Cryptocurrencies have had a rough time of late but they are clearly no flash in the pan. That has driven regulators to intensify their efforts to gain control over this financial frontier.The Bank of England’s deputy governor this week sounded a warning that if the crypto world wasn’t brought under control soon, it risked suffering its own Hindenberg moment, referring to the time the famous German airship exploded ending, perhaps prematurely, the development of what could have been a useful technology.Of course, there have already been explosions in the crypto markets but regulators are keen to find a way to bring stability to their more useful parts to allow them to flourish. We look at who is trying to bring which bits of crypto to heel and how they plan to do it.Banks have a big part to play in this too. Following the recent release of the ECB’s climate stress test for the lenders it regulates, we discuss how banks’ involvement in the notoriously energy-hungry crypto markets should be done with the aim of greening it as it develops.We also investigate the latest turmoil in Italian politics. Prime minister Mario Draghi offered to resign this week, sending Italian sovereign debt yields and spreads to Bunds higher, just as his former employer the European Central Bank is expected to reveal its new tool for keeping those very numbers under control. We take a look at what this means for Italy and how SSA borrowers will adapt their funding tactics to cope with ever more frequent disruption — this was not after all the first shock of the week with US inflation coming in above expectations at 9.1%.

Cryptocurrencies have had a rough time of late but they are clearly no flash in the pan. That has driven regulators to intensify their efforts to gain control over this financial frontier.The Bank of England’s deputy governor this week sounded a warning that if the crypto world wasn’t brought under control soon, it risked suffering its own Hindenberg moment, referring to the time the famous German airship exploded ending, perhaps prematurely, the development of what could have been a useful technology.Of course, there have already been explosions in the crypto markets but regulators are keen to find a way to bring stability to their more useful parts to allow them to flourish. We look at who is trying to bring which bits of crypto to heel and how they plan to do it.Banks have a big part to play in this too. Following the recent release of the ECB’s climate stress test for the lenders it regulates, we discuss how banks’ involvement in the notoriously energy-hungry crypto markets should be done with the aim of greening it as it develops.We also investigate the latest turmoil in Italian politics. Prime minister Mario Draghi offered to resign this week, sending Italian sovereign debt yields and spreads to Bunds higher, just as his former employer the European Central Bank is expected to reveal its new tool for keeping those very numbers under control. We take a look at what this means for Italy and how SSA borrowers will adapt their funding tactics to cope with ever more frequent disruption — this was not after all the first shock of the week with US inflation coming in above expectations at 9.1%.

The battle to control crypto

We reveal why capital markets often barely flicker even when there is the sort of huge political disruption that took place in the UK this week, when prime minister Boris Johnson said he would resign following a series of scandals and a rebellion within his own government.Closer to capital markets, we take a look at the next leap forward in sustainability-linked bonds. Chile may have brought the first sovereign deal but Uruguay could be next. It has been considering issuing once since not long after the first ever version of the product arrived from Italian energy company Enel in September 2019. We explain why Uruguay’s bond could be such an important one for this nascent asset class and what the consequences could be for other sovereign issuers.We also see how a revival of an esoteric corner of the US securitisation market is helping power companies in the country increase their ESG spending and whether the same market could develop in Europe.

We reveal why capital markets often barely flicker even when there is the sort of huge political disruption that took place in the UK this week, when prime minister Boris Johnson said he would resign following a series of scandals and a rebellion within his own government.Closer to capital markets, we take a look at the next leap forward in sustainability-linked bonds. Chile may have brought the first sovereign deal but Uruguay could be next. It has been considering issuing once since not long after the first ever version of the product arrived from Italian energy company Enel in September 2019. We explain why Uruguay’s bond could be such an important one for this nascent asset class and what the consequences could be for other sovereign issuers.We also see how a revival of an esoteric corner of the US securitisation market is helping power companies in the country increase their ESG spending and whether the same market could develop in Europe.

Sustainable bonds and unsustainable Boris

In the same week that the Green and Social Bond Principles provided a ton of new guidance on how to apply its formula to different types of security, which we discuss, we take a look at how the capital markets are offering investors different way to fund the green transition.Green capital raising is a rare bright spot in the equity markets these days but it is not all plain sailing. We look at what went wrong with Plenitude’s IPO, the listing of Eni’s renewable business. It was supposed to be a banner event for the market but instead, it got pulled. The listing of De Nora, another jumble of activities under one roof with an ESG flavour, did get done. We take a look at what it takes to raise equity capital for a green company and what deals may be round the corner.But it isn’t just public equity markets ploughing money into the green transition. Private funds are buying up various unglamourous companies — bins and buses — and helping them on their green journey. We look into what is driving this trend and what the funds’ motivations may be.Finally, it was a shocking week in the primary bond markets with deals getting hooked left, right and centre. We reveal what market experts told us were the best ways to navigate the primary bond market when it is in this state and discuss whether a pulled deal is anything to be embarrassed about any more.

