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The GlobalCapital Podcast

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A weekly podcast from GlobalCapital discussing the most interesting stories from the world’s capital markets. Contact us at podcast@globalcapital.com
75 Episodes
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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
- Capital raising about to get tougher for companies- Chaos reigns in Gilt marketWith many corporate bond issuers in Europe heading into earnings blackout periods, fears are that once they release their results in a few weeks, the negative impact of inflation, supply chain disruption and rising rates will mean lower profits.That in turn will make capital markets tougher places to raise money. We discuss who will be hit and what they can do to issue debt in the aftermath of bad results with overall market conditions looking grim. Speaking of grim markets, UK prime minister Liz Truss may have ditched another tax cut policy as well as her first chancellor in a bid to reassure the country of her leadership and bring stability to bond markets but the early signs are that she has failed again.The Gilt market is "all over the shop", according to one trader, behaving much more like an illiquid, high risk market in distress - the opposite of what it is supposed to be.
Following the PIF’s debut bond, is Saudi Arabia a credible green investment?The multitude of unusual tactics bond issuers are using to get deals done in difficult marketsThe Public Investment Fund, Saudi Arabia’s sovereign wealth fund, made a huge splash in bond markets this week with its debut deal. But the $3bn sale across three green tranches, including a 100 year bond – an unprecedented feat among debut issuers – was not without controversy.While the deal execution itself could not be hailed as anything other than a success, investors had wildly differing opinions about whether a green bond from Saudi Arabia is a credible ESG investment or not. The country is in the middle of a bold plan to transition away from oil income, which had one of the deal’s lead managers calling the 100 year piece a “bond beyond oil”, but is it doing everything it can? We examine the deal and the arguments for and against lending money to the PIF if your priorities are the environment, social wellbeing and sound governance. If anything, the deal shows there are no simple choices in ESG debt markets.Nothing is simple in the wider bond market either, it seems. Getting deals done is tricky with markets so volatile and uncertain. There is little to suggest they will become more placid, or that funding costs will fall, any time soon either. We look at how borrowers are using all of their wiles to get funding through the door while they can.
The way out of UK market disarrayItalian banks in a better stateBring back the bonus cap, say bankers We analyse the disruption to capital markets this following new UK chancellor of the exchequer Kwasi Kwarteng’s plan to fund tax cuts and energy bill support through extra government bond issuance, which spread across currencies and asset classes and ended — or perhaps just paused — with the Bank of England making an emergency purchase of some of those bonds just as the government was in the market issuing some. Sovereign debt managers often tell us they like their markets to be dull and predictable — this it most certainly was not.But where does the UK go from here? We asked the market and heard that the way out of this mess was the government’s to navigate and that it could not rely on the Bank of England stepping in to maintain orderly markets as a permanent solution.Italy is a country that has been more closely associated with volatile politics and markets in recent times. Indeed, an election result last week drove up the spread between Italian government bonds (Buoni del Tesori Poliennali, or BTPs) and German ones — a key indicator that shows investors believe Italy is becoming a more risky investment prospect when it rises.  That in turn affects Italy’s banks, of which there are many and which are big users of the markets to raise funding and capital. But, even as one Italian bank failed to price a deal in the markets this week, we uncovered the reasons why the funding picture for this key group of institutions in the European economy is better than one might think. And finally, back to the UK where we have gauged reaction in the markets to the removal of the bankers’ bonus cap — another policy from Kwarteng’s mini budget. Spoiler alert: it’s not what you'd expect.
Uruguay has taken a step further along its path to issuing a sustainability-linked bond, which will be something new for the market to get its teeth into. And in an extra wrinkle, the South American sovereign borrower is proposing to pay investors less if it hits certain sustainability targets. We take a look at how near this controversial idea is to becoming reality and whether the market thinks Uruguay will succeed or fail.Meanwhile, as we recorded the podcast, the UK’s new chancellor of the exchequer, Kwasi Kwarteng, was delivering to parliament his plans for the country’s finances. One policy he was expected to reveal was to remove the cap on bankers’ bonuses. We explain why we think this is a good policy, even if the timing appears to be horrific for a whole host of reasons.
A number of senior bond bankers in Europe’s corporate bond market cannot for figure out why investors are buying what they have to sell.With US inflation above expectations this week suggesting central banks could be about to raise interest rates imminently, yet again, some bankers are having a hard time figuring out why you’d buy anything now that you could buy at a much better yield by waiting a couple of weeks.We explain how deals are getting done in such a volatile market and what is driving investors into the market when they know bigger returns could be had by waiting.We also look at what a fresh round of investment banking job cuts in the US might bring and whether there are in fact signs of hope that suggest the cuts might not be that severe.Finally, we talk about the drive to get bankers back to the office. It could be a handy way to prune excess staffing numbers as those who crave flexibility leave the industry but, as we discover, balancing what is best for the business with what is best for the people that make it happen is far from a settled issue.
Almost a year ago, we discussed the energy crisis for the first time on this podcast — how energy companies were using the capital markets in the face of higher demand for their product and what it meant for inflation. A year on, things are much worse.Russia’s invasion of Ukraine a few months later has turbocharged that crisis to the point where this week governments are once again unveiling fiscal support packages to help people and businesses through. We look at where the capital markets might be used to fund the response and whether they can shoulder the burden with shrinking central bank monetary support.But we also revisit what the energy companies — and others linked to the sector — are doing now that they are facing extreme swings in the price for gas, what it means for their finances and what they need from the capital markets to navigate through it. And speaking of volatile markets, we discuss how one investment bank has recalibrated its primary bond business in credit markets in a way it thinks will help it to act more quickly and decisively just when such qualities may make the difference not just between winning a bond mandate or losing it but in being able to execute it without losing your shirt in the process.
Earth Wind and Fire’s September, a nostalgic paean to the joys of the first month of autumn, might strike a chord with those involved in the business of raising bonds for companies and banks this year.Traditionally — along with January — one of the busiest months in the primary market calendar, most Septembers offer a bumper harvest of bond issuance as investors return form their summer holidays refreshed and with new piles of cash to deploy for the final quarter of the year.But this year, things are very different. With no central bank buying to prop the market and a whole host of economic horrors facing it from soaring energy costs, inflation and the prospect of a global recession, issuers will face a far tougher time persuading debt investors to part with their money.We examine the perils facing banks and companies for what will be one of the trickiest months of the year to see which issuers are the most vulnerable, what kind of market they will face and how they can navigate it to raise vital funding.
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