Send us Fan Mail

◆ 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.

Send us Fan Mail

◆ 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.

Send us Fan Mail

◆ 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.

Send us Fan Mail

◆ 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.

Send us Fan Mail

◆ 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.

Send us Fan Mail

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

Send us Fan Mail

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. 

Send us Fan Mail

◆ 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.

Send us Fan Mail

◆ 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.

Send us Fan Mail

◆ Will Israel-Hamas conflict or US rates derail EM primary? 
◆ Europe's IPO market dealt a new blow 
◆ Private credit muscling in on investment grade lending

Emerging market issuers sold no dollar bonds in the immediate aftermath of both Hamas's attack on Israel on October 7 and Israel's initial response. But the violence was not the only reason for the lack of issuance, as we discover. EM bond printing is set to resume imminently and from the Middle East, of all places. We explain why and how.

Meanwhile, another pulled IPO in Europe was another kick to a market that is most definitely down. We discuss Planisware's decision to hook its listing and what the ramifications will be for future IPOs. We also look at where new listings activity might now come from.

Finally, we look at how and where private credit is making inroads into lending to investment grade companies, a business traditionally the reserve of banks. We find out that they have a niche to exploit that might well develop into what some are calling a "symbiotic" relationship with traditional lenders as they do the business the big banks won't.

Send us Fan Mail

◆ IG investors comfort eat sweet spreads 
◆ What can FIG issuers do now? 
◆ US HEI securitizations: mainstream or flash in pan?

With some core government bond benchmarks soaring to their highest yields in over a decade this week, we looked at the effects long term rising interest rates and short-term spikes in yields are having on what investors will buy and what issuers can raise from the capital markets.

We discover from which end of the risk spectrum corporate bond investors are keen to buy and what effect that is having on the pricing of the riskiest types of investment grade bonds. 

And we also look at the market from a bank funding official's point of view and how their menu of capital raising options is changing in the bond market.

Finally, we look into a burgeoning asset class in US securitization — deals based on home equity investments — and find out that higher interest rates are both friend and foe to the development of this market.

Send us Fan Mail

◆ Central banks and governments want to take banks’ money 
◆Where has the greenium gone? 
◆ Direct lending goes investment grade

 Banks have been having a whale of a time as issuers in the bond market this month, with ample demand. But a whole gang of threats is creeping towards them. Having failed to pass on higher interest rates to their depositors, banks are vulnerable to a deposit war, in which banks compete with each other to raise rates and attract deposits – but worse, governments are wolfing the same money by issuing very popular retail bonds that pay far more than deposits.

Meanwhile, central banks are not satisfied with the monetary tightening measures so far and want to actively drain liquidity out of the banking system. The European Central Bank is talking about massively jacking up its Minimum Reserve Requirement, which would force banks to park money idly and squeeze their profits. It might also start selling its QE holdings of bonds into the market, which again would suck deposits out of the banks.

All of this points to banks having to borrow much more in the bond market, which could be painful for the weaker brethren. Worst of all, it could tip the banking sector into a crisis, or the economy into a recession.

Plus we look at the dwindling greenium in the public sector bond market and the new craze among direct lending funds: investment grade companies.

Send us Fan Mail

◆ Why investors are piling into SSA bonds despite the tight spreads 

◆ Bank AT1 issuers spy chance 

◆ EDF pioneers in Kangaroo market

Benchmark bond issuance resumed across asset classes this week. In the SSA market, we investigated why issuers were able to build record order books for huge bonds when spreads are so tight.

We also inspected a restricted tier one deal from Allianz to see what it meant for banks looking to issue their version of that level of capital — additional tier one.

Finally, we looked at a rare trade from France's EDF in the Kangaroo market. Aussie dollar funding is of growing importance to the world's bond issuers so we looked into what the implications of this long-dated deal would be for other companies.

Send us Fan Mail

◆ Should markets rejoice or worry? ◆ FIG borrowers are gung-ho ◆ Topping rates poses quandary for EM ◆ CLO investors sort sheep from goats

Capital markets of all stripes wrestled this week with one question: what happens next to interest rates? Each market had its own interpretation, and they were surprisingly different.

Public sector bond specialists worried about how the Federal Reserve and European Central Bank’s ambiguous behaviour will affect deal appetite. Financial institutions are loving it and cracking on early with next year’s funding, while corporate borrowers are finding investors want just one thing: spread.

For emerging markets the stakes are much higher and the gambles issuers have to make much riskier. And we hear from the European CLO market, where investors are beginning to do what might seem obvious: distinguish between different CLO managers.

