Comment EM and The Cover

Ever since European Central Bank president Mario Draghi announced corporate bonds were to be included in the central bank’s quantitative easing programme, there has been a cacophony of dissenting voices debating the rights and wrongs of the policy. Yet no one seems to be talking about the biggest concern as the end of QE nears: the valuation of bonds the policy has affected.

The launch of yet another new social housing real estate investment trust (Reit) this week will not be easy. The market has felt congested recently, and peers have ridden over a few bumps. But there ought to be a place for this asset class.

Two pieces of news this week highlight how environmental, social and governance (ESG) investing is conquering the capital markets. But both carry a risk of intellectual laziness.

Risky assets are often beholden to perceptions of geopolitical risk, though in recent times that has been a minor factor in price movements. Perhaps this dynamic is about to change.

Once again, Deutsche Bank is at a crossroads. After a tough few years, it is still strong enough to fight back in global investment banking. New CEO Christian Sewing will decide whether it does. He seems rational and determined, but does he have the stomach for the battle?

On the rare occasion people complain about our bond deal stories, they quite often say the story didn’t tell them what the new issue premium was. People want to know whether the issuer paid 5bp, 10bp or 25bp. They want a precise measure, and they want to know as soon as the deal was priced. But should they care?

Aviva’s preference share debacle shows that there is more to capital management than getting one over on your investors.

New technologies are marching into the securities issuance process. This week came bids to shake up two very different kinds of private debt — traditional corporate Schuldscheine and funky structured notes.

Bond deals used to be executed by lead managers and co-managers. Then came passive and active bookrunners. Global co-ordinators were then thrown into the mix. And then this week, that role was split into passive and active distinctions on Tullow Oil’s €650m seven year non-call three year deal. These job titles are making less and less sense.

The year 2018 marks the 10th anniversary of the collapse of Bear Stearns and Lehman Brothers, and still the task of tackling “Too Big To Fail” is far from complete.

A top US derivatives regulator on Wednesday went into battle against his European counterparts over their new proposal that will increase the stringency of the EU’s oversight of foreign clearing houses.

When the equity markets had a severe wobble in the first half of February, corporate bonds spreads widened, but only marginally compared the wild swings seen in the equity markets. Spreads are still at some of the lowest levels ever seen. Issuers would do well to remember that in coming months.