A more than US$30bn order book for a debut CoCo transaction from HSBC restored confidence in Additional Tier 1 deals from European banks last week as the UK lender easily managed to find a home for a colossal US$5.6bn-equivalent triple-tranche deal denominated in US dollars and euros.
Expectations are already running high that Chinese e-commerce giant Alibaba Group may increase the pricing range on its landmark US$21.1bn NYSE IPO, though some big investors are warning that the company and its underwriters shouldn’t sacrifice book quality for a higher valuation.
Asian investors are resorting to desperate measures in the hope of securing an allocation in the record-setting float of Alibaba Group.
Venezuelan bonds came under pressure last week, as talk of a potential default spooked the markets, causing the sovereign’s curve to plunge several points before buying interest returned.
A new legal framework for covered bonds making its way through Brazil’s Congress could lead to the creation of a multi-billion dollar market open to both foreign and local investors alike. The move is being cheered by investors and bankers seeking ways to deepen a domestic market that still lacks alternative investment options.
The onslaught of financial issuance in the US dollar market in the past fortnight and the spread widening it caused has sent a sharp wake-up call to US banks that they need to start diversifying their sources of funding. The past two weeks have seen US$60bn of FIG issuance, with US$46.8bn of that purely from banks, according to IFR data.
Royal Bank of Scotland last week launched its previously flagged plans to sell 25% of US regional bank Citizens Financial Group via a US$3.5bn NYSE IPO, even as the arm continues to show subpar operating performance.
With more than a quarter of 2014 remaining, Asian issuers have already sold more bonds in US dollars, euros and yen this year than ever before, taking advantage of easy monetary policies to lock in financing at low fixed rates.