Send us Fan Mail

◆ A new NPL threat to Italian banks 
◆ Hybrid capital gets a makeover 
◆ Covered bond liquidity 
◆ SSA market finds its rhythm

Reaction in the markets to Italy's plan to allow bad lenders to buy back their loans at a small premium to what the owners paid for them has been both critical and robust. Is it just private investors griping about not being allowed to make enough money, or is there something bigger and more fundamental at stake for Italy's banking sector? We find out.

We delve into what Moody's revision to how it assesses hybrid capital means for issuers and give an update on some innovative deals in the asset class for multilateral development banks.

Meanwhile, news from Munich where we took the pulse of the covered bond market at its biggest event of the year and, finally, a sense of direction in the SSA market this week as two European institutions weighed in in the form of the EU and the ECB.

Send us Fan Mail

Some corporate borrowers are finding the once verdant loan market a hostile spot to hang out lately, driving some companies to test out bonds for the first time. If a debut deal this week from Germany’s Rewe — which seems to still be able to access loans without any problem — is anything to go by, then the potential debutants planning to take the plunge should feel very confident indeed.

In the world of SSAs, the market has been hit and miss in ways that bankers and issuers find hard to define. There are three major theories as to why, as explored in the podcast, but the most striking one is that the market is holding its billions of euros back for the European Union’s late summer syndicated trade.

 Meanwhile, somewhere famously not in the EU has run into some bother. The UK’s second largest city and England’s largest council, Birmingham, is facing a funding crisis. Beyond the acute problems for the city itself, the financial failures have put a significant dent in long held hopes that the UK local authorities might start to take more funding from the capital markets.

Finally, we head to Turkey, where two of the country’s biggest banks — Vakif and Yapi Kredi — were in the market on consecutive days, to the detriment of both deals. The Turkish sovereign has another $2.5bn to raise before the end of the year, so we discuss what can be gleaned from the banks’ outing.

Send us Fan Mail

◆ Nordea's novel twist on sustainable funding goes mainstream 
◆ Corporate and SSAs: here for the duration 
◆ Gabon and off: coup hits bonds

Having inaugurated the product in its home currency markets, Nordea this week brought its SLL bonds to euros. The deal's proceeds are dedicated to funding the lender's sustainability-linked loan book, creating an instrument that is ESG-themed but is neither a sustainability-linked bond, nor a green bond. We examine its credentials and find out who else might be issuing one.

In the primary bond market this week, there was clear evidence that investors want long-dated bonds, which has not been the case all year. This was clear in the corporate bond market where long-dated tranches were much in demand but what could SSA issuers be doing to take advantage of this trend?

Finally, regular listeners will be familiar with Gabon's recent debt for nature swap, which included a new blue bond. We look at what a coup in the country means for the issuer's debt pile.

Send us Fan Mail

Issuance returned to multiple debt markets this week after the summer drought, with the sovereign, supranational and agency market and corporate bond markets seeing a spurt of trades.

While everything was orderly, there was a noticeable lack of pizzaz to many of the trades, with small books compared to historical averages and some issuers needing to pay higher than usual premiums.

This is not what the market wants to see before the September surge starts in earnest. The coming weeks are going to be packed with deals, and in an ideal world, borrowers would be going into this frenetic period knowing that order books are bulging and premiums are thin.

Meanwhile, in the CLO market, spreads are nearing their magic number. With spreads tightening around 25bp, and CLOs that priced last year taking the defensive measure of adding short non-call periods, a handful of CLOs are already looking to take advantage and reset their deals to a tighter spread.

However, for more CLOs to join the trend, spreads need to tighten by a little more. But once that happens, it’s off to the races for resets, and the market can expect to see a deluge of repricings in short order.

Send us Fan Mail

◆ China property co debt straits play out in EM... 
◆ ... and European corporate bonds 
◆ The industrious sterling bond market

The aftershocks of Chinese property development whopper Country Garden's revelation that it would miss bond coupon payments rippled across the world's capital markets this week. We follow the trail from the beleaguered builder throughout the capital markets to see how it could hit the European corporate bond market and how it has already impacted upon demand for emerging market bonds.

As the German dramatist Gotthold Lessing wrote, "...everything is connected, everything is interwoven, everything changes with everything, everything merges from one into another." This is one of those fascinating threads in global finance that demonstrates the interconnectedness of the world's economy and markets. The picture was rosier in the UK, however (and how often has anyone been able to say that the last couple of years?), where the sterling bond market is in fine form. We highlight new bonds from a couple of UK FIG borrowers and examine why the market is so busy when others appear to be on a summer holiday. Who says the UK has a problem with productivity?

