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Even if you have never sailed a boat through a storm, avoiding a potential one is the obvious choice. But investors in the European bond markets have been sailing into storms they knew were coming all year.
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Industrial and Commercial Bank of China (ICBC) took plenty of plaudits last week, with a unique triple currency additional tier one (AT1) transaction that included a record-breaking offshore renminbi tranche. While some say that the trade was a testament to the depth of the CNH market, that is an argument too far. This was anything but a conventional trade. -
This week the ECB scaled back buying in the primary covered bond market and gave the private sector a chance to set the price.
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FIG dealmaking will return in 2015, but it will be smaller and less exciting than it has been in the past, writes David Rothnie.
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Russian Standard Bank is hoping to take a short cut to Basel III — using a consent solicitation to add write-down language to its old tier two debt. For investors worried about getting caught on the wrong side of the vote, RSB's proposal looks aggressive. But the function of bank capital is to protect the bank, not to simply reward investors without risk.
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Let’s hope FIG issuers learn their lesson from the avalanche of pulled senior unsecured deals over the last two weeks. One failed deal is unfortunate, but four looks careless.
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Martin Taylor, an external member of the Bank of England’s Financial Policy Committee, on Wednesday night delivered a broadside attacking the additional tier one market as it exists today, in a speech to the Oliver Wyman Institute.
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The European Central Bank's covered bond purchase programme is lowering funding costs but its price distorting effect is slowly but surely crowding out private demand. Recent deals from BNP Paribas and BPCE attracted less than 50 investors, when usually they would have attracted closer to 100. Central bank participation in primary books has more than doubled to 40% and, as bonds tighten further in the secondary market, private investors will be encouraged to take profit and sell to the only buyer in the Street.
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Bankers working on a loan for Promsvyazbank believe the hotly anticipated deal is imminent – and that it will do more to reopen the international market to Russian borrowers than Gazprom did with its bond last week.
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Journalists sometimes have to choose between being fast and being right. The Financial Stability Board, with its Total Loss Absorbing Capacity (TLAC) plans, has chosen to be fast, and a weaker financial system will be the result.
