The GlobalCapital Podcast

Will Credit Suisse survive and in what form?Tech lending after SVBA false dawn for EM issuersSwiss regulators are known for making capital requirements tougher for their banks than rule makers elsewhere — it’s known as the Swiss finish. But that didn’t prevent the Swiss National Bank from having to provide a Sfr50bn lifeline to Credit Suisse this week and the bank’s future is still far from certain.We investigate whether the crisis-dogged Swiss lender will have time to implement the restructuring it began in October or whether it is about to have a completely different solution imposed upon it, with options including being sold to its local rival, UBS.Credit Suisse got caught up in the aftermath of the collapse of Silicon Valley Bank (SVB) as markets scoured for weak links in the banking sector. We look this week, however, at what the funding for the tech sector will look like now that HSBC owns SVB UK. We also discover how hopes faded over the course of the week for emerging market issuers, which some had hoped would benefit from the rally in US Treasuries that followed the SVB disaster. Turns out it was the wrong kind of rally.

-                  Hand wringing at the end of Arm saga-                  Green bond rebirth for corporate issuers-                  Getting private money into development finance-                  Lenders look to engage Europe’s telcosArm gave the UK equity capital markets a slap this week when it opted to list in New York rather than the celebrated microchip designer’s home exchange in London, despite huge efforts to persuade it to do otherwise. It has prompted a lot of soul searching about the state of the UK as a listing venue but we question if things are really that bad, or if the UK is even being judged against the right peers.There has also been a resurgence in corporate green bond issuance as the market starts to find fault in sustainability-linked bonds. We look at what is driving the trend back to the OG of ESG-themed securities and what companies’ labelled funding mixtures will look like in future.One of the biggest problems in global development is the mobilisation of private capital. We report this week on how a new fund is looking to solve the problem and what other solutions the capital markets have come up with to bridge what some reckon is a $2.6tr gap that needs to be bridged for the world to meet the UN’s Sustainable Development Goals.Finally, we investigate the telecoms sector, which promises to be a big source of lending activity for banks in Europe this year if only something would stop holding it up.

- QT walks among us - Companies get a yen for yen - Divi recaps return - EU sets Green Bond StandardQuantitative tightening got a bit tighter this week when the ECB stopped showing up in the order books for new covered bond syndications. The central bank’s asset purchases have been a defining feature of Europe’s bond market for the last few years as used its balance sheet to fight crisis after crisis. We take a look at what the impact will be of its withdrawal and who is taking up the slack.A week ago, GlobalCapital reported on how expensive it was becoming for some banks to lend dollars to their corporate clients. This week, we found cheaper alternatives in Asia. We delve into the trend for yen in the loan market as borrowers look to manage their funding costs in a world of rising rates.Meanwhile, one of the more bullish types of leveraged finance issuance is back – the dividend recap – despite the dust barely having settled on last year when banks struggled to syndicate leveraged debt into the wider market. We examine what has driven this spate of deals and whether there has been a sudden change of heart among investors.Finally, the EU has agreed a political deal for its Green Bond Standard. But of course, negotiating such a thing over the five years it has taken is mere child’ play in European regulatory circles. We look into what needs to happen next for it to matter, including its passage into law and problems with the EU’s Taxonomy for Sustainable Activities.

Upheaval in the CEE bond marketCovid aftershocks in the US CMBS marketWhat Banga means for the World Bank and SSA bondsRussia shocked the world a year ago today when it invaded Ukraine. The world has felt the effects, including the capital markets. To mark the occasion we look into three areas of the markets profoundly changed by the war and question how they will develop as the conflict rumbles on.The pandemic also had a profound effect on how we live our lives, in particular how and where we work. This is now starting to affect the securitization market in the US where deals backed by commercial mortgages are facing rising delinquencies because of the move to hybrid working and rising interest rates. We dissect this market and look at what lies on store.Finally, it’s all change at the top of the World Bank as it searches for a new president to replace David Malpass who resigned earlier in the week. It may not be the biggest issuer in the capital markets but it is certainly among the most influential institutions on the planet both as borrower and lender. Moreover, the change comes at a time when some are urging multilateral development banks to borrow even more. We look into the surprise nominee for the presidency, Ajay Banga, and what his appointment, if it happens, means for the world’s development banks and their place in the capital markets.