Send us Fan Mail

Central Africa’s Gabon did what no other African sovereign has done this week when it completed a debt-for-nature swap which included the first ever blue bond from the African continent.

But the deal did not come without its intricacies, as the sovereign got an insurance from the US Development Finance Corp, meaning that the usually Caa1/B- rated country was now selling Aa2 rated debt.

It took a couple of attempts to get the deal right, after the sovereign postponed the deal last week because of rates volatility. We delve into what it took to get such a deal over the line.

Meanwhile, the FIG market is going full guns blazing with multiple deals pricing this week. One of the standouts was an Additional Tier 1 trade from BNP Paribas in dollars, the first such deal in the currency since Credit Suisse sent shockwaves through the AT1 market on its collapse. 

Send us Fan Mail

◆  US downgrade: why, if you liked US Treasuries at 3.96%, you'll love them at 4.18% 
◆ A new fund for forests 
◆ The African sovereign bond paradox 
◆ Pemex problems

There was a lot going on in the US Treasury market this week, following a downgrade of the sovereign by Fitch, an increase in government borrowing beyond what was expected and jobs data. We delve into what it means for the bond market.

Meanwhile, former World Bank treasurer Ken Lay is gaining some traction lately with an old idea he has been working on for years — a sovereign wealth fund to save forests. We explain how it would work and which countries are up for it.

Finally, we turn our attentions to the emerging markets where some see the return of Gabon to bond issuance this week as a sign that other African sovereigns will follow. But there's a paradox: investors don't want to buy bonds from those issuers until the yields are lower. We explain why and whether any of those issuers will be forced to raise debt capital anyway and how they might do it.

We also talk about mounting problems at Mexico's state-owned oil company, and EM bond market giant, Pemex.

Send us Fan Mail

Send us Fan Mail

◆ G20 tries again for MDBs to do more 
◆ The investment case for Turkey after UAE steps in 
◆ Will the CMBS revival be stunted?

Multilateral development banks, which borrow money from the bond market at triple-A rates to fund projects in the developing world, are the subject of great scrutiny as the world claws its way out of the pandemic and grapples with climate change.

The G20, which met this week in India, is urging them to raise more on the capital markets to lend greater support in the developing world. This week, we reveal how these financially conservative institutions are coming round to the G20’s way of thinking after much initial resistance. We discuss why and what that means for the capital markets.

Meanwhile, the UAE has made a huge financial commitment to help Turkey as it recovers from devastating earthquakes in February. We took the opportunity to examine how that and president Recep Tayyip Erdogan, re-elected in May, might be changing international investors’ views on the country.

Finally, the European CMBS market is making a comeback. We discuss how but more importantly, what structural impediments limit this asset class from reaching its full potential.

Send us Fan Mail

◆ Exclusive interview with Amundi portfolio manager, Jonathan Manning 

◆ Navigating fixed income amid tariff disruption 

◆ Investing at tight spreads

Yields are high and defying predictions that they will fall. Meanwhile, spreads are tight across credit markets with recent new issues pricing at or through fair value.

Then consider erratic US trade policy, the early signs of international investors abandoning dollar assets and the rise of private credit into investment grade credit, and you have an awful lot to think about as a fixed income portfolio manager. 

All of which was why we were delighted to speak this week with Jonathan Manning, senior global credit portfolio manager at Amundi, Europe's largest asset manager, who talked to us about all of that and much more besides.

Send us Fan Mail

◆ "Nobody on the road, nobody on the beach," as issuers spy their chance
◆ Why SSAs are in prime position for the rest of the year
◆ A record breaking deal in Asia's equity-linked bond market

Don Henley lamented the lack of people on the road and the beach in his song The Boys of Summer. Some in the bond markets might be thinking the same almost 40 years later as there appears to be very little let-up in issuance activity, putting paid to the old saw that summer is an idle period for primary markets. 

We find out why bank issuers in particular are looking for opportunities to raise debt capital and what the risks could be of entering the corporate bond market.

One issuer group in a strong position, however, is SSAs. We find evidence in a syndication from the EU this week that the balance of power lies very much with the borrowers.

Meanwhile, LG Chem issued a stunning dual tranche $2bn exchangeable bond this week, smashing all sorts of records in the process. We examine the deal and find out discuss the next lot of equity-linked issuance is coming from given the clear investor appetite for the product.