In the same week that the Green and Social Bond Principles provided a ton of new guidance on how to apply its formula to different types of security, which we discuss, we take a look at how the capital markets are offering investors different way to fund the green transition.Green capital raising is a rare bright spot in the equity markets these days but it is not all plain sailing. We look at what went wrong with Plenitude’s IPO, the listing of Eni’s renewable business. It was supposed to be a banner event for the market but instead, it got pulled. The listing of De Nora, another jumble of activities under one roof with an ESG flavour, did get done. We take a look at what it takes to raise equity capital for a green company and what deals may be round the corner.But it isn’t just public equity markets ploughing money into the green transition. Private funds are buying up various unglamourous companies — bins and buses — and helping them on their green journey. We look into what is driving this trend and what the funds’ motivations may be.Finally, it was a shocking week in the primary bond markets with deals getting hooked left, right and centre. We reveal what market experts told us were the best ways to navigate the primary bond market when it is in this state and discuss whether a pulled deal is anything to be embarrassed about any more.

Funding the green transition and hell week for new bonds

It was not that long ago that we ran a number of stories and podcast episodes about banks battling for staff so that they could get record volumes of deals through the capital markets. With inflation rampant, recession looming and interest rates on the rise, some markets have dried up as M&amp;A grinds to a halt. Now bankers fear for their jobs, with one likening the situation to the dotcom bubble bursting two decades ago.Tech firms don’t have to go so far back in time to recall a torrid spell in financial markets. As the world emerged from the Covid pandemic, tech companies went from being the belles of the ball to being the empty beer bottles. As their valuations plummeted, they kept away from raising equity capital. But this week, Ocado, the online grocer, brought a deal to market. We discuss why it had to come in such a terrible market, whether other tech firms will do the same and what their options are.Finally, we discuss what went down at Euromoney’s Global Borrowers and Investors Forum this week, where the ECB’s plans to control government bond spreads was the subject of some very lively debate. We look into why some find the idea of yet more bond market intervention so objectionable.

It was not that long ago that we ran a number of stories and podcast episodes about banks battling for staff so that they could get record volumes of deals through the capital markets. With inflation rampant, recession looming and interest rates on the rise, some markets have dried up as M&amp;A grinds to a halt. Now bankers fear for their jobs, with one likening the situation to the dotcom bubble bursting two decades ago.Tech firms don’t have to go so far back in time to recall a torrid spell in financial markets. As the world emerged from the Covid pandemic, tech companies went from being the belles of the ball to being the empty beer bottles. As their valuations plummeted, they kept away from raising equity capital. But this week, Ocado, the online grocer, brought a deal to market. We discuss why it had to come in such a terrible market, whether other tech firms will do the same and what their options are.Finally, we discuss what went down at Euromoney’s Global Borrowers and Investors Forum this week, where the ECB’s plans to control government bond spreads was the subject of some very lively debate. We look into why some find the idea of yet more bond market intervention so objectionable.

Jobs in jeopardy but tech returns to equity markets

Last week the ECB laid out its plans for its monetary policy. That surely was enough to convince bond markets that it had a grip on both rampant inflation and government bond spreads, right? Wrong.This week it had to convene an unscheduled meeting of its governing council so that it could figure out how to manage spreads in the government bond market. Dealing with inflation is the bank’s core mission; dealing with spreads is something it has had to take on during many years of crisis. In some ways, the two objectives are mutually exclusive. So we discuss what the ECB is up to and what the consequences will be.We also talk about the much more immediate consequences of the US Federal Reserve’s historic 75bp rise for emerging market bond issuers. Their market is shut but will that lead to financing problems for a number of economically vulnerable countries?We also dissect what incoming EU regulations that demand investment firms get a read on what their clients’ sustainability ambitions might be for their portfolios mean for the asset management industry. This is a huge piece of rule making that will require a mountain of work on the buy-side and it is due to come into force in August. But the industry appears to be far from ready to deal with it.

Last week the ECB laid out its plans for its monetary policy. That surely was enough to convince bond markets that it had a grip on both rampant inflation and government bond spreads, right? Wrong.This week it had to convene an unscheduled meeting of its governing council so that it could figure out how to manage spreads in the government bond market. Dealing with inflation is the bank’s core mission; dealing with spreads is something it has had to take on during many years of crisis. In some ways, the two objectives are mutually exclusive. So we discuss what the ECB is up to and what the consequences will be.We also talk about the much more immediate consequences of the US Federal Reserve’s historic 75bp rise for emerging market bond issuers. Their market is shut but will that lead to financing problems for a number of economically vulnerable countries?We also dissect what incoming EU regulations that demand investment firms get a read on what their clients’ sustainability ambitions might be for their portfolios mean for the asset management industry. This is a huge piece of rule making that will require a mountain of work on the buy-side and it is due to come into force in August. But the industry appears to be far from ready to deal with it.

