Piraeus Bank may sell the first senior unsecured bond from the country’s banking sector since 2009 this coming week, as the frantic scramble to buy debt tempts investors back to one of the eurozone’s most troubled stories. A successful deal would make Piraeus, at only Caa1/CCC/B– , the weakest-rated bank credit to raise senior debt.
Lloyds Banking Group is offering bondholders who helped rescue it five years ago the chance to swap their holdings into new debt or cash out now to avoid the risk of the bonds being called at par.
UK banks are plotting capital trades in their home currency market after Nationwide last week sold the largest such deal since the collapse of Lehman Brothers, unearthing a surprisingly deep pool of investor demand.
The International Monetary Fund is under political pressure to back a bailout of Ukraine that would have all the country’s debts honoured rather than insist on an alternative bail-in that would see US$12bn of obligations coming due in the next three years reprofiled.
China’s first cross-border offering of commercial mortgage-backed securities since 2006 is set to underline the potential for overseas financings backed by onshore assets.
Japan Display’s lofty premium to Asian competitors has not put investors off its ¥389.3bn (US$3.8bn) IPO, as institutions rushed to back the maker of displays for smartphones and other devices. With government-backed Innovation Network Corporation of Japan selling, the deal also serves as an important guide for other privatisations.
Russian companies face higher interest rates and delays on billions of dollars of loans as the crisis in Ukraine makes foreign banks increasingly wary of lending to them. The uncertainty sparked by Russia’s military intervention in its neighbour may have implications for nearly 20 high-profile corporate loans in the pipeline.
Asset managers are revolutionising their approach to bond trading to counter growing fears over their ability to keep pace with redemptions in the event of a sudden pullback from fixed income. The move comes as regulators are scrutinising the precarious liquidity mismatch of mutual funds invested in increasingly illiquid corporate bond markets while offering investors daily liquidity.
The US Securities and Exchange Commission may be gearing up to regulate how investment banks allocate new bond issues, with the regulator launching an investigation into banks including Goldman Sachs, Citigroup and Morgan Stanley following complaints from investors.
Banks in the eurozone are now more exposed to government debt than at any time since the financial crisis began, with many increasingly using their balance sheets to prop up ailing governments, deepening the bank-sovereign link that has already pushed a number of countries and lenders into bailouts.