Send us Fan Mail

◆ The World Bank's Valerie Hickey 'we need green systems, not projects'

◆ Two airports praised for SLBs

◆ Three IPOs revive market for European listings

Valerie Hickey is the World Bank’s global director for the environment, natural resources and the blue economy. She talked to us about the challenges the world faces in getting capital to developing countries, what the World Bank is doing about it and how a change of thinking is needed to make development finance more effective.

Meanwhile, Heathrow and Aeroporti di Roma both priced sustainability-linked bonds this week. The product has come in for criticism this year but market participants had good things to say about these two deals. We investigate why and question just how effective a tool these will be for bringing change to the aviation industry.

Another market that has not had a vintage year is that for new listings in Europe. But three IPOs were priced this week, giving us cause to ask whether a full recovery is underway.

Send us Fan Mail

◆ Its pipes leak but does Thames Water’s debt structure hold water? 
◆ How the EU’s funding for H2 impacts the SSA market 
◆ LatAm issuers like London buses but not for the obvious reason

Thames Water, the utility that hydrates over a quarter of the UK population, ran into trouble this week that could result in its renationalisation. We examine the company’s debt structure and assess what it means for the health of its whole business securitization.

Meanwhile, the EU revealed a much smaller funding requirement for the rest of the year than many expected this week. We discuss its impact on other SSA issuers and how it affects the issuer’s quest for investors to view it as a sovereign borrower.

London buses, the cliché says, don’t come for ages and then several arrive at once. That’s the tale of the Latin America primary bond market this year too but it’s not the only comparison to be made with the double deckers on the UK capital’s streets because plenty of this week’s deals were also big in the red. Several well-known issuers priced new issues, some of which were over $1bn and some of the week’s bonds went on to trade below reoffer. We assess what that means for LatAm issuers in the weeks to come.

Send us Fan Mail

◆ A dicey moment for bank bonds
◆ Unibail shops for hybrid solution
◆ Vibes from this year's 'Euromoney'
◆ The ESM's new MD speaks to GlobalCapital

The covered bond market had a wobble this week. It was the last thing bank bond issuers needed just as the wreckage of Credit Suisse and Silicon Valley Bank disappeared from the rear view mirror. But it could be the first sign of further volatility in FIG bonds with the market set to face an imminent, severe structural readjustment.

Commercial property firms are a class of issuer that have been facing up to tougher conditions for some time, leading to trickier financing conditions. We discuss shopping centre operator Unibail-Rodamco-Westfield’s novel way of refinancing its hybrid debt, which is callable next month.

The 32nd edition of Euromoney’s Global Borrowers and Investors Forum took place this week, at which GlobalCapital played a prominent role. The event, such a big part of the bond market chalendar that it is known to most simply as “Euromoney”, draws in anybody who is anybody from the SSA, FIG and European corporate bond markets. Well, we certainly found a somebody to speak to: Pierre Gramegna, the new MD of the European Stability Mechanism spoke to us at the conference about the institution’s future.

Send us Fan Mail

- Another blow for London listings 
- Cold property: US offices worry CMBS 
- AT1 market revival 
- SLLs vanishing

WE Soda, the soda ash producer, pulled this week its much heralded London IPO. It was a blow that the UK’s equity capital market and the European IPO market needed like the proverbial hole in the head. We examine what went wrong but discover that all is not lost, with three other deals in the works.

Meanwhile, the bank bond market has gone from strength to strength since the dark days of Silicon Valley Bank’s and Credit Suisse’s collapse in March. BBVA and Bank of Cyprus placed the cherry firmly on top of the comeback cake this week by pouncing on investors’ hunger for yield to serve up a pair of stellar AT1 deals – the asset class at the centre of Credit Suisse’s controversial rescue.

The situation is more worrying in the US CMBS market where a perfect storm highlights the peril of offices and a section of the securitized products market. Finally, in the sustainability linked loan market issuance is shrinking but as we discover, that might be a good thing.

Send us Fan Mail

- AI: the cheat code to cheap labour? 
- Why NY might be about to get it very wrong on sov debt restructuring 
- A huge green bond debut for Aussie mining state

Artificial intelligence might not have made it far past drafting generic deal pitches and finding a list of comparable bonds just yet but that, it could be argued, is already a chunk of what junior bankers do when they are learning the ropes.

As yet unable to solve some of the more serious inefficiencies in the capital markets industry yet, the use and uses of AI are surely only going to grow. We look at what the consequences of that might be on jobs and how business is done.

Meanwhile, legislators in New York are working through reforms to sovereign debt restructuring laws that would enforce the inclusion of private investors. We examine the perils of doing so.

