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MORLEY FUND MANAGEMENT

Asian Credit Derivatives House Of The Year

ALLEN & OVERY

ROBERT REOCH

DEUTSCHE BANK

BARCLAYS CAPITAL

Deutsche Bank is transferring a senior fund-linked derivatives staff member to a new role in Tokyo. Gareth James, responsible for fund derivatives in London, will head fund derivatives structuring and origination in Asia. A date for the move and further details could not immediately be determined and James was traveling and could not be reached for comment.

The reasons why hybrid debt is a suitable tool to raise capital are many: it can be used to finance share buy-backs or protect ratings; it is cost-effective relative to equity; it can give companies with a controlling shareholding a non-dilutive source of capital. And as ever this year, M&A is one of the chief drivers of issuance, as Germany's Linde showed by becoming the first company to return to the hybrid market with a second issue, to help finance its acquisition of UK gases company BOC.

Occasionally in the capital markets, a blue chip company's use of an innovative instrument can give validity to a previously peripheral asset class. Siemens' Eu2bn equivalent euro and sterling hybrid issue in September did just that for corporate hybrids, with a heavily oversubscribed order book, competitive execution, and protection for the issuer against future changes to rating agency methodology. Given its success in the aftermarket, Siemens' transaction may be the green light other companies were hoping for before raising hybrid capital.

Since losing their state guarantees in 2005, Germany's Landesbanks have been exploring a variety of funding strategies, secure in the knowledge that they had stockpiled plenty of cash in advance. The jumbo Pfandbrief market has been a favoured method, offering competitive funding costs. However, private placements are cheaper still and are becoming more popular. Meanwhile, covered bonds backed by local savings bank mortgages could find a route to market via Luxembourg. Neil Day reports.

In keeping with the rest of Europe, a surge in issuance of commercial mortgage backed securities (CMBS) has been the principal driving force behind the powerful expansion of Germany's structured finance market in 2006. Philip Moore reports.