Designer deals Fashion can be a cruel mistress, especially if you’re the only person to turn up at the party with platform sneakers, a tracksuit with “Juicy” scrawled across the derriere, and a green feather boa. Banks are experiencing their own fashion faux pas right now and working hard to maintain their appeal. Disintermediation means borrowers are no longer infatuated with banks’ 1990s styles and attitudes, and can even make them jump when it comes to winning bond mandates. The regulatory sq

For years after the financial crisis, the mere mention of the word provoked fear and loathing in Brussels and Frankfurt. To European legislators, securitisation meant asset-backed securities, an asset class tainted by its links to subprime American home loans. When those mortgages went toxic in 2007, they sowed the seeds of a global financial crisis whose impact still continues to reverberate across the continent. Despite undergoing a “near-death experience” in 2008 and 2009, said Alexandre Vigi

Sometimes, the hardest thing to do is to spot something that isn’t there. Prior to the financial crisis, the existence of a thriving, liquid secondary bond market was a given in the developed world. Debt was issued, resold, and resold again. Investors bought, held and traded bonds with the studied and natural ease with which one, say, hands around a bowl of bar nuts. Wind forward to late 2014. Secondary bond market liquidity still exists, much as those old VHS cassettes that were once displayed

Indeed, the sector surprised issuers, managers and investors right from the start. Jermaine Jarrett, head of high-yield bond syndicate at Credit Agricole, expected rates to go up by mid-year and spreads to widen. Neither happened. “We expected the pace of opportunistic refinancings to slow and that new issuance would be more event-driven,” he said. Again confounding expectations, refinancing bounced to record post-crisis highs while acquisition-driven financing was one of the great unheralded ca

Amid accelerating demand among sub-investment-grade borrowers, issuance of bonds in euros is up 18% year-on-year, according to IFR data, reaching €878bn. Issuance in US dollars, meanwhile, has declined by 3% to US$2trn. Behind the jump in European issuance is a mixture of technical and fundamental economic factors. On the technical side, the five-year eurodollar asset swap rate has declined significantly from the 70bp–80bp highs seen in 2013 to as low as flat in April, before widening slightly t

Record debt financing by emerging market issuers taking advantage of deep pools of liquidity are beginning to generate jitters that they may be getting out of their depth. Appetite for risky assets cooled in August, and in September the International Centre for Monetary and Banking Studies in its annual Geneva Report warned that a “poisonous combination” of record debt and slowing growth could presage another global crisis. Most estimates point this year to at least US$400bn of issuance by EM so

“We live in two different worlds/That’s why we’re so far apart. You made your world out of vows that are broken/I built a world in my heart.” The venerable American crooner Hank Williams’ words could have been woven explicitly to describe the increasingly estranged relationship between European banks and the companies they once funded. Once upon a time, the interests and needs of lenders and corporate borrowers across the region were, as the Chinese phrase goes, “as close as lips and teeth”. Ban

In the years immediately following the financial crisis, bank lending for just about anything in Europe, including infrastructure projects, fell apart. However, such liquidity constraints now appear to be water under the Mersey Gateway Bridge. Enticed by low default rates and relatively wide loan margins, some European banks – nine from Scandinavia, Germany, the Netherlands and most recently France – that exited the infrastructure space following the crisis have returned, market participants say

European banks have enthusiastically been raising Tier 1 capital all year. Around €85bn is the total expected for the whole year, according to UBS and with roughly €50bn raised by the end of the summer holidays the rest of the year was always going to be busy. The reason for the capital-raising is bank compliance with Basel III. In the aftermath of the debt crisis, strict guidelines were set up by the Basel Committee on Banking Supervision in July 2011 to boost balance sheets. Rather like school

This year may turn out to represent something of a turning point in the arduous debates about global warming – far from being settled, it does appear at least to have arrived at the conclusion that evidence for man-made climate change is irrefutable. Consensus may finally be in prospect in sweeping arguments that have ultimately turned on a fundamental philosophical axis: is it possible to have both economic growth and a clean environment? It seems that we may be able to have our cake and eat it

In the US, the private placements market has matured into a major component of the financial landscape. No such behemoth exists in Europe. A series of regional offerings are, however, emerging in response to the retreating bank loan market, which has left a void for financing small and mid-cap companies, or those that are unrated or not well-known. Private placement also proved itself to be reliable and steadfast throughout the crisis in 2011–12 while many other markets were only open intermitte

In mid-May, British care homes group LNT Group wanted a 10-year £51m fixed-rate loan to refinance existing debt and release capital to build six to eight new care homes. The company could not find a lender at the tenor it needed. “It used to be that you took out a medium-term loan. You would buy a care home, take out a MTL for 15 years and agree to a price. That product no longer exists,” said Lawrence Tomlinson, of the Yorkshire-headquartered group. Tomlinson said the cheapest loan option that

Over-the-counter derivatives have been under pressure on multiple fronts for some time, as new clearing, capital and funding requirements ramp up the costs and complexities of trading. The consequences of those increased costs ripple far and wide, but debt capital markets have seen a significant impact as issuers look to hedge their exposures as cost-efficiently as possible. “The changing landscape of legislation has affected derivatives markets more widely than expected and the costs and conseq