The ECB’s impossible task and an ESG regulatory riddle

We wouldn’t normally talk about a capital markets conference on the podcast but next week sees one of the biggest — Global ABS, the biggest gathering for the European securitization market — resume its pre-pandemic full, physical form at its regular haunt, Barcelona. It comes just as the securitization markets in Europe are in a rough state.  We discuss what the thousands of delegates at the meet-up will be talking about and where their market is headed — which is also the topic of our newest podcast which is about securitizaton, Another Fine Mezz, available now on globalcapital.com.There are also changes afoot in the leveraged buyout market, as private lenders muscle in on business that has traditionally been run by banks. We examine what this means long term for LBOs. And in the corporate bond market, we investigate the rise of the glocos — global coordinators that is, a title banks in a bond syndicate are taking on, what it means (if anything) and why the term has started to appear.

We wouldn’t normally talk about a capital markets conference on the podcast but next week sees one of the biggest — Global ABS, the biggest gathering for the European securitization market — resume its pre-pandemic full, physical form at its regular haunt, Barcelona. It comes just as the securitization markets in Europe are in a rough state.  We discuss what the thousands of delegates at the meet-up will be talking about and where their market is headed — which is also the topic of our newest podcast which is about securitizaton, Another Fine Mezz, available now on <a href="http://globalcapital.com" rel="nofollow" target="_blank">globalcapital.com</a>.There are also changes afoot in the leveraged buyout market, as private lenders muscle in on business that has traditionally been run by banks. We examine what this means long term for LBOs. And in the corporate bond market, we investigate the rise of the glocos — global coordinators that is, a title banks in a bond syndicate are taking on, what it means (if anything) and why the term has started to appear.

Barcelona, buyouts and bond syndicates

From bonds to equities, issuers are finding it harder to raise capital. Inflation, invasion and disruption, not to mention rising interest rates, are shortening the times when the financial markets are stable enough to allow issuers to come to the market with deals. We look into what that means for the rest of the year in bond and equity markets and discover that it is forcing issuers to crowd into the same, smaller windows for new issuance than they have been used to for the last few years. We highlight the problems that will cause some of them.We also discuss what may be something of a Martin Luther moment in socially responsible investing. Stuart Kirk, HSBC’s head of responsible investing, boldly went and named his criticisms with the ESG finance industry at an industry event recently. His critique has caused a furore in a part of the capital markets where there is often too cosy an alliance of — at least in terms of what is said publicly — bland, good intentions. We discuss whether Kirk had a point — after all, he is no global warming denier or an outsider to financial markets — and how the ESG finance sector and HSBC should respond.

From bonds to equities, issuers are finding it harder to raise capital. Inflation, invasion and disruption, not to mention rising interest rates, are shortening the times when the financial markets are stable enough to allow issuers to come to the market with deals. We look into what that means for the rest of the year in bond and equity markets and discover that it is forcing issuers to crowd into the same, smaller windows for new issuance than they have been used to for the last few years. We highlight the problems that will cause some of them.We also discuss what may be something of a Martin Luther moment in socially responsible investing. Stuart Kirk, HSBC’s head of responsible investing, boldly went and named his criticisms with the ESG finance industry at an industry event recently. His critique has caused a furore in a part of the capital markets where there is often too cosy an alliance of — at least in terms of what is said publicly — bland, good intentions. We discuss whether Kirk had a point — after all, he is no global warming denier or an outsider to financial markets — and how the ESG finance sector and HSBC should respond.

Crowd trouble in the capital markets

There is no doubt that bond markets are becoming tougher places from which to raise money. Even in the public sector bond markets, where issuers flock in times of trouble, what are typically issuers prized for their rarity are now enjoying less demand because investors have come to value highly the ability to sell out of positions easily given the volatility.But at least borrowers are getting their funding done there. In the emerging markets, which so often bear the brunt of capital markets and economic turmoil, there is a rather different problem. Here, issuers are having to come to terms with rising yields, widening bond spreads and no end in sight to the volatility as they face the prospect of recession, a strong dollar and rampant inflation; all of which makes life tough for them in the capital markets. On the podcast this week we question why more of them aren’t trying to do more to issue bonds before the situation grows even worse.Elsewhere, travel and tourism sector companies have been making the most of rising passenger numbers and fewer restrictions to raise equity capital to pay down debts. But they too face risks to their recovery from the pandemic. We investigate what they are and whether their capital markets revival will be short lived.

