Up in the air: While once viewed as the one market sector that could be relied upon to offer a sea of calm within a turbulent world, the sovereign, supranational and agency arena has become increasingly influenced by events that have called previously trusted notions into question. True, emerging market and lower rated entities have always had their fair share of political risk to contend with – more than their fair share on some occasions, some would argue – but threats, both real and imagined, have altered the landscape across large swathes...Read more
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The rising wave of right-wing politics across the West has taken the public debt market by the throat heading into a series of elections across Europe, but some of the most prolific issuers remain confident they can work around the volatility coming their way.
A new sector opened up in the Green bond market at the end of 2016 when Poland became the first sovereign issuer to tap into the growing investor interest for climate-linked debt. France was not far behind with its well-flagged issue: the biggest and longest to date. The appearance of a pure rates instrument has positive implications for the Green bond market, Green finance in general and – it is hoped – for the planet.
Public debt borrowers pushed out maturities further than ever last year in what was labelled a fad for ultra-long debt by some bankers, and opinion is split over whether the demand for long maturity is still alive in 2017 in the face of rising rates.
Through the pilot phase of its Project Bond Initiative and into the next stage of its credit enhancement products, the EIB has proved its value in facilitating non-bank investor flows into financing infrastructure. Lessons learned will be key to opening up capital to new types of project risk. It will also establish a model of practice for multi-nationals to be replicated elsewhere in the world.
If it were a political drama, the story of Greece’s economic collapse might be compulsive viewing, with its brinkmanship, intrigue and complex subplots – though critics may argue the twists have started to feel a little repetitive. But the crisis, which is now in its eighth year, is all too real and looks nowhere near reaching a resolution.
Primary dealerships have come under the spotlight again as banks have reviewed their fixed income businesses in the run-up to the introduction of Basel III.
Gilt yields have been highly volatile since the Brexit vote in June and are likely to remain so as negotiations take place this year and uncertainty about the UK economy continues.
Middle Eastern sovereigns have hit the bond market in size this year to fund budget deficits and supply shows no sign of drying up.
Mozambique’s sovereign debt default has spooked investors already concerned about a region struggling with rising debts and low growth. Will more defaults follow in sub-Saharan Africa – or will demand rebound, encouraging more sovereign issuers to tap the debt markets?
The origins of the Asian Infrastructure Investment Bank are political but its entry into global infrastructure financing presents a welcome boost for Asia. Its earliest forays suggest that the AIIB is set to be a collaborative force with its multilateral development bank peers as well as with the private sector.
Venezuela is experiencing the greatest economic depression of a country outside a war zone in modern times and its inflation rate is expected to surpass a whopping 1,600% this year.