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A weekly podcast from GlobalCapital, the capital markets news service based in London and New York, discussing its most interesting stories from around the world.
Every Friday, listen to lively discussion about the very latest themes, the most innovative and important bond and equity issues and syndicated loans and much more from the capital markets.
This podcast is for anyone working in - or who wants to work in - the capital markets from investment bankers, to funding and treasury officials, investors, lawyers, analysts, NGOs and lobbyists, regulators and policy makers, and analysts.
GlobalCapital has been the "voice of the markets" for over 35 years, covering bond, loan, equity and securitisation markets around the world.
We cover everything from public sector bond issuers, financial institutions, emerging markets and investment grade corporate bonds and loans to securitisation (including CLOs and ABS), regulation and market news as well as industry gossip.
GlobalCapital is written for capital markets professionals but the podcast is of value to anyone with an interest in the industry, whether you have been working in it for as long as we have, or are looking to make your first career move into it.
This podcast is a commute-sized slice of everything that's most interesting from the world's capital markets with the aim of helping you sound smarter in your morning meeting, or making you stand out from the crowd of other hopefuls when kick-starting your career.
And don't forget, you can #AskGC anything you like and we will select the best questions to answer on the show.
Contact us at podcast@globalcapital.com
139 Episodes
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◆ Supranationals speak on callable capital ◆ Bank funding: pricing reset ◆ The demise of the cornerstone investorAs the great and the good of the development finance world gathered in Washington, DC for the World Bank/IMF Spring Meetings, multilateral development banks published details about their callable capital, the next vital step along the way to powering up their lending to solve some of the planet's most urgent problems. We digest what they said and why it matters.In the FIG bond market, issuers decided to postpone new issues as rates volatility gripped the market. We figure out when they will be back and how much extra they will have to pay for the funding.Finally, equity capital market experts think the IPO revival is strong enough to do away with cornerstone investors. And what do the cornerstones think of that? Listen in to find out (spoiler alert: they're not exactly tearing up the paving stones over it).
◆ Why everyone from nuns to pro-coal US state treasurers are giving banks stick over ESG ◆ El Salvador's punchy new debt structure ◆ Appetite for duration in covered bondsWest Virginia: almost heaven unless you're on state treasurer Riley Moore's list of banks the state won't do business with over fossil fuel financing. But unlike most ESG-related exclusions, in this case opprobrium is reserved for financial institutions deemed to be anti fossil fuel.Bank of Montreal has dodged making the list in a week where four others were added. But the pressure on banks to behave a certain way over ESG is mounting on both sides with some nuns in the US taking Citi to task over what they see as exploitation of indigenous people.We look into what this means for banks picking a treacherous route to building their ESG credentials while trying to make money serving traditional clients. We also examine what investors in their bonds think.Investors had another tricky consideration to make this week as El Salvador issued a funky new structure as it looks to beat its debt distress. We examine the new bonds and what the market reaction to them.Finally, we discuss the growing appetite for long dated covered bonds.
◆ Do investors want unified capital markets coverage? ◆ Corporates fear democracy ◆ Why are FRNs trending? ◆ Second lien mortgages in arrears ― yes pleaseBanks’ urge to cut costs in debt capital markets, especially syndicate desks, is prompting some to call for the ‘global capital markets’ model: one team for equity and all kinds of debt.They argue this could heal banks’ disjointed thinking and allay investors’ frustration that they have to say the same thing to five different bankers at every firm. But there are plenty of sceptics...Few in the corporate bond market expected its rally to last into this year, still less the second quarter. But here we are and it’s still running. A motley bunch crammed into the market this week and found a great reception. As Mike Turner explains, they’re partly packing the funding in to avoid this year’s great big risk event: the US election.Floating rate notes are the natural product for banks to issue, but normally they don’t much, because most investors prefer fixed rate bonds. So why are investors gagging to buy floaters now, just when everyone agrees interest rates are about to fall? Sarah Ainsworth goes through the ins and outs.Second lien mortgages are the kind of — shall we say 'challenging' — collateral familiar from the US securitization market, but as George Smith and Victoria Thiele highlight, the UK has produced four deals in the past five months. The latest, from Equifinance, had some pushback in the market, but investors were only joshing and bought it in the end. We ask if lower ranked mortgages are the hot new asset class.
