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Jumbo leveraged buyouts are no longer cool. That at least was the view of private equity executives attending the Euromoney LevInvest conference. -
BNP Paribas’s recent deployment of securitisation techniques in the trade finance world is another useful showcase of how banks can offset increasingly expensive trade finance capital requirements. For this type of deal to become more commonplace, however, investors will need to become comfortable with securitization and trade finance — both of which require enormous amounts of expertise.
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EM debt bankers should not berate issuers for piling into the market in their post-summer rush. Co-ordination is impossible and issuers have every incentive to seek the best terms at the expense of others.
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Emerging market borrowers should be lining up to tap the loan market. Not only is there plenty of liquidity as this year's volumes scrape the record lows of 2012, but lenders have repeatedly shown their hands by letting clients get away with the sorts of terms treasurers usually can only dream about.
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There must be plenty of films to which bankers would like their deals to be compared. A League of Their Own, perhaps, or Chariots of Fire. But over the last few weeks a very different narrative has been playing out in the leveraged loan market. Two entities, produced just a few days apart, have faced vastly differing fates. We are of course in the territory of the 1988 classic, Twins.
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The Debussy CMBS from Toys R Us showed that bank arrangers are not irreplaceable. Investors are taking a more hands-on role in structuring. This should be welcomed if it gives them the confidence to buy riskier deals.
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How healthy is a loans banker? Not very, you might think. A diet of all things financing takes its toll, no doubt. The banker’s daily bread — a complex carb blend of margins, discounts, currencies and broader market fluctuations — isn’t easily digested. And the sleepless nights, oh the sleepless nights!
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A heavy burden of internal bureaucracy when dealing with emerging market issuers is nothing new to bankers. But while they have long accepted that they are there to help treasurers look good, these days they disagree with their clients over which funding strategy will put them in the best light.
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Near term maturities for speculative grade rated companies in Europe, Middle East and Africa are surging, according to a report by Moody's. The amount of debt issued by these companies that matures next year, has reached $101bn — a 20% increase from Moody's calculation of 2014 maturities a year ago.
