Latest articles from Edward Russell Walling

Banks open their doors on to the world of Islamic finance

February 2, 2005

Islamic bond issuance is growing from an investor-driven market into one which is issuer-driven and there are strong signs that it is becoming more that just a niche market, says Edward Russell-Walling.
This year’s first sukuk, or Islamic bond, has already come to market – a $600m five-year sovereign issue from Pakistan. It will not be the last. As 2005 got under way, various London bankers and lawyers were beavering away on at least three other international Islamic deals.

Lloyd’s takes long route to market

January 3, 2005

After 300 years, Lloyd’s of London has issued its first bond to improve its capitalisation and its ratings – underlining the venerable market’s modernisation. Edward Russell-Walling reports.
History seemed to be catching up with itself when one of the world’s oldest markets knocked at the door of one of its youngest in search of capital. Yet Lloyd’s of London is such a unique credit, with such a stormy recent past, that corporate bond investors needed some convincing. It has taken Lloyd’s a little over three centuries to issue its first – and highly successful – bond, raising the equivalent of £500m in lower Tier 2 capital.

Corus of approval as bond issue is deemed a success

December 1, 2004

Anglo-Dutch steel maker Corus is enjoying an upturn in fortunes, as signalled by its latest deal. Edward Russell-Walling reports.
All companies have bad patches, but steel makers’ bad patches tend to be more nerve-wracking than most. So when Corus’s first straight bond issue in September attracted bids worth eight times the available paper, it was very public recognition that the good times are returning for the Anglo-Dutch steel company.

New bond exchange to rouse derivatives market

December 1, 2004

The JSE Securities Exchange in South Africa aims to give a boost to a lifeless exchange-traded derivatives market by trading the underlying cash instruments and derivatives side by side. Edward Russell-Walling reports.
The South African bond market – at least, the government bond market – is one of the most liquid in the world. So it is hardly in need of competition to pep it up. Yet competition is what it is about to get – not because of any shortcomings in the bond trade itself, rather as an attempt to waken a lifeless exchange-traded derivatives market.

FX pulse rate picks up

November 4, 2004

Gauging the health of the world’s foreign exchange market is an awkward business, but every three years the Bank for International Settlements takes its pulse as best it can. Edward Russell-Walling reports.
The last time the Bank for International Settlements (BIS) brought out its stethoscope, in 2001, the FX heart was found to be beating rather feebly. But the bank’s latest survey shows it to be pounding. Daily turnover shot up from an average of $1200bn in 2001 to nearly $1900bn this year, according to BIS.
That represented a rise of 57% (36% at constant exchange rates), which was rather more than most anticipated. The consensus had been for closer to $1500bn. “We were all surprised,” admits Mansoor Mohi-uddin, UBS chief currency strategist. “No-one expected the jump to be this much.”

GMAC revs up the bond market

November 4, 2004

The US car maker’s over-subscribed bond issue was a triumph of diversifying fund sources, writes Edward Russell-Walling.
It is not often that General Motors Acceptance Corporation (GMAC) sets the corporate bond market alight. But as dealers trooped back to their desks after the summer holidays, it managed to do exactly that, in a display of well-judged opportunism.
Its two-tranche e2bn jumbo bond attracted bids worth an extraordinary e9bn in one day, even though the GM finance subsidiary had been put on negative outlook by Standard & Poor’s and a downgrade was expected by many. Such was the demand for the paper that lead managers Barclays Capital, Commerzbank and Deutsche Bank could price both tranches a whole 7bp within price guidance.

Citigroup SIV enters uncharted space

October 4, 2004

Citigroup Alternative Investments last month launched a pioneering structured investment vehicle. It boosts leverage to the subordinated noteholder without really increasing the risk and will widen the potential investor base. Edward Russell-Walling talks to the team.

Banks go big game hunting

October 4, 2004

As electronic trading has cemented the commoditisation and wafer-thin margins for FX, banks have created specialist teams to advise, structure and pull down the more sophisticated and lucrative high-margin bespoke deals. Edward Russell-Walling reports.

Emerging from the shadow of the dollar

September 2, 2004

Despite being dismissed by forex traders when it was launched five years ago, last year the euro became the dominant currency in bond issuance, says Edward Russell-Walling.

Research renaissance

July 2, 2004

After a heady rise to prominence, research fell from grace just as quickly. Now it is making a recovery – although, as Edward Russell-Walling reports, banks are ensuring that this time there are firm barriers between research and their other functions, such as sales.

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