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Hybrid bonds fly as investors chase lower risk issuers

Red-hot corporate hybrid bond market could tempt more debut issuers
Japan’s sovereign, supranational and agency (SSA) borrowers continue to be among the most highly regarded issuers in global debt markets, supported by strong credit fundamentals and deep domestic demand. But with a complex geopolitical background, diverging global monetary policies, the Bank of Japan’s policy signals, and recent elections in the country, issuers are operating in an unpredictable environment.

UK bank Chetwood funds owner Elliott’s film finance joint venture

Deal raises questions about whether transaction was done at arm's length

Nordic duo seize favourable window to bring green SNP trades

◆ Sentiment improves after ceasefire extended ◆ Handelsbanken nears record tights ◆ Jyske Bank attracts €3.3bn of orders
Japan’s sovereign, supranational and agency (SSA) borrowers continue to be among the most highly regarded issuers in global debt markets, supported by strong credit fundamentals and deep domestic demand. But with a complex geopolitical background, diverging global monetary policies, the Bank of Japan’s policy signals, and recent elections in the country, issuers are operating in an unpredictable environment.
Sub-sections
  • The percentage of triple-C rated loans held in CLOs has tripled to 12% in the past three months, leading 21% of outstanding deals to fail at least one overcollateralisation test, according to Bank of America.
  • The fallout from the Covid-19 crisis has touched nearly every economic and employment sector, from the largest corporations to the smallest businesses. The pain has prompted an unprecedented policy response aimed at rescuing economies and markets, and further measures are likely to come. US commercial real estate has been especially impacted, with commercial mortgage lending slowing dramatically, already struggling retailers going dark across the country and a likely rethinking of the use of space following a nationwide experiment in working from home.
  • Emerging market loan volumes have declined further amid the panic and uncertainty that Covid-19 has plunged the market into. Loan bankers show little optimism and say that the second quarter will likely resemble the first.