FIG - Article Archive

  • Crisis forces hard choices on European banks

    The coronavirus crisis has reshaped many aspects of finance, but not the line-up of top investment banks. It does appear to have pressed some firms into sharp decisions, though.

    • 13 Aug 2020
  • Investors find reasons to be cheerful about bank credit

    A sombre set of second quarter earnings has done little to frighten credit investors away from European banks this month. Fund managers believe the sector is well capitalised enough to withstand any reasonable shock from Covid-19, putting subordinated bonds in an ideal position to rally into the end of the year, writes Tyler Davies.

    • 13 Aug 2020
  • What’s next for Société Générale and Natixis?

    Société Générale and Natixis have purged their senior ranks following second-quarter losses and to prepare for strategic revamps, but David Rothnie thinks the future will remain challenging for both.

    • 13 Aug 2020
  • Senior rally puts dollar covered bonds 'in the shade'

    An improvement in the cross-currency basis swap has made dollar funding look more attractive to covered bond issuers, but this is not expected to lead to higher supply with bank senior unsecured dollar paper looking the more compelling option.

    • 13 Aug 2020
  • Citi makes decent fist of covered trading

    Citi has taken market share from other banks in the past year to become one of only four that account for 60% of all secondary market covered bond volume traded on Bloomberg so far this year, thanks to a combination of devoting balance sheet to trading and having the appetite to take risk.

    • 13 Aug 2020
  • FIG bankers predict homeworking will facilitate post-summer supply

    FIG market participants expect a smooth return to euro bond issuance from next week, with bankers and investors now set up to facilitate deals where ever they may be.

    • 13 Aug 2020
  • S&P highlights ‘inherent structural tension’ in green bank capital

    S&P has warned there is no smooth way for banks and insurers to direct proceeds from debt capital instruments towards specific green financing objectives. It recommended that these issuers instead focus on making broad commitments through their green subordinated bonds.

    • 13 Aug 2020
  • AMC bond supply back with a bang as Great Wall takes $500m

    China Great Wall Asset Management Co reopened bond supply from the country's bad debt managers this week with a tightly priced $500m deal.

    • 13 Aug 2020
  • Covid curveball complicates Cédulas reform

    Spanish Cédulas reform has been widely anticipated for years. However, whether Spain is ready to execute the sweeping reforms necessary to bring the regime into line with the European Union’s covered bond directive remains to be seen, as the impact of the coronavirus risks diverting attention.

    • 12 Aug 2020
  • Prudential could roll off debt after split with US operations

    Prudential plc confirmed this week that it intends to separate from its US arm, Jackson National. The move means Prudential will likely deleverage by letting bonds roll off over the next two years.

    • 12 Aug 2020
  • ECB fears banks may be ‘overestimating’ their internal capital levels

    The European Central Bank has asked financial institutions to justify why they are using additional tier one and tier two bonds as sources of internal capital, highlighting its concern that the instruments lack real economic value.

    • 12 Aug 2020
  • EDDI forum to hold first meeting next month

    A temporary forum created by the European Central Bank to discuss the proposed European Distribution of Debt Instruments (EDDI) project will hold its first meeting in September.

    • 12 Aug 2020
  • WFH has brought fintech to the core of capital markets

    Some argue that innovation has taken a backward step in the pandemic with the loss of people working in close proximity bouncing ideas off each other. But that’s not the case in the capital markets. In fact, working remotely in such a vast but archaic business has brought the use of technology to the centre of discussions.

    • 11 Aug 2020
  • Nomura sets out covered bond trading ambition but has a way to go

    Nomura has ambitions to improve its covered bond market making presence, but it has a long way to go before getting close to the top, where Citi, Santander, and JP Morgan all occupy a clear lead, according to investors.

    • 11 Aug 2020
  • Lloyds conducts bi-lateral covered bond buy-back

    Lloyds has bought back a small amount of sterling covered bonds on a bi-lateral basis. Most investors that wanted to hand back bonds will have already done so in its previous public tender offer.

    • 11 Aug 2020
  • HSBC launches TLAC tender and senior bond

    HSBC Holdings has launched a tender offer for nine short-dated senior securities in dollars as it looks to optimise its liability structure for the total loss-absorbing capacity (TLAC) requirements. The announcement followed a dual-tranche senior deal in the same currency.

    • 11 Aug 2020
  • Fed sets high capital targets for European bank subsidiaries

    European banks will be subject to some of the Federal Reserve’s highest capital targets, after the US regulator switched to using stress test results as the main input for its requirements.

