Top stories
CDS faces bail-in threat
Market participants are still evaluating the potential impact of the European Commission’s proposals that regulators should have the ability to forcibly write down the senior debt of faltering banks. For their part, CDS traders are worried that the current wording of the proposals could mean that the CDS no longer performs its job of providing credit protection to bond investors. Christopher Whittall reports.
Commerzbank gets creative
Commerzbank’s tender offer to buy back hybrid debt is likely to be the first of many moves to retire such notes in light of the new Basel III rules. But the precise nature of the deal – with Commerzbank effectively swapping equity for the hybrid notes – is borne out of the German bank’s particular tribulations and is unlikely to set the template for others to follow. Owen Wild reports.
FT puts squeeze on banks
Just as bankers were hoping that investment-grade loan pricing had ceased its rapid decline, France Telecom’s aggressively priced self-arranged loan refinancing has appeared on the scene to provide an early test of loan market conditions. As banks face increasing costs of funds, cut-priced refinancings have to be subsidised through the supply of ancillary business, as Alasdair Reilly reports.
Russian risk revived
Russia is set to be a key IPO market in 2011 and proved it with three flotations launching last week to raise US$1.8bn. Yet there were concerns that none was a must-have, while an accusation that another IPO candidate was operating a cartel was a reminder of Russian risk. Abhinav Ramnarayan reports.
Returning to respectability
The booming German economy and the consequent demand for credit suggest that the country should be a fertile ground for structured finance in 2011. And many market specialists think that the sector will continue its slow recovery from the post-financial crisis depths. But German securitisation bankers face the twin challenges of repairing the asset class’s battered image and rebuilding the investor base for structured paper. Jean-Marc Poilpre reports.
EFSF prepares amid expansion talk
The inaugural deal for the European Financial Stability Fund might appear in the market as soon as this week as the debate about whether the Triple A institution should be expanded continues to rumble on.
Laos stock market makes auspicious debut, Cambodia to follow
A strong first-day performance for Laos’s first listed stocks last week has lifted confidence in the country’s efforts to develop a domestic equity market.
Comment: Keith Mullin
Securitisation to the rescue
Asset-backed securities are slowly but surely clawing their way back to respectability, having been cast aside as a pariah for having, if not caused, then certainly exacerbated the global financial crisis in the eyes of the general populace.
Up Front
Risk assessment
Politicians have come a long way since some called for the death of the CDS market in response to the sovereign debt crisis and the rising cost of refinancing government bonds. Most now take a more pragmatic approach, accepting that the CDS sector might not actually be responsible for the problems after all.
Buttonholing the bankers
After enduring another week of public opprobrium for “trousering” large bonuses (copyright, all newspapers), bankers must be delighted to receive common sense support from a man who makes the trousers into which the controversial remuneration is tipped.
Commerzbank gets creative
Commerzbank’s tender offer to buy back hybrid debt is likely to be the first of many moves to retire such notes in light of the new Basel III rules. But the precise nature of the deal – with Commerzbank effectively swapping equity for the hybrid notes – is borne out of the German bank’s particular tribulations and is unlikely to set the template for others to follow. Owen Wild reports.
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