Comment - All Articles

  • If the buck ain’t broke, don’t fix it

    US regulators rightly acted to boost money market funds’ resilience to shocks after the Reserve Primary Fund “broke the buck” in 2008. But given the funds’ performance during the crises of 2011, further risk reduction proposals are unnecessary and could be detrimental to regulators’ intentions.

    • 31 Jan 2012
  • Renminbi deposit drop is bad news for loan market

    The shine appears to have come off the offshore renminbi market. Funding costs are rising, bond investors are posturing and some analysts now think that renminbi deposits in Hong Kong will actually fall this year, after an almost unbroken growth streak for the last two years. That is bad news for loans bankers.

    • 31 Jan 2012
  • How long-term is the LTRO?

    Moody's reckons the ECB's long term refinancing operation is credit negative for Europe's banks. It's hard to square this with the relief it is providing the sector, but the agency is right to warn of the dangers of relying on central bank funding.

    • 31 Jan 2012
  • Hester: a CEO betrayed

    The chief executive of RBS has been hounded into giving up a bonus that he had been awarded. No one — least of all the UK government — should be proud.

    • 31 Jan 2012
  • Southpaw: King calls on BarCap troops to go on the offensive

    Barclays Capital’s goal to be a top three player across all market products may seem ambitious. With the build-out now behind it, the bank believes it can be done. But staff will be under more pressure than ever: there will be no excuses for missing a deal, as David Rothnie writes.

    • 27 Jan 2012
  • The phony forbearance war is over

    Corporate default risk is back centre stage. Nine companies have defaulted so far this year, among them Switzerland’s Petroplus, Yell in the UK and the US’s Eastman Kodak.

    • 27 Jan 2012
  • Cake: having/eating

    Oh, how the grass is always, always greener. After a heavy six months of full time thumb-twiddling, when the market returned this month it seemed that everyone had apparently forgotten that the good ole days also had their tough points.

    • 27 Jan 2012
  • The Naked Broker: Not worth the candle

    After many years of commentating with unerring inaccuracy on things in my traditional sphere of Russian equities, I thought it was about time I paraded this talent for misprognosis on a wider basis.

    • 27 Jan 2012
  • Right twice a day

    If 2012 was shaping up to be a bad year for loans bankers, for one poor soul on syndicate it got a whole lot worse last week. Cycling into the office as he does every day, Tuesday’s downpour caught him by surprise, causing terrible traffic jams making the young pup late.

    • 27 Jan 2012
  • Chinese New Year with the culinary savant

    It was fun while it lasted. But Chinese New Year is now over for those of us left in Hong Kong. There is still a great mass of bankers and lawyers and investors sitting on south-east Asian beaches, or sliding down mountains in Japan. But, for you lucky few at your desks and able to read this fresh off the press, I hope you had more fun than me.

    • 27 Jan 2012
  • MTN Leak - Meatstalgia

    Who knew that enormous great big steaks could bring on a bout of nostalgia? An interesting fact, and one scientists (and advertisers) would do well to investigate.

    • 27 Jan 2012
  • Synthetic bond flow? Don’t hold your breath

    Debt bankers tried their best last year to drum up demand for synthetic currency bonds, but after the lacklustre performance of a few early deals combined with a big spike in investor caution, the market quickly fizzled out. Is there greater hope for the synthetic currency market this year? There is reason to think not. It might just be even worse.

    • 27 Jan 2012
  • Greek Debt Negotiations Continue

    The negotiations for the appropriate haircut for private sector involvement in a voluntary Greek debt restructuring continue.

    • 26 Jan 2012
  • Time is ripe for UK sukuk

    Indications that Luxembourg and Ireland could issue sovereign sukuk in the coming months have galvanised London’s Islamic market participants to demand a UK government rethink on the asset class. The Treasury appears no closer than it did a year ago to meeting this call, but the market looks perfectly primed.

    • 24 Jan 2012
  • Fade picks wrong moment to turn price maker

    Public sector debt markets, while better than they were in December, remain fragile and must be handled with care. Fade’s pulled five year bond is an early warning for SSA borrowers not to push pricing too far.

    • 24 Jan 2012
  • Some borrowers are more equal than others

    The disparity between the borrowing costs of identically-rated European companies from different jurisdictions has ballooned. The gap reflects the contrasting funding conditions for domestic lenders rather than a changed credit outlook at borrowers, but it may not last long.

    • 24 Jan 2012
  • Sound and fury over BTA, but signifying nothing

    Another year, another BTA restructuring, and this time around, creditors are adamant that it will lead to a reassessment of attitudes to Kazakh debt. That's an understandable reaction, but it looks unlikely.

