Next move
A prolonged period of arguably the best global capital-market conditions for a decade appears to be coming to an end as volatility returned early in 2018. Speakers at the KangaNews Debt Capital Markets Summit debated where markets, economies and societies are now – and the future direction.
“Populism is a much-used and little-defined term. The definition I find most satisfying is ‘when politicians propose unworkably simple solutions to complex problems’.”
“Australian politics has seen a combination of unleashed personal ambition and partisan aggression. Problem solving has given way to full-time parlour games.”
“Many borrowers are looking for 10- year funding with the same or fewer covenants than 3-5 year bank debt. However, the longer the tenor the more changes that can occur in the structure of the underlying business. If we want sustainable long-tenor issuance, issuers need to be willing to provide more covenants.”
“There are some interesting technical dynamics around the removal of QE – starting with the short end but which have spilled into the long end. We are still able to carve out preferential treatment from the market because we are from a group of banks that remain favourable. But deals are getting tougher.”
“With such robust growth coming out of Asia it is reasonable to assume we will source a larger part of our funding from the region going forward. We still need to work through regulatory limitations on accessing these markets, while the depth of swap markets and ability to access local currencies are areas that also require some development.”
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