When policymakers in the developed economies took concerted action in late 2008 there was a widespread determination to prevent the recession turning into a prolonged period of depression. Record low interest rates, a little harmless inflation and a stiff dose of banking reform were meant to get the world economy turned round and back on a path of sustained growth. And growth was going to be the key to taking the sting out of reducing indebtedness – governments, financial institutions and consumers could all cut their borrowings without feeling...Read more
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The financial crisis that started with the credit crunch in 2007 demonstrated ratings agencies’ business models needed serious reform at best. More scathingly, some have argued ratings agencies were one of the direct causes of the crisis. The agencies themselves have been busy trying to restore their reputations. Have they done enough?
The emergence of the European Financial Stability Facility and the European Stabilisation Mechanism has changed market dynamics as the EFSF has been transformed from being an insurance policy to a major European debt issuer.
All eyes have been on the periphery since the market opened this year. Italy has decoupled from and recoupled with Spain, leaving many covered bond participants anxious about the shaky future of peripheral issuers.
Exposure to doubtful eurozone sovereign debt is putting an enormous strain on European banks. Until some of that uncertainty is resolved, many will struggle to raise funding. The next few months could prove to be among the most traumatic ever experienced in the sector.
Bond issuance in the Middle East is on course for its lowest year since before the financial crisis as borrowers baulk at the price investors are demanding for market access but bankers are optimistic that issuance will pick up in 2012.
By the middle of June, the Samurai market was in a healthy state and looking ready to challenge established records.
After celebrating its first anniversary on July 19 2011, Hong Kong’s offshore renminbi bond market continues to move at a fast pace.
Bankers are known for always being in fashion. So it is no wonder that most debt desks in Latin America spent a good deal of 2011 pitching for offshore Reg S/144a deals denominated in Brazilian Reais.
A trading floor of distressed bankers, head in hands, eyes bulging and beads of sweat adorning their red faces as they eye the charts: rocketing spreads, falling stocks and no end in sight to debt deadlock.
Europe’s second-worst high-yield sell-off in a decade has been a wake-up call for some banks that have been left struggling with a multi-billion buyout debt exposure after using aggressive underwriting tactics to win market share.
Issuers continue to vie for low coupons but this time inflation and rates are on their side, and as concessions grow, investors will be returning to the market.
With yields and spreads widening to 2010 levels, US leveraged finance markets are pricing in an increased likelihood of another recession in the world’s largest economy. However, investors are confident that high-yield borrowers’ balance sheets will withstand slowing growth and they expect defaults to remain below 2% this time around.