becoming difficult as we can’t do site visits,”
bets as spreads widen, while some are turning
EU said one German broker.
defensive on speculation that the spread of
corona will worsen and tip the US and other Coronavirus is similarly expected to impact The longer-term impact of coronavirus is harder
global economies into recession. European ABS in terms of bond cashflows and to gauge as it depends on how long the crisis
supply. Direct impacts include reduced foot will last. This is especially the case for real
CMBS showed some signs of stabilizing
traffic at shopping centers in CMBS, disruption estate markets that follow the economy with a
Tuesday after spreads blew out near correction
to mortgage payments (including from voluntary time lag. Deals may resume, but a coronavirus-
levels Monday amid the broader market rout.
or government-imposed payment holidays), induced recession will impact tenants and
Fannie Mae priced a USD 426m Multifamily
increased defaults in leveraged loan and SME landlords.
Connecticut Avenue Securities 2020-01 on
CLOs, and reduced supply in sectors such
Tuesday, though the harsh turn in financial “I wouldn’t say that people are stalling, but
as auto ABS as sales contract. How these
markets forced it to widen spreads in parts they are certainly slowing down,” said a hotel
expected changes impact securities will be
of the deal. Separately, the managers of the investment advisor. “It is very hard to be bidding
highly jurisdiction and deal specific - do sellers
long-awaited USD 1.9bn casino CMBS, which in the current climate. The market is still there,
have to compensate ABS issuers for payment
hit the market on 5 March, are holding off for investors haven’t gone away, but it is definitely
holidays, for instance, and if not, how much
a few days before attempting to price the more challenging to commit to a number now.
liquidity protection is available?
transactions. We don’t know what the likely outcome will be,
Indirect impacts will be felt from the economic but we are hopeful that there will be greater
Hotel and lodging REITs, meanwhile, are
fallout - for instance, unemployment is a big visibility soon.”
withdrawing their full-year 2020 guidance
driver of defaults in most ABS asset classes,
because of corona related hotel room
though interest rate cuts may push back the
acuris.com16
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