The GlobalCapital Podcast – Details, episodes & analysis

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◆ Why Europe's corporate bond market is on a roll 

◆ Reverse Yankees, hot hybrids and huge size with more to come 

◆ Europe's stock exchanges' attempts to drum up more IPOs

Market participants had expected this week to be a busy one for euro and sterling investment grade corporate bond issuance. But the volume of business that was done exceeded all expectations. 

With jumbo deals from the likes of Alphabet to successful offerings from less common credits like Brisbane Airport, benchmark issuance this week was almost four times the volume of the weekly average for the rest of this year. We examined why and discussed the factors that will keep the deal spree going deep into November.

Within that sector were also some notable hybrid deals in euros for US companies. We inspected these and divulged what is driving this market.

We also looked into what different European stock exchanges, and their regulators, are doing to boost not just the supply of public stock listings but also the demand.

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◆ Pause clauses could add to disaster arsenal 

◆ KfW CEO Stefan Wintels on bond digitisation 

◆ What ESG backlash? Banks ramp up green bond issuance

As Hurricane Melissa ripped through the Carribbean this week, the bond market had a part to play in helping Jamaica fund its recovery from the storm. That came in the form of a catastrophe bond, which we explain in detail, but we also discuss how sovereign debt could be tweaked in future to help stricken countries get by.

German promotional bank and leading bond issuer (not to mention recent GlobalCapital Podcast sponsor) KfW is an important player in the European economy and in global capital markets. Its CEO, Stefan Wintels, joined us to discuss the bank's role in the German economy as the country ramps up infrastructure and defence spending, Germany's green transition, and the digitisation of the bond market.

We also delved into why Europe's banks have recently boosted their issuance of green and other labelled bonds.

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◆ How French issuers are responding to political ructions 

◆ French corporate, agency, bank and sovereign bonds discussed 

◆ French lender brings innovative European Defence Bond

French prime minister Francois Bayrou's decision this week to hold a confidence vote in his government is likely to be a key influence on European capital markets for the immediate future and possibly beyond.

We discuss how it is affecting the borrowing costs and behaviour of different issuers from the country and further afield — from its agencies and the European supranationals, whose spreads took a hit this week, to its investment grade companies, which did some surprising deals.

We also look at an innovative deal from French bank BPCE. It priced a bond the proceeds of which will finance defence. Rising defence spending will be a huge and controversial topic for the capital markets and society for years to come so we examined whether this new label would be one that will stick, what it can achieve for the issuer and the defence industry, and what we can deduce from the execution given the politically-driven market volatility.

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◆ Israel has been loading up on bonds since Hamas attack 
◆ Is the SLB market about to come of age? 
◆ A fresh innovation in corporate lending

Israel has issued almost $5bn worth of bonds since the end of September, an unusual spell of activity for the borrower and one that coincides with its war against Hamas. We examine what deals it has done, with whom, what they will fund and what it means for the rest of Israel's capital markets plans.

Meanwhile, while sustainability-linked bonds have been in the doghouse this year, we uncover some developments in that market that may well assuage investor concerns that the product does little other than greenwashing on issuers' behalf.

Finally, we look at an old dog with a new trick in the loan market as companies alter their revolving credit facilities in a way that lets them have easier access to the money just when they may need it as credit conditions toughen.

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◆ US RMBS sales in Europe: immigration or vacation? 
◆ UBS AT1 makes nonsense of claims of investor fears 
◆ The EU's last hurrah in the SSA market

Concorde and supersonic air travel may be the most famous things that were once yet are no longer transatlantic but the securitization market is another. Stringent regulations since the 2008 financial crisis have made cross-border business difficult. Relief came earlier this year when European regulators clarified what investors needed to do to hold overseas paper and since then business has started to flow.

But it was another, more recent financial crisis that really stimulated the revival. US banks pulled back from parts of their domestic RMBS market after the banking crisis of the spring. Issuers have therefore found a willing audience of investors in Europe. It seems to suit both sides of the trade but doing that business is not without cost. We explain what has been going on and assess whether or not it will last.

Another consequence of the banking crisis was the demise of Credit Suisse and the write-down of $17bn of its additional tier one (AT1) bonds. Some investors swore off the product as a result but this week, CS's new owner, UBS, built the largest ever order book for an AT1 deal. We discuss the reasons for the U-turn in sentiment and look into the deal pipeline.

Also in the pipeline is the last big euro SSA syndication of the year, due from the EU next week. We talk about what sort of market the EU will find when it brings its deal, and moreover, what it tells us about the full scale resumption of issuance in January.

If you thirst for more on securitization, track down Another Fine Mezz, GlobalCapital's weekly podcast dedicated to the market.

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North Africa is one of the most important regions for the European Investment Bank’s financing outside the EU, and one where it sees great potential for funding sustainable development.

In this special podcast supported by the European Investment Bank from Marrakech, which is hosting the World Bank and IMF annual meetings, Ricardo Mourinho, the EIB vice-president responsible for Morocco and Tunisia, explores the Bank’s activities in the region.