There is no doubt that bond markets are becoming tougher places from which to raise money. Even in the public sector bond markets, where issuers flock in times of trouble, what are typically issuers prized for their rarity are now enjoying less demand because investors have come to value highly the ability to sell out of positions easily given the volatility.But at least borrowers are getting their funding done there. In the emerging markets, which so often bear the brunt of capital markets and economic turmoil, there is a rather different problem. Here, issuers are having to come to terms with rising yields, widening bond spreads and no end in sight to the volatility as they face the prospect of recession, a strong dollar and rampant inflation; all of which makes life tough for them in the capital markets. On the podcast this week we question why more of them aren’t trying to do more to issue bonds before the situation grows even worse.Elsewhere, travel and tourism sector companies have been making the most of rising passenger numbers and fewer restrictions to raise equity capital to pay down debts. But they too face risks to their recovery from the pandemic. We investigate what they are and whether their capital markets revival will be short lived.

Tough choices for emerging market bond issuers

War in Ukraine, the pandemic and the recovery from it, rampant inflation and the end of the era of cheap money — people in the capital markets have a lot to think about when allocating or raising money. But are they missing the biggest problem of all: China’s slowing economy? A growing number of market participants think so. China as a producer of goods sold to the world and a key consumer of plenty of the world’s commodities and finished goods, is an integral part of the global economy and therefore, a driver of what is possible in the capital markets. Hopes of a revival in European stock market listings are now foundering as investors look long and hard at which companies are the most reliant on a Chinese economy dogged by lockdowns and port and factory closures.We discuss who will be hit and how hard. We also look into how problems in other emerging market countries may effect their ability to raise funding in the bond market and where else they might go for cash instead.We also take a look at some new bonds that were priced this week in different parts of the market and figure out what they tell us about how borrowers will have to approach a volatile bond market in the weeks and months to come.

War in Ukraine, the pandemic and the recovery from it, rampant inflation and the end of the era of cheap money — people in the capital markets have a lot to think about when allocating or raising money. But are they missing the biggest problem of all: China’s slowing economy? A growing number of market participants think so. China as a producer of goods sold to the world and a key consumer of plenty of the world’s commodities and finished goods, is an integral part of the global economy and therefore, a driver of what is possible in the capital markets. Hopes of a revival in European stock market listings are now foundering as investors look long and hard at which companies are the most reliant on a Chinese economy dogged by lockdowns and port and factory closures.We discuss who will be hit and how hard. We also look into how problems in other emerging market countries may effect their ability to raise funding in the bond market and where else they might go for cash instead.We also take a look at some new bonds that were priced this week in different parts of the market and figure out what they tell us about how borrowers will have to approach a volatile bond market in the weeks and months to come.

The panda in the room

Normally when central banks make policy decisions that they were expected to, capital markets activity carries on unencumbered. But not this week.The 50bp interest rate increased from the Federal Reserve on Wednesday was long anticipated but while markets appeared to take the news well at first, by Thursday things had gone sour once more making issuance difficult. Certainly, there’s a lot to feel grim about in the economic realm — supply chain disruption, war in Ukraine, rampant inflation and possibly a looming recession. Meanwhile, investors and issuers are dealing with the gradual withdrawal of central bank economic stimulus. All of that makes the capital markets a tougher place to navigate and picking the right deal to do at the right time a harder task than it has been for years. This week, we look across debt and equity capital markets to examine how they will respond and discuss whether some borrowers are in for an unduly rough ride or whether this is simply the return of the good old days when investors discerned between the good credits and the bad.

Normally when central banks make policy decisions that they were expected to, capital markets activity carries on unencumbered. But not this week.The 50bp interest rate increased from the Federal Reserve on Wednesday was long anticipated but while markets appeared to take the news well at first, by Thursday things had gone sour once more making issuance difficult. Certainly, there’s a lot to feel grim about in the economic realm — supply chain disruption, war in Ukraine, rampant inflation and possibly a looming recession. Meanwhile, investors and issuers are dealing with the gradual withdrawal of central bank economic stimulus. All of that makes the capital markets a tougher place to navigate and picking the right deal to do at the right time a harder task than it has been for years. This week, we look across debt and equity capital markets to examine how they will respond and discuss whether some borrowers are in for an unduly rough ride or whether this is simply the return of the good old days when investors discerned between the good credits and the bad.

The nature of credit markets is healing

A weekly podcast from GlobalCapital discussing the most interesting stories from the world’s capital markets.Contact us at podcast@globalcapital.com

It’s not just raw materials and components that are hard to get hold of nowadays. The European leveraged finance market is bang on trend and experiencing some supply chain disruption of its own. We explain which parts of the market are just starting to work again and which are about to seize up and how that will proliferate across other parts of the capital markets. Naturally, we also find a way to crowbar a discussion of Elon Musk’s planned purchase of Twitter into the mix and examine how the leveraged finance market might help or hinder that deal.We also look at how the bond market for financial institutions trying to raise funding is changing. We test the idea that it may become a market of haves and have-nots in terms of cheap, easy access to bond market funding. Then we turn to sustainable finance. We discuss how investors are making bigger demands of issuers who want to print sustainability-linked bonds and the knock-on effects this will have on their supply chains and on the products and services they produce as the capital markets learn ever more about how to account for and mitigate emissions.

