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UK Bond Market 2010

IFR’s UK Bond Market Roundtable, held in London on September 8, found participants in pensive but broadly optimistic mood. Sterling bond issuance has been slow all year, hamstrung by a basis swap that stubbornly refuses to budge, making it uneconomic for non-UK issuers. The same high swap spreads have made the US dollar market compelling for those UK issuers that have ventured into the market. For top UK names, sterling funding has been anything between 25bp and 45bp back of dollars this year. Those conditions are showing signs of reversing...Read more

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UK Bond Market 2010: Participants

Frazer Ross - Deutsche Bank Frazer Ross is a managing director on the global risk syndicate desk at Deutsche Bank within global credit trading at Deutsche Bank in London. His focus is euro and sterling corporate new issues. He has worked at Deutsche Bank for over 10 years. Prior to joining the bank in 2000, Ross worked on the syndicate desk at Toronto-Dominion Bank in London for two years, and at various positions in Sydney. Thomas Schroder - EIB Thomas Schröder is deputy head of division and managerial adviser in the capital markets department...

UK Bond Market 2010: Part I

IFR: The first thing I wanted to pick up on was the fact that there seems to be very good demand for Gilts, even with 10-year yields below 3%. How does the panel see ongoing demand? Are there technical issues behind the inflows? Do you feel the level of interest in Gilts and sterling assets will change within the next three to six months? Sam, can you get us going with a strategic perspective? Sam Hill, RBC Capital Markets: Well it’s definitely true that in the context of another large year of supply, digestion of that supply has been...

UK Bond Market 2010: Part II

IFR: Before we move on from Gilts, I just wanted to talk a bit about the syndicated Gilts programme, specifically the transferability of that issuing format to other borrowers. We have seen significant demand for syndicated Gilts. Might that offer an opportunity for SSA borrowers to issue in size under this format? Robin Stoole, Lloyds Banking Group:I think the shift in the DMO’s issuance tactics to the large syndicated issues has been extremely well received by the markets. I think it’s perceived to be more transparent and I think it’s added a...

UK Bond Market 2010: Part III

IFR: What would investors look for? One of the issues presumably is liquidity. I guess there are transparency issues as well in the bond market that borrowers are not necessarily used to, if they have been used to tapping a small bank club for funds. For the bond market to really pick up steam, what kind of companies, what kind of size would pass muster? Myles Clarke: That’s the problem, right. You’re looking for liquidity with a minimum deal size of, say, £300m. The structure of the UK corporate market is such that there’s probably not a lot...