    • 24 Jan 2012
  • Défense-ive finance: what the Coeur case means for covered bonds

    French courts threw out contractual rights when they ruled to protect the owners of the Coeur Défense tower from their creditors. But the answer to this isn’t self-righteous indignation. It’s to beware of any market that’s never seen a default.

    • 24 Jan 2012
  • We’re spammin’, we’re spammin’

    We live in an era of mass loquacity. We are bombarded on all sides by media in its various forms; print, social, televisual, EuroWeek and surely the most incontinent of the lot, stockbroking.

    • 20 Jan 2012
  • Goldman and the re-birth of the M&A banker

    Goldman Sachs has been quietly investing in its M&A business during one of the more vulnerable periods in its history. The idea is to bring through the firm’s next generation of dealmakers, writes David Rothnie.

    • 20 Jan 2012
  • MTN Leak - Bad weather

    The weather is miserable and the Eurozone crisis has returned, but that does not mean that there is no cause for celebration in the MTN markets.

    • 20 Jan 2012
  • Change of direction?

    Given that we are in a bonus season that’s likely to be a bit lighter than last year, it is understandable that some on the street are taking a moment to re-examine their career paths. Ahead of the traditional period of liquidity on the street, one global head of DCM appeared to be wondering what opportunities might be out there, and considering what attributes he had to offer.

    • 20 Jan 2012
  • SSA borrowers battle on

    Imagine if you will an embattled group of grizzled veterans and a short Frenchman in an alliance with some Germans struggling to maintain a grip on a European crisis. Never mind 2012: this could be 1812. Plus ça change, plus c’est la même chose, n’est-ce pas?

    • 20 Jan 2012
  • Loan Ranger: Happy New Year (again)

    A certain vampire squid institution renowned for strong armed tactics came under the cosh in a City bar on Friday night. According to one excited loans banker, one fresh-out-of-university vampire squid was negotiating a restructuring. She had been told that no matter what, one point on the contract had to be amended.

    • 20 Jan 2012
  • Strong January Set For Credit

    Barring a capitulation next week it looks set to be a relatively strong January for sovereign credit and credit in general.

    • 19 Jan 2012
  • Looking for tips in all the wrong places? Why not!

    CLSA has again issued its surprisingly reliable Feng Shui report, the product of its interviews with feng shui masters and its own analysts.

    • 19 Jan 2012
  • EMERGING MARKET LOANS

    There are tentative signs that underwriting is returning in emerging market loans. If the trend becomes established, it would mark a big change from the wariness of 2011.

    • 17 Jan 2012
  • Indian IPO hopefuls should not delay

    Indian companies hoping to raise equity do not have the luxury of time. State elections at the start of this year and next, and the national vote in two years, will leave them little time to appeal to foreign and domestic investors without populist political rhetoric getting in the way. The start of the new financial year in April should be their starting gun.

    • 17 Jan 2012
  • Downgrade reaction offers a lesson for the PSI

    S&P’s European sovereign downgrades last week were well telegraphed and followed sentiment rather than leading it. They offer a lesson for all those involved in the Greek debt swap negotiations in how not to make a drama out of a crisis.

    • 17 Jan 2012
  • Deal boom is a sign of stress — but who cares?

    Why are companies issuing so many bonds? They are worried funding conditions will deteriorate, as sovereign turmoil, international tension or economic gloom start to gnaw at investors’ souls. That could suggest investors are wrong to buy the deals now. But money needs a safe home, and at the moment, corporate debt is it.

    • 17 Jan 2012
  • Asia's bond rally is impressive, but scary too

    Asian bond issuers have had an impressive run so far this year, closing a record amount of deals in just a few weeks. But the more crowded the market becomes, the more likely it is that the window of opportunity will slam shut.

    • 17 Jan 2012
  • Aussie issuers should stick closer to home

    Commonwealth Bank of Australia’s ground-breaking Aussie dollar covered bond deal is the story that everyone was waiting for. Its success disproves the conventional wisdom that euros and dollars are the only really liquid markets.

    • 17 Jan 2012
  • The trillion euro question

    As banks look ahead to the second long term refinancing operation from the ECB next month, recycling that cash into high yielding sovereign paper seems like an obvious strategy. But that does not mean they should.

    • 17 Jan 2012
  • Polkomtel will test HY investors’ guts on disclosure

    For the last couple of months, European high yield investors have seemed to be making real progress in their battle to win better disclosure from issuers — something long enjoyed by US investors. But now, after a long deal drought, along comes Polkomtel, seeking €900m but without the full disclosure many funds want. Will investors have the courage to turn it down?

    • 17 Jan 2012
  • The return of underwriting

    There are tentative signs that underwriting is returning in emerging market loans. If the trend becomes established, it would mark a big change from the wariness of 2011.

