Greece and its creditors may have only two weeks after this weekend’s referendum to come up with a new bailout agreement, a lot less than many market participants expect, with the country set to default by July 20 if it is unable to come up with funds to repay bonds held by the ECB.
Last Tuesday was Anshu Jain’s last day as co-CEO of Deutsche Bank. It was almost 20 years to the day since the then 32-year-old banker left his managing director role at Wall Street behemoth Merrill Lynch to join the German bank, widely regarded back then as a sleepy European lender focused primarily on the German Mittelstand.
While the bond markets have not been entirely closed by events in Greece, there has been precious little new issuance in spite of a pipeline that has been continuing to grow.
Upside positioning through call option structures was at the forefront of equity derivatives activity as investors scrambled for hedging opportunities ahead of the referendum that could determine Greece’s future in the eurozone.
The European leveraged loan market felt the heat last week as a result of wider macro volatility caused by the Greek crisis, with another repricing cancelled and a high-profile launch delayed.
The European Central Bank took the market by surprise on Thursday when it added three Italian corporates to the list of names eligible for purchase under its quantitative easing programme.
China’s desperate efforts to restore confidence in mainland equities last week failed to halt a market crash that has wiped out 30% of market value in just three weeks.
Holders of senior debt from Singapore’s banks will have reason to breathe easy if the Monetary Authority of Singapore implements proposals to limit its statutory bail-in framework to subordinated debt.
Asian credit held firm last week even as fears for Greece’s future in the eurozone slammed the brakes on new issues, lifting Asia’s appeal as a safe haven from the European crisis.
Puerto Rico is rejecting calls from creditors as it embarks on a long-term austerity programme to cut costs and service some US$72bn in municipal bond debt. The debt, said the commonwealth’s governor, Alejandro García Padilla, was not payable.
An eleventh-hour deal between Greece and its creditors to unlock desperately needed funds for the government and narrowly avoid default will not end the acute liquidity and solvency crisis being faced by the country’s banks.