Bloomberg Daybreak: Europe 06/27/2025
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The Securities That Banks Are Backing Away From: Credit Weekly
(Bloomberg) -- US banks, among the few companies that still sell preferred shares, are following JPMorgan Chase & Co.'s lead and retreating from the securities, even as investors are eager to buy them. Foreign Buyers Swoop on Cape Town Homes, Pricing Out Locals Trump's Gilded Design Style May Be Gaudy. But Don't Call it 'Rococo.' Massachusetts to Follow NYC in Making Landlords Pay Broker Fees NYC Commutes Resume After Midtown Bus Terminal Crash Chaos What Gothenburg Got Out of Congestion Pricing Capital One Financial Corp. redeemed a $500 million preferred share this week, resulting in the market shrinking on a net basis this year, according to data compiled by Bloomberg. If the trend continues, this will be the second year in a row that the market for US bank preferreds has shrunk, something that hasn't happened since the lenders were replacing obsolete capital after the global financial crisis. At the same time, preferred managers have received more cash to invest this year, as investors pile into higher-yielding assets that can perform well when rates are cut. Assets under management in the 10 largest funds in the space have risen by more than 10% on average year-to-date, based on Bloomberg-compiled data. Capital One's redemption follows JPMorgan cutting its preferreds outstanding by more than a quarter last year. Banks are broadly paying off the securities because they don't need as many of them anymore: capital regulations that made preferred shares attractive to issue, including the Basel III endgame rules, are being eased now in the US. The securities are expensive for banks, because they pay relatively high dividends. But banks were among the few companies still selling preferred equities, a sort of equity with some debt-like characteristics, that helped finance the industrialization of America. For earlier generations of investors, the securities were an attractive source of income, offering more than a company's notes would pay, but also coming with more risk. If the company fell on hard times, preferreds were close to the back of the line to be repaid, for instance. Non-financial companies have been backing away from preferreds, in favor of securities known as 'hybrid bonds.' Hybrids are among the last bonds to be repaid if a company runs into trouble, but aren't as far back in line as preferreds, which are equity. Issuance became viable for companies once Moody's Ratings changed its methodology in early 2024 and the securities quickly became one of the hottest sources of capital-raising in the US. With preferreds growing less popular, the managers of the largest preferred-focused funds are looking for alternatives. They are banking on the relatively high leeway they have to invest in securities similar to preferreds, such as hybrid bonds. 'That's the nice thing about our universe. When people talk about preferred securities, the definition is very grey,' said Douglas Baker, head of preferred securities at Nuveen. 'If things get tight in one area, we typically have plenty of places to pivot to,' he said. It's a view shared by Mark Lieb, founder and CEO of Spectrum Asset Management and a veteran of the preferred market, who expects the supply of hybrids from US utilities to expand in order to cover the growing demand for infrastructure investments supporting AI. That growth can outweigh any loss of issuance from US banks, as their regulatory needs keep decreasing. 'We will have to see what the final rules and regulations are but on the utility side it's going to more than offset it,' Lieb said in an interview. 'Capex is going to go up.' Non-financial corporates in the US sold about $30 billion of hybrids last year, with another $10 billion sold so far in 2025, data compiled by Bloomberg shows. This far exceeded what was repaid through the exercise of call options. Week In Review JPMorgan Chase & Co. helped Warner Bros. Discovery Inc. restructure its debt by offering creditors a deal that would leave them with billions less than they were owed, despite the notes having an investment-grade rating. A trio of banks joined Morgan Stanley in a $5 billion debt deal for xAI Corp., after the company requested their participation to maintain relationships that could help with financings down the line. New World Development Co. closed a record $11 billion refinancing deal, averting a potential crisis in Hong Kong's fragile property market. SoftBank Group Corp. sold $4.2 billion of bonds in dollars and euros, as the technology investment firm turns to global debt markets to accelerate its artificial intelligence push. JPMorgan Chase & Co. and UBS Group AG are among a group of Wall Street banks sounding out investors ahead of a mid-July launch for a $4.25 billion debt package backing Sycamore Partners' buyout of UK pharmacy Boots. The European Central Bank held onto two bonds of embattled payments company Worldline SA while prices slumped after news reports alleging the company covered up fraud by some of its customers. Goldman Sachs Group Inc. is leading a potential transaction for Gray Media Inc. to help the company refinance some of its existing debt, aiming to raise at least $750 million in the high-yield bond market. Flora Food Group BV is the first issuer in Europe rated one of the lowest levels of junk to sell bonds in nearly a year, a sign of investors' insatiable appetite for risk. Vodafone Group Plc pulled in multi-billion investor bids across a multi-currency debt sale, the proceeds of which will be used to finance a sweeping €2 billion ($2.35 billion) debt buyback. Wolfspeed Inc., a chipmaker caught in President Donald Trump's push to reshape Biden-era tech subsidies, filed for bankruptcy to enact a creditor-backed plan to slash $4.6 billion in debt. AMC Entertainment Holdings Inc. said it reached an agreement with creditors to end litigation that resulted from the movie theater chain's debt restructuring last year. Merit Street Media, the startup founded by celebrity psychologist Phil McGraw, filed for bankruptcy in Texas. On the Move Josh Harris' 26North Partners is hiring bankers from JPMorgan Chase & Co. and Deutsche Bank AG as it continues to grow its investment-grade bets. The platform has tapped Todd Marr, formerly global head of debt private placements at JPMorgan, and Ravi Suresh, former head of insurance private asset solutions at Deutsche. BNP Paribas hired Denise Chow from Morgan Stanley's leveraged finance team, one in a string of recent moves across lenders' debt capital markets desks. Uros Stosic, a longtime leveraged loan trader, left Morgan Stanley to join Truist Financial Corp.'s team in New York as a managing director. He reports to Eddie Ferguson, head of loan and sales trading. SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too For Brazil's Criminals, Coffee Beans Are the Target America's Top Consumer-Sentiment Economist Is Worried Sperm Freezing Is a New Hot Market for Startups Pistachios Are Everywhere Right Now, Not Just in Dubai Chocolate ©2025 Bloomberg L.P.
