Author: admin

Global law firm K&L Gates has assisted PGIM Private Capital (PGIM) in finalizing a US$200 million private shelf facility with Verona-based multi-utility company AGSM AIM S.p.A., which involved Italian, US, and UK finance issues and Italian tax matters. PGIM is the private capital division of PGIM, Inc., the global investment management business of Prudential Financial, Inc.

The first issuance under the facility was a €50 million green bond granted to AGSM AIM and underwritten by PGIM. Proceeds from the green bond will support AGSM AIM’s Green Financing Framework, including funding strategic investments in energy transition, energy efficiency, technological innovation, and the sustainable development of its services. Over the next three years, AGSM AIM will have the opportunity to issue additional bonds up to the euro equivalent of US$200 million.

The Finance team was led by Milan partner Chiara Anceschi with support from partners Sean Crosky (London), Michael Anderson (London), and Anthony Nolan (New York), as well as trainees Elisa Massimetti (Milan) and Harriet Sherwin (London). Milan partner Vittorio Salvadori di Wiesenhoff provided tax advice.

Anceschi commented: “This project has so many remarkable aspects. Not only is it the first green bond issued by PGIM in Italy for sustainable initiatives, but it also marks the launch of a Private Shelf Facility with AGSM AIM, supporting strategic investments in energy transition and innovation. It serves as a successful example of how we can operate as a truly integrated, cross-border, multidisciplinary firm to assist a major international client pursue impactful sustainability goals across jurisdictions. We look forward to seeing positive results accrue from this collaboration.”

K&L Gates’ global Finance practice integrates the many disciplines involved in financing and restructuring transactions across markets and industries around the globe. With lawyers in offices across Asia, Australia, Europe, the Middle East, North America, and South America, the practice maintains a balance between buy-side and sell-side representation in its work on behalf of lenders, borrowers, servicers, collateral managers, trustees, rating agencies, investors, and other participants in a wide array of financing transactions.

The chancellor has told the financial industry it must change the “negative” narrative around savers investing money in stocks and shares in order to help grow the economy.

In a speech, Rachel Reeves said: “For too long, we have presented investment in too negative a light, quick to warn people of the risks without giving proper weight to the benefits.”

The government is working with the financial regulator to provide support for would-be investors.

It comes as Reeves stepped back from cutting the tax-free limit on cash Individual Savings Accounts (Isas) after a backlash from lenders – she is keen to shift some of the £300bn in these accounts to being invested in the UK and its companies.

At the annual Mansion House dinner in the City of London, Reeves told business leaders: “Our tangled system of financial advice and guidance has meant that people cannot get the right support to make decisions for themselves.”

She said the government is consulting with the Financial Conduct Authority “to introduce a brand-new type of targeted support for consumers ahead of the new financial year”.

The government is under pressure to ignite growth after figures revealed the UK economy shrank in May following a contraction in April.

Meanwhile, U-turns on welfare benefits and the winter fuel allowance have stoked speculation there could be tax rises in the Budget later this year.

Some Labour MPs have previously suggested a wealth tax, such as a 2% tax on assets worth more than £10m, could raise £24bn per year.

Speaking at the Mansion House event, Sir William Russell, former Lord Mayor of the City of London, told the BBC: “Unfortunately, there’s going to be this pause between tonight and October. In a way, that’s not good because there’ll be speculation about wealth tax which I don’t think will happen, this government is much more sensible than that.”

But he said: “That pause doesn’t help because there is uncertainty and if there’s one thing we all would agree with, the City does not like uncertainty.”

Reeves said the new measures to encourage consumers to invest would mean “savers can reap the benefits of UK economic success”.

But the value of investments in assets such as shares can go down as well as up, and savers have tended to be cautious over the risks involved, although the spending power of savings can be eroded by rising prices.

The government has in the past encouraged the public to buy shares in UK companies, including in 2013 when Royal Mail was floated on the London Stock Exchange.