Finally, Western Australia priced a huge debut green bond last week. The state has a huge mining industry that does environmental harm. We find out why none of the proceeds of the bond will go directly on reducing its impact.

Send us Fan Mail

• An attempt to raise standards in the SLL market
• Will WE Soda’s IPO pop?
• Grocer price caps enrage bond investors

First off, apologies to John Betjeman for the above mauling of his work but it isn’t often that you see market participants applauding attempts to regulate what they do and it inspired us to verse, albeit not our own. That happened this week when the UK’s Financial Conduct Authority decided to investigate the sustainability-linked loan market to see if things needed tightening up. We tell you what they are and why.

Meanwhile, after years of fretting over its status as a major equity market, London is about to host the biggest listing in Europe all year. WE Soda may not be the sort of glamourous tech company the UK craves for its stock exchange but it will be a big deal and a big moment for both the UK and European IPO markets. We discuss what is at stake.

Meanwhile, bond investors expressed fury that food retailers might be subject to price caps. We examine why.

Send us Fan Mail

• How borrowers are navigating the US’s debt ceiling stand-off
• The rise of Middle East capital markets
• Tougher times ahead for European corporate issuers

 This was the week when capital markets really started to worry about the US hitting its debt ceiling. We examine how that affected issuers in the dollar market this week from SSAs to the big Wall Street firms, to big companies. But the tension has spread far beyond the US, including to the European corporate bond market where, if you looked closely, there were this first signs of trouble after a buoyant three weeks of issuance. We look at how that market will cope in the coming weeks and months given Uncle Sam paying his dues is far from its only worry.

The Middle East capital markets have also been in fine form. Not only do we discuss the sukuk market’s stellar year and weather this marks a turning point in its development; we also look at an astonishing IPO from Abu Dhabi to see what it tells us about the growth, but also the limitations, of the region’s capital markets.

Send us Fan Mail

• Sukuk market flying but other parts of EM in peril
• What now for Turkis issuers?
• SSAs dive into dollars despite debt ceiling threat
• Exciting pricing in UK RMBS

Emerging market issuers are hardly a uniform bunch and that was demonstrated this week with some taking full advantage of an undersupplied sukuk market, while in Latin America, some borrowers are facing disaster. Meanwhile, in Turkey, market prices last week suggested investors and dealers got their election predictions wrong. With the run-off vote approaching, we look into how Turkish borrowers’ market access will shape up.

The dollar market has become a less reliable place for SSA issuers since the Federal Reserve started putting up interest rates. But issuers piled in this week as pricing fell in their favour. We look at the impact the problems with the US debt ceiling may have for these issuers.

The RMBS market was ablaze with activity this week too with three deals. Two of them — for Lloyds and Virgin Money — achieved remarkable pricing. We discuss those trades and what they mean for a market that is likely to once again become a more important part of banks’ funding mix.

Send us Fan Mail

• Pivotal moment for Turkey’s bond issuers
• Once upon a time… in Ecuador
• Crunch time for RMBS

It’s not every day that a Hollywood megastar endorses a bit of finance arranged by a notorious investment bank to protect the Galapagos Islands; in fact that is a very specific set of circumstances indeed. So, when Leonardo DiCaprio posted on Instagram this week in praise of the largest debt for nature swap so far — for Ecuador, arranged by Credit Suisse — we had to talk about it.

The drama around the deal is even higher for it coming at a time when Ecuador’s president is at risk of impeachment. And another president who might be facing an imminent exit is Turkey’s Recep Tayyip Erdogan. We look at what the country’s elections this weekend will mean for its bond issuers.

Finally, we brace for a critical period in European securization as RMBS issuance ramps up as banks wean themselves off central bank funding.

Send us Fan Mail

◆ Wendel proves the summer market isn't just for the big boys 

◆ Trio of new issues show buoyant market for banks 

◆ Private credit's threat to the investment grade bond and loan markets

Both the investment grade corporate and financial institution bond markets this week hosted stellar new issues, proving that for certain issuers the perceived lack of summer liquidity is a fiction.

Wendel broke its usual issuance pattern to price a very successful new issue, proving that it isn't just the biggest blue chips that can get deals done. We ask what Wendel's success has done to the immediate pipeline in that asset class.

Meanwhile, there was a hat-trick of well-received new issues from major bank issuers. We look at the options for FIG issuers across the capital stack in light of these trades.

Finally, the rise of private credit is one of the hottest topics in finance. Traditionally a source of cash for sub-investment grade companies, investors are now looking to lend to the best rated borrowers. We discuss whether this is a threat to the bond and loan markets.

