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Meeting the margin challenge
Clearing Houses collecting margin to manage their counterparty risks is perhaps the central tenet of the G20 plan to de-risk the derivatives market. To work, it depends on collateral moving quickly and efficiently between market participants and clearing houses. Time is tight and delays can have major consequences.
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AMBIF driving standardization across Asean+3’s local currency bond markets
The Asean+3 governments and regulators are maintaining their drive to create standardized bond and note issuance practices. The AMBIF initiatives began in 2014 and were followed by a pilot issue in the Thai baht bond market in 2015. Although there has been a hiatus since then the impetus towards uniformity is as strong as ever.
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Schuldschein from an international investor’s perspective
Penelope Smith, Director, Head of non-German Schuldschein Origination, DCM Loans at Commerzbank, considered the role of this unique private placement instrument in international investors’ portfolios.
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Italy is still Europe’s main political tail-risk
Europe’s investor prospects are superficially safer due to economic recovery, but elections in Germany and in Italy, especially, present tail-risks. This is a manifestation of deeper uncertainty urging a fresh approach to risk management.
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Chile’s risk score is higher than its ratings suggest
The rating agencies seem overzealous downgrading Chile, as commodity prices have rebounded from their lows and its financing problems are a temporary blip.
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Germany’s risk spike is not just election related
There are numerous risks for the government to address as the country prepares to elect a new parliament in September.
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10 Years of Green Bond Issuance at EIB
Developing a Lingua Franca for Green Bonds
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Country risk: Agrokor’s failings should not overshadow Croatia’s strong credentials
The sovereign borrower’s investment grade should be handed back, even allowing for the enforced restructuring of the food producer and retailer.
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Serbia’s credit risk is lower than the rating agencies suggest
The economy is on the mend and it is high time the raters take notice.
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The roadmap of change for collateral management
How banks, brokers and CSDs manage collateral is undergoing a once in a generation change. For market players looking at how they best prepare for this, it is important to analyse the process in which change occurs. In the world of collateral management, the revolution caused by new regulation is happening at the same time as the financial technology underpinning the sector is rapidly evolving. But that is not enough. Existing market players need to be willing adopters of the new ways of doing business, while outside innovators must also be allowed into the market. The final phase occurs when the market comes together to adopt a new set of standards that enshrines the revolution into a new way of working.
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CGIF’s new guarantee for construction risk in SE Asian greenfield projects
The financing of greenfield infrastructure projects in Southeast Asia has recently been boosted by the arrival of a new facility to guarantee bond investors against all risks during the construction period. The innovative solution was augmented on May 24 by the signing of a collaboration agreement between the Credit Guarantee & Investment Facility (CGIF), and Surbana Jurong Private Limited (SJ). The initiative is designed to boost the use of local currency-denominated project bonds to finance greenfield infrastructure projects in the Asean markets. GlobalCapital discussed the new facility with Kiyoshi Nishimura, CEO of CGIF.
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New opportunities in intraday liquidity
There has never been a greater need for banks to monitor and manage their intraday and overnight liquidity provisions.
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Indonesia’s borrowers ready to reap rewards of deeper debt markets
As one of the fastest growing economies of all the G20 countries, Indonesia is on the up. Having taken some difficult decisions after coming to power in 2015, Joko Widowo’s administration is reaping the rewards with growth accelerating, a budget deficit below 3%, and inflation tamed. The benign economic background has helped the Indonesian government become one of the most sophisticated sovereign borrowers in the international market
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Portugal’s declining risks should return its complement of investment grades
It won the Euros, it won Eurovision – now it is time to win back its lost investment grades.
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Green Bonds: Joining the Mainstream
With policy and regulation, businesses, consumers, investors, and technology all pushing sustainable finance rapidly into the mainstream, HSBC discusses the market’s outlook and opportunities.
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Financing the UK
The funding landscape for UK-based corporates has undergone a radical transformation since the financial crisis of 2008, driven by macro-economic changes and a growing sophistication in the way that companies finance their activities.
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Country risk: Russia is on the long road back
Experts are beginning to feel more confident about Russia’s prospects, and its credit ratings will ultimately reflect this.
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Derivatives: A force for good
Over the past 30 years, derivatives have been a force for good. Their practical application allows for more risk mitigation, yield enhancement and contingency planning, making financial markets work better.
