It has been an extraordinary year for the debt capital markets. Just over a year ago the world economy flew so close to the flames that it seemed like complete meltdown was the most likely outcome. In the aftermath, most markets ceased functioning in any meaningful way. The loan markets went into a paralysis from which some are still tentatively emerging, while even those that resumed business more quickly have shrunk. The equity markets went into freefall, and though they have since bounced back, opinion is sharply divided over how sustainable...Read more
To purchase printed copies or a PDF of this report, please email leonie.welss@lseg.com and shahid.hamid@lseg.com
Despite higher funding requirements for many, most SSA issuers have managed to access the capital market with relative ease this year. Record sub-Libor spread levels at the end of summer 2008 gave way to spiraling funding costs, as the government-guaranteed market sprang to life, but spreads have been grinding back in and may even go full circle. Michael Winfield reports.
In the depths of mid-winter, the outlook for the bank capital market looked bleak – to the point that it seemed it would never see daylight again. Deutsche had just not called a LT2 and the ghost of coupons passed on Tier 1s and UT2s sat constantly at the end of investors’ beds. Instead of dying out, however, a frank reassessment of terms has seen the market revive, as accounts regained their appetite for risk. Philip Wright reports.
The impact of the ECB's unconventional covered bond purchase programme has been nothing short of extraordinary. Market spreads, and hence funding costs, have fallen dramatically, and the amount available to banks has risen sharply. But this has created a number of worries, such as whether the market can sustain the resultant influx of supply, whether another bubble is being inflated, and how the market will react to an ECB withdrawal. Rachelle Horn reports.
While the European corporate bond market was widely expected to bounce back somewhat this year compared to the depressed issuance and volatility seen in 2008, it was still a surprise package in terms of the sheer volume that came to market. It also saw the most blistering tightening of spreads and massive levels of demand that the market had ever seen. But how much longer can it maintain the momentum? Andrew Perrin reports.
The high-yield market has been in surprisingly good shape this year, after breaking out of the credit market freeze that began in mid 2007, with even the previously moribund European market beginning to show some sparks of life. Deals on both sides of the Atlantic that would until recently been considered improbable have crossed the finishing line. The future looks bright, as Joy Ferguson reports.
The remarkable improvement in market sentiment since March 2009's nadir has triggered an impressive revival in emerging markets issuance. This year’s EM supply has already exceeded 2008's total. Yet one region lags its peers: CIS credits - for so long the cornerstone of EEMEA and even EM primary markets – have been limited to a mere handful of deals so far this year. John Weavers reports.
Middle Eastern credits have filled the void left by CIS issuers, driven by an intensifying race between banks to land lucrative Gulf tickets, and by investors eager to access what they believe to be diversified, high quality assets. Although Dubai – usually a stalwart of the region – has disappointed, the slack has been picked up by others. Bakyt Azimkanov reports.
The US high-grade bond market rebounded quickly this year, proving much more receptive to borrowers’ needs than loans or other more structured asset classes. Bonds have been used to term out bridge loans, refinance strong issuers’ balance sheets and, most notably, fund acquisitions directly. With such a financing resource at their disposal, issuers are bolder than ever. Timothy Sifert reports.
The spike in LatAm new issuance post summer, which saw September become the busiest this year, surprised even the optimists. A recycling of flows into riskier assets after a dearth of supply this year helped buoy LatAm DCM, luring a broader range of investors and borrowers, as well as tightening spreads. But has the market come to far too fast, or will year-end volumes near those seen in 2007? Paul Kilby reports.
The Samurai market's landscape changed dramatically after Lehman Brothers collapsed. The market that had provided financing when it was unavailable elsewhere saw a dramatic increase in risk-aversion, with tolerance for foreign credits almost evaporating. It took Triple A rated government guarantees from the most respected sovereigns to revive the market, which now appears to be heading in the right direction. Atanas Dinov reports.