The GlobalCapital Podcast – Details, episodes & analysis

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◆ Slovenia debut emblematic of issuers tapping Japanese market despite carry trade chaos 
◆ Being all things to all investors in the covered bond market 
◆ Corporate issuers keep it short and sweet

This week we take an in-depth look at the techniques bond issuers are using in the race to get as much funding done before the US election. Benchmark issuance resumed early this year after the summer lull and it is clear that issuers are keen to get their bonds sold as quickly as possible. We focussed on three tactics.

One was investor diversification. Slovenia made its debut in the Samurai market this week but it is not alone among what have traditionally been considered emerging market sovereigns in doing so. Mexico was a recent issuer and there are plenty of countries in the pipeline. We examine the attractions and difficulties of the Japanese market, especially in light of the recent market volatility caused by the Bank of Japan putting up rates and the effect that had on the so-called yen carry trade.

We also looked into the diminishing demand for long-dated debt. Bonds with long tenors were a hot ticket all year but demand has dwindled of late. We find out why through the lens of the corporate bond market and what issuers are doing to adjust.

In the covered bond market a third tactic was in play: appealing to as many investors at possible at once. TD priced a slug of covered bond issuance in euros this week that you would more commonly find in the dollar market for unsecured debt. We discuss what the Canadian issuer was trying to achieve, whether it succeeded and if the technique will catch on.

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◆ Why benchmark issuance has resumed earlier than usual
◆ What lies ahead for capital markets
◆ African issuers switch out of loans to bonds

Unpredictable weather is increasingly a feature of modern times. Indeed, as GlobalCapital recorded this week's show, summer appeared to have ended abruptly in its corner of the UK, with distinctly autumnal weather dampening both the pavements and the mood despite there still being a chunk of August to go.

The bond market was also looking distinctly unseasonal this week too, as issuers across asset classes resumed public benchmark bond issuance early compared to most years. We look at what got done, the health of the market and why issuers have gone early.

We also discuss what African borrowers are planning as they switch from loan funding to bond markets and what is driving that behaviour. Plus the latest from defaulted Ethiopia's negotiations with creditors.

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◆ Banks need a bond market leader, just not a French one 
◆ From Golden Goose to lame duck 
◆  CMBS problems, rise of solar ABS

Europe's banks have been unwilling or unable to issue bonds since French president Emmanuel Macron sent the markets into a tailspin a couple of weeks ago by calling parliamentary elections. We explain why the uncertainty the election is causing is so bad for so many bond issuers, and also which banks can restart issuance in their market.

We also look at a triumphant return to sustainability-linked bond issuance for Enel, the Italian power company which created the structure. But it wasn't all good news from the country this week. Golden Goose, the maker of expensive trainers, pulled it IPO. We examine why.

In securitization, we looked into problems in the commercial real estate sector that are hitting investors but rather more cheerily, we find out why solar ABS might be coming to Europe.

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A number of senior bond bankers in Europe’s corporate bond market cannot for figure out why investors are buying what they have to sell.

With US inflation above expectations this week suggesting central banks could be about to raise interest rates imminently, yet again, some bankers are having a hard time figuring out why you’d buy anything now that you could buy at a much better yield by waiting a couple of weeks.

We explain how deals are getting done in such a volatile market and what is driving investors into the market when they know bigger returns could be had by waiting.

We also look at what a fresh round of investment banking job cuts in the US might bring and whether there are in fact signs of hope that suggest the cuts might not be that severe.

Finally, we talk about the drive to get bankers back to the office. It could be a handy way to prune excess staffing numbers as those who crave flexibility leave the industry but, as we discover, balancing what is best for the business with what is best for the people that make it happen is far from a settled issue.

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Almost a year ago, we discussed the energy crisis for the first time on this podcast — how energy companies were using the capital markets in the face of higher demand for their product and what it meant for inflation. A year on, things are much worse.

Russia’s invasion of Ukraine a few months later has turbocharged that crisis to the point where this week governments are once again unveiling fiscal support packages to help people and businesses through. We look at where the capital markets might be used to fund the response and whether they can shoulder the burden with shrinking central bank monetary support.