Send us Fan Mail

• European banks duck out of lending and underwriting
• Can risk transfer solve the US banking problem?
• Irritation in the corporate bond market

Evidence has emerged of banks, particularly from Europe, doing less funding for high polluting clients. It represents a riposte to accusations of greenwashing but, as always in green finance, we discover there are many shades of grey. Meanwhile, US regional lenders are under further pressure. We look into whether a technique popular in Europe for managing risk could save them. Finally, we examine whether corporate bond issuers’ claims that their banks are serving them poorly in terms of telling them what investors want are warranted.

Send us Fan Mail

• Italy and Switzerland give bank bonds a boost
• A renaissance for emerging market corporate issuance… or not
• Using pension funds to fix UK equity capital markets

Banks’ access to debt funding and capital hit two important waypoints on the journey back from March’s crisis towards full health. UniCredit called an additional tier one deal, reassuring investors that all is as it should be in the asset class, and a Swiss bank priced a bond in the international market. But, as we discover, questions remain for the sector despite both events. 

Meanwhile, a bond for a South African energy firm was the sort of deal that might be expected to lead to a spree of emerging market corporate issuers in the market. But here too there were plenty of reasons to be sceptical of a full reopening taking place.

Finally, we looked at hopes that the pensions industry in the UK can fix the country’s equity capital markets — if only someone could figure out how…

NEXT WEEK: GlobalCapital did its first ever editorial webinar this week with three of its editors tackling your questions on some of the biggest topics in capital markets. You can view it here. And if you have a question you’d like us to answer, or any comments you’d like to make based on the webinar, or indeed anything you encounter on GlobalCapital, then please email us at podcasts@globalcapital.com and we will do our best to tackle some of them next week.

Send us Fan Mail

• Will securitization finally throw off the shackles?
• Bank funding progress report 
• EU sustainability taxonomy causes more aggro
• Australians take over European corporate debt

European securitization has been in something of an open prison, GlobalCapital argued this week, since the 2008 financial crisis. But the end of central bank funding schemes — themselves an indirect consequence of that crisis, which securitization carried the can for — means that ABS could be about to break out. We examine the market to see if it is going to rediscover its pre-crisis heyday. It will be a key funding source for banks, which this week showed how well they are recovering from the March madness that claimed Silicon Valley Bank and Credit Suisse. But, as we discover, the market still bears scars. Meanwhile, new additions to the EU Taxonomy for Sustainable Activities are proving just as controversial as what was already in there. And finally, we work out why so many Australian companies hit the European corporate bond market this week and discuss the implications.

Send us Fan Mail

• Quantum computing’s impact on capital markets, oh boy!
• IPOs are back, and they’re going to be done differently
• The corporate hybrid debt market’s biggest test
• A green rating to rule them all

We assess what boffins and bankers have been telling us about the impact quantum computing will have on financial markets. As is so often the case with technological leaps, views differ between whether the computational power that quantum offers is a solution in search of a problem that isn’t already being solved adequately by Microsoft Excel, or whether we stand on the cusp of a genuine revolution in how markets work. And of course, there are huge risks to consider, not least around security. Is the sky the limit, or is Skynet the limit? We examine the claims. We also look into the European IPO market’s comeback and a shift in how deals will be done; an intimidating amount of corporate hybrid debt that needs refinancing; and a new venture for rating companies’ green claims.

Send us Fan Mail

• Europe’s big banks issue for first time since Credit Suisse collapse
• Investment grade corporates power through
• What makes a crisis?

Lent appeared to end early in the bond markets this week as issuers across the credit spectrum brought a rash of deals, leaving encouraging markers for the weeks ahead. By recent standards of market dysfunction, issuers have been quicker to come back to the market than some would have expected. But were these Easter eggs all they cracked up to be?

Certainly, issuance resumed after the hiatus caused by the demise of Silicon Valley Bank and Credit Suisse last week but it powered up a notch since as big eurozone banks entered the fray, well rated corporates issued deals and even high yield issuers priced bonds. But we took a closer look at how these deals performed and how well investors digested the feast to give a health assessment of the capital markets. We also looked ahead to what could quash the positive feeling that drove issuance this week.

Among those items on the worry list is, of course, the banking crisis that has dominated the markets for the last month. We talk not only about whether it is over but whether it is even right to call it a crisis in the first place.