    • 11 Aug 2020
  • French banks may pre-fund with covered bonds

    French banks have been among the most active issuers of covered bonds so far this year but, with the pace of mortgage origination expected to slow and deposit inflows rising, further supply is less certain with pre-funding for next year becoming an option with doubts over the longevity of the prevailing strong market conditions.

    • 10 Aug 2020
  • European banks get ready for euro trades

    FIG deal arrangers say the euro market could reopen for business as early as next week, with more investors set to return from their holidays.

    • 10 Aug 2020
  • Dark clouds gather over European bank credit ratings

    The outlook for bank credit ratings deteriorated more sharply in Europe than in any other region over the first six months of 2020, according to Fitch.

    • 10 Aug 2020
  • Vereker turns up at Santander UK

    Six months after joining JP Morgan, William Vereker has been named as the next non-executive chair of Santander UK.

    • 07 Aug 2020
  • Bank of Cyprus sells €916m of NPLs to Pimco

    The Bank of Cyrus has announced the sale of a €916m non-performing loan (NPL) portfolio to Pimco, dubbed Project Helix 2 after the first Project Helix cleared €2.7bn of NPLs from the bank’s balance sheet.

    • 07 Aug 2020
  • Lower covered bond issuance increased OC levels, says Fitch

    Overcollateralisation (OC) levels have increased on covered bond pools since last year for European issuers, Fitch Ratings said this week. But while issuers in some countries, like the UK, showed a rise above the average, borrowers that have participated in central bank funding, like those in Germany, have managed to keep OC levels down.

    • 07 Aug 2020
  • Investors embrace new AT1s as extension risk evaporates

    Investors have been more than happy to buy into new additional tier ones (AT1s) this year, with a rise in spreads having minimised the risk that deals could be extended beyond their first call dates.

    • 07 Aug 2020
  • Govs face dilemma on relief measures

    Financial authorities face a tough call on how and when to exit from the exceptional regulatory relief measures they put in place to shelter borrowers from the worst impacts of the Covid-19 pandemic, according to the Bank for International Settlements (BIS).

    • 06 Aug 2020
  • Bank capital: more than meets the eye

    The coronavirus crisis is a further reminder that fundamentals are not the only thing that matters when investing in bank capital.

    • 06 Aug 2020
  • European banks turn to sub debt in Yankee summer spree

    Subordinated debt transactions in dollars from a trio of European banks left no doubts about the strength of the Yankee market this week. Bookrunners are encouraging issuers to execute trades in the asset class quickly, as they are unlikely to encounter better conditions before the end of this year, writes David Freitas.

    • 06 Aug 2020
  • Small banks pin hopes on BoE reducing the scope of MREL

    Smaller UK lenders are hoping the Bank of England will limit the scope of the minimum requirements for own funds and eligible liabilities (MREL) this year, relieving them of the potentially challenging task of raising new bail-inable debt in the capital markets.

    • 06 Aug 2020
  • Cost cuts central to Gottstein's Credit Suisse shake-up

    Credit Suisse chief executive Thomas Gottstein has brought its investment bank back together but threatens to leave it with a diminished corporate finance business, David Rothnie reports.

    • 06 Aug 2020
  • Market welcomes new Natixis CEO Namias

    Investors appeared positive on Natixis's prospects after Nicolas Namias replaced François Riahi as chief executive. Meanwhile, the bank has said it will reposition its equities division after it endured another tough quarter.

    • 06 Aug 2020
  • Dutch insurers resume dividend payments after strong earnings

    Solid financial results are encouraging Dutch insurance companies to resume dividend payments and share buyback programmes after getting the green light form the national regulator.

    • 06 Aug 2020
  • UniCredit turns profit with bolstered MDA buffer

    UniCredit returned to profit in the second quarter with a larger pool of excess capital to reward shareholders from next year, if the European Central Bank gives its permission.

    • 06 Aug 2020
  • BoE floats ‘temporary changes’ to capital buffers

    The Bank of England has said it may be necessary to make ‘temporary changes’ to capital buffers in the UK, owing to concerns that the existing framework could discourage banks from lending during the coronavirus pandemic.

    • 06 Aug 2020
  • Nykredit readies last tap of biggest ever covered

    Danish covered bond auction season is underway with Nykredit and Nordea announcing sales. August’s auctions also provide the last opportunity to buy certain 30-year callable bonds, of which one is the largest covered bond ever issued.

    • 06 Aug 2020
  • CMB Leasing revives 10yr bonds for China FIG

    CMB Financial Leasing Co returned with five year and 10 year dual-tranche bonds on Wednesday, selling the first decade bond from a Chinese FIG credit in more than a month as costs for longer-dated notes fall.

