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The preference for a diverse group of lead managers and the convention of reciprocity keep covered bond bookrunning competitive despite concentration so far this year
Chemical sector's growing uncompetitiveness a problem when it comes to attracting investment in the capital markets
When staff complain, they deserve a fair hearing, not a wall of silence
Benin reaped the rewards of its sukuk debut last week, and will do so for years to come
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The strategic reasons for Westpac to buy St George Bank have not changed for years. What has changed is that St George, heavily reliant on wholesale funding, has been weakened by the credit crunch, especially its reliance on securitisation.
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The crumbling of the leveraged finance overhang is a rough process, verging on chaotic. Individual banks in syndicates are selling their positions without telling the others; opportunistic private equity funds are buying back their own debt below par. Most accept that some of this indiscipline is unavoidable, but loan bankers and the Loan Market Association are trying to decide where — and if — they can draw the line.
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Monoline insurer MBIA, nearly drowned by losses on subprime mortgage-related securitisations, appears to have hoisted itself out of the river and be crawling, still covered in mire, up on to the bank. Could it slip back? Look closely at its numbers and you may not be filled with confidence.
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For months the biggest impediment to recovery in the structured credit market has not been investors’ fear of defaults, but their fear of short term mark-to-market losses if CDOs fall further in price. Big asset sales, such as UBS offloading $15bn of US mortgage paper to BlackRock, will do a great deal to restore confidence that there is a realistic bottom to the value of securities and that it may be safe to buy.
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Spreads on Turkish debt have been knocked wider and investors unsettled. Why? This time it is not bad news on the economic front, but the ugly reappearance of political instability, as the elected government is threatened, this time with a court case. Self-appointed guardians of Turkey’s secularism should understand: what the country needs is for the AKP government to get on with its job.
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A US academic has suggested that credit rating agencies be paid partly in the bonds they have rated. This interesting take on the puzzle of how to maintain a viable rating system without perverse incentives has emerged from a casual private conversation. It shows that regulators need to take plenty of time and leave no stone unturned in considering how to reform the rating agencies.