Australia’s biggest bank is pressing ahead with plans to offer complex hybrid capital securities to retail buyers, even after the UK regulator deemed the format too risky for individual investors.
Desperation for yield prompted investors last week to put big “lottery ticket” bets on several RMBS issues from 2006. The securities are deemed worthless by some, but for others they have the potential for large payouts.
Argentina’s latest debt swap proposal may have made resolution of its default mess an even more distant prospect, but the sovereign’s bond prices still remain surprisingly robust.
The bidding war for discount retailer Family Dollar has exposed the weaker covenants that have seeped into US bonds issued during the red-hot issuance run of the past few years.
For years running up to the 2008 crisis, over-the-counter swap dealers and clearing houses boasted of growing notionals in their derivatives books as a way to exhibit their trading and risk management prowess. That the ballooning numbers also served to inflate the perceived importance of the OTC derivatives market was simply a pleasant by-product.
As the first anniversary of the fledgling single family rental bond market approaches, issuers find themselves at a crossroads as it becomes harder to source homes at knockdown prices.
Holders of Argentina CDS protection are likely to receive significantly lower payouts than they expected after the ISDA Determinations Committee decided to include two yen-denominated bond issues in the list of securities deliverable into the auction.
The first covered bond issue from a Singaporean bank could finally be on its way as regulators near an agreement to open a market estimated to be worth S$25bn (US$20bn). Singapore’s central bank set rules for covered bonds almost a year ago, but the first deals have been delayed for lack of clarity over title issues involving the city’s pension fund.
Junk-bond exchange-traded funds created for retail investors have been hijacked by hedge funds using them to make broad bets on bond prices, causing roller-coaster distortions in the high-yield market. Funds designed for retail investors have morphed into hedging tools that sell off too suddenly, and in too great a size, for illiquid high-yield bonds to keep up.
The rejection of an IPO application that would have been Malaysia’s biggest cash-shell listing has underscored regulators’ concerns over the increasingly popular special-purpose acquisition company format.