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10 key topics CEE bond issuers should keep in mind when approaching the debt markets
Bond markets are performing well and proving safe from external political and macroeconomic factors. Borrowers are therefore likely to continue moving more of their funding into the bond markets. Societe Generale CIB suggests 10 things that issuers from Central and Eastern Europe (CEE) should bear in mind and emphasise to capital markets investors, if they want to negotiate the best financing terms.
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A Healthy, International Sterling Bond Market is Vital for a Successful Post-Brexit Britain
The Sterling bond market facilitates inward investment into the UK, provides financial institutions and corporations with efficient access to capital and maintains the relevance of Sterling as a major currency. At a critical period for the UK on the international stage, the Sterling bond market can showcase the foundations from which the UK economy has thrived over the years; its maturity, outward-looking, progressive nature and investment expertise. To do this, it must continue to evolve and address some key structural challenges.
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Euro Covered Bonds: The beginning of the end?
Since April this year, the ECB has reduced its monthly QE purchases from €80bn to €60bn. This did not have much direct effect on the covered bond market though; the ECB has predominantly scaled back the purchases of government bonds, with spreads which already sufficiently reflected this. On the covered bond side we do not expect to see any strategic changes in buying behaviour (yet) as CBPP3 (the third covered bond purchase programme) purchases are decreasing in any case for seasonal reasons amid shrinking primary market activity. However, it is ultimately only a matter of time until the ECB has no choice but to start official tapering on a broader front. Commerzbank expects the QE programme to be gradually reduced further from the beginning of 2018 and then finally cease at the end of 2018. Consequently, while up to now we have always regarded it as premature to speculate on the CBPP3 end game effects, it does make sense to start thinking now about the spread impact of the exit.
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Bank to the future: how technology is changing the capital markets
The capital markets have not seen the same degree of automation witnessed in other market sectors. This is about to change. The onward march of technology, in a marketplace increasingly shaped by the waves of regulation since the financial crisis, means further structural change is inevitable. Data is already king — but it is the way we use it to optimise working practices that will be critical for the future shape of the industry. Martin Egan takes a look at how the primary and credit markets have evolved — and what the landscape might look like in the near future.
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China downgrade predicted by ECR/Euromoney survey
The decision by Moody’s to lower its sovereign rating on China was flagged-up in ECR’s crowd-sourcing survey more than a year ago, and it will mean higher funding costs in the offshore market.
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Healing qualities: Azerbaijan’s economy is slowly finding its feet, in response to higher oil prices since 2016
Risk experts are still downgrading Azerbaijan in response to disappointing economic indicators, highlighting the effects of depressed oil prices and a lack of clarity from the government concerning its policymaking.
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Political risk should be the number-one concern for investors
Euromoney’s country risk survey shows political risk rising in 64 countries this year. The march of populism is a key factor investors must consider before chasing tempting returns, but there are many others to guard against.
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Hellenic Bank: Technological transformation
Hellenic Bank is the second largest commercial bank in Cyprus, with market shares of 13% and 7% in deposits and loans respectively. Recapitalised following the crisis, it is now introducing innovative measures to restructure its loan portfolio, rebuild its loan portfolio and enhance operating efficiencies. In this interview with GlobalMarkets, Hellenic Bank’s chairwoman, Irena Georgiadou, outlines the progress that the bank has made since its re-capitalisation and looks forward to the opportunities that are being generated by the economic recovery in Cyprus. Click the link to the right to find out more.
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Cooperative Central Bank: Preparing for a stock exhange listing
The Co-operative Central Bank (CCB) of Cyprus was originally founded in 1937 as the central governing body of Cyprus’s 18 affiliated Co-operative Credit Institutions (CCIs), giving the bank unrivalled access to retail customers on the island. Click the link to the right to find out more.
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Bank of Cyprus: Shrinking to strenghten
Bank of Cyprus is comfortably the largest lender in Cyprus, with market shares of 39.7% in loans and 30.8% in deposits as of January 2017. It is also the only Cypriot bank listed on the London Stock Exchange (LSE), making it a natural proxy for the economy. In this interview, Bank of Cyprus’s CEO, John Hourican, shares his views with GlobalMarkets on the recent performance of the bank and on the outlook for the Cypriot financial services industry and economy. Click the link to right to find out more.
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Georgia's Macroeconomic Outlook
Georgia’s diligent work in the past on developing its economy has not been in vain. The real economy has grown at about 5% on average annually since the global financial crisis; that in a period characterised by a major slowdown in growth rates throughout the world. IMF’s longer-term forecasts of Georgia’s future real output growth also stand at about 5%, one of the highest in the region. Click the link to the right to find out more.