Send us Fan Mail

• Banking crisis not over, says veteran analyst
• Why European banks are sitting out the primary market revival
• From Berlaymont to Berlin: reading the runes in the SSA market

The creatures of the capital markets poked their noses tentatively out of their burrows this week to see if the banking storm had passed and to survey its impact. Issuers tested the primary markets with new bonds and no further banks needed rescuing. But, according to veteran equity analyst, Steve Clapham, founder of Behind The Balance Sheet, this could well be a lull in the torrent rather than the promise of blue skies from now on.

He talked to us about the state of the banking sector, its serious problems, the difficulty in fixing them and whether more lenders could go to the wall in the near future. 

Meanwhile, we looked into when banks will be able to issue fresh debt and what they will be asked to pay for it after a week where they were the most cautious type of issuer to do venture into new public funding.

It was a different story in the sovereign, supranational and agency bond market where there were deals galore. But after a barnstormer from the EU, the following pack did deals that were less spectacular. We assess what this tells us about the state of the bond markets.

Send us Fan Mail

• Is the banking crisis over?
• Is additional tier one capital finished?
• Rival banks will try to pick off Credit Suisse’s corporate clients

 The elimination of Credit Suisse as an independent bank last weekend was swift and clinical, but the market response has been anything but. Bond issuance was all but closed this week.

Financial institution bond spreads widened massively at the beginning of the week, especially on additional tier one capital (AT1) bonds. This uber-geeky product became a household name when the Swiss authorities decided to wipe out all Sfr16bn of Credit Suisse’s AT1, treating it worse than the equity. We discuss whether AT1 can recover or is now fatally tainted.

We also explore when and how bond issuance will resume by public sector, financial and corporate borrowers. Volkswagen did manage to bring a successful deal this week, but in general even the public sector space was barren of deals as issuers shied away from the volatility. There were high hopes for next week, but with bank stocks falling on Friday, they are now fading.

Investment banks are already sensing an opportunity amid all the angst, however – they are trying to woo away Credit Suisse’s high quality corporate clients. It is early days, but there are reasons to believe they may have good success.

Send us Fan Mail

• Will Credit Suisse survive and in what form?
• Tech lending after SVB
• A false dawn for EM issuers

Swiss regulators are known for making capital requirements tougher for their banks than rule makers elsewhere — it’s known as the Swiss finish. But that didn’t prevent the Swiss National Bank from having to provide a Sfr50bn lifeline to Credit Suisse this week and the bank’s future is still far from certain.

We investigate whether the crisis-dogged Swiss lender will have time to implement the restructuring it began in October or whether it is about to have a completely different solution imposed upon it, with options including being sold to its local rival, UBS.

Credit Suisse got caught up in the aftermath of the collapse of Silicon Valley Bank (SVB) as markets scoured for weak links in the banking sector. We look this week, however, at what the funding for the tech sector will look like now that HSBC owns SVB UK.

 We also discover how hopes faded over the course of the week for emerging market issuers, which some had hoped would benefit from the rally in US Treasuries that followed the SVB disaster. Turns out it was the wrong kind of rally.

Send us Fan Mail

-                  Hand wringing at the end of Arm saga

-                  Green bond rebirth for corporate issuers

-                  Getting private money into development finance

-                  Lenders look to engage Europe’s telcos

Arm gave the UK equity capital markets a slap this week when it opted to list in New York rather than the celebrated microchip designer’s home exchange in London, despite huge efforts to persuade it to do otherwise. It has prompted a lot of soul searching about the state of the UK as a listing venue but we question if things are really that bad, or if the UK is even being judged against the right peers.

There has also been a resurgence in corporate green bond issuance as the market starts to find fault in sustainability-linked bonds. We look at what is driving the trend back to the OG of ESG-themed securities and what companies’ labelled funding mixtures will look like in future.

One of the biggest problems in global development is the mobilisation of private capital. We report this week on how a new fund is looking to solve the problem and what other solutions the capital markets have come up with to bridge what some reckon is a $2.6tr gap that needs to be bridged for the world to meet the UN’s Sustainable Development Goals.

Finally, we investigate the telecoms sector, which promises to be a big source of lending activity for banks in Europe this year if only something would stop holding it up.

Send us Fan Mail

- QT walks among us 
- Companies get a yen for yen 
- Divi recaps return 
- EU sets Green Bond Standard

Quantitative tightening got a bit tighter this week when the ECB stopped showing up in the order books for new covered bond syndications. The central bank’s asset purchases have been a defining feature of Europe’s bond market for the last few years as used its balance sheet to fight crisis after crisis. We take a look at what the impact will be of its withdrawal and who is taking up the slack.