It’s not just raw materials and components that are hard to get hold of nowadays. The European leveraged finance market is bang on trend and experiencing some supply chain disruption of its own. We explain which parts of the market are just starting to work again and which are about to seize up and how that will proliferate across other parts of the capital markets. Naturally, we also find a way to crowbar a discussion of Elon Musk’s planned purchase of Twitter into the mix and examine how the leveraged finance market might help or hinder that deal.We also look at how the bond market for financial institutions trying to raise funding is changing. We test the idea that it may become a market of haves and have-nots in terms of cheap, easy access to bond market funding. Then we turn to sustainable finance. We discuss how investors are making bigger demands of issuers who want to print sustainability-linked bonds and the knock-on effects this will have on their supply chains and on the products and services they produce as the capital markets learn ever more about how to account for and mitigate emissions.

Supply chain disruption comes to capital markets

It was just a fortnight ago that we reported on what could turn out to be a swathe of job losses in the equity capital markets. But all is not lost; not only are some companies readying initial public offerings to give ECM bankers something to do, for those still left wondering if they’re facing the chop next, there is a hiring spree afoot elsewhere in the capital markets. We tell you where that is and what you can expect to be paid.That hiring spree, like everything else in the capital markets, has been driven by what central banks are up to and the effect that has on bond issuance. We saw that influence manifest in other parts of the bond market this week too and we discuss whether the differing speeds of central bank monetary policy change will make this a year one of short lived opportunities for cheap funding in different markets. We discuss what borrowers will benefit from that and what they will need to do to take advantage.Finally we highlight a growing trend in private lending — net asset value loans made to private equity funds. It’s an old technique so why is it having such a resurgence? Subscribe to the GlobalCapital podcast at wherever you get yours from to find out.

It was just a fortnight ago that we reported on what could turn out to be a swathe of job losses in the equity capital markets. But all is not lost; not only are some companies readying initial public offerings to give ECM bankers something to do, for those still left wondering if they’re facing the chop next, there is a hiring spree afoot elsewhere in the capital markets. We tell you where that is and what you can expect to be paid.That hiring spree, like everything else in the capital markets, has been driven by what central banks are up to and the effect that has on bond issuance. We saw that influence manifest in other parts of the bond market this week too and we discuss whether the differing speeds of central bank monetary policy change will make this a year one of short lived opportunities for cheap funding in different markets. We discuss what borrowers will benefit from that and what they will need to do to take advantage.Finally we highlight a growing trend in private lending — net asset value loans made to private equity funds. It’s an old technique so why is it having such a resurgence? Subscribe to the GlobalCapital podcast at wherever you get yours from to find out.

Fantastic pay rises and where to find them

If ever there was a week to demonstrate the interconnectedness of the international capital markets to what is going on in the rest of the world — in this case the awful events in Ukraine — this was it. On the podcast this week we follow a thread that starts with the appalling situation in eastern Europe and ends in the US securitization markets by way of looking at how companies are responding to the heightened uncertainty that the war has brought to the global economy, how it has affected their financing needs and how this is influencing the capital markets in turn.We also discuss why so many companies are making their public bond market debuts at the moment and finally, we turn our attention to the equity markets where, again, the war in Ukraine is resulting in some interesting behaviour from sellers of large stakes in public companies — trying to hide their identity when they come to market. We examine what they are doing, why they are doing it and, ultimately, whether it is a good idea or not.

If ever there was a week to demonstrate the interconnectedness of the international capital markets to what is going on in the rest of the world — in this case the awful events in Ukraine — this was it. On the podcast this week we follow a thread that starts with the appalling situation in eastern Europe and ends in the US securitization markets by way of looking at how companies are responding to the heightened uncertainty that the war has brought to the global economy, how it has affected their financing needs and how this is influencing the capital markets in turn.We also discuss why so many companies are making their public bond market debuts at the moment and finally, we turn our attention to the equity markets where, again, the war in Ukraine is resulting in some interesting behaviour from sellers of large stakes in public companies — trying to hide their identity when they come to market. We examine what they are doing, why they are doing it and, ultimately, whether it is a good idea or not.