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Halkbank a leader in SME banking in Turkey
Net income was up 10.5% in 2016, with equity prof-itability reaching 12.6%. Which factors played defining roles in this strong performance? Was Halkbank able to report similar figures at the start of 2017? Click the link to the right to find out more.
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Conflict risk is cracking South Korea’s appeal
A stronger yen-won exchange rate underlines Japan’s perception of safety with Seoul now plunged into a crisis, awaiting elections and wary of tensions escalating on the Korean Peninsula.
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Ireland’s passport to success in a post-Brexit world
Although Ireland will not escape entirely the disruption caused by Brexit, the potential for the country to benefit is significant as banks and other financial services companies consider moving away from London.
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Cyprus focuses on new FDI push
While the recent performance of the Cypriot economy has been impressive, local economists say that the prospects for longer-term growth and job creation would be enhanced if the island can address the problem of its notoriously low productivity.
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Accelerating the recovery in Cyprus’s banking sector
Investor confidence in the Cypriot banking sector has been driven in large part by the decisive way in which the industry has tackled the problem of non-performing loans (NPLs), which at the peak of the crisis threatened to spiral out of control.
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Cyprus eyes golden future for tourism industry
Tourism numbers are up in Cyprus and another strong year is expected. But more needs to be done, including attracting wealthy Muscovites, for example, who could get on a plane on a Thursday evening and three hours later begin a long weekend somewhere safe, sunny and warm.
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Mexico’s EM attraction questioned
Mexico is considered the most attractive emerging market (EM) by Bloomberg, but is not the safest according to Euromoney’s country risk metrics.
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Striking back: Indonesia offers an alternative to other large Ems
The borrower’s gradually improving risk profile could see it overtake Brazil and Turkey before too long.
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Cyprus’s game-changer: the Mighty Aphrodite
The discovery of the Aphrodite gas field in Cypriot waters has led many to believe that the potentially huge gas reserves in the eastern Mediterranean could transform Cyprus’s economy.
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High-risk Egypt is poised for a comeback
Egypt’s fall from grace is one of the more noteworthy of recent years.
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Erdogan is wrong: Turkey’s creditworthiness is waning
Euromoney’s survey experts continue to downgrade the borrower, disagreeing with the president’s claims there is no justification for it.
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Country risk: India upgrade is long overdue
The OECD’s arguments in favour of a higher credit rating are endorsed by experts taking part in Euromoney’s country risk survey.
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Cyprus — building bridges, not walls
The choice of Cyprus as a location for this year’s EBRD meeting will help to strengthen the fast-improving perception of the island among international investors. It will also help to put the potential of the Turkish-Cypriot economy on the map, with the EBRD planning to host two meetings north of the Green Line in Nicosia
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The Netherlands remains a safe place to invest
Geert Wilders’ Eurosceptic-populist Freedom Party might win the forthcoming parliamentary elections. Yet the prospect of him forming a government is low, preventing political risk from overshadowing economic and fiscal strengths.
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Delays to second bailout cause spike in Greek risk
Greece must find a way to secure more aid from its creditors, but is caught in the crossfire between the IMF defending its pleas for debt relief and European policymakers insisting on repayment. The outcome is likely to be messy given the preponderance of elections in Europe this year, and a sense of déjà vu by kicking the can further down the road.
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Fiscal risks take the shine off Ghana’s prospects
The country has disappointed investors by revealing undisclosed liabilities, which is underlining how African borrowers must be treated with caution.
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Three approaches to funding for European SMEs
Since the global crisis, plenty has been written about banks paring back their lending activities and more stringent capital adequacy rules limiting funding opportunities, particularly for higher-risk borrowers such as smaller companies.
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Cypriot economy surprises on the upside
The durability of the economic platform that Cyprus has built since the financial crisis suggests that sustainable growth is well within its grasp, says finance minister Harris Georgiades.
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Croatia is heading for investment grade
Leaping into tier three, the country is on course to regain the rating it lost four years ago.
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Catching the next wave of OTC derivative margining
The initial launch of the new regime for margin requirements for non-cleared derivatives passed on September 1. This first wave affected those firms with the largest presence in the market for both initial and variation margins under the new regulations.
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Investor risk now higher in Australia than New Zealand
The rating agencies still won’t budge as the two countries’ risk scores diverge.
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Euromoney Country Risk survey results 2016: Italy, UK and US shocks underline the risks of populism
ECR’s crowd-sourcing survey shows global risk rising in 2016, with leading economists and political experts revising their views on asset safety.
