Margin Calls Looming

September 08, 2022

Good Morning,

Contact Energy will invest $300m (NZD) into a fourth geothermal plant, the Australian economy grew 0.9% in June, the US has bared tech companies from building factories in China, leverage loan defaults hit $6B in August, European energy companies need a minimum of $1.5 trillion to cover exposure, and Covid vaccines are likely to become annual.

Let's jump in.

Before The Bell

Markets

  • The New Zealand market was down as it was under pressure due to global sells offs. It did withstand the significant declines seen elsewhere, though. (Stuff)

  • Sharp declines in the resource sector dragged the Australian market to a seven-week low. (AFR)

  • The US markets declined on their first day back trading after Labour Day.

  • US 10Y Treasures hit their highest levels since June whilst US 30Y Treasures closed at their highest levels since 2014.

  • Bond yields climbed as higher rates are in sight. (AFR)

Earnings

  • Kiwi Wealth's revenue increased by 15% before the Fisher Funds acquisition. Net profit was also up. (NBR)

News Summary

  • The New Zealand Government has outlined its $80m (NZD), 3-year Māori media strategy. (Stuff)

  • Contact Energy will invest $300m (NZD) into a fourth geothermal plant in Taupō. (Stuff)

  • Seek boss Ian Narev will chair the new NZ Rugby commercial arm. (Stuff)

  • Afterpay supports greater buy-now, pay-later regulation if it is sector specific. (NBR)

  • NZ-based online retailer 1- Day has been fined $840k (NZD) by the NZ commerce commission for misleading false deals. (RNZ)

  • Z Energy CEO Mark Bennets has quit, and current CFO Lindis Jones will take over on March 1st 2023. (NBR)

  • The Australian economy grew 0.9% in June. (AFR)

  • Australian fruit and vegetable prices have dropped on the back of crops recovering. (9 News)

  • Australian Federal Treasurer Jim Chalmers has said that infrastructure spending will be deferred due to inflation. (AFR)

  • The US has bared tech companies that receive federal funding from building advanced technology facilities in China. (BBC)

  • Juul, an electronic cigarette maker, has paid $438.5m (USD) to settle the probe into youth marketing in the United States. (BBC)

  • Air travel rebound to above 2019 levels in the US over Labour weekends. (CNBC)

  • Leverage loan defaults hit $6B in August, the highest amount since October 2020. (WSJ)

  • Russia has blamed the US for Europe's gas supply crisis. (RT)

  • European energy companies need a minimum of $1.5 trillion USD to cover their exposure to rising gas prices. (RT)

  • The EU has blocked Illumina's deal to buy Grail. (WSJ)

  • Covid vaccines are likely to become annual. (AX)

Deal Flow

Investments/ M&A

  • Spanish oil and gas company Repsol is selling a quarter of its exploration and production unit to a US PE firm EIG Global Energy Partners, for $3.4B (USD). (BBG)

  • Texas Capital has agreed to sell its insurance premium finance unit to Truist Financial Corp in a $3.4B (USD) deal. (RT)

  • SoftBank is closing in on a ~$2B (USD) deal to sell Fortress Investments to Abu Dhabi sovereign fund Mubadala Investment Corp. (BBG)

  • State Farm Mutual Automobile Insurance has purchased a 15% stake in Apollo-backed commercial security systems and services company ADT for $1.2B (USD). (BBG)

  • Shell and Exxon Mobil have put the Dutch joint venture NAM, one of Europe's largest and oldest natural gas production ventures, up for sale. They hope to raise over $1B (USD) from the sale. (RT)

  • Repsol has also agreed to sell Alberta oil assets to Canadian Pension Plan Investment Board-backed Teine Energy in a deal worth ~$304.65m (USD). (RT)

  • Chinese gaming giant Tencent will double its stake in Ubisoft after buying 49.9% of Guillemot Brothers for ~$198m (USD). (BBG)

  • Kiwi Property Group will sell its Northlands mall in Christchurch for $160m (NZD) in a conditional deal with Queenstown-based MP Holdings 5 Limited. (Stuff)

  • Obayashi and the Tauropaki Trust have partnered to create a hydrogen refuelling joint venture called Halcyon Power. They also announced a deal to supply Toyota NZ's Hydrogen Project Car Share Scheme. (Herald)

  • Sydney-based Allegro Funds and Melbourne's Tanarra Funds will have the largest equity stakes in Camp Australia when the lender syndicate takes control in a debt-for-equity swap on Friday. (AFR)

  • APA Group is the preferred bidder for Basslink. (AFR)

  • Cognet Communications announced it would acquire T-Mobile's wireless business. (RT)

VC & Fundraising

  • Baring Private Equity Asia has raised $11B (USD) for its largest fund ever. (BBG)

  • Arsenal Biosciences, a programmable cell therapy company, closed a $220m (USD) Series B financing. (BW)

  • Battle Motors, an electric truck manufacture, has raised a $150m (USD) Series B. (BW)

  • TruKKer raised $100m (USD) from investors, including Investorcorp and Mubadala, in what is likely to be its last round of funding before it IPOs. (BBG)

  • Lightyear, a solar-powered carmaker, raised $81m (USD) as it prepares to start production. (TC)

  • Behemoth Brewing, an Auckland beer business, is seeking a $3m (NZD) capital injection for expansion. (Herald)

Equity Raises

  • AIG will sell 80m shares in its life and retirement unit, Corbridge Finance, between the price of $21-$24 (USD) in an IPO which aims to raise ~$1.9B. (BBG)

  • FWD, an insurance company, based in Asia, is eyeing an IPO on the Hong Kong Stock Exchange in 2023 with plans of raising ~$1B (USD). (BBG)

  • Comet, a Queensland gas explorer, is raising $22m (AUD) at a 28.6% discount. (AFR)

  • NZ-listed medical cannabis business Greenfern has launched a $1.2m (NZD) wholesale offer at a 29% discount as part of its plan to raise $5m (NZD). (NBR)

  • Australian MGI Golf has enlisted Deloitte to find investors as they chase a capital injection to help fuel growth in the US. (AFR)

  • The Greek Government are considering listing 30% of Athens International Airport on the Athens Stock Exchange. (RT)

  • ABB shareholders agreed to a spinoff of turbocharging business Accelleron with the aim of a listing in October. (RT)

Debt

  • Walmart will raise $5B (USD) in a bond raising with the bonds due between 2025 and 2052 with coupon rates between 3.9% and 4.5%. (RT)

  • Lowe's Companies, a home improvement store, has announced the pricing of a four-parts note offering at $4.75B (USD). (RT)

  • McDonald's will raise ~$1.5B (USD) in two-part bonds due 2052 and 2032. (RT)

  • Target will raise $1B (USD) in bonds that mature in 2032. (RT)

  • Mitsubishi UFJ Financial Group plans to sell $806m (USD) worth of Marelli debt to Deutsche Bank. (RT)

  • UBS has locked in $495m (AUD) debt for BGH Capital's Virtus Health. (AFR)

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