Tracing the effects of war in Ukraine across global capital markets

It was only recently that GlobalCapital reported on both the huge amounts of business being done in the capital markets and the tussle between banks to hire enough staff to cope with it all. Record volumes meant soaring pay, especially among the massed legions of junior bankers as firms competed for staff. But the equity capital markets in particular have just had a dreadful quarter with very few pockets of activity and some recently hectic parts of the market all but closed. Already, bankers are starting to fear lay-offs cannot be far away. We discuss this week whether they are right to fear a wave of redundancies or whether this is a knee-jerk reaction and that business will come bounding back as markets grow used to life with inflation, the war in Ukraine and its wider economic effects.We also highlight how certain groups of investors are returning to parts of the bond market they had abandoned for years, proving that rising rates and widening credit spreads are not all bad news for bond issuers.

It was only recently that GlobalCapital reported on both the huge amounts of business being done in the capital markets and the tussle between banks to hire enough staff to cope with it all. Record volumes meant soaring pay, especially among the massed legions of junior bankers as firms competed for staff. But the equity capital markets in particular have just had a dreadful quarter with very few pockets of activity and some recently hectic parts of the market all but closed. Already, bankers are starting to fear lay-offs cannot be far away. We discuss this week whether they are right to fear a wave of redundancies or whether this is a knee-jerk reaction and that business will come bounding back as markets grow used to life with inflation, the war in Ukraine and its wider economic effects.We also highlight how certain groups of investors are returning to parts of the bond market they had abandoned for years, proving that rising rates and widening credit spreads are not all bad news for bond issuers.

So much for the hiring spree…

Calm

For more than a decade, Europeans and Americans have only known low interest rates and central banks soothing debt markets with endless lashings of liquidity, through buying bonds. In recent years, the European Central Bank has been buying up to 40% of every corporate bond and covered bond issued in the eurozone, as well as vast quantities of public sector bonds.But it is pulling out — meaning the euro bond market is losing its biggest investor. Can it cope? Even the best rated supranational, sovereign and agency borrowers are having a tough time — the market was so volatile this week they could no longer price deals over the usual benchmark of mid-swaps.But lower down the credit spectrum the effects are likely to be much more painful.The Swiss franc bond is usually a placid place, where conservative investors soberly swallow low yielding, low risk bonds. But it does contain a streak of adventure — the more gamesome investors, especially wealthy individuals investing through private banks, like to buy emerging market bonds, which provide much higher returns.Some shine has come off this year, though. This week Russian Railways, which has issued in Swiss francs, tried to pay an interest coupon but could not because of sanctions. Russian borrowers are quite big in Swiss francs, partly because rich Russians’ Swiss bank accounts invest in the deals. Could this put Swiss investors off their emerging market food?Listen to GlobalCapital’s podcast to find out.

For more than a decade, Europeans and Americans have only known low interest rates and central banks soothing debt markets with endless lashings of liquidity, through buying bonds. In recent years, the European Central Bank has been buying up to 40% of every corporate bond and covered bond issued in the eurozone, as well as vast quantities of public sector bonds.But it is pulling out — meaning the euro bond market is losing its biggest investor. Can it cope? Even the best rated supranational, sovereign and agency borrowers are having a tough time — the market was so volatile this week they could no longer price deals over the usual benchmark of mid-swaps.But lower down the credit spectrum the effects are likely to be much more painful.The Swiss franc bond is usually a placid place, where conservative investors soberly swallow low yielding, low risk bonds. But it does contain a streak of adventure — the more gamesome investors, especially wealthy individuals investing through private banks, like to buy emerging market bonds, which provide much higher returns.Some shine has come off this year, though. This week Russian Railways, which has issued in Swiss francs, tried to pay an interest coupon but could not because of sanctions. Russian borrowers are quite big in Swiss francs, partly because rich Russians’ Swiss bank accounts invest in the deals. Could this put Swiss investors off their emerging market food?Listen to GlobalCapital’s podcast to find out.

Turbulent times: ECB retreats from bond market, defaults spoil Swiss calm

A month into Russia’s war on Ukraine, capital markets are getting more used to the risk it poses, and a wider range of issuers are able to raise money. But riskier types of deal — emerging markets, high yield and equities — are still virtually impossible.Emerging market bond issuance did resume with deals for Nigeria and Turkey, but then the brakes were slammed on again this week when Jay Powell, chairman of the US Federal Reserve, startled bond aficionados by hinting that some of the Fed’s rate hikes this year could be double-sized: 0.5% in one go. On this week’s GlobalCapital podcast, George Collard, EM bonds reporter, explains how this is affecting countries from Latin America to the Middle East, and gives an update on the efforts by Russian borrowers to pay interest on their bonds — while Western authorities try to stop some of them.Mike Turner, public sector bonds reporter, says even some of the highest quality borrowers in the world, such as the European Union and German state bank KfW, are finding the bond market full of traps at the moment. What investors liked one day, the next they hate.A good equity deal got done in Iceland, however, where the government sold $400m worth of shares in Islandsbanki, one of the three banks it had to nationalise in 2008. Victoria Thiele, equities reporter, asks if this could lead to more privatisations of former zombie banks in Iceland and elsewhere in Europe — such as Spain, the UK and Ireland.Occasionally capital markets produce something truly cheering. Jon Hay, sustainability editor, explores the World Bank’s ‘rhino bond’, issued this week, which enables investors to finance rhino conservation in South Africa in an innovative way – by giving up their interest payments.