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The battle for infrastructure — and how to finance it
Toby Fildes looks ahead to an even bumpier ride in 2017 when Fed rate rises might be the least of the global capital market’s worries.
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Eating London’s lunch. The battle for Europe’s financial centre
Toby Fildes looks ahead to an even bumpier ride in 2017 when Fed rate rises might be the least of the global capital market’s worries.
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Investors give high-risk Mongolia a wide berth
The borrower is on its knees, crippled by a huge debt burden and in need of an external lifeline. Only an IMF deal can improve its fortunes.
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Country risk review 2016: Populism is risky
Euromoney Country Risk shows global risk rising, as leading economists and political experts revise their views on asset safety.
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Betting on a risky year
Toby Fildes looks ahead to an even bumpier ride in 2017 when Fed rate rises might be the least of the global capital market’s worries.
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The GlobalCapital DCM poll
GlobalCapital’s Toby Fildes interviewed the heads of debt capital markets at 20 of the top 25 banks in late November and December, to ask their views on how the market will evolve in 2017. Here are their thoughts. Information design Jon Hay, Sam Medway.
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Public Sector Borrowers Infographics
In a year where the unexpected became the norm, one of the few constants was the ECB’s presence in the eurozone sovereign bond market — you can see the monthly pace of Mario Draghi’s purchases. Elsewhere, the shock election of Donald Trump as US president and the Brexit vote took its toll on government bond yields and sterling’s level against the dollar.
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Financial Institutions Infographics
The creation of senior non-preferred debt in France means the country’s financial institutions can really start to build their loss-absorbing debt levels towards their requirements for total loss-absorbing capacity (TLAC) rules and Europe’s minimum requirement for own funds and eligible liabilities. But how much does each bank need to issue over the coming years? Since October 2014 the European Central Bank has been steadily buying more securities eligible for its covered bond purchase programme, helping issuers command much tighter pricing for new transactions. The resulting change in distribution by covered bond investor type has been stark. Real money investors — including asset managers and investors — have been squeezed out in the new pricing environment, while central banks have ramped up their purchases.
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Canada’s borrowers enjoy solid demand in volatile world
Canada’s low debt to GDP ratio and stable politics have made it a haven in a turbulent era in global politics. But, with fears of a wave of protectionism growing, the trade-focused country faces problems ahead. However, with its fiscal stimulus programme an example to other nations wishing to promote growth, Canada’s borrowers are confident they can adapt and prosper in the new political reality. GlobalCapital hosted this roundtable in early December.
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Corporate brokers aim for returns over glory
The land-grab for blue-chip accounts has been replaced by a more targeted approach as corporate brokers look to forge relationships that will be both long-term and highly remunerative. David Rothnie reports.
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Financial services and Brexit: a certain uncertainty
The immediate aftermath of the UK’s vote to leave the EU reflected the oft-repeated mantra that financial markets hate uncertainty with the value of the pound, plunging around 15% against the dollar to a 30 year low, acting as a proxy for wider market sentiment.
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Myanmar could be a high-risk gamble worth taking
Its risk score is still improving, but it should not be ignored the borrower is still an acute-risk, tier-five option, a year on from the elections.
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Uganda’s outlook suffers as banking and currency risks rise
The borrower is on shakier ground as its ability to refinance debt is questioned.
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10 Aspects of regulation every corporate board should know
The six years following the global credit crisis have seen a blizzard of financial regulation hit Europe and wider global markets. As the regulatory landscape starts to settle, we consider the regulatory facts of life that can help companies of all sizes negotiate this new terrain successfully.
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Malaysia riskier than its credit rating suggests
The fall in the currency could have repercussions for investor safety, extending the downward trend in its country risk score.
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12 things every CFO should know about Equity Capital Markets
Macro and political headwinds make investors nervous. Uncertain market conditions have created a tough environment for anyone seeking to conduct an equity flotation or rights issue in Europe. Some recent high profile cancellations of equity transactions can also be attributed to poor planning or unrealistic expectations. So here are my thoughts on how a CFO can help keep an equity transaction on track — and more generally, keep a company’s shareholders on board.
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Italian shock might blow a hole in stronger Piigs risk profile
Investor prospects in Portugal, Ireland, Spain and even Greece have brightened this year, but Italy could still put a damper on the recovery.