In the second part of GlobalCapital’s exploration of how bond syndicate desks are changing, after a swathe of the discipline’s senior bankers have been made redundant, we discuss the syndicate job itself.Technology and market transparency have stripped away some of the grunt work, but also made knowledge easier to come by. Are banks thinking they don’t need so much experience on desks?Bankers admit pricing bonds has often become more routine. But when markets get difficult, or situations do, as with Equinix’s recent pulled deal, you need experience.We also talk to Ana Fati and Mike Turner about the latest plunge down for Thames Water after shareholders refused to put in much needed equity. What are bond investors and lenders thinking about the UK water sector?And it’s been a huge week for African bond markets, with Zambia finally getting its official creditors and bondholders to agree to a restructuring. This one is meant to be tougher to bondholders, but if Zambia does well economically, it will have to pay extra. George Collard explores whether that is a good thing, or will prove a burden.
◆ MUFG's Del Canto and SG's Menzies on what comes next for capital markets ◆ The juniorisation of syndicate desks ◆ Two deals pulled despite fantastic marketsIt was only a few months ago that GlobalCapital asked more than 50 of the bond markets' most senior bankers where they thought the primary markets were headed in 2024 for our Review 2023|Outlook 2024 special report. This week, two of them joined us on the podcast to see which predictions had come true and what comes next for issuers and investors after what has been a stellar start to the year for bonds.Fabianna Del Canto is MUFG's co-head of capital markets in the EMEA region. She has worked in syndication and origination for over 20 years and jointly runs the Japanese firm's business in the investment grade, structured, leveraged and emerging markets.Andrew Menzies is Societe Generale's global head of debt capital markets. He has been at the French firm since 2003, working with clients across the Americas — during a stint in New York as the bank's head of DCM for the continent — the UK and Ireland, the Netherlands and Scandinavia.But as good as markets have been for issuers this year, there were two stark reminders that access to bond funding can never be taken for granted. Two issuers hooked their deals right in the middle of book building — Equinix and Raiffeisen Bank International. We examine both cases to see what went wrong.We also look into why some of the most senior syndicate bankers in the Street are leaving their jobs and being replaced by more junior staff.
◆ The UK is about to embark upon a new, higher funding remit with a key part of its investor base dwindling ◆ Why the FIG bond market is so strong and why it will stay that way ◆ If investors are still leaving EM bond funds, who is buying record amounts of issuance?The UK plans to sell £28bn more Gilts from April — the start of its financial year — than last year, at £265.3bn. As a bond issuer, it has been able to rely on what some have called a captive investor base, in particular UK pension funds that cannot buy long-dated sterling assets in such volumes from anywhere else. But their demand is falling. We explain why, and how the UK's Debt Management Office will adapt.Whatever the future holds, it did not stop the UK from achieving a record order book for a syndication this week. And credit markets are going great guns too. We look at what is driving demand for bank bonds in euros an spot an opportunity for issuers that may be able to do something a little different.We also investigate the riddle of emerging market bonds — if dedicated funds keep suffering net outflows, then who is behind the record volumes and deal sizes? And what will it take for net inflows to return to the asset class?You can subscribe to this podcast by hitting any of the buttons below, or by following us on YouTube, using this link.