Yahoo
an hour ago
- Yahoo
The Securities That Banks Are Backing Away From: Credit Weekly
(Bloomberg) -- US banks, among the few companies that still sell preferred shares, are following JPMorgan Chase & Co.'s lead and retreating from the securities, even as investors are eager to buy them. Foreign Buyers Swoop on Cape Town Homes, Pricing Out Locals Trump's Gilded Design Style May Be Gaudy. But Don't Call it 'Rococo.' Massachusetts to Follow NYC in Making Landlords Pay Broker Fees NYC Commutes Resume After Midtown Bus Terminal Crash Chaos What Gothenburg Got Out of Congestion Pricing Capital One Financial Corp. redeemed a $500 million preferred share this week, resulting in the market shrinking on a net basis this year, according to data compiled by Bloomberg. If the trend continues, this will be the second year in a row that the market for US bank preferreds has shrunk, something that hasn't happened since the lenders were replacing obsolete capital after the global financial crisis. At the same time, preferred managers have received more cash to invest this year, as investors pile into higher-yielding assets that can perform well when rates are cut. Assets under management in the 10 largest funds in the space have risen by more than 10% on average year-to-date, based on Bloomberg-compiled data. Capital One's redemption follows JPMorgan cutting its preferreds outstanding by more than a quarter last year. Banks are broadly paying off the securities because they don't need as many of them anymore: capital regulations that made preferred shares attractive to issue, including the Basel III endgame rules, are being eased now in the US. The securities are expensive for banks, because they pay relatively high dividends. But banks were among the few companies still selling preferred equities, a sort of equity with some debt-like characteristics, that helped finance the industrialization of America. For earlier generations of investors, the securities were an attractive source of income, offering more than a company's notes would pay, but also coming with more risk. If the company fell on hard times, preferreds were close to the back of the line to be repaid, for instance. Non-financial companies have been backing away from preferreds, in favor of securities known as 'hybrid bonds.' Hybrids are among the last bonds to be repaid if a company runs into trouble, but aren't as far back in line as preferreds, which are equity. Issuance became viable for companies once Moody's Ratings changed its methodology in early 2024 and the securities quickly became one of the hottest sources of capital-raising in the US. With preferreds growing less popular, the managers of the largest preferred-focused funds are looking for alternatives. They are banking on the relatively high leeway they have to invest in securities similar to preferreds, such as hybrid bonds. 'That's the nice thing about our universe. When people talk about preferred securities, the definition is very grey,' said Douglas Baker, head of preferred securities at Nuveen. 'If things get tight in one area, we typically have plenty of places to pivot to,' he said. It's a view shared by Mark Lieb, founder and CEO of Spectrum Asset Management and a veteran of the preferred market, who expects the supply of hybrids from US utilities to expand in order to cover the growing demand for infrastructure investments supporting AI. That growth can outweigh any loss of issuance from US banks, as their regulatory needs keep decreasing. 'We will have to see what the final rules and regulations are but on the utility side it's going to more than offset it,' Lieb said in an interview. 'Capex is going to go up.' Non-financial corporates in the US sold about $30 billion of hybrids last year, with another $10 billion sold so far in 2025, data compiled by Bloomberg shows. This far exceeded what was repaid through the exercise of call options. Week In Review JPMorgan Chase & Co. helped Warner Bros. Discovery Inc. restructure its debt by offering creditors a deal that would leave them with billions less than they were owed, despite the notes having an investment-grade rating. A trio of banks joined Morgan Stanley in a $5 billion debt deal for xAI Corp., after the company requested their participation to maintain relationships that could help with financings down the line. New World Development Co. closed a record $11 billion refinancing deal, averting a potential crisis in Hong Kong's fragile property market. SoftBank Group Corp. sold $4.2 billion of bonds in dollars and euros, as the technology investment firm turns to global debt markets to accelerate its artificial intelligence push. JPMorgan Chase & Co. and UBS Group AG are among a group of Wall Street banks sounding out investors ahead of a mid-July launch for a $4.25 billion debt package backing Sycamore Partners' buyout of UK pharmacy Boots. The European Central Bank held onto two bonds of embattled payments company Worldline SA while prices slumped after news reports alleging the company covered up fraud by some of its customers. Goldman Sachs Group Inc. is leading a potential transaction for Gray Media Inc. to help the company refinance some of its existing debt, aiming to raise at least $750 million in the high-yield bond