Daily Brief - 30 May 2024

China Vanke seeks $6.9 billion loan to tackle property crisis

China Vanke, a major property developer, is negotiating with banks for a $6.9 billion loan to address its financial issues. If approved, this would be the largest loan in Asia outside Japan since 2022.

Vanke plans to pledge nearly 90 billion yuan in assets as collateral. The company has already secured a 20 billion yuan loan to help ease investor concerns.

Several banks, including ICBC and Ping An, are involved in the talks. The funds will be used to repay bonds and other debts.

Golden Goose aims for €100 million in Milan IPO to boost Europe's market

Italian luxury sneaker brand Golden Goose plans to raise €100 million in a Milan IPO, with its main shareholder Permira also selling some shares. This move contributes to the revived European IPO market, which has seen more than double the proceeds compared to the same period last year.

Golden Goose is expected to be valued at around €3 billion, including debt. The company will use the funds to reduce its debt.

Despite some market challenges, Golden Goose's sales grew by 18% last year, showing resilience in the luxury sector.

Japan's 30-year bond-swap rate gap hits highest since 2012

The gap between Japan's 30-year government bond yields and swaps contracts has widened to its largest point since 2012, indicating rising interest rates. Super-long note yields, preferred by life insurers, have outpaced swaps rates as bond buyers anticipate further rate hikes.

Investors hedge by exchanging fixed-rate swaps for floating ones to mitigate bond losses when yields rise. The current gap of 42 basis points suggests concerns over potential reductions in bond purchases by the Bank of Japan.

Speculation is growing that the BOJ may cut its monthly ¥6 trillion bond purchases in June. Despite rising yields, Japanese investors may continue favouring higher-yielding foreign bonds.