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The time to borrow
As borrowing costs in Europe continue to hit historic lows, Dr Michael Kilka, Divisional Head Advisory at Commerzbank responsible for capital market coverage of large corporate and institutional clients, discusses the opportunities and challenges for corporate financing
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South Korea riskier but panic button out of sight
Political turmoil is heightening investor risk and will likely narrow the risk score differential with Japan, but a strong macro-fiscal situation should not be overlooked.
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Rabobank: A New Strategic Blueprint
January 1, 2016, was a landmark date in the recent history of Rabobank, the A+/Aa2/AA-/AA rated Dutch co-operative bank regarded as one of the most stable and robust in Europe. Founded over 115 years ago, Rabobank is now active in 40 countries and has 8.6m customers worldwide.
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Trump victory sends markets haywire, extending the rise in country risk
Investor risk has been rising this year with fears over Brexit, China, the oil price slump, eurozone debts and global conflict weighing heavily on portfolio decision-making. The shock impact of the Republican victory has made the picture even murkier and sent assets into a tailspin.
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Country risk: No reason to fear pirates in Iceland
The October elections did not deliver the shock investors were bracing themselves for when anti-government protests took place earlier in the year – easing the risks and endorsing Iceland’s credentials for a credit rating upgrade based on its improving macro-fiscal profile.
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Buyside appetite in OTC derivatives remains undiminished
Like most major regulatory changes, the introduction of new margin, collateral and capital requirements for non-cleared OTC derivatives has been subject to delay as regulators finalise the details and dealers are struggling with their implementation. With its global start date already having been delayed from Q3 2015 to 2016, Europe is now pushing back further, most likely to Q2 1017.
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Azerbaijan’s risk score slide underlines the region’s red-flag warning
Although the CIS is learning to adjust to low oil prices, the recovery is slow, the political risks complex, and with fiscal deficits widening living standards are failing to keep pace with other emerging markets.
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Frankfurt lays out its financial centre credentials
Will Frankfurt be the main beneficiary of Brexit? It is certainly working hard to develop its Finanzplatz and polish up its image as a place to live and work. In this roundtable, a who’s-who of representatives from the Frankfurt region exchanged their views on the prospects for the city in the post-Brexit era.
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Italy’s rising risk is warning of an existential eurozone shock
Its risk score plunged the most of any country worldwide in Euromoney’s country risk survey in Q3 2016, highlighting how eurozone investors must remain on their toes.
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Slovenia’s sunny outlook a bright spot amid gloomy neighbours
The country is gradually improving its position in the ECR rankings – unlike several of its neighbours.
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Changes to OTC derivatives margining and what it means for the buy-side
As buyside firms look at their options for sourcing, mobilising and protecting collateral assets to be used as margin, whether for cleared or non-cleared OTC derivatives instruments, they very soon come up against problems of fragmentation.
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ECR survey results Q3 2016: China, Italy, Nigeria mar stabilizing global outlook
The calming of the political shock of Brexit, with oil prices now receiving Opec support, is preventing global risks from worsening. Yet with a referendum looming in Italy, elections in the US and Europe to come, not to mention frail banks and several countries mired in difficulties, it might be the calm before another global storm.
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ECR correctly predicts S&P’s Hungary upgrade – Bulgaria is surely next
The decision to reassign Hungary’s investment grade will bring delight to Budapest, bringing the sovereign borrower correctly in line with Romania, but S&P needs to take note – Euromoney’s country risk survey is shining the spotlight on another country that is closely aligned.
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Ukraine’s turning fortunes are not a ringing endorsement
Continuing engagement with the IMF is a positive sign, but it’s a long way back as the economic, political and security risks are still sky-high.
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Country risk: In search of the next investment grade
Hungary’s improving score in recent years prompted ECR in April to highlight the potential for the sovereign’s upgrade. Five months later, on September 16, rating agency S&P did just that.
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Technology helps Asian corporate treasurers battle FX volatility
Over the past two years, shocks to the FX market seem to have come thick and foast. Central banks in jurisdictions from Switzerland to Japan have sparked turmoil with unexpected currency or interest rate moves, while geopolitical events such as the UK’s Brexit vote have added to the climate of uncertainty.
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Moody’s should stop kicking its heels – a Polish downgrade is overdue
Poland’s declining risk score trend in Euromoney’s survey signals the rating agency is lagging experts in the field.
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IMF deal holds the key to Sri Lanka’s improving prospects
The borrower will not challenge Indian safety for the foreseeable future, but faith in the emerging market (EM) is justified by its improving risk score.