market. Flora Food Group BV is the first issuer in Europe rated one of the lowest levels of junk to sell bonds in nearly a year, a sign of investors' insatiable appetite for risk. Vodafone Group Plc pulled in multi-billion investor bids across a multi-currency debt sale, the proceeds of which will be used to finance a sweeping €2 billion ($2.35 billion) debt buyback. Wolfspeed Inc., a chipmaker caught in President Donald Trump's push to reshape Biden-era tech subsidies, filed for bankruptcy to enact a creditor-backed plan to slash $4.6 billion in debt. AMC Entertainment Holdings Inc. said it reached an agreement with creditors to end litigation that resulted from the movie theater chain's debt restructuring last year. Merit Street Media, the startup founded by celebrity psychologist Phil McGraw, filed for bankruptcy in Texas. On the Move Josh Harris' 26North Partners is hiring bankers from JPMorgan Chase & Co. and Deutsche Bank AG as it continues to grow its investment-grade bets. The platform has tapped Todd Marr, formerly global head of debt private placements at JPMorgan, and Ravi Suresh, former head of insurance private asset solutions at Deutsche. BNP Paribas hired Denise Chow from Morgan Stanley's leveraged finance team, one in a string of recent moves across lenders' debt capital markets desks. Uros Stosic, a longtime leveraged loan trader, left Morgan Stanley to join Truist Financial Corp.'s team in New York as a managing director. He reports to Eddie Ferguson, head of loan and sales trading. SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too For Brazil's Criminals, Coffee Beans Are the Target America's Top Consumer-Sentiment Economist Is Worried Sperm Freezing Is a New Hot Market for Startups Pistachios Are Everywhere Right Now, Not Just in Dubai Chocolate ©2025 Bloomberg L.P. Error al recuperar los datos Inicia sesión para acceder a tu cartera de valores Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos
Yahoo
an hour ago
- Yahoo
Why Robinhood Stock Was Scorching Hot Last Month
Some companies wilt in the early summer heat when June rolls along. This one certainly did not. Management was busy adding features to its platform and bolstering its crypto offerings, among other activities. 10 stocks we like better than Robinhood Markets › June is a sluggish month for some, but it sure was active for next-generation brokerage Robinhood Markets (NASDAQ: HOOD). The company launched a set of new features on its platform, closed an acquisition, and published monthly operating metrics that pleased the market. That might be an understatement; the stock rose by over 41% in value across June. Not every development was a boon for Robinhood, however. Speculation was rife that the company's stock would be added to the benchmark S&P 500 index as part of the gauge's quarterly rebalancing. Those hopes were dashed, however, when S&P Dow Jones Indices announced that it would leave the index unchanged. Investors sold out of Robinhood on the news. The S&P 500 disappointment came after a bright spot for the company, namely its monthly operating data release. Robinhood divulged that in May, total assets on its platform were up a beefy 89% year over year to $255 billion. Meanwhile, overall trading volumes also rose briskly, with volumes for stocks more than doubling to over $180 billion, options contracts advancing 36% to nearly the same amount, and a 65% increase in crypto activity (to just under $12 billion). The new features announced by Robinhood in mid-June also piqued the market's attention. While most of these were fairly minor, several have the potential to make the company's trading portal stickier. One is stock "tokens," or equity derivatives that reside on a blockchain, that will allow European users to trade U.S. titles. Another is its artificial intelligence (AI)-enhanced Cortex Digests analytical tool. On the subject of blockchain technology, Robinhood completed a big move in that space. It announced that it had closed its buyout of global cryptocurrency exchange operator Bitstamp. In the press release trumpeting this, the company said that Bitstamp has more than 50 active licenses and registrations around the world, as well as customers located in the U.S., U.K., European Union, and Asia. In the press release, the company said that owning Bitstamp "significantly enhances Robinhood's Crypto product for customers across the globe." So, June was a whirlwind, but in a good way for Robinhood. Some investors might not be too excited about the company doubling down in the volatile world of crypto, but as a trading platform -- essentially an intermediary -- it shouldn't be directly affected by the asset class's famous volatility. Outside of that, those metrics sure looked good, and overall, management seems to be positioning Robinhood in front of some juicy growth opportunities. I'd be bullish on this company's future. Before you buy stock in Robinhood Markets, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Robinhood Markets wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $976,677!* Now, it's worth noting Stock Advisor's total average return is 1,060% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Why Robinhood Stock Was Scorching Hot Last Month was originally published by The Motley Fool
