So long a lender, the IMF is preparing to change tack and embark on a new role – that of surveillance monitor and adviser. The IMF has lost a lot of relevance for investors because it has become an outsider. For those Fund clients with the longest memories, and especially those in Asia, the transformation the agency is now forcing on itself smacks somewhat of the school bully suddenly hoping for a role as milk monitor. Looking to its traditional heartland of Latin America offers the Fund no furt

Since the Iraq war the top tier Turkish financial institutions (FIs) have skilfully ridden a wave of lender optimism towards the county and have been able to put in place larger loans at cheaper prices. Syndications having been largely abandoned in favour of relationship defining clubs, pricing fell to as low as 47.5bp all-in with loans regularly breaching the US$1bn barrier. Pricing looked set to continue to fall when events intervened. Sparked by a sharp devaluation in the Turkish lira market

The idea of 'yank the bank' is simple enough. In old banking language it simply means avoiding paying underwriting fees for refinanced deals. Banks in the existing loan syndicate are asked if they would like to join the new deal under a waiver procedure on the existing documentation. This waiver is usually nothing more than dropping the loan margin. Banks which do not agree are yanked out of the deal and in their stead, a new bank has to be parachuted in or an existing bank needs to put up more

The switch to focus a greater number of European ECM originators on emerging markets has been rapid, reflecting the speed with which the market dynamic has changed. In 2004 only a handful of banks were active in bringing ECM deals from emerging Europe on a regular basis, but growing opportunities led to new entries, including some of the largest banks. Their prior absence reflected the wide geographical area to be covered with relatively few deal candidates, and then low fees on any deals that d

Aseries of deals struck in the wake of the restructuring of Iraq's Paris Club debt in November 2004 have endorsed the haircut of around 80% agreed. With the Paris Club sovereigns and also the majority of commercial creditors in tow, it only remains for around 15 non-Paris Club sovereigns to agree to the same deal before Iraq can say it is clear of its financial restructuring. Of the near 50 non-Paris Club countries that Iraq had to reach agreement with, only 15 have debt restructuring talks stil

Anarrow segment of sovereigns such as Colombia are still selectively using multilateral funding, but for the most part countries have decided to wipe IMF debt off balance sheets, freeing themselves of the conditionality that comes with such loans. A future crisis may change all that, but for now multilaterals like the IDB (Inter-American Development Bank) are rapidly shifting their focus in the region. "Today the private sector accounts for close to 90% of economic activity," said Carlos Guimara

In November 1999 Singapore’s Prime Minister Lee Hsien Loong, chairman of the Monetary Authority at the time, gave a speech to the Asian Bankers Association in which he outlined the lessons to be taken from the Asian financial crisis of 1997. Second on his list, after a need for strong banks, was the importance of developing deep and liquid local currency bond markets in the region. “There is now widespread recognition that Asian countries depended too heavily on bank loans for financing,” he sai

Asia is in a position of incredible financial strength, with the region's countries endowed with ample reserves, enough and more to meet their individual and combined needs should there be another crisis. Clearly the region has little or no need for the crucial role that the International Monetary Fund has always played, that as lender of last resort. The role for the IMF of checking and monitoring exchange rate policies is for the region's bankers and debt issuers the one that the Fund needs to

Local currency-denominated corporate fixed-income security volumes in Asia are close to their highest levels and issuers are becoming increasingly sophisticated. But while the pace of development has been impressive, there is still some way to go before markets reach their full potential. "The trend is clearly for the further development of bond markets," said Joseph Tan, an economist at Standard Chartered in Singapore. "There are generally huge amounts of trade surpluses [in Asia], which could

The emergence of the private placement market in Asia stems largely from the fact that many commercial banks are refusing to lend to a number of the region's companies even though most economies are now very healthy and despite the fact that many corporates have now very low debt levels. The banks lending were forced to take huge haircuts on the claims in the years following the 1998 Asian crisis because debtors – which were often protected by the judiciary or by powerful politicians – were able

Banks will continue to dominate the Russian issuance space as cash rich commodity-based companies simply do not need to come to the bond market except to maintain a profile. Banks on the other hand require substantial external financing to fund the sector's extraordinary expansion. Another reason to expect an upturn in bank supply is the loan market's waning appetite for Russian financial institution paper. Lenders are having a problem with credit limits, which credit committees are refusing to

Global investment banks have so far been reluctant or slow to take advantage of the goldmine that is Brazil local debt market but they are likely to start moving more quickly after it became clear in late August that they can no longer rely on Brazil to issue US$4.5bn-$6bn overseas anymore. The standard 30 cents fees per Brazilian international bond offer are as good as gone after the Republic scrapped its external debt programme, saying it would finance US$14.19bn worth of 2007-2008 net foreign

Argentina has grown at an average of 9% over the past three years, while exports have risen 16%, both from low bases. The recurrence of such strong numbers has given Argentines a new self-confidence - one that is boosted by the fact that they no longer have to answer to outside arbiters of their economic health. The sovereign paid down it’s US$9.8bn debt to the International Monetary Fund in January thus ending a rocky relationship with an institution that some say is already a relic of the past

There is no value in EM external debt, with spreads back near the all-time tights of March, said Julian Jacobson, portfolio manager in charge of fixed income at Fabien Pictet & Partners (FPP), an EM hedge fund. "The combination of low US Treasury rates and low spreads seems pretty dangerous to me." Similar complaints were heard earlier in the year, when EM spreads hit historical lows and investors moved down the credit spectrum to pick up yield. It was hoped that the sell-off in May and June, al

The IMF has long been drifting into obscurity for many capital markets participants. It is at best a research shop and conference organiser, to its harshest critics a politically manipulated waste of money. Barry Eichengreen, professor of political science at the University of California has described it as, "a rudderless ship, adrift on a sea of liquidity". The IMF's research lacks edge, benign global conditions have obviated the need for a lender of last resort, while its proximity to the G7 a