Comment - Tuesday View

Latest Tuesday Views

• Maybe UK banks were right: it was demand all along

  The Bank of England’s Funding for Lending Scheme (FLS) has finally caught on. The last quarter saw almost as much borrowing as the entire year previously, suggesting that the banks were right all along — the reason they weren’t lending was because nobody wanted to borrow.

  • 06 Mar 2014

• Russia: Lenta hurt nobody but the specialists, thankfully

  Emerging markets are only for experts, as events in Ukraine and Russia showed this week. Big returns and big deals do not change that: they just make the stakes higher. This week, Lenta proved yet again that no matter how compelling the story, or well-liked the deal, investors should bear in mind that any apparently huge reward is always matched by commensurate risk.

  • 06 Mar 2014

• Sukuk looks great but is yet to be tested

  The dollar sukuk market has seen three issues so far this year, with three great results capped off by the Islamic Development Bank boldly entering new territory with an unprecedented $1.5bn last Thursday. But while each of these deals has stirred Islamic finance professionals to proclaim the growing profile and pools of capital for the asset class, the market is yet to see a true test of demand.

  • 04 Mar 2014

• Germany isn't bluffing, Depfa sale could actually go ahead

  Last week Hypo Real Estate Holding said it would sell the Dublin based Depfa plc by June. However market participants do not think that will happen, if the tight prices of the defunct bank’s covered bonds are anything to go by. But the market is wrong to think Germany won’t sell up.

  • 04 Mar 2014

• Russia: Lenta was a deal for specialists only

  Emerging markets are only for experts, as events in Ukraine and Russia showed this week. Big returns and big deals do not change that: they just make the stakes higher. This week, Lenta proved yet again that no matter how compelling the story, or well-liked the deal, investors should bear in mind that any apparently huge reward is always matched by commensurate risk.

  • 04 Mar 2014

• Maybe UK banks were right: it was demand all along

  The Bank of England’s Funding for Lending Scheme (FLS) has finally caught fire. War in the Near East and the Oscars have obscured this extraordinary fact, but the last quarter saw almost as much borrowing as the entire year previously. This suggests that the banks were right all along — they weren’t lending because nobody was borrowing.

  • 04 Mar 2014

• Asian loan syndication needs a retreat from Taiwan

  There appears to be no stopping the rise in three month TaiFX, the interbank US dollar funding rate in Taiwan. The widening divergence between TaiFX and Libor has increased the pressure on Taiwanese banks, forcing many to shrink their offshore lending. It is time for bookrunners consider the alternatives.

  • 04 Mar 2014

• Don’t turn off the taps just yet in Asian bonds

  Deviation from the norm always draws out the naysayers. So when Gemdale (Asia) Investment issued a tap just two days after it priced a Rmb750m ($122m) three year bond, critics wasted no time in decrying the tactic. But as the issuer was looking to get the funding it needed without upsetting secondary markets, such flexibility should be applauded.

  • 04 Mar 2014

• A short history of (Ukrainian) debt

  The focus on Ukraine has moved from the macroeconomic to military sphere. But it is worth remembering that even if full scale conflict with Russia is averted, Ukraine’s economy is in an appalling state, and the bond market helped it end up there.

  • 04 Mar 2014

• Russian Railways’ risky strategy was lucky, not clever

  Russian Railways’ lead managers last week claimed waiting a month for a favourable fall in rates before executing resulted in the lowest yield the company could have achieved on its €500m nine year bond. But that contradicts what bankers have often recommended as prudent bond market behaviour. Others should be cautious of following its example.

  • 04 Mar 2014

• GE's sukuk debut should not deter corporate supply

  When General Electric issued a debut $500m sukuk five years ago it did not receive a great deal of acclaim. But with the company considering another potential Islamic deal later this year, neither it — nor other rumoured western first time borrowers such as Total — should fear for a bad result this time round.

  • 25 Feb 2014

• The importance of being choosy

  Choosing your friends has never been tougher for issuers looking to tap Hong Kong’s IPO market. But it is time for firms to smarten up and master the subtle art of relationship management if they are going to use a “friends and family” IPO to the fullest.

  • 25 Feb 2014

• Ukraine's unrest will lock its corporates out of debt markets

  The deadly clashes between protesters and police in Kiev have made a country already off-limits to many lenders the risk/reward equivalent of tossing cash into a black hole. The impact this will have on Ukraine’s corporates has the potential to be devastating.

  • 25 Feb 2014

• Mexico: an investor’s dream in need of critics

  Debt capital market bankers and portfolio managers in New York covering LatAm struggle to find a bad word to say about Mexico it seems. That is a dangerous thing. The country is riddled with risks and has yet to show concrete signs of the growth on which investors are betting. Moreover, recent history shows that a healthy dose of scepticism should accompany any widespread hype in emerging markets.

  • 21 Feb 2014

• Solocal's deal reveals the complicated future of refinancing

  Solocal’s refinancing deal announced last week may be complicated, pressured and messy, but for many issuers across the capital markets whose business models — and not just their balance sheets — are under increasing pressure, it may be a sign of things to come.

  • 21 Feb 2014