Its presence there is longstanding – in Morocco it has invested €10bn since 1979. The EIB’s involvement is also deepening, with recent investments spanning renewable energy, water, sanitation, education and health. In the immediate aftermath of the September earthquake, the EIB first worked with the Moroccan authorities to repurpose existing investments, and then pledged €1bn to the reconstruction programme.

Longer term, climate change is a serious challenge for the region – the need to manage water carefully is becoming a key priority, as is sustainable transport. Mourinho emphasises that “the future is green”, so the EIB will not fund projects that are not Paris Agreement-aligned.

Capital Ideas is GlobalCapital's dedicated podcast channel for thought leadership. To find out how GlobalCapital can help your organisation amplify its message, contact:

Jack Thomson, publisher
jack.thomson@globalcapital.com
+44 20 7779 8083

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Sustainable finance has become a huge market, with issuers all over the world having sold more than $2 trillion of green bonds. Yet the climate emergency is still getting worse. Finance is committed to aligning with the Paris Agreement, but is it on track?

In this special podcast supported by the European Investment Bank to coincide with the World Bank/IMF annual meetings in Marrakech in October 2023, Nancy Saich, the EIB’s chief climate change expert, and Eila Kreivi, its chief sustainable finance advisor, discuss the finance industry’s efforts to become sustainable.

They point out that no parts of the financial markets are yet fulfilling the Paris commitment. While finance is flowing to green technologies, this needs to increase massively – and just as importantly, the financing of fossil fuel expansion has to end.
Between those two priorities is another – financing the whole economy as it transitions. Saich and Kreivi discuss how the financial system can create standards to define what is an ambitious transition, and what is a just one.

Capital Ideas is GlobalCapital's dedicated podcast channel for thought leadership. To find out how GlobalCapital can help your organisation amplify its message, contact:

Jack Thomson, publisher
jack.thomson@globalcapital.com
+44 20 7779 8083

Send us Fan Mail

◆ The Beatles may have a new, if that is the right word, song but one of their classics sums up Zambia's debt restructuring best 
◆ The bank treasurer's dilemma 
◆ A new index for the covered bond market

To say Zambia has had a convoluted route to get to its debt restructuring is something of an understatement. But it has made major progress this week and the deal it has arrived at with bondholders could be a sign of things to come for the many other emerging market countries negotiating debt relief. We delve into the new debt package and assess its pros and cons.

Meanwhile, at the other end of the credit spectrum, we take a look at the dilemma facing covered bond issuers for the month ahead. Their travails are emblematic of those facing funding officials in all corners of the bond market — whether or not taking the opportunity to issue now will be a smart move to get ahead of the pack in January.

We also look into a new index for the covered bond market from JP Morgan and ask if it solves the problem it means to and whether it will be widely adopted. 

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◆ Why the PE industry is going to have to make the IPO market work 
◆ Real estate, real refi risk 
◆ Managing the SSA bond pipeline

The European IPO market is in a pitiful state. Of the few deals that do make it to book building, some are pulled while some that are priced then tank. Discounts are eye-watering and a lack of liquidity makes bringing mid-cap companies all but impossible. As one ECM banker told us this week, "something has got to give."

Well, it turns out it might just be the private equity industry that does the giving. We discover why financial sponsors must start coming to the IPO market next year and what they can do to manage the risks of doing so. "The whole world is trying to work out what this new price of money actually means," said one market participant.

It seems to mean little but misery for a number of real estate companies. A sector that thrives on high leverage, it is starting to face genuine refinancing risk now interest rates have soared. We sort those that have access to capital from those that have none and discuss the latter's options for staying alive.

Speaking of interest rates, the ECB stood still this week with its monetary policy. We looked into what that means for the sovereign, supranational and agency bond market for the rest of the year, and more importantly, for January — traditionally the busiest month of its funding calendar.

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◆ Scottish government puzzles bond market with debt plan 
◆ Saudi sov wealth fund makes sukuk debut as crisis in Middle East deepens 
◆ Supranational hybrids and other highlights from the IMF/World Bank Annual Meetings in Marrakech

Scotland's first minister Humza Yousaf caught the attention of the bond market this week by revealing plans for the country's first sovereign issue. The plans are vague and he has given himself until May 2026 to price one, so we cast our net far and wide to see what the market thought of the idea and whether it's prudent policy or political posturing.

As GlobalCapital said would happen last week, there was debt issuance from the Middle East, despite the escalation in fighting between Israel and Hamas. It was a landmark trade too: Saudi Arabia's Public Investment Fund's debut sukuk. We assess how it went and what comes next, if anything, for emerging market bond issuers.

Scotland's plans for sovereign bonds, or Kilts as we're calling them, may have been eye catching but they're not the only innovation in the SSA market at the moment. Far more concrete an idea — and with far greater consequences for the market at large, and development finance generally — is hybrid capital from supranationals. 

They were a hot topic at the IMF/World Bank Annual Meetings in Marrakech last week, from which our team has just returned to share the most important discussions that took place from development bank capital, to Morocco's earthquake recovery to the impact of war in the Middle East and more.