But we also revisit what the energy companies — and others linked to the sector — are doing now that they are facing extreme swings in the price for gas, what it means for their finances and what they need from the capital markets to navigate through it. 

And speaking of volatile markets, we discuss how one investment bank has recalibrated its primary bond business in credit markets in a way it thinks will help it to act more quickly and decisively just when such qualities may make the difference not just between winning a bond mandate or losing it but in being able to execute it without losing your shirt in the process.

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Earth Wind and Fire’s September, a nostalgic paean to the joys of the first month of autumn, might strike a chord with those involved in the business of raising bonds for companies and banks this year.

Traditionally — along with January — one of the busiest months in the primary market calendar, most Septembers offer a bumper harvest of bond issuance as investors return form their summer holidays refreshed and with new piles of cash to deploy for the final quarter of the year.

But this year, things are very different. With no central bank buying to prop the market and a whole host of economic horrors facing it from soaring energy costs, inflation and the prospect of a global recession, issuers will face a far tougher time persuading debt investors to part with their money.

We examine the perils facing banks and companies for what will be one of the trickiest months of the year to see which issuers are the most vulnerable, what kind of market they will face and how they can navigate it to raise vital funding.

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Perenna is a company hoping to change the way home buyers borrow money in the UK with a system borrowed from Denmark. It claims its way of lending money will make housing more affordable. We test that claim and look into how this change could affect the covered bond and residential mortgage backed securities (RMBS) markets.

With the number of publicly listed companies seemingly in secular decline, we discuss how stock exchanges and regulators around the world are competing to persuade companies to list with them — especially exciting, new tech firms. We examine what a company needs from an IPO and the public trading of its stock and what it wants to avoid, and how the various reforms are helping or hindering those aims. 

We also take a closer look at the biggest market of them all, New York, which seems to be taking a rather different approach to regulation from the rest of the world and debate what the consequences of that may be.

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The Rhine, which flows through Germany's industrial heartlands, is drying up and that could spell trouble for the corporate bond market.

A number of industrial giants — investment grade bond issuers with around €66bn of debt between them — all of a sudden can no longer use the river in the ways they are used to.

They are struggling to get materials in, carry out their processes and to ship their goods out. It is the second time the river has run low in just four years. The last time it was this low was over 100 years ago.

We examine what the ramifications of this will be for the companies affected and their debt and for their suppliers and customers, but also whether this is a prime example of the true costs of failing to tackle environmental sustainability — perhaps the defining long term problem facing capital markets and society at large.

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Nancy Pelosi, speaker of the US House of Representatives, riled China this week by dropping in on Taiwan. The ripples of the visit spread across the Asian bond market, already suffering from myriad pressures both local and global.

Issuers pulled deals as investors worried about just how far China would go in its retaliation but it was not such a bad week for every borrower, as Singapore demonstrated. We look at how the diplomatic dispute will hurt the Asian bond market in the weeks and months ahead.

In Europe, trouble is brewing in the collateralised loan obligation (CLO) market. The investors which stump up the cash to allow issuers to put CLOs together in the first place are being squeezed to the point where it is becoming uneconomical for them to put money in. We examine the causes driving this and what the CLO market can do to overcome it and keep the deals flowing.

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From the German equity capital markets, through leveraged finance, to the hairier parts of the blue chips’ balance sheets, raising capital is not easy if you’re a corporate treasurer.

We take a look at the problems hindering Frankfurt-listed companies from raising equity capital and what they propose to do about it — not to mention the perils they face if they do.

But we also look at the barren leveraged finance market. Sponsors and banks in this deal desert had found an oasis in the form of direct lenders. But now the well looks to be running dry, we investigate why and what the alternatives are.

We also look ahead to what must surely be a day of reckoning fast approaching for companies with hybrid capital — a complex type of funding designed to improve an issuer’s debt metrics and credit ratings. The market for hybrid debt has been moribund but it cannot remain that way forever. We talk about what is likely to happen when it reopens and what affect this will have on the companies that use it.