Pre-migration untagged articles

The stampede of top European banks into the securitisation market to clean up their balance sheets before year-end became even more thunderous this week, as Barclays Bank priced its £5bn collateralised loan obligation and ABN Amro announced a Eu6.75bn CLO, foreshadowed by EuroWeek two weeks ago.

Brit Insurance Holdings launched the first public debt issue for a Lloyd's name yesterday (Thursday), a £150m lower tier two deal that was also a test of appetite for non-life insurers after this summer's hurricanes in the US. The trade is the first from the sector since Hurricane's Katrina and Wilma battered US coastal regions — indeed the issue was delayed from September as a result of the storms.

Indonesian coal miner Adaro has completed what is arguably Asia's most successful high yield transaction for the last eight months — a $300m five year bond that was increased to $400m after attracting $1.7bn of orders.

The sterling CDS and bond index (see EuroWeek 931) was launched this week, and the funded version of the index was sold as a £400m 10 year note. This will trade as closely as possible to the synthetic index but allows investors still getting used to the CDS market to participate in a funded form. The issue was lead managed by Royal Bank of Scotland, alongside co-leads ABN, Barclays, HSBC and UBS. The issuer is SDI Funding, a Dublin-based SPV, and the collateral is derived from the CDS positions and bank deposits.

It was another rollercoaster ride for the autos this week. At the close yesterday (Thursday), GMAC widened 10bp to close at 465bp mid after a newswire story quoted a United Auto Workers trade union official saying that a strike at Delphi was "highly likely". Earlier in the day GMAC had rallied after the auto firms announced November sales figures in New York. GM said sales had dropped 11% but raised its North American production forecast for the next quarter. Its price came back to 455bp after this encouraging news.

Single name and credit specific trading hogged the headlines in the default market this week. For TDC, the Danish telecommunications conglomerate, it was another week of fast and volatile dealing. It rallied about 80bp to 250bp mid-market on Wednesday after the consortium of private equity firms that is buying the Danish telecommunications announced that it was prepared to buy back all the outstanding bonds at par.

The much heralded ISDA Novation Protocol, to which 2,000 firms have signed up, will increase the backlog of unconfirmed CDS trades, according to John Lewis, vice president and general manager of Scrittura. "Just signing up to a Novation Protocol doesn't decrease the problem of extreme volumes, it increases it," said Lewis. This is because the protocol doubles the number of trade confirmations in any trade assignment that will be sloshing around the market.

The rush of issuance in the corporate bond market continued this week, but the reaction to new issues was mixed as issuers ceded to investors' demands for more generous pricing.