Compagnie de Financement Foncier is making fast progress in its plans to raise €12bn this year. Its $1bn short-dated issue, aimed at diversifying the investor base, appealed strongly to Asian central banks, Edward Russell-Walling reports.Asian investors feel increasingly at ease with covered bonds and are developing quite an appetite for the product, as Compagnie de Financement Foncier (CFF) was delighted to discover with its recent $1bn three-year offering.
In just one week, the hit team – drawn from Deutsche Bank, Goldman Sachs and Morgan Stanley – devised a strategy, pricing, timing and a script for pricing conversations with investors that made Germany’s $5bn bond issue sell like hot strudel, reports Edward Russell-Walling .
This year is the 10th anniversary of the jumbo pfandbrief. Famous for its security, its past is more chequered than you would imagine. Edward Russell-Walling talks to Dresdner Kleinwort Wasserstein, which has been a top three player since the market started.
Edward Russell-Walling reports on what is likely to be Sampo Bank’s last conventional bond issue before it enters the covered bond market. It was a case of April showers in the bond markets, as the General Motors downgrade dampened investor enthusiasm for non-government issues.Finland’s Sampo Bank stayed out of the wet, however, with a nicely judged €500m offering that was nearly twice oversubscribed.
In a highly complex equity and debt transaction for Allianz, JP Morgan reworked instruments called Miles to devise a more flexible way for the insurer to deleverage its unwanted equity holdings. As Edward Russell-Walling reports, the solution was found when the two firms put their heads together.
Germany’s KfW is once again breaking new ground, this time with an uridashi exchangeable bond. Edward Russell-Walling explains.The word ‘unique’ is often used less than scrupulously. Yet as banks go, Germany’s state-owned Kreditanstalt für Wiederaufbau (KfW) really is one of a kind. As a vehicle for the country’s economic and social policy, it has become the largest financial issuer in Europe.
Edward Russell-Walling examines the move by HBOS to create a social housing covered bond and its attractiveness to European investors.Any half-decent treasury textbook warns of the need for diversification of funding sources. Few advise the creation of a new asset class, although that has not discouraged HBOS. Last December, the bank carved out new territory in the sterling debt market with a £3bn programme of covered bonds secured on loans to housing associations. Enter stage left the “social housing covered bond”, a hitherto unknown species of debt.
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.
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.
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.
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.
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.”
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 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.