The View - All Articles

  • Sustainability-linked bonds: I should Coco

    The recent high profile spurt of sustainability-linked bonds, including deals from Brazil’s Suzano, Switzerland’s Novartis and, coming this week, France’s Chanel, is a sharp change, after this structure — where the coupons are linked to sustainability performance targets — has made a surprisingly quiet and disappointing start to life.

    • 22 Sep 2020
  • ECB risks disturbing nest of German legal vipers

    The ECB is considering imbuing its regular asset purchase programme with the powers reserved for its special Pandemic Emergency Purchase Programme (Pepp). From the central bank's perspective it’s a tempting move, but it could tip the eurozone into full-blown yield curve control and would certainly draw the ire and no doubt legal challenges from some in Germany.

    • 22 Sep 2020
  • Covid-19 could hand more power to the ECB

    The European Central Bank would stand to gain more autonomy as a result of new proposals on how to improve bank capital rules.

    • 22 Sep 2020
  • UK government virus switcheroo risks City's long-term health

    The UK government’s sudden volte face on working from home on Tuesday may slow coronavirus infections but it betrayed a fundamental lack of strategic thinking and stability over the most pressing issues. That should worry the City, which is in a fight for its future as a major financial centre as a result of Brexit.

    • 22 Sep 2020
  • ESNs can help the ECB exit QE

    If the European Central Bank is serious about eventually scaling back its quantitative easing programme and encouraging a return to normal market funding, it will need all tools at its disposal. That suggests there is good scope for an instrument that delivers a low cost of funding, which supports the European economy. European Secured Notes, which are likely to form part of the European Commission’s capital markets action plan — to be unveiled this Thursday — could provide the answer.

    • 22 Sep 2020
  • Taiwanese banks should hold their ground on loan pricing

    Formosa Plastics Corp is gearing up to set a new pricing benchmark with its planned $2bn loan, which bankers reckon could be a record low for a borrower from Taiwan. If the company succeeds, it could set a dangerous precedent for the long-term health of Asia’s loan syndication market.

    • 22 Sep 2020
  • Goodwill towards bank M&A has misrepresented badwill

    An accounting practice called badwill is central to debates about European bank M&A — but it probably should not be, as it leads to some confusing rhetoric.

    • 16 Sep 2020
  • The covered bond paradox: the best and worst of times

    Surging covered bond issuance that is printed only for repo at the central bank and official sector purchases means that the asset class is now less relevant for market funding purposes than ever before. If this continues, the systemic importance of the €2.7tr global market will be undermined just as efforts to develop it look to bear fruit.

    • 15 Sep 2020
  • UK’s hand is weak against acquisitive foreigner bidders

    In just a few days, two of the UK’s largest companies have had acquisition offers made for them by North American rivals. Heading into the 11th hour of a still chaotic Brexit process amid the highest national redundancy levels since the global financial crisis will have more foreign buyers circling yet.

    • 15 Sep 2020
  • BOC lays blue foundation; now others should follow

    Bank of China has opened a new area of sustainable investing with Asia’s first blue bond. The excitement over the potential for sustainable ocean-related financing in the region is justified — but the market should temper its expectations.

    • 15 Sep 2020
  • EU could give sustainable bond market the biggest boost

    The European Union is about to kick-start its huge borrowing programme for the Support to Mitigate Unemployment Risks in an Emergency (SURE) fund later this month. It is expected to bolt on additional financing needs for its recovery fund too, once that has been ratified. That could mean up to €100bn of new supply by the end of next year. Printing that as sustainability bonds will give that market the best fillip it could wish for. The EU must seize this opportunity given its commitment to the cause.

    • 08 Sep 2020
  • Fear of the FAANGs

    Equity investors should be nervous about US tech valuations as the fabled FAANG (named for Facebook, Amazon, Apple, Netflix and Google) stocks look extremely expensive after reaping in the cash during the equity rally that followed the initial Covid-19 sell-off. With valuations at near-preposterous levels and the macro-economic environment worsening with rising Covid-19 cases and a bitter election around the corner, market moves down last week could be a sign of worrying times ahead.

    • 08 Sep 2020
  • Asia’s answer to green bond push lies in China property

    Green dollar bonds from Chinese high yield real estate developers are rare, but property companies have the potential to push the green market in the region to the next level — and see some pricing benefits in the process.

    • 08 Sep 2020
  • UK retail is injured but it has ripped off the plaster

    The coronavirus has been seen in some quarters as the final nail in the coffin for the long suffering UK retail sector. But having embraced e-commerce earlier than elsewhere, the sector may learn lessons from the crisis faster and emerge stronger, which means UK CMBS holders might not be in as bad a spot as they imagine.

    • 01 Sep 2020
  • It’ll take more than sandwich sales to get the City thriving again

    City workers used to go to ubiquitous sandwich chain Pret A Manger because it was close to the office. Now, the UK government wants us to go to our offices because they’re near a Pret. Yes, the City’s retail and commercial property economies are in trouble, but cajoling people back to the office is not the answer.

    • 01 Sep 2020
  • Singapore: a case study for Libor transition

    Singapore has been a front-runner when it comes to moving away from Libor to a new benchmark, with its regulators, borrowers and banks playing an active role in preparing the market. The rest of Asia’s loan market should pay attention.

    • 01 Sep 2020