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Electronic FX trading hits tipping point in Asian emerging markets
Falling costs, increasing transparency requirements and the advent of new technological solutions are encouraging traders in key Asian markets to make the switch from voice to electronic FX trading
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A look at the rise of the green bond market
2016 is expected to be another record year for green bond issuance. Here Mirko Gerhold, Head of DCM Bonds Solutions at Commerzbank, explains the evolution and benefits of the green bond sector. He also looks ahead to the trends expected in the next two to three years and how issuers and investors can benefit in this growing market.
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Spain, Turkey bank risk puts cloak of fear over Europe’s investor outlook
While the focus has been on how Italy must resolve its banking sector problems, investors should also be keeping an eye on the risks lurking elsewhere in Europe.
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Mexico’s investor risk spikes as the US elections approach
Uncertainty is increasing for peso assets as the fight for the White House heats up. Even a victory for Hillary Clinton comes with reservations attached, demonstrating how it is not just the possibility of Donald Trump winning that is ringing alarm bells.
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Europe’s bank stability is in question, say risk experts
Country-by-country assessments of Europe’s banking sector show that risks are at new highs, as the financial services industry struggles to cope with the aftershocks of the 2007/08 crisis. Resolving the Italian bank crisis is key to how it will all pan out.
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Brexit is no disaster for the UK, but it has increased the risk of investing
Euromoney’s survey shows the UK’s risk score falling in the wake of the shock referendum decision coming out in favour of a withdrawal from the European Union. The risk experts acknowledge the potential longer-term positives, the swift changes shoring up political stability, and the opportunities created by the pound depreciating. They are nevertheless concerned by the economic outlook and its impact on the fiscal metrics.
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10 things about DCM markets every CFO should know
From our extensive time in debt capital markets, we’ve come across plenty of myths and misconceptions about corporate funding. But equally there are certain golden rules that hold true for almost every issuer, whatever their size or profile. Here we’ve gathered 10 universal truths that we hope will help guide any finance director looking to raise funding via DCM loans or bonds.
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Coming soon: Cyprus special report
GlobalCapital will soon be publishing a special report on Cyprus. Please see below for sponsorship enquiry contact details.
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A time for change in the non-cleared OTC derivatives industry
To bring good luck in marriage, an English bride is often advised to wear “something old, something new, something borrowed, something blue” on her wedding day. Some derivatives contracts last longer than marriages these days, but relationships between the counterparties are no longer trusted to luck. From September, a stricter regulatory framework is being introduced for bilateral OTC derivatives transactions, including rules that ensure the assets of one counterparty are unaffected by default of the other, thus avoiding being tied together, “for richer, for poorer”.
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Emerging markets: two steps forward, one step back?
With yields across much of the developed world entrapped in an apparently endless downward spiral, investor attention is once again focusing on the potential of emerging market (EM) debt. Cristian Maggio, global head of emerging markets strategy at TD Securities, explains that it is not just the relatively high yields available in the asset class that is attracting renewed investor interest. Following a lengthy period of underperformance, there are several compelling drivers of rising investor confidence in the longer term prospects for EM.
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ASEAN bond & treasury markets roundtable: Growth in an uncertain world
Malaysia and Indonesia, two of the biggest economies in the ASEAN region, are being forced to adjust to a new global landscape. Demand from China is falling, US rates are creeping up, and commodity revenues are becoming increasingly unreliable. The transition towards sustainable growth in the future is essential for these countries, and essential for the continued development of their capital markets. Asiamoney sat down with a panel of leading experts from both countries to discuss how they can best navigate the path ahead.
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New Citi research uses ECR scores to identify sovereign default risk and relative asset value
Citi Research has released a detailed report combining its own econometric model with the output from Euromoney’s Country Risk Survey to yield a new, more powerful tool for identifying default probabilities and relative value for sovereign issuers.
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Setting a new benchmark in the global SSA market
When TD Securities was appointed as the 22nd primary dealer in the US in February 2014, it represented an important landmark in the evolution of TD Securities’ global capital market franchise, underscoring its long-term commitment to the world’s largest and most liquid fixed income market. John Moore, head of US and international fixed income, says that the firm’s increasingly prominent position in the US capital market builds on the fast-growing footprint of its parent, Toronto-Dominion Bank (TD Bank) across the US banking sector.
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Corporate liability management in a world of European quantitative easing
After a strong start to the year, liability management activity came to a halt following the ECB’s announcement of its corporate sector purchase programme, prompting questions as to how this latest stimulus package will affect the market. Despite the slowdown, however, there is reason to believe an uptick in activity is on the horizon, according to UniCredit’s Liability Management team.