A week ago, GlobalCapital reported on how expensive it was becoming for some banks to lend dollars to their corporate clients. This week, we found cheaper alternatives in Asia. We delve into the trend for yen in the loan market as borrowers look to manage their funding costs in a world of rising rates.

Meanwhile, one of the more bullish types of leveraged finance issuance is back – the dividend recap – despite the dust barely having settled on last year when banks struggled to syndicate leveraged debt into the wider market. We examine what has driven this spate of deals and whether there has been a sudden change of heart among investors.

Finally, the EU has agreed a political deal for its Green Bond Standard. But of course, negotiating such a thing over the five years it has taken is mere child’ play in European regulatory circles. We look into what needs to happen next for it to matter, including its passage into law and problems with the EU’s Taxonomy for Sustainable Activities.

Send us Fan Mail

◆ Mexico throws Pemex innovative debt lifeline 

◆ Callable ZCs in vogue for public sector issuers 

◆ Why ECB regs update will drive insurance capital issuance

Pemex, Mexico's state-owned energy company, is a storied bond issuer. But lately it has been in a spot of bother. We explain what has been going and what an innovative bit of financing organised by the Mexican government this week — a P-cap — will do to ease the company's debt burden.

Meanwhile, a particular group of investors is buying callable structured notes from public sector bond issuers. We reveal who, the market forces driving this trend and what's in it for the investors, issuers and the banks that put them together.

We also discuss the ECB's latest regulatory update on what is known as the Danish Compromise. The guidance on this piece of regulation that governs how banks treat the capital of the insurance companies that they own is likely to lead to more issuance. Insurance capital is a small, specialist but popular asset class. We debate whether this will be its lift-off moment.

Send us Fan Mail

• Upheaval in the CEE bond market
• Covid aftershocks in the US CMBS market
• What Banga means for the World Bank and SSA bonds

Russia shocked the world a year ago today when it invaded Ukraine. The world has felt the effects, including the capital markets. To mark the occasion we look into three areas of the markets profoundly changed by the war and question how they will develop as the conflict rumbles on.

The pandemic also had a profound effect on how we live our lives, in particular how and where we work. This is now starting to affect the securitization market in the US where deals backed by commercial mortgages are facing rising delinquencies because of the move to hybrid working and rising interest rates. We dissect this market and look at what lies on store.

Finally, it’s all change at the top of the World Bank as it searches for a new president to replace David Malpass who resigned earlier in the week. It may not be the biggest issuer in the capital markets but it is certainly among the most influential institutions on the planet both as borrower and lender. 

Moreover, the change comes at a time when some are urging multilateral development banks to borrow even more. We look into the surprise nominee for the presidency, Ajay Banga, and what his appointment, if it happens, means for the world’s development banks and their place in the capital markets.

Send us Fan Mail

• Are EU bonds govvies yet?
• Fast moving credit market develops a strange rattling noise
• Debt-for-nature: from the Galapagos to the developing world

The EU’s huge funding programme and how it issues debt make it appear very much like a sovereign borrower. But while it might like to view itself as such, its audience of investors and bankers don’t entirely agree that it is… yet.

We discuss why the EU wants to be part of the govvie market, what it needs to do to get there and discover that there could be all sorts of consequences if it achieves its goal in the eyes of the bond market.

Meanwhile, the go-faster stripes seem to be wearing off of the speeding credit market as investors worry about spreads and interest rates and some new bank and corporate bond issues start to look a little stodgy — and it could not be happening at a worse time for issuers.

Finally, we look into debt-for-nature swaps and how this innovative bit of financing could help vulnerable countries deal with two of their most pressing problems: global warming and debt sustainability.

Send us Fan Mail

- Do two IPO swallows make a summer, or a winter of discontent?

- Why investors think SLBs are 'worthless' and what to do about it

- The buy-side grapples with government green bonds

- Moans in loans

The first two IPOs in Europe this year were priced this week, for Ionos and EuroGroup Laminations. They were a key test for the market after a dismal 2022 when many new listings were shelved as market participants grappled with inflation, rising rates, the threat of recession and geopolitical horrors. We examine what the deals tell us about equity capital markets this year.

Meanwhile, all is not well in the sustainability-linked bond market, a nascent crucible of innovation that aims to help issuers meet environmental targets. We look into why investors are calling the coupons the bonds pay irrelevant and look at the latest efforts to value the economics of these trades more meaningfully. We also look at a new resource to evaluate government green bonds.

Finally, although the bond markets has had a stellar start to the year, activity in the loans markets - an alternative source of capital for companies - is way down. We ask why and discover why having such a busy bond market could in fact be a source of encouragement for lenders.