This was supposed to be the year that rates began their inexorable rise. The new regulatory environment would start to strangle the banks. And the end of QE would bring a halt to the credit market’s long bull run.
Instead, Treasury yields fell by around 75bp; M&A was reborn; equity indices marched to all-time highs; and 2014 saw another year of booming bond issuance, including some of the biggest deals ever printed. Throughout the year, everyone seemed to be waiting for the hammer to fall; they’re pretty much still waiting.
The investment banks and issuers honoured in these pages – and the deals that they crafted – are ample proof that visions of gloom about the future are never quite a match for the possibilities of the present. In short, 2014 was full of surprises, many of them surprisingly happy.
It wasn’t all roses, of course. There were robust bouts of volatility that choked off the primary markets for weeks at a time. Bank fines were big, and there are more to come. Commodities struggled, as did several other sectors (notably biotech). The ongoing legal mess over Argentina’s debt descended at times into outright farce. And headline risks such as Ebola, Ukraine and ISIL regularly gave the markets pause for thought.
Yet it’s hard to see much wrong with an investment-grade primary market that had already bested the previous annual issuance record by November, or with an equities market that saw continued near-record levels of capital formation. Yes there were bumps in the road, but they proved to be just that – only bumps, not mountains.
So forgive us if we’re a bit cautious now about trying to imagine what lies ahead for the industry in 2015. After all, much of the worrying overhang heading into 2014 is still with us as we get ready for the new year. The regulatory landscape continues to be uncertain. The volatility that whipsawed the markets in summertime is certainly capable of returning at any moment. Bull markets in both credit and equities quite naturally elicit talk of a correction.
So we suspect 2015 will be a lot like 2014 and indeed every other year – one fraught with risks but rich with opportunities. IFR’s award-winners this year repeatedly demonstrated the know-how to navigate round the former and jump right into the deep end of the latter. Please join us in congratulating all of the richly deserving recipients of the 2014 IFR Awards.
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