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Century bonds might be smart funding for an issuer but they are also a signalling tool that tell us about investor desire, confidence and changing market cycles
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
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Since sovereign wealth funds have so much money and freedom of action, speculation about their likely actions is out of control. Last week private equity chiefs suggested they might replace investment banks in the leveraged finance market. Such tales are impossible to disprove, but rather than believing every fable, market participants should proceed from what is known. Many of the more high-flown stories would then seem fabulous.
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The real scandal on view in the UK Parliament’s debate on Northern Rock last week was not the Granite securitisation vehicle but the appalling ignorance of most people who attacked it. Politicians are cynical but lazy media reporting also fuels a culture of misinformation that is genuinely dangerous for the UK’s stability as a financial centre. The capital markets urgently need to find some eloquent and telegenic champions who are willing and able to restore some sanity to the credit crunch debate.
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One year on from China’s stock market wobble, the country’s Securities Regulatory Commission’s warned this week against irresponsible share sales fearing further listings could imperil the future of its equity market.
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With many European and US banks still licking their subprime wounds, borrowers in eastern Europe are turning to Asian and other eastern European banks to finance their loans. This is a welcome shake-up to the market, but such demand will remain marginal: for borrowers with big financing needs there is no substitute for the familiar loan powerhouses.
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The publication of 2007 results by leading banks was widely expected to be a watershed. With the subprime damage all out in the open, market participants believed, confidence would return and credit markets would be reinvigorated. That moment has come, but it is abundantly clear that the market crisis is not over. Recovery will take a long time, and things could still get worse before they get better.
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Since securitisation was at the centre of the US subprime mortgage market’s collapse, it is easy to think things would all have been different if covered bonds had been used instead. But covered bonds as we know them could not be used to finance subprime mortgages. Covered bonds have many merits, but solving the US mortgage market’s troubles is beyond them.