Are EU bonds govvies yet?Fast moving credit market develops a strange rattling noiseDebt-for-nature: from the Galapagos to the developing worldThe EU’s huge funding programme and how it issues debt make it appear very much like a sovereign borrower. But while it might like to view itself as such, its audience of investors and bankers don’t entirely agree that it is… yet.We discuss why the EU wants to be part of the govvie market, what it needs to do to get there and discover that there could be all sorts of consequences if it achieves its goal in the eyes of the bond market.Meanwhile, the go-faster stripes seem to be wearing off of the speeding credit market as investors worry about spreads and interest rates and some new bank and corporate bond issues start to look a little stodgy — and it could not be happening at a worse time for issuers.Finally, we look into debt-for-nature swaps and how this innovative bit of financing could help vulnerable countries deal with two of their most pressing problems: global warming and debt sustainability.

- Do two IPO swallows make a summer, or a winter of discontent?- Why investors think SLBs are 'worthless' and what to do about it- The buy-side grapples with government green bonds- Moans in loansThe first two IPOs in Europe this year were priced this week, for Ionos and EuroGroup Laminations. They were a key test for the market after a dismal 2022 when many new listings were shelved as market participants grappled with inflation, rising rates, the threat of recession and geopolitical horrors. We examine what the deals tell us about equity capital markets this year.Meanwhile, all is not well in the sustainability-linked bond market, a nascent crucible of innovation that aims to help issuers meet environmental targets. We look into why investors are calling the coupons the bonds pay irrelevant and look at the latest efforts to value the economics of these trades more meaningfully. We also look at a new resource to evaluate government green bonds.Finally, although the bond markets has had a stellar start to the year, activity in the loans markets - an alternative source of capital for companies - is way down. We ask why and discover why having such a busy bond market could in fact be a source of encouragement for lenders.

Investors bored with sustainability targetsHow green was my allocation? Bookrunners won’t tell youCan emerging market borrowers keep up the comeback?There’s a clash brewing in the sustainability-linked bond market with investors losing interest in issuers’ KPI targets. We ask why these important sustainability targets are missing the mark and what the consequences are for the SLB market.We also look into the problems surrounding another key element of the socially responsible bond market — demonstrating that green bonds are going to green funds.Finally, we focus on emerging market bonds, which in terms of issuance have gone from a dreadful 2022 to smashing records so far in 2023. We investigate whether such a pace can continue after a huge week of economic data and central bank interest rate announcements and which issuers can regain access to the market.

What’s up with ECM?European politicians suddenly love securitization againAdani versus Hindenburg Research and what it means for Adani’s banksThe equity capital markets were supposed to have been alive with deals this January — bond markets certainly have been — but very little has happened. We investigate who is to blame and when we might see some action.Meanwhile, European politicians and officials have stigmatised the securitization market after its part in the 2008 financial crisis. All of a sudden, as a letter from French and German politicians and leaked to GlobalCapital reveals, they agree with the banks that many of the rules that tame this market are a hindrance. We look at what they are calling for and why they’ve had such a big change of heart.Finally, Adani Group, the Indian industrial conglomerate, has come under a short attack by activist hedge fund, Hindenburg Research. We look at what Hindenburg is alleging and Adani’s response but also what it means for the banks in the capital markets that serve Adani.

Mighty Earth vs JBS: how sustainable is the SLB market?How the FIG and corporate bond markets are changing this yearWhat can put a stop to record bond issuanceThe sustainability-linked bond market is a nascent one but booming. It is a controversial one too, with some accusing it of being a platform for greenwashing. Those accusations escalated this week when Mighty Earth, an NGO, made a complaint to the US Securities and Exchange Commission about SLB issuer and beef production giant JBS. The outcome is sure to resound through this market for years to come. We examine Mighty Earth’s complaint and look at JBS’s response to it. We also talk about what the consequences might be for the wider SLB market.Meanwhile, the primary bond market has been fizzing. It has been a record year for euro issuance, for example. We look at how the bullishness in credit is affecting issuance in the financial institution and investment grade corporate bond markets. But we also question the exuberance, whether it can last and what will derail it.

Sergiy Nikolaychuk of Ukraine’s central bank offers an in-depth look at the country’s economy in wartimeCan the good times last in the primary bond market?Real estate looks for refi rehab and direct lenders end up as ownersSergiy Nikolaychuk is the deputy governor of the National Bank of Ukraine, the country’s central bank. Appointed to the job in 2021, he has been at the heart of Ukraine’s financial system and economy throughout Russia’s invasion. We spoke to him in Vienna this week about how the NBU makes plans during wartime, its expectations for the conflict and how its economy and financial system has held up as well as its latest agreement with the IMF.While Ukraine might not be able to come to the capital markets for now, bond issuers across different sectors are making the most of it. Issuance records both for individual borrowers and market sectors are tumbling just two weeks into the year. Issuers are suffering from FOMO, market participants tell us. But what else should they fear and can the good times in the bond market last? We find out.Not every type of borrower is able to get into the market, however. Issuers from the beleaguered real estate sector have debt to refinance in the coming years but had a tough time borrowing last year. We look at the mounting problems for the industry in capital markets.We also take a look at direct lenders who are increasingly taking the keys to the companies they have lent to that got into trouble. We look at how widespread this could become and the consequences for the direct lending market.