◆ Basel gets tough on banks gaming ratio regs ◆ Fast fashion ESG dilemma for London ◆ What drove Israel's record dollar dealThe Basel Committee that supervises banks has unearthed evidence that some of the most important banks are window dressing their accounts to meet regulatory requirements. We discuss the illusions being created and what the supervisors plan to do about it.In the equity markets, London has been soul searching for some time over how to restore its former glory as a listings venue. Chasing the IPO of fast fashion giant Shein is one possibility but just how helpful will hosting a deal for a company mired in ESG concerns be for the bourse's reputation? We find out.Finally, Israel took to the bond market this week to meet a big chunk of its funding requirement, much elevated by its war with Hamas. We talk about the deal, how it went and raise the question of whether the bonds of a country engaged in a conflict that has generated such a great deal of controversy fits with an investment industry that spends so much time talking about its ESG priorities.You can subscribe to this podcast by hitting any of the button below, or by following us on YouTube, using this link.
◆ The consequences of sovereign retail bonds ◆ Asset managers alter covered bond landscape ◆ Ramadan drives Gulf deal surge ◆ One word: plasticsAs the UK took a step towards including greater retail investor participation in its Gilt auctions, we looked at recent developments among it peers in doing the same and assess the pros and cons of democratising debt markets.Asset managers are pouring into covered bonds, swelling order books. Is that leading to some deals being mispriced? We find out.Meanwhile, there is a surge in issuance from borrowers in the Gulf underway as they look to issue before Ramadan begins later in March. We look into who is selling what and how well they're doing it.Finally, we examine a new sustainable finance initiative to tackle the plethora of plastics clogging up the environment.You can subscribe to this podcast by hitting any of the button below, or by following us on YouTube, using this link.
◆ Markets plead for regs pause ◆ Barclays' new strategy ◆ Middle East ECM to take it up a gearOn the one hand, the EU wants a Capital Markets Union that will make the bloc a single pool for financing to compete with the US or China. On the other its lust for rules has created an incoherent mess of red tape, choking off any chance of CMU happening.Now, trade bodies are pleading with the European Commission to pause and tidy up. We look into what they're asking for.Barclays, meanwhile, revealed the latest plan to turbo charge its investment bank, which eats up too much capital for the amount of money it makes. We look into the detail of the new plan.Finally, Middle East equity capital markets have bustled in recent years, while those in the rest of the CEEMEA region have stagnated. We look ahead to the swarm of deals due in the region this year.You can subscribe to this podcast by hitting any of the button below, or by following us on YouTube, using this link.
◆ Kenya deal ducks default but two more countries in crosshairs ◆ Transition finance after historic Japanese bond sale ◆ How the IPO revival is a boon for the loan marketKenya may have averted fears of default by raising fresh money this week but already investors are working their way down the list of African sovereigns with troubling debt piles. Tunisia and Egypt are next on their list, leading us to look at each country's problems and how they can avoid default.Japan has executed its first auction of government bonds to finance the country's transition to a more sustainable economy. We look into the deal to see how successful it was and debate whether Japan has set a template for other countries to follow that improves on bog standard green bonds.Finally, we look at how the loan market could see a pick-up in activity thanks to the revival of initial public offerings in Europe.You can subscribe to this podcast on all the major platforms, or by following us on YouTube, using this link.
◆ Primary market for banks flying but will property burst the bubble? ◆ Japan to debut transition bond as SLLs fall out of favour ◆ Kenya back in bond marketThe bond market for bank issuers goes from strength to strength. Any trade seems possible in any format and new issue premiums are rarer than hen's teeth. But is a sharp dose of reality coming in the form of exposure to bad real estate loans?We also discuss the demise of the sustainability-linked loan and whether the product has a future alongside such ESG finance innovations as Japan's debut transition bonds, which we pick apart to see if they could provide a way for more sovereigns to fund innovation in sustainability.Finally, we look into Kenya's bond market return. It wasn't that long ago — two weeks in fact — that market participants said the country was a default candidate and had no bond market access. Now it is planning to price a new issue. We explain what's going on.