A month into Russia’s war on Ukraine, capital markets are getting more used to the risk it poses, and a wider range of issuers are able to raise money. But riskier types of deal — emerging markets, high yield and equities — are still virtually impossible.Emerging market bond issuance did resume with deals for Nigeria and Turkey, but then the brakes were slammed on again this week when Jay Powell, chairman of the US Federal Reserve, startled bond aficionados by hinting that some of the Fed’s rate hikes this year could be double-sized: 0.5% in one go. On this week’s GlobalCapital podcast, George Collard, EM bonds reporter, explains how this is affecting countries from Latin America to the Middle East, and gives an update on the efforts by Russian borrowers to pay interest on their bonds — while Western authorities try to stop some of them.Mike Turner, public sector bonds reporter, says even some of the highest quality borrowers in the world, such as the European Union and German state bank KfW, are finding the bond market full of traps at the moment. What investors liked one day, the next they hate.A good equity deal got done in Iceland, however, where the government sold $400m worth of shares in Islandsbanki, one of the three banks it had to nationalise in 2008. Victoria Thiele, equities reporter, asks if this could lead to more privatisations of former zombie banks in Iceland and elsewhere in Europe — such as Spain, the UK and Ireland.Occasionally capital markets produce something truly cheering. Jon Hay, sustainability editor, explores the World Bank’s ‘rhino bond’, issued this week, which enables investors to finance rhino conservation in South Africa in an innovative way – by giving up their interest payments.

Bonds in turmoil, a glimmer of hope for bank equities — and rhino bonds

Circle

Banks might finally be held to account for the damage to the environment their bond and equity underwriting does. Elsewhere, three Russian companies might face bankruptcy thanks to the effect of sanctions on their convertible bonds.While it has been fairly straightforward to measure what emissions a loan or an investment funds, assessing the part a bank’s capital markets deal arranging business plays in polluting the planet — working on an oil company IPO, or lead managing a bond for a mining company, say — has been harder to acknowledge. Now, work is underway to shed light on this vital part of greening the financial system just as HSBC — a big bank in this business — committed to disclose the impact of its capital markets business for oil, gas, power and utilities clients, following shareholder pressure.But what will these disclosures tell us? How long will they take to arrive? And most importantly, how will they get banks to reduce their impact via the capital markets?Meanwhile, three Russian companies are facing an existential threat thanks to the convertible bonds they issued running up against sanctions. We have discussed Russian defaults on the podcast before but these companies, thanks to a combination of Western sanctions, and those of their own government, face bankruptcy if they cannot find the money to buy back the bonds they sold to investors. So far, the bondholders — who likely don’t want to or can’t own a Russian business in a different sector to their own — are working with lawyers and the companies themselves to work out how to resolve a complicated situation.We discuss how they ended up in this mess and what the remedies may be in what is, in the parlance of our times, an unprecedented time for this part of the capital markets.

Banks might finally be held to account for the damage to the environment their bond and equity underwriting does. Elsewhere, three Russian companies might face bankruptcy thanks to the effect of sanctions on their convertible bonds.While it has been fairly straightforward to measure what emissions a loan or an investment funds, assessing the part a bank’s capital markets deal arranging business plays in polluting the planet — working on an oil company IPO, or lead managing a bond for a mining company, say — has been harder to acknowledge. Now, work is underway to shed light on this vital part of greening the financial system just as HSBC — a big bank in this business — committed to disclose the impact of its capital markets business for oil, gas, power and utilities clients, following shareholder pressure.But what will these disclosures tell us? How long will they take to arrive? And most importantly, how will they get banks to reduce their impact via the capital markets?Meanwhile, three Russian companies are facing an existential threat thanks to the convertible bonds they issued running up against sanctions. We have discussed Russian defaults on the podcast before but these companies, thanks to a combination of Western sanctions, and those of their own government, face bankruptcy if they cannot find the money to buy back the bonds they sold to investors. So far, the bondholders — who likely don’t want to or can’t own a Russian business in a different sector to their own — are working with lawyers and the companies themselves to work out how to resolve a complicated situation.We discuss how they ended up in this mess and what the remedies may be in what is, in the parlance of our times, an unprecedented time for this part of the capital markets.