Why the good times in primary bond markets may not lastThe consequences of the ECB’s demand that banks buffer their leveraged finance positions on LBOsHow that could play into the hands of private creditorsThe first couple of weeks in January are not just among the busiest of the year in the capital markets but can also tell us a lot about the year ahead. In the first GlobalCapital Podcast of the year, we take a look across the credit spectrum from ECB rulings in the leveraged finance market to how sovereigns will fund the energy price crisis.How bond issuance goes in January is especially important this year after such a disrupted 2022 for so many borrowers. A lot of the problems underlying bond issuers’ attempts to raise capital last year have not been solved — inflation is still high, rates are rising, recession is looming and the effects of war in Ukraine linger.Nonetheless, issuers across the board enjoyed a strong first few days in the markets. Bigger tests are to come, however, especially once the bloated piles of cash that investors have to deploy each January start to dwindle.Meanwhile, the ECB has increased the capital it wants banks to hold against their leveraged finance positions. We discuss how that will affect the investment banks that dominate this market, why it could play into the hands of private credit and what it means for leveraged buyout volumes this year.

In GlobalCapital's last podcast of 2022, four of our journalists pick the moments from this year that stood out most for them as important, memorable... or amusing.We also discuss how the UK regulator is using Brexit to try and ease some of the harsh restrictions imposed on securitization by the EU since 2008 — while the EU is refusing to listen to the industry’s complaints.In the equity capital market, there has been a burst of block trades, proving that investors have appetite — an encouraging sign for the chances of more ambitious deals next year.And bond investors are finally getting to grips with one of the big questions in sustainable finance: how can you assess whether oil and gas companies are genuinely transitioning towards low carbon.

Will the easing of Chinese Covid rules help or harm emerging market issuers?How public sector issuers compete with a jumbo — and growing — borrower like the EUPrivate credit’s late bloomChina relaxed some of its zero-Covid policy this week, giving hope that this will stimulate Chinese growth. We explain why that will be a boost for beleaguered emerging market bond issuers and investors — and also why it might not.The European Union completed its gigantic funding task for the year this week with a €7bn bond sale. Other SSA issuers have had to navigate around it all year as this bond behemoth must come to the market often and in size. But next year, the EU — and other sovereign issuers — are likely to have to borrow even more. We explore what is driving this and what it means for the SSA bond market.Finally, we revisit the world of private credit and direct lending — sectors that have boomed in recent times — to see where managers are having the most success in raising cash from investors, following the successful closing of two new funds this week, and where they are struggling.

Hungary, its investors and their ESG worriesThe digital bond markets take a step forwardAroundtown drama fails to cool hot hybrid marketHungary came to the markets this week with a privately placed increase of a dollar bond. Along with recent green bonds from the issuer, the response from some in the market was that the issuer was doing funding this way to avoid scrutiny over its standards of governance.The country is in an escalating dispute with the EU over allowing the primacy of the rule of law, as bloc membership demands. The European Commission has recommended freezing disbursement of funds to the country unless it makes certain reforms. If Europe's Council of Ministers votes in favour of the freeze, Hungary will be more reliant on capital markets. We look at investors’ observations of what they think Hungary is doing and ask whether they are fair. We also discuss Hungary’s response — both to the Commission and to those investors.We also look at the latest digital bond from the European Investment Bank — what advancements were made, what the benefits are, where digital bond issuance is headed and what could stop it from getting there.And as the Santa rally that we first discussed two weeks ago runs on and on, we take a look at the rampant market for hybrid corporate debt and how it appeared to reach a new level of sophistication this week.

How much longer can the extraordinary run of bank bond issuance last?Are sustainability-linked bonds too complicated to be meaningful?New bond, old tricks: the art of underwriting returnsIt has been a record November for bank bond issuance and one of the busiest months for that market ever. That is, of course, unusual. What is even more unusual is that many in the market expect the pace of issuance to run long into December.Typically, the market dies down after the US Thanksgiving holiday at the end of November. We look into what is driving this late spree of deals and ask what might stop it.Sustainability-linked bonds are not straightforward products and this week, one from Valeo, the French car parts maker, had investors expressing frustration. The deal itself was a success but investors are concerned about the complexity of some of the environmental targets the issuer and others like it are aiming for. They argue they lack the expertise to judge whether ambitions around emissions are meaningful. We look at their complaints and how an industry geared towards assessing financial performance can come to judge environmental progress.Finally, we look into a bond issue from Slovenia’s largest bank, NLB. The issuer tried the deal with a syndicate of banks but postponed it only to return with the same deal one trading day later with only one lead manager mandated, which had offered to underwrite the bond. We ask whether the art of dealers buying deals is making a comeback.

