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Oh, how quickly loans bankers come alive when an exciting new money deal is being touted! Aspen’s $2bn M&A facility, launched last week, brought with it a tidal wave of praise — most notably from bankers not even on the deal. But that didn’t stop them having a giggle at the basic mathematical mistake in the Aspen invitation email from Bank of America Merrill Lynch — one of the lead banks.
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The recent US Treasury volatility has hit emerging market bonds hard, but worse in dollars than in euros. Should CEEMEA borrowers therefore turn now to the euro market? The time for that push is not here yet, but it could come soon.
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Transparency will be the key to luring investors into Basel III-compliant Indian bank debt. Now that the buyside is on heightened alert, sweeping risky components under the carpet will only backfire on issuers.
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Europe has hit yet another stumbling block on the path to banking union, just as central banks are being urged to look for an exit from QE. Without a solid financial system, including a resolution framework which gives the public confidence that bank failures can be handled, growth will continue to be constrained.
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Traditionalists among the ECM set won’t be impressed, but plans for a £33bn distribution of Lloyds Banking Group and Royal Bank of Scotland shares to the general public are moving closer to fruition. Those whose eyes glaze at the mention of the “idea that just won’t die” would do well to look again: it is ECM structuring at its best.
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It would be mad to think that central banks around the world are about to slam the brakes on official stimulus. But the reaction to Ben Bernanke’s slightest of suggestions is a warning that central banks not only need a plan for how to unwind QE — they also need to talk about it.
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Covered bond issuers have finally woken up to the realisation that conditions are not going to get any better for them any time soon. Rather than hold out for yet another basis point, some have decided to pile into the market. There is a risk of overcrowding, but that’s probably better than the alternative — leaving it too late.
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The fuss over covered bond issuance and the impact of asset encumbrance on the senior unsecured claim is nothing more than a warm-up act for the main show — the fading away of senior unsecured bank debt.
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Bank of America Merrill Lynch’s aggressive expansion in Europe is striking fear into its rivals, writes David Rothnie.
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Moody’s sudden downgrade of Co-op Bank gave investors a very nasty shock, turning their senior debt into junk in one fell swoop. Bankers insist that this is an isolated case — but in reality it shows that investors are ignoring bail-in risk.