    • 17 Jan 2012
  • Aiming lower: sovereign moves could ease ABS pressure

    ABS issuers could aim for lower ratings, dropping their fixation on hitting triple-A, Standard & Poor’s suggested last week. Now, thanks to other rating actions, the agency may have a point.

    • 17 Jan 2012
  • Michelangelo and markets

    Gary Jenkins thinks he has discovered a new art form, something that combines the grace of Michelangelo and the surrealism and shock of Picasso and which will hold the fascination of any aficionado of the bond market.

    • 13 Jan 2012
  • Hit the ground limping

    Here we are: 2012 and right back in the thin of it. It’s slowed down after a slow start and I expect things to slow down from here before coming to an eventual and perpetual halt at some stage this spring. I’ve been back in the orifice for three days now and it’s fair to say I’ve hit the ground limping. I’m already a week behind everyone else because I couldn’t actually face showing up to work those first few days in January.

    • 13 Jan 2012
  • AA — more than just a rating

    Who does Noel Williams, RBC’s SSA syndicate supremo, call when he’s stranded half-way up a snow-covered mountain in the French Pyrenees? Mountain rescue?

    • 13 Jan 2012
  • Take That! And... do some MTNs?

    It’s a new year, and Leak is full of ideas for resolutions. Polling the market this week, one early contender has emerged — the seasonal favourite — eating weird food.

    • 13 Jan 2012
  • Nomura falls out of love with Lehman dream team

    The departure of the top two bankers in Nomura’s wholesale bank effectively ends the Japanese firm’s global bulge bracket aspirations. It also shows that Nomura has abandoned its previous position of seeking to retain the former rump of the Lehman business at all costs. David Rothnie reports.

    • 13 Jan 2012
  • You gotta fight for your right to leverage

    Pity any poor investment grade loan bankers whose New Year’s resolutions were to be more productive in 2012. It must be pretty exhausting thinking of new ways to say “we’re optimistic that we’ll see more M&A this year”. And just think of all the paper cuts you get from shuffling piles of documents in an attempt to keep busy.

    • 13 Jan 2012
  • SSA market should be handled with care

    With €19bn of new euro paper and $8.5bn of new dollar issuance this week, you would think that all was right again in the sovereign, supranational and agency market. Think again. This was a great week compared to what many people’s expectations were before Christmas but as with many things in the post-festive period there are signs of strain, flab and economic distress.

    • 13 Jan 2012
  • Bond Auctions Hook CDS Investors

    Participants in the sovereign credit markets haven’t had much to go on in 2012, so when a relatively important event occurred they seized on it.

    • 12 Jan 2012
  • The surest way to bolster your salary: lai see

    Given the poor end to last year and the lack of activity in equity and loan markets, with Chinese New Year fast approaching, now is the time to think about how to fill those lovely lai see envelopes.

    • 12 Jan 2012
  • Visit Switzerland — the funding’s great (for corporates)

    Swiss francs has been a backwater for corporate bonds, but no longer. Displeased by the sovereign and banking crises, Swiss investors want corporate debt above all — and they are much more broad-minded about ratings than they used to be. Corporate treasurers should book a flight to Zurich, while the craze lasts.

    • 10 Jan 2012
  • Greek PSI geared up to cause chaos

    The Greek debt burden, we are often told, is a trifle compared to the rest of Europe’s debt woes. But the Private Sector Initiative, first touted in the summer and designed to help banks and sovereigns alike through the crisis, is still causing headaches for participants. It threatens to devastate all attempts to restore confidence to markets.

    • 10 Jan 2012
  • Poor Fuggers — is Spain bust again?

    Sovereign default in Europe is as old as finance. Bankers and states have been locked in a tussle for centuries. But who has got the best of it? Defaults damage lenders and borrowers, but both usually survive, if not in the same form then in the same spirit.

    • 10 Jan 2012
  • A leaner RBS could be keener and fitter

    The future of Royal Bank of Scotland’s ambition as a global investment bank will be decided in the coming weeks. Don’t write the firm off. RBS was not strong in the threatened business lines anyway. It remains a top player in debt. If it decides to make a go of it, RBS has a good chance of thriving as a debt-based investment bank.

    • 10 Jan 2012
  • Liquidity is the new obscenity

    Defining liquid assets is always going to be a problem; the whole concept is flawed. The best regulators can do is use the Supreme Court’s standard on obscenity – “I know it when I see it”, in the words of Mr Justice Potter. Results otherwise are likely to prove perverse.

    • 10 Jan 2012
  • Europe doesn’t believe its own rhetoric

    If the European Parliament is writing bail-outs into CRD IV, what happened to the last four years of political and regulatory debate?

