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Tuesday, 12 December 2017

Upfront

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  • A general exterior view of the US Securities and Exchange Commission (SEC) building in Washington,

    Allocation, allocation, allocation

    It will come as no surprise to anyone with even a passing knowledge of the new issue bond markets, but investors are not happy with the way in which paper is allocated.

  • Ukraine

    Power games

    Ukraine’s finances at the moment are as murky as its politics. Russia’s US$15bn aid programme, which included a pledge of US$3bn through a Eurobond issue, has been suspended. The interim government of new Prime Minister Arseniy Yatsenyuk is now seeking a wider international bailout led by the IMF – but also potentially using bilateral money from the US and Europe.

  • Wizard

    Capital wizardry is no substitute

    Deferred tax assets are a strange concept – an accounting quirk that in bleaker times allowed banks to record future tax credits as part of their capital ratios – and Basel III rightly put an end to the practice.

  • A US$100  banknote is seen on top of five and 10 lira banknotes

    Here we go again

    Issuers that were recently considered highly risky propositions – a sovereign fresh from a currency crisis, a Spanish CoCo, a PIK toggle, the list goes on – all were overwhelmed with demand last week.

  • Bill Ackman, chief executive officer and portfolio manager of Pershing Square Capital Management, L.P.

    Short story

    The dramatic story of Herbalife took another turn last week when the nutritional supplements retailer followed through on earlier promises and bought back roughly 10% of its outstanding shares, choosing a convertible bond issue as the financing instrument.

  • AngloGold Ashanti's main sulphide treatment plant is seen in Obuasi

    Look more closely

    Last week, a pan-African energy company issued bonds in the international market. As did a Kuwaiti holding company, a Czech energy outfit, a Guatemalan telecoms firm and a Chilean subway operator.

  • An ArcelorMittal steel factory worker holds his helmet

    Bitten in the Arcelor

    No one ever pretended it was easy being an investor. There’s the constant pressure of trying to produce consistent above-market returns in what is still a low-yield environment. Then, just when you think you’ve found something that fits the bill, it turns round and bites you.

  • CA

    The world turned upside down

    The thing about a capital structure is that it has, well, err, structure. For those investing in banks, this is quite easy to identify, with covered bonds at the safe end, followed by senior debt, Tier 2 and then Tier 1 at the other end of the spectrum. That’s just the natural order of things.

  • Fireworks

    Back with a bang

    The bond markets began the year all guns blazing – as is now the norm. Some US$158bn of paper was priced around the globe, and while this may not be a record-breaking figure, neither is it too shabby.

  • Bizzare year for EM debt

    The EM conundrum

    It’s been a bizarre year for emerging markets debt. Performance-wise it could hardly have been worse, with the benchmark indices all in negative territory. Indeed, no other asset class has fared as badly in 2013, bar emerging markets equities. Clearly, the spike in rates has proved damaging, but spreads too have widened, catching investors by surprise.