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GC Asia
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TAIPAN: Enter the dragon
It is hard to imagine that any of Australia’s biggest banks would be worried about losing their share of their domestic loan market to a foreigner. But are the first signs of unease creeping in?
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Southpaw: BofA Merrill offers 25% cash as FSA turns up heat on latest London bonus round
Bank of America Merrill Lynch’s star bankers say the firm could be about to renege on pay deals put in place last year to retain staff. The bank appears to have settled on a solution already used by Citi and Royal Bank of Scotland to pay some of its bonuses, writes David Rothnie.
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Leak Table
Leak has been edging ever closer to solving the mystery of the absurdly quiet week in private placements.
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Calyon’s rebranding must begin with the YMCA
Celebrations are afoot in the ranch this week, as the sun has decided to shine on leveraged finance once more. Even better, it’s at the expense of the equity market. We’re convinced that KKR’s £955m snatching of Pets at Home from the jaws of an IPO is the beginning of a trend.
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Credit Matters: Pitchforks vs Pitch books
President Obama is spoiling for a fight with Wall Street. Gary Jenkins backs the administration’s plan to outlaw prop trading but wonders if the president has the resources to win a war against the men with the money.
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Euroblog 1139
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The Naked Broker: Birthday treat
This Wednesday past occasioned the 66th anniversary of the lifting of the siege of Leningrad, the 254th anniversary of Mozart’s birth, the day that Thomas Crapper (who, according to Wikipedia didn’t invent the toilet, he just made it more popular, which surprised me because I would have thought that it was always relatively popular) kicked the bucket exactly 100 years ago and, more plainly, The Naked Broker’s birthday.
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Greek Sovereign CDS Tipped To Break 450bp
Some traders in London believe five-year credit default swaps on Greece could surpass the 450 basis points mark this week, after the cost of protection on the sovereign hit a record high of 390bp today and kept climbing intra-day to 420bp.
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Enter the dragon
It is hard to imagine that any of Australia’s biggest banks would be worried about losing their share of their domestic loan market to a foreigner. But are the first signs of unease creeping in?
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TAIPAN: Vietnam’s sovereign error
The Socialist Republic of Vietnam hit all its targets on only its second sovereign bond issue this week, but showed in the process that it still has some learning to do.
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Merrill offers 25% cash to escape bonus muddle
Bank of America Merrill Lynch’s star bankers say the firm could be about to renege on pay deals put in place last year to retain staff. The bank appears to have settled on a solution already used by Citi and Royal Bank of Scotland to pay some of its bonuses.
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EuroWeek View: Mubadala no trailblazer for MidEast loans
The first glimmer of a Middle Eastern loan since Dubai’s debt crisis in November emerged last week. But it will take more than a blowout deal from Mubadala, one of the region’s best credits, to open up the market for other borrowers.
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Loans: In it for the long term
Long tenors are returning to the syndicated loan market. While improving volumes and pricing might be more important to bankers, the shift is a crucial step in re-emphasising the market’s relevance to European companies.
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Expanding syndicates turn IPO gold into short rations
Equity capital market bankers have reason to cheer. More than 30 businesses are planning to go public in Europe, making this year the busiest for IPOs since 2007. But bankers will have to get used to splitting the fee pot with larger IPO syndicates than ever before.
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ManUtd shows European high yield burying reckless tag
Asian and US buyers rallied to the controversial bonds sold by Manchester United football club on Friday — but the deal showed a welcome caution on the part of European high yield investors.
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Greece wins the battle, but the war is yet to be won
Failure in the sovereign bond market today was quite simply not an option for the Hellenic Republic. And by pricing Eu8bn of five year bonds some 300bp back of Germany, Greece and its lead managers ensured the deal was a blowout success. But before the European sovereign bond market gets carried away, life is set to get tougher for Greece as an issuer before it gets better, on account of the vast amounts it and its fellow European sovereigns still need to raise this year
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Mubadala no trailblazer for MidEast loans
The first glimmer of a Middle Eastern loan since Dubai’s debt crisis in November emerged last week. But it will take more than a blowout deal from Mubadala, one of the region’s best credits, to open up the market for other borrowers.
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No way out from regulators’ onslaught
Fault lines are developing in the global regulatory crackdown on banking but it is clear that governments expect to get their pound of flesh. The only certainty is intrusive and costly regulation.
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Euroblog 1138
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Credit Matters: Fears for Greek domino make bail-out certain
Would the European Union support Greece if that country’s debt problems deteriorate? Gary Jenkins, the credit analyst who has always been on the simple side of arguments, thinks that faced with the threat of contagion sweeping through peripheral Europe, the EU would have no choice but to act to support its weakest member.
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Leak Table 1138
Harry Coyle has arrived. That’s not a typo. Henry Coyle, baby Harry’s father, texted Leak to say so last week. Leak can only assume that Marketa vetoed "Henry Jnr", and Henry went with the common knowledge that it’s only the first letter and last that people really notice.
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The Naked Broker: Class War
Goldman Sachs just doesn’t employ people like the Naked Broker. And President Obama doesn’t bother to berate people like him either. But with class war looming between the prop desks and the politicos, perhaps they overlook him at their peril.
