Firms across the globe are ditching fund-raising deals at a quickening pace, as volatility destabilizes credit markets following Russia’s invasion of Ukraine.
Electric car giant Tesla Inc. is the latest big name firm to scrap financing plans, as it postponed a $1 billion offering of bonds backed by leases on its vehicles last week. Almost 80 companies, nearly half from the U.S., have put at least $25 billion of deals on hold since the start of the war nearly a month ago.
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“There has been a severe jolt to investor confidence since the invasion of Ukraine as sanctions have been slapped on Russia and commodity prices roared upwards,” said Susannah Streeter, senior investment and markets analyst with Hargreaves Lansdown Plc.
The caution has reached all corners of the globe. India’s Mumbai International Airport Ltd. recently delayed a dollar bond deal, SS&C Technologies Holdings Inc. halted a $1.7 billion buyout loan on Wednesday and Brazil’s Trocafone SA scrapped an initial public offering.
More than $18 billion of the delayed deals are for debt financing, including bonds, loans and asset-backed securities, while the rest is for for mergers, acquisitions and initial public offerings.
The war has also left dealmakers in Europe unsure about if and when roughly $300 billion of mergers, acquisitions and listings will go ahead.
There’s already been a 74% plunge in global equity listings, and a 28% fall in global corporate bond issuance so far this year, according to data compiled by Bloomberg.
Read the full article here by Jacqueline Poh, Advisor Perspectives.
