To view the digital version of this report, please <a href="http://edition.pagesuite-professional.co.uk/Launch.aspx?EID=ab554090-a482-4b49-949a-e192106337ab" onclick="window.open(this.href);return false;" onkeypress="window.open(this.href);return false;">click here</a>. To purchase printed copies or a PDF of this report, please email gloria.balbastro@thomsonreuters.com The earth has been shifting particularly in Europe, and nervous relief that the tremor

To view the digital version of this report, please click here. Referred to as Mrs Watanabe, the famed Japanese households command vast financial assets, estimated at ¥1,483trn (US$18.37trn) as of December 2011, according to the Bank of Japan. In its quest for yield in deflationary Japan, retail investors have been exporting Japanese capital to foreign issuers for years. The Uridashi issuance, done under foreign law and brought back to Japan, provides one of the channels for mass-market distribut

To view the digital version of this report, please click here. ESMA’s review of the big three identified several shortcomings and areas of improvement in the ratings of sovereign debt, banks and covered bonds. The findings were hardly surprising to critics who have long questioned the relevance of CRAs in SSA analysis and raised renewed relevance concerns, but may also enhance ratings transparency and restore some confidence in the SSA ratings process. The relevance question typically resurfaces

To view the digital version of this report, please click here. It had been a frenetic start to the year, with sentiment in the European government bond market surprisingly strong, especially considering the horrors of late 2011. Then came the Easter break, with Spanish yields jumping to 6%, reviving memories of former market chaos. Suddenly investors were again asking if European governments’ plans to cut deficits while implementing savage austerity plans were viable.  As IFR went to press it wa

To view the digital version of this report, please click here. There are signs that some supranationals and agencies are moving closer to signing two-way credit support annexes (CSAs), as a combination of impending regulation and the eurozone crisis has intensified pressure on these participants to post collateral against swaps exposures. The majority of SSA borrowers currently have one-way CSAs, whereby they receive collateral when in-the-money on a swap with a dealer, but do not post when out-

To view the digital version of this report, please click here. The market’s bullishness had three major sources. First, markets had built up a wall of liquidity following a near closure at the end of last year; greater use of the LTRO boosted demand; and some evidence of a desire for a resolution to the European sovereign crisis increased overall confidence. The result was a hunger for paper from Triple A rated issuers. But some bankers have raised concerns that early fundraising may preclude is

To view the digital version of this report, please click here. Every emerging market nation, as it progresses along the path towards becoming a fully fledged market economy, aspires to improve its standing with the international investment community by lengthening its sovereign debt curve. Indonesia and the Philippines issued bumper bonds with 30 and 25-year tenors, respectively, to an enthusiastic audience of domestic and international investors. From this point on, most investors believe there

To view the digital version of this report, please click here. Investors were already struggling to cope with a dramatic change in circumstances, with much of the eurozone’s sovereign bonds no longer deemed risk-free. The banking sector was completely lacking with the indices hitting record wides. Even Europe’s bailout fund, the EFSF was struggling to raise funds at a rate, and in a manner, befitting a Triple A rated supranational. And there was the demise of another bank – Dexia. Then came the

To view the digital version of this report, please click here. Many issuers are looking to reduce their exposures to certain institutions, while all are paying more attention than before to the credit quality of their counterparties. Will this trend lead to the exit of many banks from the business, while increasing the grip of a small number of top tier banks on the market? The European sovereign debt crisis has changed the game for SSA bankers. Issuers are re-evaluating their priorities, and th

To view the digital version of this report, please click here. The decision taken by the Eurogroup in March this year to run the European Financial Stability Facility and the European Stability Mechanism in parallel for a year has two key elements, both relating to confidence building. First, it provides a permanent structure for a European bailout mechanism in 2012, one year earlier than formerly announced. Once ratified, this will be a fully fledged European institution, providing bankers with

To view the digital version of this report, please click here. Kangaroo issuance from SSA borrowers sprang back to life in late February 2012 ending months of inactivity for many bankers. Tightening spreads, a much improved currency basis swap and growing overseas demand sparked the upturn. But things are not all on the up. Basel III liquidity rules and new capital requirements are likely to prevent a return to the market’s previous heights. The dramatic revival showed how issuers had been lined

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