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A tough couple of days skiing with RZB
Psychologists know the third Monday in January as Blue Monday. Statistically, it’s the most depressing day of the year. Indeed somebody somewhere has actually bothered to make to calculate this, taking into account the weather, debt (we presume they mean average household debt rather than dealfow in the syndicated loan market), the time since Christmas, the time since failing our New Year’s resolutions, low motivation levels and the feeling of a need to take some action.
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Southpaw: Softly-softly SG takes steps on M&A expansion
SG’s coverage and advisory head Thierry Aulagnon has the task of broadening the bank’s business by creating a global M&A franchise. The recent appointments of 13 senior bankers show that he is eschewing big-name stars but it’s not clear that will be enough to expand beyond SG’s heartland, writes David Rothnie.
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A new leveraged fad
Is leveraged finance back in fashion? Certainly some seem to think so.
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The US deficit tax that dare not speak its name
The Obama administration is presenting its new bank levy as a means to recoup the money injected directly into banks at the peak of the crisis. In reality, it is one step in reducing the budget deficit, dressed up in anti-bank rhetoric.
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TAIPAN: Backing Rusal
Hong Kong’s regulators may not like it, but it seems there are plenty of others who are only too happy to welcome Rusal to the city’s stock market - and that could leave them with some tough questions to answer.
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Euroblog: Who is the coolest banker?
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The Naked Broker: Suicide sales-trading
To my colleagues here at Inn Securities and you out there on your yachts or your estates it may not look like I’m trying very hard.
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MTN Leak 1137
Barclays has a new boy. Leak’s ears pricked up. But the real question is why he’s been kept a secret for over a month.
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Southpaw: Credit Suisse jumps to head of queue amid $50bn consumer M&A splurge
The consumer sector is this January’s M&A hotspot and it is Credit Suisse that is feeling the warmth after picking up an armful of advisory mandates. Its aim is to become a top ranking big-ticket M&A house by making external hires, but it is its long-standing bankers and clients that are in the thick of the action at the moment, writes David Rothnie.
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Loan Ranger 1137
The ranch got particularly excited this week when Manchester United — you know, the team David Beckham (Posh Spice’s hubby/Golden Balls) used to play for — announced a £500m junk bond to pay back its loans.
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Sovereigns Looks Riskier Than Corporates
Credit spreads in the peripheral euro zone countries widened sharply this week, pushing the Markit iTraxx SovX Western Europe index wider than the Markit iTraxx Europe index for the first time. This implies that European sovereigns are more risky than corporates.
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New-look Indonesia
Indonesia returned to the global bond market with a twist this week. Dropping its usual decision to roadshow deals before pricing, the sovereign opted for a quickly executed issue from its freshly updated MTN programme.
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Junk credits sneak to safety
The corporate default rate in 2009 was a damp squib compared to the predicted onslaught of bankruptcies. Now that banks have rebuilt equity capital and established work-out groups, it is the booming high yield bond market that is pouring cold water on the pessimists. For the moment.
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Crunch time for bank hybrid callers
Hybrid tier one issuance has yet to make an appearance this year — and, thanks to the Basel Committee, it is unlikely to for months. But not only do banks have to worry about future-proofing new deals, they also have to work out what to do with $22bn of bonds callable in 2010.
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TAIPAN: Loans at last
Asia's lending banks are finally getting back to what they do best. If the first few days of 2010 are anything to go by, this year looks set to mark the return of bumper volumes in the region's syndicated loan market.
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Euroblog: Canned food at HSBC
What a lot of mayhem a few snowflakes can create.
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Leak Table 1136
Leak is cold, and was hoping to be warmed by the post-Christmas joviality flooding the market.
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Southpaw: Fee chase is on as private equity bankers race to lead LPs to the exit
Private equity firms are uppermost in the minds of investment bankers seeking deal fees as they navigate the first weeks of the year. Apax, CVC, Hellman & Friedman and KKR are some of the firms in aggressive buying mode but the real theme of 2010 will be how PE firms arrange exits, not acquisitions, says David Rothnie.
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The Naked Broker: Endurance in the bleak mid-winter
The first day back at the coalface in January is difficult enough as it is but the Deep Freeze which began on Tuesday has demanded the endurance of Shackleton to struggle through the ice and snow to the office.
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Loan Ranger — Snow Ranger
Snowed in this week? Can’t get into work, or, perhaps worse, spending hours a day in commuting hell? The ranchers feel your pain, although, being more used to the sunny climes of the Wild West, we confess we found ourselves even less prepared than most for the onslaught of arctic conditions.
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Iceland’s Rebelliousness Roils The Markets
Greece's status as the black sheep of the eurozone looks secure for the foreseeable future. But outside of the currency club, Iceland is again attracting the wrong sort of attention amid signs that it is falling foul of the international capital markets.
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Loans at last
What a difference a week makes. Asia’s usually slow-moving syndicated loan market has already registered a clutch of new launches — I hear at least two more deals are set to come out before the end of the week — and bankers have only been back at their desks for four days.
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The cost of living large
After the blizzard of new banking regulations proposed in 2009, we might soon have an idea of how much these initiatives will cost, and what the industry will look like when regulators have finished with it. Initial estimates show some surprising results.
