The big buyer bails out

Quantitative 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.