    • 10 Jan 2012
  • ECM bankers: gently does it as Chinese New Year approaches

    Chinese New Year is just around the corner, and ECM bankers in the region know that means they cannot expect any big IPOs over the next few weeks. But while they are right to turn to block trades to keep themselves busy, caution is a must: the market is on shaky ground, and too many aggressive deals at once could damage sentiment for the rest of the quarter.

    • 10 Jan 2012
  • An Eastern Front

    It has been an inauspicious start to the year for the sovereign credit markets. A rally on the first day of trading proved ephemeral as the old bugbears of the debt crisis weighed on sentiment.

    • 06 Jan 2012
  • Euroblog: C’est l’amour...

    The ladies of the Euromarkets are inconsolable at the news that one of the EM’s finest, the Del Boy of the capital markets Nick Darrant of BNP Paribas, has taken himself off the shelf in style.

    • 06 Jan 2012
  • Loan Ranger: And a happy new year?

    Loan Ranger is aquiver with anticipation at what 2012 will bring. A brand new year means a brand new set of balance sheets awaits. But while the start of the year often makes people giddy with the thought of all the opportunities out there for the next 12 months, this year the market appears much more downbeat. There’s still little dealflow in sight, and nobody expects underwriting or even bookrunning roles to pick up this year. Many people might like to put 2011 behind them, but for those in the leveraged market that still have those bridges hanging around like a bad smell, this is more easily said than done.

    • 06 Jan 2012
  • Fireworks from EFSF call SSAs to action

    Defying many bankers’ fears, the sovereign, supranational and agency bond market has made a rousing start to the year. Most significant of this week’s $16.7bn of benchmark deals in dollars, euros and sterling was the EFSF’s return to form.

    • 06 Jan 2012
  • MTN Leak: Future's cloudy

    Seemingly every economist on Earth has been forecasting a cloudy economic year for 2012. We at Leak speculate that this outlook has been prejudiced by the poor weather that has enveloped the entire planet — or at least the places where the MTN crowd spent their festive holidays.

    • 06 Jan 2012
  • Southpaw: RBS’s withdrawal leaves Lazard with tough job to sell Hoare Govett

    As RBS takes the knife to its global banking and markets division, buying the equities platform would be an ideal way for one of the emerging forces in global investment banking to enter this business, writes David Rothnie. The problem is there are few candidates willing or able to take it on.

    • 06 Jan 2012
  • Between two celebrations, my resolve is gone

    Welcome back from your Christmas breaks, readers. I hope you all had a better time of it than I did. I don’t mean to sound like a Scrooge while the memories of crackers and mulled wine are still so fresh, but Christmas is probably the hardest time in the world for those in my position: an overweight booze hound trying to prove to his wife that he can live a nice and healthy lifestyle.

    • 05 Jan 2012
  • Asian markets will adapt — and prosper

    Forget the Mayan predictions, 2012 is not going to be the end of the world. Asian investors in particular have a lot to be optimistic about. But as the Asia Pacific region adjusts to changing economic conditions in other parts of the world, bond investors and issuers alike will have to change too.

    • 05 Jan 2012
  • Opinion: Asian markets will adapt — and prosper

    Forget the Mayan predictions, 2012 is not going to be the end of the world. Asian investors in particular have a lot to be optimistic about. But as the Asia Pacific region adjusts to changing economic conditions in other parts of the world, bond investors and issuers alike will have to change too.

    • 04 Jan 2012
  • EFSF three year is a cautious toe in troubled waters

    The EFSF is the right borrower to bring the first SSA trade of the year. But anything less than a smooth print this week for the bail-out fund will be a missed opportunity to set much needed calm market conditions for the rest of the month and possibly even, rest of the year.

    • 03 Jan 2012
  • If the ECB loves collateral, it should set it free

    The ECB is going to be the only bank that grows this year. It therefore needs to start acting like one. That means getting its vast warehouse of repo collateral back out to a market that desperately needs it.

    • 03 Jan 2012
  • Asian markets will adapt — and prosper

    Forget the Mayan predictions, 2012 is not going to be the end of the world. Asian investors in particular have a lot to be optimistic about. But as the Asia Pacific region adjusts to changing economic conditions in other parts of the world, bond investors and issuers alike will have to change too.

    • 03 Jan 2012
  • A Happy New Year? EuroWeek weighs the odds

    The dawn of 2012 brings new hope — and new fears. The sense of foreboding in financial markets is pervasive, but sentiment is self-fulfilling. Investors, bankers and funding officials alike must approach the year with determination and calmness, or the troubles besetting markets will only get worse. There are many good reasons to feel confident, as well as to worry. EuroWeek highlights five of each.

    • 03 Jan 2012