Will the Santa rally in bonds last until Christmas?How much bond issuance will TLTRO repayments drive?Ithaca Energy: autopsy of an IPO The first UK IPO of significance in a year might have been hoped to be a bellwether for future deals and perhaps spark a revival for listings. But the IPO of Ithaca Energy has not worked out quite as the company and its investors might have hoped with the share price tumbling. We take an in-depth look at the company and the listing to find out what happened.In the primary bond market the tale has been, on the whole, much rosier. Investors have bet that central banks are nearing the top of their interest rate rising cycle – or at least they believe the pace of increases will slow. That means they are buying bonds again, giving a boost to the primary market. A better than expected US inflation number last week turbocharged that dynamic in this week’s primary market.But how long can this Santa rally last? And is the market good enough for all borrowers to take advantage? We look into some of the successes and failures in the bond market this week and give the tyres on which it is rolling a thorough kicking – no reindeers were harmed in the making of this episode.Meanwhile, the ECB is revealing data on repayments of its Targeted Longer-Term Refinancing Operations. Banks and some supranational and agency borrowers took trillions in cheap cash from the central bank but now the terms have worsened they are handing it back. A big chunk of this they will have to refinance in the bond market. We take a look at what that means for SSA and covered bond issuance.

The re-emergence of lender protection in leveraged financeHow one Korean insurance company caused chaos in Asia’s bond marketClimate resilience comes to sovereign bondsSome serious people in the leveraged finance market believe that covenants designed to protect investors are on their way back. That would mark the reversal of a trend that has been going on for perhaps 20 years of borrowers, and the people that own them, pushing the conditions that govern their borrowing ever more in their own favour.  It is early days – to the extent some market insiders do not believe it is even happening – but we investigate this week what restraints lenders are demanding and how far they can push back with interest rates rising and recession looming. Financial institutions’ autonomy in deciding to redeem their regulatory capital early or keep it in place is often a controversial topic. This capital is designed to be called but a borrower’s call option is just that: an option, not an obligation. Nonetheless, chaos ensued in the Asian market recently when Heungkuk Life, an insurance company, made some very strange decisions about what to do with one of its callable bonds. It was a story of how on company’s confusion spread throughout the bond market dragging in all manner of innocent bystanders.Finally, we take a look at an announcement made at COP 27 in Egypt this week and what an effort to build climate resilience into bonds means for the small, low income countries most vulnerable to climate change.

That the asset management industry – and the financial markets at large – has a problem with gender equality and women’s participation will be a shock to no one. But a recent survey laid bare just how stark the issue is despite years of debate about how to make the business a better place to work for half of the population.Two women with a wealth of financial markets experience joined us this week to discuss the state of the industry and what to do to improve it. Louise Wilson is the co-founder of Abundance Investment and was previously head EMEA of equity capital markets at UBS. Apiramy Jayarajah was most recently head of UK wholesale at Aviva Investors, which she joined from HSBC Global Asset Management but before that worked on trading floors at ABN Amro and Royal Bank of Scotland. We are also right in the middle of recruitment season for those looking to get into the industry, either through internships or graduate schemes. So, we took the opportunity to ask Louise and Api what women in particular should be mindful of and what they should be asking prospective employers about a career in finance.

Who’s inWho’s outWho’s paying for itCredit Suisse finally revealed its new strategy this week — breaking the firm up into three. Talk about a Swiss finish. Many of the details had been leaked in the run up to the announcement but it was no less momentous for all of that.The Swiss firm will keep its domestic operations, wealth and asseet management and markets businesses. Meanwhile, it is selling its profitable but capital-hungry securitization business to investment houses Apollo and Pimco and setting up a separate capital markets and advisory business to be called CS First Boston, reviving a storied Wall Street brand much to the delight of some of its veteran deal makers.We look into the rationale behind the plan, what businesses will thrive and what will be shut down in the new regime. We take a look at who will be running CSFB and how he will staff it given the high number of senior departures from scandal-ridden Credit Suisse over recent years. We also take a look at how the restructuring will be financed.

Will Liz Truss’s exit as prime minister be enough to calm the capital markets? What must her successor do to put the UK back on track? Plus who dares wins in corporate bonds and the far-reaching implications of HSBC ads being banned for greenwashing