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Understanding the drivers behind negative swap spreads
Issuers and investors have had to get used to an environment of heavily negative swap spreads in the US market during the last six months. Swap spreads have come back from the tightest levels seen before Christmas, however intraday volatility and big swings in the shape of the swap spread curve continue to provide a challenging backdrop for SSA issuers and investors to navigate
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British Columbia: harvesting the benefits of diversification
The recent performance of the province of British Columbia’s economy provides a compelling lesson in the long-term benefits of diversification. At a time when the Canadian economy has been negatively impacted by weakness in commodity prices, BC has established itself at the top of the country’s provincial growth rankings
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The origins of enterprise-wide collateral management
To date, the new regulatory framework for bilateral OTC swaps has received less attention than other aspects of the post-crisis derivatives reform agenda. But its impact is likely to be just as far-reaching.
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Bond market volatility driving Schuldschein boom
The past few years have seen substantial activity in Germany’s Schuldschein market. With bond markets roiled by volatility and negative yields, many investors — including an increasing number of international players — are seeing Schuldscheine as an attractive alternative, and 2016 looks set to be one of the market’s biggest years yet, says Rudolf Bayer¬, Managing Director, and Jörg Stührwohldt, Managing Director, at UniCredit.
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Sterling SSA primary market dynamics in 2016
The sterling SSA primary bond market is set to have a record breaking first quarter in terms of issuance volumes, which currently stand at £12.25bn. There have been a number of notable deals from inaugural issuers and those returning to the market after a long break, but also regular issuers have achieved much bigger volumes. From the demand side, the breadth of participation has also been apparent, with the three big investor bases — central banks, bank treasuries and UK real money — all participating in good size. We look into the reasons why and whether it will continue.
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Competition replaces crisis as banks, platforms hone SME focus
Small and medium enterprises are the hardworking families of the business world — politically untouchable, the foundations of growth, dynamism and entrepreneurship. This is why funding them has been so politically controversial in the UK. There’s still huge state involvement in the market, but it has become less important — SMEs now have more funding options than ever. Owen Sanderson reports.
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The true cost of collateral settlement fails
Act now before the nuisance becomes a real headache!
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Covered bonds: what does the year ahead hold?
Commerzbank’s Michael Weigerding looks at trends in the covered bonds market for the year ahead
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OTC margins: The challenges of regulatory compliance
Even by the standards of today’s fast-changing regulatory environment, the new OTC variation margin requirements due to be introduced from March 2017 pose a major challenge to sell-side and buy-side alike. Asset managers will face major operational burdens and risks as they prepare to comply; the scale of which may not yet be fully appreciated.
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Nine questions to ask about your M&A strategy
What should you be asking?
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Leasing: a value added financing tool for all corporates
Commerzbank Corporates & Markets examines the benefits of leasing in corporate finance
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Soc Gen: Covered bonds set for another record breaking year
After surpassing several milestones in 2015, the covered bond market should be set for another record-breaking year in 2016. Bill Thornhill talks to Société Générale CIB’s head of covered bond origination, Ralf Grossmann, and the bank’s senior covered bond research analyst, Cristina Costa, about their predictions and recommendations for the forthcoming year.
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UniCredit Outlook 2016
Europe gains traction on domestic demand: we like risky assets and see limited euro downside
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European IPO markets: growing in maturity
Commerzbank Corporates and Markets reviews European IPO activity
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Investors driving boom in Italian IPOs
Since the 2008 financial crisis, for a number of years subdued activity in IPOs was believed to be the norm on Italian exchanges. Yet since 2014, political and economic trends are changing the script — prompting a boom in Italian IPO activity, according to Stefania Godoli, global head of equity capital markets at UniCredit.
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High potential in high yield
Commerzbank Corporates & Markets outline the current attraction of the High Yield Bond Market
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Green bond markets in corporate bloom
The growth of corporate issuance in the green bond market is a compelling trend in modern capital markets. While this growth will continue, market entrants must pay heed to the market’s unique demands, say Antonio Keglevich, head of green bond origination, and Robert Vielhaber, green bond analyst at UniCredit
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Previous bright mines are going dark
Last week we highlighted the positive performance of the mining sector with the Euromoney Global Mining Index returning +8.55% in October. Certainly not a bad start to the fourth quarter. Platinum producer Lonmin, who has been in the Euromoney Global Mining Index since 1985, topped the companies’ performance league table. That could be a bit misleading.