◆ The first of a new asset class in SSA debt ◆ Full inspection of AfDB's landmark deal ◆ A power shift in the European CLO marketYears in the making, the first publicly sold hybrid deal from a multilateral development bank arrived this week. The African Development Bank's latest instrument heralds not just the dawn of a new product in the bond market but, as other MDBs bring their own deals, will lead to an increase in supranational bond issuance overall and, most importantly, more development dollars for lower income countries.We take a look this week at how this deal came to fruition, who bought it and why, and what will happen next as this nascent asset class takes its first steps.Meanwhile, Victoria Thiele, co-host of our sister podcast dedicated to securitization, called Another Fine Mezz, helped us examine how growing demand for equity tranches in European CLOs means the buyers of their triple-A tranches no longer have it all their own way.
◆ Are lawsuits about funding polluters the next big risk for banks? ◆ Sub-Saharan Africa issuance returns... ◆ ... but will any follow Ivory Coast's lead?The Dutch branch of Friends of the Earth is suing ING over its roll in financing pollution. It is the latest in what may become a wild spread of lawsuits brought against banks — and governments and corporates, for that matter — as environmental bodies seek to enforce tougher timelines for transition.We look at what this means in terms of being a big risk for the banking sector and analyse how it might develop.Meanwhile, Ivory Coast issued a bond this week, to much acclaim. It was the first African sovereign syndication since April 2022. But does this mean African governments have bond market access again? And if so, do they even need it?Don't forget you can #AskGC about anything on the show, or that you read on globalcapital.com. Just email podcast@globalcapital.com
◆ Records smashed in primary markets but what's driving it? ◆ Why order books are so swollen ◆ Rampant demand but companies want to cut hybrid debtIssuers and investors may agree that this is not a perfect market by any means, but that is not stopping them from getting deals done while they can.Investors are piling into asset classes that they haven't bought for some time and issuers are happy to take advantage even though pricing might not be the tightest it has ever been. We look at how this fear of missing out in the first weeks of the new year is helping issuers smash records in the bond market and what might threaten it.One asset class issuers are less keen to strap on more of is hybrid debt — for investment grade companies at any rate. A new issue this week flew out of the door, which would usually be a signal for other companies to launch their own deals. But if anything, companies want less of this debt on their books. We explain why.Don't forget to #AskGC about anything that features on the show or that you're curious about from elsewhere in the capital markets. Email your questions to podcast@globalcapital.com and we will endeavour to answer the best questions on the show.
1Amid all the records being smashed across primary bond markets this week, one could be forgiven for missing what has been happening in the sterling bond market. But fear not; we were all over it. From remarkable debut deals from corporate issuers to a change in how public sector borrowers approach sterling bond issuance in what is a very busy time for the market, we discuss in-depth what has been going on, what is driving it and what it means.Then a change of tack this week as we stop to recognise one of our own. Forgive the self-indulgence but we think it is worth it. Bill Thornhill, our covered bond editor is retiring and we wanted to mark the event by talking to him about where he saw the covered bond market heading next and about his 40 year career from trading cotton to chronicling Pfandbriefe.And don't forget to #AskGC any questions you have about capital markets for us to answer on future shows. Just email podcast@globalcapital.com, or DM us on LinkedIn.
◆ SSAs throw etiquette out of the window in rapid start to year ◆ Banks blind-sided by sudden correction ◆ Mixed fortunes for corporate issuersThe first few days and weeks of January have always been a critical time for capital markets issuers but perhaps this year more than ever. As interest rates have risen and central banks have withdrawn support for the bond markets, so issuers have come to rely more upon the first spell of the year for their borrowing needs by front-loading their debt programmes.This week we looked at how SSA issuers threw etiquette out of the window to great effect, how financial institutions were caught out by a sudden correction in spreads and what the first few trading sessions tell us about the prospects for emerging market and high grade corporate issuers this year.Ask GCIn a new feature for the GlobalCapital Podcast, we will be attempting to answer your questions.Each week we will answer a sample of the very best ones (most likely about capital markets but we're also happy to share recipe ideas, sartorial tips and attempt to solve your moral dilemmas if that's what you're struggling with) and will answer them in a new segment on each episode.To #AskGC drop an email to podcast@globalcapital.com, message us on social media, or comment under one of <i class="rte2-style-italic">GlobalCapital</i> or Ralph Sinclair's posts on LinkedIn.
