LONDON, Sept 2 (Reuters) – European banks could issue around
25 billion euros ($32 billion) of hybrid bonds in the final
quarter of the year as they rush to beat new capital rules that
will drive up their costs by billions of dollars.
If current favourable credit market conditions hold,
financial borrowers are expected to set a blistering pace of
bond issues that count towards Tier 1 and Lower Tier 2 capital
and so avoid having to raise capital later, when costs are
likely to be higher.
LONDON (Reuters) – Plans to make hybrid bond investors share the pain when banks run into trouble could polarize the financial sector into big firms that can afford to pay up for capital and smaller players that cannot.
Financial regulators want to ensure that taxpayers are not the only ones on the hook when banks fail by proposing that bonds that count toward a bank’s capital should be written down or converted to equity if it is close to collapse.
LONDON (Reuters) – Contingent capital, a breed of hybrid bond that could help capitalise banks in crisis, will struggle to grow into a mainstream asset class if rating agencies persist in refusing to rate it.
Contingent capital came into the spotlight nine months ago when Lloyds, converting existing hybrid debt, raised over 10 billion pounds as it raced to shore up its balance sheet.
LONDON (Reuters) – Credit investors see opportunities among Europe’s banks, which offer attractive long-term plays versus other asset classes despite doubts over the rigor of stress tests on the sector.
Investors say tougher regulation on banks after the credit crisis and more robust capital requirements will make banks a
LONDON (Reuters) – Attempts to restore investor’s confidence in Europe’s banks via stress tests are unlikely to prise open the bond markets for those second- and third-tier players that need funds or capital the most.
Investors say they want clear answers about the financial health of banks from the tests, otherwise they will be unwilling to lend to them.
LONDON, July 14 (Reuters) – First-quarter revenue at the
London Stock Exchange (LSE) (LSE.L: Quote, Profile, Research) rose by 1 percent as the
exchange won market share for UK cash equities trading for the
first quarter since European markets deregulated in 2007.
Chief Executive Xavier Rolet said on Wednesday the LSE was
encouraged by the recent improvement in share of trading in UK
cash equities and the growth in trading on Turquoise, a rival
platform the LSE acquired last year that gives the exchange a
LONDON, July 13 (Reuters) – Italy’s Unicredit (CRDI.MI: Quote, Profile, Research) on
Tuesday unveiled a new form of hybrid Tier 1 bond before
regulators spell out what they want European banks’ capital to
look like and before bank stress tests show how much they need.
The deal is also a positive signal that shows a revival of
investor appetite for higher-yielding bank securities that could
spur other banks to follow.
LONDON (Reuters) – European banks’ shareholders are failing to account for a seismic upward shift in the cost of bank funding, a phenomenon that credit investors have fretted over for months.
While investors are demanding higher coupons on the bonds issued by banks that have large financing requirements, equity buyers have not got fully to grips with these differences.
LONDON, July 1 (Reuters) – Moody’s Investors Service’s new
system for assessing the equity and debt characteristics of
hybrid securities will not lead to big changes in the credit
ratings of banks or companies issuing these instruments, the
agency said on Thursday.
The new framework will mean that some hybrids will receive
more “equity credit,” which is beneficial for a company’s
overall credit rating.
LONDON (Reuters) – HSBC(HSBA.L: Quote, Profile, Research) has braved the regulatory uncertainty over bank capital with a massive $3.4 billion Tier 1 bond sale in the United States with few other European banks likely to follow its bold move.
Rather than wait for more clarity on new rules, which might raise the cost of selling hybrid bank securities in the future, HSBC has seized an opportunity to tap into U.S. investor demand for higher yielding assets.