Corporate credit correspondent
Jane's Feed
Nov 11, 2009

Jury out on wider appeal for Lloyds’ new hybrids

LONDON, Nov 11 (Reuters) – Lloyds <LLOY.L> looks set to get
investor support for a hybrid bond exchange into 7.5 billion
pounds of new enhanced capital notes (ECN) but it is not clear
how much wider appeal these new securities will command.

That wider appeal could be enhanced not just by the outlook
of current investors in Lloyds’ Tier 1 and upper Tier 2 bonds –
and the performance of the transaction — but whether there will
be continued regulatory approval for existing hybrids.

Nov 4, 2009

Credit markets face bumpy ride into year-end

LONDON, Nov 4 (Reuters) – The credit markets can expect to
see liquidity fall and volatility rise more than is usual this
year-end as banks and investors pull in their horns to preserve
fat profits from the corporate bond rally that began in March.

Banks, battered by the crisis, will particularly step back
from taking big positions as they try to shrink balance sheets
to bolster capital ratios ahead of their financial year-ends in
December, analysts said.

Oct 23, 2009

Bonus season puts heat on JP Morgan Cazenove deal

LONDON (Reuters) – JPMorgan Cazenove’s joint venture owners are keen to decide whether J.P. Morgan <JPM.N> should buy out its UK investment banking partner before bonuses are set for staff around the turn of the year, industry sources said.

A decision on a buyout or carrying on the JV should be made before bonuses are set by early January, according to the sources. Uncertainty about a deal and future structure of the company could see rivals attempt to poach staff.

Oct 22, 2009

Thomson CDS auction a good deal for some

LONDON, Oct 22 (Reuters) – The outcome of an auction on
Thursday to settle credit default swaps on Thomson <TMS.PA>
after a debt restructuring at the French electronics firm could
leave some investors dissatisfied with the process.

The auction produced a surprisingly high recovery rate for
debt with short maturities, according to analysts.

Oct 16, 2009

Date set for Thomson credit derivatives auction

LONDON, Oct 16 (Reuters) – An auction to settle credit
derivatives contracts on Thomson <TMS.PA> after a debt
restructuring at the French electronics company is to take place
on Oct. 22, according to Creditfixings website on Friday.

The auction is under close scrutiny as it could expose
weaknesses in a new system designed to simplify settlement of
credit default swap (CDS) contracts on a company after a debt
restructuring.

Oct 7, 2009

Thomson puts credit derivatives in spotlight

LONDON, Oct 7 (Reuters) – The opaque world of credit
derivatives is in the spotlight ahead of an auction to settle
contracts on a debt restructuring at French electronics company
Thomson <TMS.PA> that could expose flaws in the process.

The auction is taking place as politicians and regulators
push for more clarity and less complexity in credit derivatives
markets, which were at the heart of the credit crisis that
crippled the world’s banking system.

Jun 4, 2009
via Summit Notebook

Don’t mention the R word

Policitians are often scared to use the “R” word, because a recession makes them unpopular. Investment bankers dislike the “R” word too, but in this case it stands for regulation.
Regulation and lots of it is being cooked up in Washington and Brussels in response to the excessive risk-taking that helped bring on the credit crisis.
Credit derivatives are in the firing line as the bad guys of the credit crisis and derivatives in energy and commodities could get caught in the cross-fire.
Oil could also take a hit after rampant speculation was blamed for driving the price to a record of nearly $150 a barrel last year.
Although the quest to get rid of excesses is driven by good intentions, industry insiders say there will be unintended consequences and argue the regulators could have underestimated the difficulty of their task.
“It’s not easy to bring back the genie into the bottle,” Libya’s top oil official Shokri Ghanem told the Reuters Global Energy Summit.