This year's special report on Germany finds the country confounding the doubters in many areas. Despite concerns about the ability of the Grand Coalition government to deliver on reform, the still booming world economy has boosted economic growth, and against that background, corporates are increasingly looking beyond the country's borders for acquisition-driven growth opportunities. Investment bankers are naturally hoping to reap the rewards. However, as the market becomes more competitive, for

The result of record activity in Germany is many banks having to narrow their focus due to the size of the ECM pipeline. This is most common at the top of the market with some of the established banks looking only at larger deals. "Activity is so high now that it is impossible for all banks to compete for every deal," said Georg Hansel, head of German ECM at Deutsche Bank. "Equally investors cannot give attention to all deals. The result is we are more selective on smaller deals as they will not

The face of German corporate culture is changing, and investment bankers believe they are best placed to take advantage of this rapidly shifting environment. The country is enjoying strong annual GDP growth of about 2.7%–-2.8%, and the budget deficit is expected to come in at less than 1% next year. The economy, which is Europe’s biggest and still the third largest in the world after the US and Japan, is sound after tough years at the start of the millennium. "Germany will be one of the fastest

Angela Merkel’s Grand Coalition and its opening shots at economic policy were given a less than rapturous welcome by economic and political commentators alike. The uncomfortable coalition partners were not expected to deliver much more than the gradual reform process of the Schroeder government, let alone preside over a strong rebound in the economy. But a somewhat surprising success now seems likely, as even the 3% VAT hike in January looks to have passed off smoothly with the economy still on

Equinet Securities has seen the average size of IPOs that it leads rapidly increase from around €20m to €125m. It is one of several firms that have benefited from an increase in activity on Deutsche Boerse's Entry Standard junior market. Others include Viscardi Securities, MM Warburg and Berenberg Bank. MM Warburg and Berenberg are both private banks that are capitalising on their client base to win business, in a similar manner to the regional Landesbanks, but Equinet and Viscardi are different

A new securitised derivatives exchange was launched by the Deutsche Boerse and SWX Group in Germany in January, and a number of banks have recently entered or re-entered the local warrants and certificates market. Royal Bank of Scotland, Morgan Stanley and Barclays Capital count among the relatively new arrivals, and Lehman Brothers is among the institutions expected to return to a market that shared in the global equity downturn of the early years of the century, before an explosive revival. “I

Overzealous hedge funds that piled into German distressed credits are cutting their exposure to that market after reaching the harsh conclusion that they lack the skill-sets necessary to run a business. The country's creditor-unfriendly insolvency law is also scaring funds from Europe's most promising distressed draw, leaving the better pickings to an elite handful. "Several years ago, no one in Germany knew what a hedge fund was," said Marcel Laehn, director at BHF-Bank in Frankfurt. "There has

German LBO volumes have risen markedly over the past three years. In 2005, 21 German leveraged loans worth US$11.23bn were booked, according to data from Thomson Financial. This rocketed to 34 deals worth US$20.97bn in 2006, and 2007 has started with a bang – seven deals worth US$3.32bn have already been booked. Although this rise partly reflects a pan-European expansion in leveraged finance, it does provide definite cause for optimism, especially as the German LBO market is less developed than

This time last year Germany had booked more than US$50bn worth of loans, against just US$1.5bn for this year so far. The scale of last year's acquisition boom always meant that a repeat performance in 2007 would be difficult to achieve but nobody expected such a dramatic fall. One reason that the sharp drop in volumes is surprising is that there are plenty of good reasons to believe that the German loan market's long-term growth prospects are excellent and even though some monster M&A deal's lik

In its German securitisation outlook for 2007, S&P said that the German structured finance market would be unable to maintain what it called the "dizzying growth it showed in 2006". The agency said that volumes would be approximately the same as last year, when the number of deals it rated rose to 52 with a value of €66bn, up from €30bn in 2005 – a 120% annual growth rate. That growth was driven by the CMBS sector, where there were 27 deals worth €27bn, representing one third of the total Europe

Over the years, the music has increasingly been playing outside of Germany where covered bonds are concerned, as new jurisdictions and sophisticated structures have served to dominate the headlines. With origins dating as far back as the 1700s, the Pfandbrief has long been marketed by its domestic professionals as the back-bone of the covered bond universe. However, it has been well documented that Germany's presence on the international covered bond stage has been slowly eroding over recent yea