The end of the first quarter; a time for pause, a time for reflection . . . and in the case of this year, a time of standstill in the new issue markets. The fact that the hiatus in primary capital market issuance was preceded by a period of virtually non-stop activity, where for many bankers Christmas hardly proved much of an interruption, suggests more of a welcome break than the beginning of the end. After all, while the woes of GM and AIG were largely attributed to have tipped the markets over, there is little evidence of any systemic credit...Read more
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The debt capital markets train is once again picking up steam after hitting the buffers quite abruptly before the Easter break. If ever there were an illustration of the old adage that “no market ever moves in a straight line”, it would be now. Industry figures understand the risks but generally remain positive over prospects for the rest of the year. By John Laubscher.
The Swiss franc bond market witnessed a dramatic first quarter, with surging issuance. The passing of the old calendar year – when so many investors were caught by the resolute refusal of yields to back up – together with a heavy redemption schedule and an ongoing lack of domestic supply, have helped open the floodgates. Ian McDiarmid reports on the robust state of this sector.
Samurais are again expected to play the key role in international yen bonds this year, while the outlook for Euroyen/Global yen remains bleak. Despite robust conditions for Samurais, however, the sector remains one of the smallest in the international bond arena. Julia Okuda and John Laubscher examine the respective dynamics.
Since its inception the euro has failed to cut it as a major funding tool for Asian issuers. Yet after five years in the wilderness, the last six months has been the busiest period on record for Asian issuers in euros.
Asia is set for another bumper crop of bonds in 2005. South Korea seems destined to be the main provider once again, but there are some new tigers on the prowl. The likes of Taiwan, India and Indonesia are all expected to have some of their busiest years ever. Cross-border issuance could well top US$40bn again, as James Griffiths reports.
While the health of the secondary market determines the pace of new supply, a number of savvy borrowers has found that mere talk of regulatory changes creates fervent investor demand. However, the market can be taken for a ride when it becomes over-exuberant about potential shifts or when the changes fail to emerge. By Andrew Stein.
Hybrid capital has long been inching its way into the corporate sector, but apart from a few patchy trades the market has never taken off in any sizeable volume. A deeply subordinated bond from Casino earlier this year promised much in achieving desired ratings treatment but the market appears to have stagnated once again. Helen Bartholomew reports.
Almost a year on and the now not-so-new EU entrants continue to make steady progress towards euro-zone entry. Since joining the EU, large and small borrowers alike have shown their mettle in the capital markets, pricing deals at tighter spreads than ever, reaching out to new investors and tapping into even longer-dated maturities. Helene Durand reports.
The UK's FSA is working on a regulatory framework that should enable the UK’s covered bond sector to become UCITS compliant. William Thornhill outlines the main issues that regulators are examining, the schedule for putting this in place and the main stumbling blocks.
For a market comfortable with spreads moving in one direction, March’s hiccup came as a nasty surprise and served to concentrate a few minds. Sufficient structures exist to accommodate most predilections, however, and the will to make them work is evident. It appears we have stepped back from the brink. By Philip Wright.
Delta hedging of synthetic CDO issuance continued to play a major part in the tight credit spread environment which gripped the market again in the first quarter of 2005. Only the fallout from GM's profit warning and the subsequent rating agency action conspired to divert spreads from their tightening pattern, although hedging activity from CDOs certainly helped protect the downside. David Bentley writes.
The emergence in Europe of the commercial mortgage loan conduit during a period of dramatic credit spread-tightening has inverted the traditional competitive dynamic between investment banks and balance sheet lenders. With tireless origination staff and cheap exits on their side, investment banks are challenging old lending relationships. Joti Mangat reports.
European high-yield exploded in 2004. Investors threw cash at the sector, issuance broke records and default rates fell. Historically tight spreads brought into question the term “high-yield”, while hedge fund dominance led to increasingly aggressive structures, sidelining traditional investors. But with macro-economic concerns re-surfacing, Kate Haywood asks whether investors are again looking for a way out.