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Rabobank’s retained Eu50bn securitisation last week, through Best 2010, goes against the grain. But it’s worth sitting up and taking note, even if Rabo isn’t your average financial institution.
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Just when you thought there were enough acronyms in the world of regulation, the Financial Stability Board comes up with a new one. But this time, it seems misguided.
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Senior RMBS holders can only hope that Irish mortgage holders will be willing to shoulder the crippling burden through what is likely to be a long and painful period of austerity to amortise their notes.
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Banks took up just Eu12.5bn of financing from a European Central Bank tender operation on Thursday, as Eu37.5bn of funding fell due, indicating Spanish and Portuguese banks are reducing their central bank funding.
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To bring old securitisation favourites back to market, spreads need to come in. But this means alienating the ABS investors that have kept the market going this year.
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Bondholders can sometimes be their own worst enemy. The actions being pursued by holders of Irish bank debt are certainly not going to win them many friends. On several levels, they are unreasonable, and run the risk of making a bad situation worse.
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Senior bondholders must acknowledge their place in the recovery waterfall — and realise that going concern haircuts are not completely out of line.
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The latest difference of opinion between ratings agencies could lead to wide ratings differentials for the world’s biggest banks. Unsurprisingly, there are worries that this will encourage ratings shopping. But blind consensus ought not to be the aim either. As Wall Street’s Gordon Gekko might have said, disagreement is good.
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Necessity, not curiosity, should be the driver of bank capital deals now.
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In a surprisingly simple deal, Anglo Irish last week secured funding from a Swedish pension fund. But dealers — and Irish borrowers — should not get too excited: for many investors, Irish risk remains prohibitive.