    • 06 Aug 2020
  • Commerz warns on corona impact for corporate clients

    Commerzbank expects its corporate division to remain under pressure from the coronavirus crisis in the second half of the year, after a second quarter where international firms rushed to take out debt products but the bank was stung by a large single provision, understood to relate to disgraced payments company, Wirecard.

    • 05 Aug 2020
  • MREL woes resurface for Metro Bank

    Metro Bank has said that it could slip below its minimum requirements for own funds and eligible liabilities in the coming months. It is paying close attention to a review of MREL being carried out by the Bank of England, which may help it to avoid embarking on another costly debt-raising exercise.

    • 05 Aug 2020
  • BNPP sells MTNs linked to new Aussie climate index

    BNP Paribas has issued a series of green medium-term notes linked to the performance of the new Australian Climate Transition Index (ACT), which is made up of companies expected to thrive in the transition to keep global warming below 2°C.

    • 05 Aug 2020
  • Squeeze tightens but no room for complacency

    European Central Bank covered bond buying and mounting covered bond redemptions will exacerbate a technical squeeze — but with Bunds set to underperform swaps, issuers cannot afford to be complacent.

    • 05 Aug 2020
  • Capital markets ready for insurer financing as FCA case ends

    The insurance industry is eagerly awaiting the result of a court case which would determine whether they have to pay out Covid-19 claims under basic business interruption policies. If the case goes against them some are expected to hit the capital markets for financing.

    • 05 Aug 2020
  • Barclays gives investors chance to grab dollar AT1 paper

    Barclays has following Credit Suisse in marketing additional tier one paper in dollars this week, bringing a deal on Wednesday that could be used to refinance an existing euro bond.

    • 05 Aug 2020
  • Is Monzo at risk of a capital crunch?

    The auditor for digital bank Monzo warned that a slower than expected recovery could lead it to breach its capital requirements, even though at the end of February it had a much better capital ratio than traditional banks. So what’s going on? GlobalCapital wonders if the risk is more about investors’ appetite to continue funding an unprofitable business than the bank breaching the requirements in the next few months.

    • 04 Aug 2020
  • Renovation revolution spurs green covereds

    The refurbishment of existing housing stock promises to deliver big strides in cutting global carbon emissions and will provide issuers with a large new stream of green collateral to issue green covered bonds.

    • 04 Aug 2020
  • Covid has bolstered the case for joined-up banking supervision, says BIS

    The coronavirus crisis has proven that central banks should have financial stability mandates encompassing both macro and micro-prudential policy goals, according to a new paper from the Bank for International Settlements.

    • 04 Aug 2020
  • Credit Suisse lifts lid on August supply with dollar AT1

    Credit Suisse opened books on a new additional tier one (AT1) in the dollar market on Tuesday, as bankers predicted that other European issuers could bring follow-on supply in the currency.

    • 04 Aug 2020
  • CICC seals $500m bond inside fair value

    A recent flurry of bonds from financial institutions did not dent appetite among investors for China International Capital Corp’s (CICC) $500m deal on Monday.

    • 04 Aug 2020
  • A close call for this year’s covered bond awards

    Just a few few votes separate the leading contenders in some of the categories in GlobalCapital’s Covered Bond Awards 2020 survey and, with the outcome uncertain, market participants that have not voted yet are encouraged to do so soon.

    • 03 Aug 2020
  • Embattled HSBC to press on with restructuring

    HSBC revealed a big increase in credit loss provisions in its second quarter results on Monday, as it vowed to step up the pace of its strategy shift. In the investment bank, it was a strong outing for fixed income and currencies trading, but a disappointing quarter for equities.

    • 03 Aug 2020
  • LCR amendment could disrupt Lux covereds

    The European Commission’s proposed amendment to the Liquidity Coverage Ratio Delegated Act suggests covered bonds, such as those issued by NordLB Luxembourg and others, could be excluded, which could extinguish banks’ demand for them. However, it is likely that a solution referencing the covered bond directive will be found.

    • 03 Aug 2020
  • BoE proposes closer look at lev ratio framework

    The Bank of England will open a new consultation on the way the leverage ratio works in the UK after it has finished reviewing the framework through its committees.

    • 03 Aug 2020
  • European banks consider dollar opportunities after results

    FIG deal arrangers predict the dollar market could come alive again in early August, as European banks exit earnings blackouts and weigh up their funding options.

    • 03 Aug 2020
  • Social bonds ‘come to the rescue’ during pandemic

    Social and sustainability bonds have blossomed in Asia amid the Covid-19 pandemic, with debt bankers expecting more supply from the asset class for the rest of the year.

    • 03 Aug 2020