But perhaps the most famous example was in 1986, when the state-owned British Gas was privatised and Margaret Thatcher’s government launched the “tell Sid” campaign. TV adverts featured characters urged each other to “tell Sid” about the chance to buy shares in British Gas.

In reference to her recent travails – including a tearful appearance in the House of Commons – Reeves said that during a visit to a school, a girl had asked her what job she would do if she could have any job in the world.

“Given the events of the last few weeks, I suspect many of you would sympathise if I had said “anything but chancellor”,” she joked with the audience. “But I didn’t.”

In her speech, Reeves said she would “continue to consider further changes to ISAs, engaging widely over the coming months”.

She also provided more details about changes to the UK’s financial services sector including reforming regulation.

“In too many areas, regulation still acts as a boot on the neck of businesses,” she said. “Choking off the enterprise and innovation that is the lifeblood of growth.”

She said regulators in other sectors “must take up the call I make this evening not to bend to the temptation of excessive caution but to boldly regulate for growth in the service of prosperity across our country”.

Ahead of giving his own speech at the Mansion House gathering, Bank of England governor Andrew Bailey was asked if there was a trade-off between providing stability and growth.

In the past, Mr Bailey has been cautious about deregulation.

But he told the BBC: “In no way am I suggesting that all our rules are perfectly formed so no, there isn’t a trade-off, but that doesn’t mean to say that we don’t change and modernise the system and keep it up to date – we balance those two things.”

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Activist hedge fund Elliott Management has built a sizeable stake in Global Payments as the payment processing group looks to win back investors after its $24.2bn acquisition of Worldpay caused shares to plunge to a 10-year low, said people familiar with the matter.

The investment comes as the Atlanta-based payments group plots its future after buying Worldpay earlier this year in its biggest acquisition to date as it tries to grow its core business of processing payments for merchants.

The three-way, cash-and-shares acquisition with private equity group GTCR and financial technology company Fidelity Information Services came as a surprise to investors. It jarred with pledges from Global Payments’ management including at its 2024 investor day to focus on divestments and returning cash to shareholders.

Elliott’s demands and the size of its stake could not be established.

When the Worldpay deal was announced in April, shares in Global Payments fell 17.5 per cent on the day.

Although the stock has since rallied, its market capitalisation of $19bn means the company is trading at 7 times earnings, among the lowest levels across the industry. Shares in Global Payments jumped 5.2 per cent in after-hours trading on Tuesday.

Conversely, shares in rival FIS, which exited its 45 per cent stake in Worldpay and bought Global Payments’ issuer solutions business for $13.5bn as part of the deal, soared on the day.

In order to fund the deal, Global Payments trimmed its capital returns target between 2025 and 2027 from $7.5bn to $7bn, reversing course on its promise to prioritise share buybacks and dividends. But the company has said it will boost its capital returns from 2028 onwards. It also announced plans to take on $7.7bn worth of debt financing just as fears of an economic slowdown grow.

Elliott cannot block the deal before it closes because the structure of the three-way agreement means it does not require a shareholder vote.

But, as a large investor, the fund could seek to influence how management and the board go about integrating Worldpay into the wider business.

Elliott and Global Payments declined to comment.

Global Payments is among the payment processing companies with legacy technology systems that have been worst hit by competition from software-focused rivals such as Stripe, Adyen and Toast.

As part of a wave of consolidation across the sector in 2019, Global Payments and rivals Fiserv and FIS each struck their own megadeals, spending more than $90bn between them.

But investor sentiment around most of those acquisitions soured, leading several of the deals to be unwound. Fiserv’s $22bn all-stock acquisition of First Data stands out as a rare example of a deal investors welcomed.

Elliott, with $72.7bn of assets under management, is Wall Street’s best-known activist hedge fund, having unveiled high-profile investments at groups including BP and Hewlett Packard Enterprise this year.

The fund, founded by billionaire investor Paul Singer, has invested in a large number of technology stocks, including fintech companies such as PayPal and FIS, according to regulatory filings.

At an investor conference in May, Global Payments’ chief executive Cameron Bready blamed the poor reaction to the Worldpay acquisition on the deal landing in the immediate aftermath of US President Donald Trump’s tariff policy upending markets.