Capital markets faces carbon reckoning as vultures circle Russian companies

The full implications of the Russian invasion of Ukraine for the capital markets are still far from clear. As we recorded this episode, European leaders were meeting at Versailles to discuss, among other things, another gigantic borrowing programme for the EU that could be funded in the bond markets — this time to fund defence and energy. We discuss all that we know so far on this developing story and whether it will make the EU the sort of permanent capital markets presence that defines it as the eurozone’s benchmark issuer.The EU wasn’t the only European institution considering its response, however. A key European Central Bank meeting on Thursday gave the first indication of what monetary policy makers plan to do to combat inflation now that war threatens both even greater rising costs and lower growth. The US Federal Reserve and the Bank of England will follow next week.Closer to the eye of the storm we look at what the world’s major banks are doing about their businesses in Russia. Goldman Sachs and JP Morgan are pulling out but, as we discover, it’s not simply a case of packing up and going home when your clients are all trying to do the same. Finally, we look into something just as complex but where there is even less transparency — whether Russian issuers will be willing and able to comply with the country’s decree that they only pay their bond obligations in roubles, whether that will result in mass defaults and what the long term implications of that will be.

The full implications of the Russian invasion of Ukraine for the capital markets are still far from clear. As we recorded this episode, European leaders were meeting at Versailles to discuss, among other things, another gigantic borrowing programme for the EU that could be funded in the bond markets — this time to fund defence and energy. We discuss all that we know so far on this developing story and whether it will make the EU the sort of permanent capital markets presence that defines it as the eurozone’s benchmark issuer.The EU wasn’t the only European institution considering its response, however. A key European Central Bank meeting on Thursday gave the first indication of what monetary policy makers plan to do to combat inflation now that war threatens both even greater rising costs and lower growth. The US Federal Reserve and the Bank of England will follow next week.Closer to the eye of the storm we look at what the world’s major banks are doing about their businesses in Russia. Goldman Sachs and JP Morgan are pulling out but, as we discover, it’s not simply a case of packing up and going home when your clients are all trying to do the same. Finally, we look into something just as complex but where there is even less transparency — whether Russian issuers will be willing and able to comply with the country’s decree that they only pay their bond obligations in roubles, whether that will result in mass defaults and what the long term implications of that will be.

Russian invasion: response, retreat and repayment

The Russian invasion of Ukraine has given capital markets participants in the West compelling legal, moral and financial reasons to question, and indeed halt, their involvement in financing the country and its businesses.Swathes of new sanctions have forbidden all sorts of financing activity, but critically, investors and companies like index providers — which provide a framework for so much investment in Russian assets — are now going beyond what is laid out in the proscriptions as they look to disentangle themselves from Russian capital markets.The effects will likely be catastrophic for Russia, especially its equity markets. But if westerners are forced to sell their Russian assets all at once into a market with no buyers, it won’t just be Russia that feels the financial pain.On the podcast this week, we discuss how banks, index providers and investment managers can cut their risk exposure to Russia and whether they can do it without hurting themselves in the process. We also look into whether a recent sudden interest in buying defence stocks is compatible with the sort of ESG concerns that are being given as a moral justification not to invest in Russia.

The Russian invasion of Ukraine has given capital markets participants in the West compelling legal, moral and financial reasons to question, and indeed halt, their involvement in financing the country and its businesses.Swathes of new sanctions have forbidden all sorts of financing activity, but critically, investors and companies like index providers — which provide a framework for so much investment in Russian assets — are now going beyond what is laid out in the proscriptions as they look to disentangle themselves from Russian capital markets.The effects will likely be catastrophic for Russia, especially its equity markets. But if westerners are forced to sell their Russian assets all at once into a market with no buyers, it won’t just be Russia that feels the financial pain.On the podcast this week, we discuss how banks, index providers and investment managers can cut their risk exposure to Russia and whether they can do it without hurting themselves in the process. We also look into whether a recent sudden interest in buying defence stocks is compatible with the sort of ESG concerns that are being given as a moral justification not to invest in Russia.

Getting out of Russia

This week’s podcast was recorded the morning after Russia began a full scale invasion of Ukraine.We look into the immediate effects on the capital markets — what the fresh rounds of sanctions means for Russian issuers and what sort of deals other borrowers will be able to do once enough stability returns to markets.We also discuss an area of the capital markets where investors are flocking to buy deals that may turn even hotter as a result of the invasion: the IPO market in the Middle East.  

This week’s podcast was recorded the morning after Russia began a full scale invasion of Ukraine.We look into the immediate effects on the capital markets — what the fresh rounds of sanctions means for Russian issuers and what sort of deals other borrowers will be able to do once enough stability returns to markets.We also discuss an area of the capital markets where investors are flocking to buy deals that may turn even hotter as a result of the invasion: the IPO market in the Middle East.

Russia, Ukraine and the capital markets

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