Italian bank CDS amid senior non-preferred issuance In our last article of 2017 we noted that it was widely billed as the year of political risk. Perhaps those in the fixed income world will call 2018 the year of TLAC (Total Loss Absorbing Capacity). It doesn’t have quite the same resonance, but there is little
Italy CDS – watch the ISDA basis This year was widely touted by many – including yours truly – as the year of political risk. As we now know it didn’t turn out that way. Emmanuel Macron fought off the challenge of the National Front, Mark Rutte was re-elected as Dutch Prime Minister and Italy
iTraxx Crossover underperforming? Here in the UK there is no end of doom and gloom about Brexit and the state of the economy. One could be forgiven for approaching the end of 2017 in a bleak mood. But the European investment grade market appears immune to this despondency; indeed, we are going into year-end in
Venezuela – are we close to default? Waiting for a default on Venezuela’s bonds has been like waiting for Godot. Low oil prices and macroeconomic mismanagement has led to a catastrophic collapse in economic activity – our colleagues in country risk are forecasting a 7.5% GDP contraction. Civil unrest is on the rise,...
Wind CDS orphaned? We noted last month that orphaned CDS seemed to be on the rise, with both EDP in Portugal and Italy’s Wind possibly losing their relationships with deliverable obligations. The picture was clear with EDP – bonds will be issued out of EDP Finance BV and this was reflected in the entity’s inclusion
Toys R Us triggers CDS credit event Toys R Us became the latest CDS name to default after it filed for Chapter 11 bankruptcy protection. There have been lots of contentious credit events this year (Noble, Banco Popular, Monte to name a few) but this one was cut and dried. An auction will be held
CDS orphaning risk Wind Acquisition Finance and Energias de Portugal (EDP) are two credits that appear to have little in common. One is a financing vehicle for an Italian telecoms group, while the other is a Portuguese electricity operator. There is a tenuous link – EDP is one of the world’s largest wind power producers....
Hurricanes impact reinsurers Hurricane Harvey wreaked devastation across central America and the United States (particularly Texas and Louisiana), leaving an incalculable human cost. But what of the economic cost? As usual with natural disasters it will be some time before it is possible to attach a firm number. But Moody’s estimate that the total cost
South Korea widens as rhetoric ramps up Donald Trump’s promise to bring “fire and fury” to North Korea if it continues to threaten the United States has certainly caused consternation across the world. But has Trump’s rhetoric affected the credit markets? In the space of a couple of days it has had an impact, though
Italian banks bounce back The Eurozone has many structural flaws, inherent design failings that were painfully exposed over the last decade. Some of these have been rectified and good progress has been made on a banking union, in particular. But the work is not complete,...