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The Covered Bond Directive is reaching a critical stage that will determine the market’s form and shape for years to come. Luca Bertalot, general secretary of the European Mortgage Federation and European Covered Bond Council, discusses this — and other key factors that will drive the market in 2019.

Capital instruments issued by financial institutions under previous regulatory regimes was a topic of contention in several instances this year. With regulators set to lay down further positions, legacy capital will remain on the agenda in 2019.

Falling global stock markets and and billions of dollars of equity fund redemptions mean ECM bankers will have to be careful with what deals they bring when markets reopen in January.

Supply of MREL-eligible debt is expected to boom in 2019, when all European banks will finally be in a position to issue senior bonds that count towards the requirement. But a full range of issuers will be competing to issue these new and more expensive instruments at a time when markets are becoming increasingly volatile. Stand by for pulled deals and creative funding strategies.

Bond and currency markets rallied on Monday after Mexico’s new president Andrés Manuel López Obrador (Amlo) presented a budget that Fitch said marked a continuation of Mexico’s existing fiscal framework.

Emerging markets, reeling from a dreadful fourth quarter, should return to form in January, in spite of the bad conditions prevailing in the broader market.

GlobalCapital has put together a series of infographics looking at the financial institutions bond market in 2018 and in the year ahead.

After several years of very favourable conditions in new issue markets, 2018 has turned into something of a bitter pill for financial institutions. A sharp repricing of risk pretty much wiped out investment returns for many funds, as the market faced up to concerns about global growth, the end of QE and the rise of populism in mainstream politics. This backdrop made life extremely difficult for issuers and bookrunners wanting to make the most of the primary market. GlobalCapital wanted to reward the new issues that achieved stand-out results for issuers, in terms of pricing, execution and timing. The winners are presented here:

As central banks retreat from public markets, spreads are widening in dollars and euros, and cross-currency basis swaps are improving for international borrowers, Swiss bankers believe the good times might be returning to a market once known the world over for diversification and arbitrage.

Europe’s leveraged finance market has survived another year without a downturn — indeed, spirits are remarkably buoyant going into 2019. The market is priced for perfection, however, and with rates starting to rise, issuers and investors have some serious forward planning to do. Victor Jimenez reports.

Caius Capital and UniCredit have settled a dispute over a hybrid capital instrument issued by the latter. Caius will pay the bank an undisclosed sum, after UniCredit sought around €90m of compensation for damages back in August.

After back to back record years for non-UK sterling SSA supply, the 2019 outlook is obscured by thick Brexit fog. Nevertheless, public sector borrowers have a host of non-core currency options to tap as currency diversification becomes increasingly important.