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While the cult of the environmental, social and governance-linked (ESG) bond has gone from strength to strength in investment grade markets, with dedicated bond funds, attempts to build risk-free green curves and more than $100bn of issuance per year, the leveraged finance market — in loan and bond form alike — has been a laggard. But it’s where the rubber (from sustainable sources) really needs to meet the road.
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Six months into its inception, the ‘simple, transparent and standardised’ (STS) securitization framework seems to be doing its job. It has successfully established a market set to inherit the majority of ABS issuance, with issuers noting a raft of new investors operating in the sector. But have those buyers made a wrong assumption about how the ECB views STS deals? -
The suspension of the Woodford Equity Income Fund and the collapse of London Capital & Finance show how retail investors lack regulatory protection. This is strange, when a source of safer returns — bonds issued by large banks — is often deemed too complex and risky for the ordinary person to invest in.
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Greek stocks and bonds jumped this week on the news of a bad result for governing left-wing party Syriza in the European elections and the announcement of a snap national election, increasing the prospect of pro-market and centre-right party New Democracy taking power soon. But the revision of asset valuation on the back of this doesn’t add up.
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The speed with which sterling sub-sectors have switched their benchmark rate from Libor to Sonia has been astonishing. There’s still some way to go, particularly in the corporate market, but the transition, which looked almost unassailable in 2017, might just be done on time.
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Theresa May’s statement today that she will step down as leader of the Conservative Party on June 7 has increased the likelihood that the UK will leave the European Union without a deal, meaning capital markets need to prepare for the worst again.
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European commercial mortgage-backed securities (CMBS) have enjoyed a revival of late, despite the battering they took during the crisis years. Although regulators excluded the asset class from the Simple, Transparent and Standardised (STS) framework, it has shown that a select band of specialist investors is enough to get by in post-crisis securitization markets.
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While other central banks have started to grapple with climate change, the Federal Reserve has been conspicuous by its absence. But as green shoots begin to emerge in the US, the Fed will not be able to ignore the topic for much longer.
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There were widespread hopes earlier this year that not only would Italy’s Garanzia sulla Cartolarizzazione delle Sofferenze (GACS) scheme be extended, but it would also include a provision for loans classified as unlikely-to-pay (UTP).
