European banks could be forced to sell billions of euros of subordinated debt or completely reshape their corporate structures if global regulators go ahead with new rules seeking to stop banks being “too big to fail”.
“Buy the rumour, sell the fact” goes the old market adage. But for anyone basing their trading strategy on the machinations of the European Central Bank, these are highly confusing times.
UK used car group BCA Marketplace postponed its £400m London IPO at the end of pre-marketing last Tuesday, with bankers declaring the chances of securing a satisfactory valuation far greater in the new year.
The largest Australian private health insurer, Medibank Private, is pushing ahead with its jumbo IPO of up to A$5.5bn (US$4.83bn), despite the recent volatility in global markets.
Fears are growing that Russia could face a dollar liquidity crunch if Western sanctions remain in force, though in the short term the default risk is limited given the central bank’s firepower.
US regulators including the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency have approved final risk retention rules that are expected to result in a significant reduction in CLO issuance.
In contrast to the howls of anguish from those involved in CLOs, issuers and bankers in the US private-label RMBS and CMBS markets breathed a sigh of relief last Tuesday as regulators appeared to take a soft approach on new risk retention rules on securitisation (see “CLO issuance to plunge after ruling”).
Samsung SDS’s strong reputation and prominent position in its industry prompted investors to flock to the company’s IPO of up to W1.16trn (US$1.1bn), in the process setting a positive tone for another upcoming Samsung-related deal, the US$1.4bn listing of Cheil Industries.
The controversy aroused by Austria’s recapitalisation of Hypo Alpe-Adria may steer Germany’s Landesbanken away from copying such measures should any require extra capital after the European Central Bank’s comprehensive assessment exercise, according to several informed sources.