Investors have frequently fallen into the trap of viewing the Triple A label as the equivalent of a capital guarantee. Being less sophisticated, retail investors have been particularly susceptible to this. In the extended bull market that finally ended in the summer of 2007 this illusion looked increasingly like reality and investors had no reason to question the system that was bringing them consistent financial rewards. The market can be a cruel teacher, and in the second half of 2007 and into 2008 it became a fearsome disciplinarian indeed...Read more
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Many investors who relied on the rating agencies’ to pick a sure thing have been disappointed since the start of the credit crunch. Many Triple A rated deals have been hammered in the market but nobody quite knows where the blame lies. What have the rating agencies done wrong and what can they do better, asks Solomon Teague.
The monoline sector has in some way come to epitomise the demise of the wider structured finance market that it was so inextricably linked to. Whilst some players decided to stay away from the ABS CDO sector, thereby preserving their ratings, others returned, believing they could withstand collateral losses that in hindsight proved fatally toxic. William Thornhill reports.
After years of growth in financial engineering, the structured finance market is going back to basics. Little of the 2008 vintage has yet emerged, but a few structural tweaks have allowed issuers to obtain vital funding. Jean-Marc Poilpre reports.
The European Investment Bank has traditionally acted as a role model for other issuers in the European capital markets with its multi-currency based approach to funding its borrowing requirement. Central to this is a core focus on the role of financing in US dollars, euros and sterling, while continuing to push the frontiers in the less frequently used currencies. Mike Winfield reports.
The promotional bank of the Federal Republic of Germany has the largest funding need of the European agencies at €70bn for this year. Despite this the issuer still tries to makes opportune use of the capital markets to achieve its funding and maximise the performance of its public deals. Mike Winfield reports.
The flight to quality has generally benefited the Triple A issuers. They have made significant progress with their 2008 financing programmes, without incurring the wrath of investors looking for weakness in their credit armour. Mike Winfield reports.
It might not be the most obvious Triple A entity in the world. But the African Development Bank has its status as a multilateral development bank and the strength of its shareholders to thank for its Triple A ratings. It has avoided the impact of the credit crisis so far and seen interest in its activities at an all-time high, writes Savita Iyer.