Americas

The US Federal Reserve has been raising rates for nearly three years now and was tapering its quantitative easing for two years before that. Meanwhile the European Central Bank was still cutting its rates and only in 2018 did it start tapering its quantitative easing. However, the change in the ECB’s policy may mean we see growth converging rather than diverging and it is something investors are already considering.

Atlantica Yield, the UK-based energy yieldco that was formerly Abengoa Yield, abandoned a $300m eight year high yield bond issue on Tuesday, as yields in the market reached their highest for over two years.

HSBC Canada opened books on Tuesday for its first covered bond and followed in the same three year maturity, and with the same starting spread, as DBS Bank's issue on Monday. But, after several hours, when the spread was fixed at the initial level, lead managers failed to update investors on the order book size, leading some to question how well the deal was going.

Dan Berkovitz, the US Commodity Futures Trading Commission’s newly appointed Democratic commissioner, has selected a new chief of staff and special counsel to assist him.

Société Générale has agreed to pay $1.34bn in fines and an enhanced monitoring programme for violating US sanctions against Cuba, Iran, Sudan, Libya, Myanmar and North Korea, according to notices issued by US agencies on Monday.

Colombian oil company Frontera Energy is increasing the reward bondholders will earn if they give it permission to make more payments to shareholders.

Some Latin American DCM bankers think the year is over for new issuance, and several are indeed wishing it already were. Although much of what put the brakes on in Lat Am this year will continue to affect the market in 2019, bond bankers should find reasons to believe January will be better.

Europe’s banks continued to lose global significance, according to the Financial Stability Board’s 2018 list of global systemically important banks (G-SIBs), although Groupe BPCE was re-added to the list. The French bank says this will not affect its funding plans.

Regulators' attempts to incentivise market participants to clear derivatives centrally have broadly worked, according to global watchdogs, though there are lingering concerns.

In this round-up, wealthy Chinese individual investors now have access to local government bonds, Russian and Chinese leaders in the financial industry are meeting to strengthen mutual market access, and northbound trading volume via Stock Connect reached Rmb8.77tn.

The two A-rated new issues shown to Lat Am bond buyers last week both traded well on Friday, but it was a different story for the bulk of the region as bankers have little hope of deals during the Thanksgiving week.

A strong bond market return from Bermuda on Thursday did little to cheer Latin America DCM bankers about prospects for the rest of the year as Brazilian paper company Klabin became the latest company from the region to wait after completing investor meetings.