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Schuldschein continues to shine brightly
Commerzbank Corporates & Markets examines the international attractions of Germany’s private placement solution
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Euro corporate hybrid bonds - To stay over the cycle
The Euro corporate hybrid bond market has evolved exceptionally well since 2013, reaching a total market size of circa €85bn as of today, having become a well accepted, fairly standardised source of funding for many corporates. Featuring debt and equity characteristics alike, hybrids offer accounting, rating as well as tax benefits and create economic value for issuers. For investors, hybrids offer a welcome opportunity to diversify their investment portfolio and increase average return, but inherent risk should be eyed carefully.
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Collaborating to conquer the OTC collateral challenge
For the OTC derivatives industry, joining forces is the only way to prepare for a rising tide of regulation. Only a combined industry initiative can drive the transformation in fluidity that will be needed when new regulations place collateral at the centre of every OTC derivatives trade. Unprecedented regulation is leading to unprecedented collaboration.
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August’s European Small Cap share price gains and falls
The Euromoney Smaller European Companies Index Series currently comprises 1350 companies across 16 European countries.
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August’s biggest share price gains and falls – EMIX Europe Index
The Euromoney EMIX Europe Index currently comprises 637 companies across 16 European countries, including the largest 350 stocks and the most liquid 35% of the smaller company universe.
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The Impact of Collateral
How collateral’s rise will profoundly impact markets
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China: Breaking the Myth of the 'Automatic Bailout'
The number of onshore corporate defaults in China during 2015 has already exceeded the total for last year. The recent trend has broken the myth of the “automatic bailout” in China’s onshore market which had led some investors to ignore credit fundamentals in the expectation that all debts would ultimately be underwritten by the state.
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Bank Profiles
Latest news by market and league table performance
Bond Comments
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UK GBP6bn 1.625% Oct 71
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SEK USD1bn 2.875% May 21
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AfDB EUR1.25bn 0.875% May 28 social bond
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ADB EUR1.25bn 0.2% May 23
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ESM EUR2bn 1.2% May 33
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Kommuninvest USD1bn 2.875% Mar 21
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NRW.Bank EUR1bn 0.5% May 25
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Enel EUR500m 2.5% 60.5NC5.5 year, EUR750m 3.5% 63.5NC8.5 year
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United Technologies Corp EUR750m 3mE+20 2 year, EUR750m 1.15% 6 year, EUR500m 2.15% 12 year
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CEB EUR1bn 0.125% May 23
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Danske Bank EUR1.25bn 0.875% May 23 non-preferred
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Banque Fédérative du Crédit Mutuel EUR500m 0.5% May 28 tier two
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Ford Motor Credit EUR600m 3mE+42 3 year, EUR400m 3mE+72 5.5 year
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Lanxess EUR500m 1.25% 7 year
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NIB EUR500m 0.5% Nov 25 environmental bond
All International Bonds
| Rank | Lead Manager | Amount $m | No of issues | Share % |
|---|---|---|---|---|
| 1 | Citi | 162,719.54 | 628 | 8.01% |
| 2 | JPMorgan | 151,101.13 | 653 | 7.44% |
| 3 | Bank of America Merrill Lynch | 147,779.52 | 484 | 7.28% |
| 4 | Barclays | 124,794.16 | 438 | 6.15% |
| 5 | Goldman Sachs | 108,281.07 | 343 | 5.33% |
Bookrunners of All Syndicated Loans EMEA
| Rank | Lead Manager | Amount $m | No of issues | Share % |
|---|---|---|---|---|
| 1 | JPMorgan | 25,947.26 | 30 | 9.74% |
| 2 | Citi | 16,842.42 | 38 | 6.32% |
| 3 | SG Corporate & Investment Banking | 15,575.88 | 46 | 5.84% |
| 4 | Deutsche Bank | 14,198.98 | 44 | 5.33% |
| 5 | Bank of America Merrill Lynch | 13,028.84 | 31 | 4.89% |
Bookrunners of all EMEA ECM Issuance
| Rank | Lead Manager | Amount $m | No of issues | Share % |
|---|---|---|---|---|
| 1 | Goldman Sachs | 6,961.44 | 31 | 9.30% |
| 2 | JPMorgan | 6,815.38 | 29 | 9.10% |
| 3 | UBS | 5,503.59 | 15 | 7.35% |
| 4 | Citi | 5,145.98 | 30 | 6.87% |
| 5 | Deutsche Bank | 4,303.27 | 25 | 5.75% |