◆ What the most senior debt bankers in the world are worrying about for next year ◆ Who's eating Credit Suisse ◆ If a property company falls in the forest and doesn't make a sound...One of the very biggest investment banking stories this year was the collapse of Credit Suisse. But its rescue by UBS and what the rest of the Street makes of the demise of its rival is a story that will play out into 2024 and beyond.In our Review 2023 | Outlook 2024 special report, we have the most in-depth reporting you will find anywhere on what is happening to the stricken Swiss bank's market share, clients and staff, and what its new owners on the other side of Zurich's Paradeplatz plan to do with their new acquisition. We discuss all of those topics on this week's show.We also look at what the heads of debt capital markets at the biggest bond houses are thinking about business next year, from volumes, products and fees to travel, bonuses and bugbears.Finally, in this week's news, we look into how the collapse of Austrian property company Signa might affect the bond market and wonder why nobody seems to be all that worried about it just yet.Read our special report for free hereThis is the final episode of The GlobalCapital Podcast for 2023. Thank you to everyone who downloaded us this year and subscribed. We'll be back in the first week of January so in the meantime, Merry Christmas and enjoy the holiday season.
◆ Latin America’s bond markets at an (interest rate) inflection point ◆ Who’d be a primary dealer? ◆ What price briiiiidge loans?As GlobalCapital launches the poll for our first dedicated Latin America Bond Awards, our podcast takes a deep dive into the region’s troubled capital markets, with special guest Omotunde Lawal, head of emerging markets corporate debt at Barings.There may not be many deals in the market — at least not public ones, as Lawal points out — but there is masses going on. Javier Milei, Argentina’s new populist firebrand president, has gobsmacked everyone by choosing establishment figures to run finance. Mexico has an election next year that could hold upside for the markets, and in the meantime, the region’s CFOs and treasurers, used to tough times, are getting on with the job.In Europe, we look at government bond primary dealerships, long a source of gripes for investment banks as it is so hard to make money on them, and easy to lose it. Capital rules are about to tilt the balance of incentives still further, and waiting in the wings are non-bank market makers like Citadel Securities.Patience is a virtue — especially in the loan market, where bridge loans for M&A deals are having to go on, and on, and on. M&A deals simply take longer to close nowadays, which is changing the dynamics for banks.
◆ German court ruling may hit Bund issuance in 2024◆ KfW and Länder funding may also be affected◆ Banks and borrowers shrink loan syndicatesThe German constitutional court has rocked the country's public sector borrowers just as they finalise their funding needs for 2024.We look at how the new multi-billion euro-sized hole in the government's budget that is the result of the ruling will affect Bund issuance next year, as well as the funding programmes of KfW and the countries federal statesMeanwhile, banks are paring down the amount of lending they do to companies in the quest for profitability. But there is evidence that borrowers are perfectly happy with shrinking syndicates. We explain why.
◆ Do green bonds still offer enough reward for issuers? ◆ Crédit Agricole's nuclear option ◆ Banks rush to offer better terms to sub-IG companies Two sovereign issuers recently complained that the pricing advantage of doing a green bond rather than a conventional one — the fabled greenium — was not enough to justify the extra costs associated with labelled issuance. That prompted us to look across capital markets to see if we could identify the habitats where this hard to spot creature now dwells and whether it was thriving in any of them, or facing extinction. We reveal our findings this week.Meanwhile, Crédit Agricole has added a novel feature to its green bond framework — the chance to fund nuclear power projects. The inclusion of nuclear energy in the EU's Taxonomy of Sustainable Activities was not without controversy, so we looked into how the French bank and investors will use this new facility.We also looked at banks' race to lend to sub-investment grade companies at ever better terms and find out why they are doing so just as rates have rocketed and the credit outlook has deteriorated.
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