“Certainly it’s not lost on us that the timing, perhaps from a market standpoint, wasn’t ideal,” Bready said.

He added: “There’s not a scenario that I contemplate where we’re not better off by doing this transaction than we were obviously continuing forward with our standalone plan.”

Rachel Reeves called it “the biggest set of reforms to financial regulation in a decade”, and, in one narrow sense, her Leeds Reforms would qualify for the description. If the ringfencing regime for banks were to be scrapped, we really would be entering a new era – or going back to an old one, since the separation of banks’ retail and investment banking activities was the single biggest regulatory change introduced after the 2008-09 crash to try to prevent another blow-up.

Reeves on Tuesday, however, merely announced a review to look at how reforms to ringfencing could “strike the right balance between growth and stability, including protecting consumer deposits”. One hopes that does not mean outright abolition, which is what banks such as HSBC, Lloyds and NatWest have been urging on the grounds that the rules trap capital and impede growth.

The stout defence of ringfencing from Andrew Bailey, governor of the Bank of England, has always felt more compelling: the regime has made banks safer and removal would increase the cost of loans and mortgages. It would surely be hard for a chancellor to override the Bank on this core question, especially when Barclays – which, in theory, might have most to gain from abolition as it has the largest investment bank – is also in the defence camp.

A fudged outcome would see more activities allowed within the ringfenced entity. It is technical stuff, but also deeply important. Get it wrong and the cautious voices sounding the alarm over a government in search of a sugar-rush of growth via financial deregulation would have a point. Tread carefully, chancellor: ditching ringfencing in its entirety risks unlearning the lessons of the last crisis.

In other respects, however, Reeves’s red tape-slashing, investment-boosting, obstacle-removing reforms can be criticised in the other direction: yes, some changes are sensible tidying-up exercises but others are underwhelming.

Take the showbiz headliner: the advertising campaign to encourage over-cautious savers to push a few quid into the stock market. The goal is admirable in itself for the reasons the Treasury gives: savers are doing themselves long-term financial harm if they do not understand that shares beat cash over most long-term periods.

But it’s not as if the Treasury itself is doing much more than cheering from the wings. The ad campaign will be funded by the industry, which presumably could have launched the thing itself without government endorsement. At the very least, Reeves could have given the volunteers a hand by abolishing stamp duty on shares for purchases within ISAs. Even that gentle step was conspicuous by its absence.

Tweaking risk-warning messaging may help at the margins. So will better access for retail investors to corporate debt and corporate fund-raising, as announced by the Financial Conduct Authority (FCA). But if Reeves is truly alarmed (as she should be) by the statistic that the UK has the lowest level of retail investment in the G7 group of rich economies, bolder measures are needed. It could take a generation to change saving habits to encourage “informed risk-taking” but the crisis in the London stock market is happening now. Stamp duty remains the drag in the background, and is the real test of the Treasury’s seriousness.

Elsewhere, several reforms look justified: help for “challenger” banks on capital rules; some loosening of rules to help first-time buyers; a trimming of the size of the authorisation regime for bank senior managers in the interest of efficiency; changes to allow the London Stock Exchange to quote dollar- and euro-denominated shares.

A third pot of policies are straightforward lobbying victories for the City. That lot includes the neutering of the financial ombudsman service, but the banks may have had a point about the body acting as a “quasi regulator” within the FCA. The timing of the reform looks terrible while the unresolved car finance affair rumbles on, but the regulatory setup did look basically confused. The onus now falls on the FCA to act sooner to spot looming scandals, which is not a wholly reassuring thought.

But let’s not overstate the significance of the Mansion House speech. Yes, the financial services industry deserves its place as one of the eight growth-driving sectors within the government’s overall industry strategy; it’s too big to ignore. But, despite some of the rhetoric, it’s not as if the City is currently being strangled by regulation in the way that purer industrial sectors are being hampered by high energy costs. So don’t go overboard on ringfencing reform: it is the bit that matters the most.