Banks’ credit research departments are readying themselves for a turn in the credit cycle towards a higher level of defaults and volatility. Florian Neuhof reports on the state of play.

Mexico has long considered itself a groundbreaker in international debt capital markets. But its latest attempt to make history fell rather flat: it was downsized by $2 billion in the face of weak demand for the new debt part of the deal.

Worth only the paper it’s printed on

Unbundling of commission regulation will increase independent data provision.

US growth companies faced with the increased cost of listing at home are among foreign issuers seeking a home on London’s junior market.

The first wave of easy returns on commodities has passed, while allocations continue to grow. Traditional players are having adapt to a much more liquid market, swimming with a new breed of investors and their active hedging strategies. Peter Koh examines the changes.

“Oh, these are among the most toxic instruments we’ve created. And they’re absolutely a bull market instrument. In a bear market, it’s not a question of maybe losing just a percentage point. You can lose 10 points in a heartbeat.”

In a sign that Kazakhstan is set to become increasingly visible on investors’ radar screens, a new investment bank has been set up there to offer a full range of corporate finance and brokerage services.

Argentina's default $800 million more than commonly assumed.

Research shows an increase in abnormal stock trading in the UK despite recent FSA clampdown. Some of the irregular share price movements may be indicators of insider trading.

Euromoney meets the chief executive of a specialist financial services firm recently bought out by management. Such deals are rare in a sector where most participants are inherently leveraged through their day-to-day operations. Is the firm’s capital structure not now rather strained? Not at all, says the CEO. It could ask its backers or other third parties for more money tomorrow and get as much as it wanted. Raising money isn’t the problem. Almost anyone can get funding right now. Identifying the right investments to build the business – that’s the tough part.

Deutsche Bank has hired from a private equity firm to expand its presence in the rapidly growing real estate, gaming and lodging sector in Asia. The bank has hired Matthew Mrozinski from Colony Capital, the private equity firm that specializes in real estate investments. There, Mrozinski was vice-president of acquisition and head of Asia-Pacific capital formation. In this newly created role at Deutsche, Mrozinski will report to the bank’s head of M&A for Asia, Douglas Morton, but will also be responsible for the financings of real estate deals.

NIBC is planning a hybrid capital deal linked to the 10-year constant maturity swap rate. The deal, via lead manager Morgan Stanley, is fixed for the first five years at a whopping 8% before switching to the 10-year CMS plus 10 basis points. The coupon is capped at 8% with no floor. Such deals were extremely popular until a year ago but hybrid capital referenced to CMS coupons has fallen out of vogue since. The sector boomed during 2004 and the first quarter of 2005, with borrowers attracted by the highly aggressive all-in after-swap funding costs. But after the curve flattened many of these securities have traded at prices in the low 80s. With the curve as flat as it is, it seems the view is that the downside is now limited.

The EU’s emissions trading scheme and Kyoto’s clean development mechanism are succeeding in promoting renewable energy. But electricity utilities are turning out to be surprise beneficiaries. Peter Koh reports.

The regional real estate investment trust craze has finally sired a pan-Asian Reit, driven from Australia, and to be listed in Singapore. Despite its billing however, Allco Commercial Reit currently boasts just three assets: an office tower and shopping mall in Singapore, a stake in an office in Perth and a minority stake in an existing Australian property fund managed by the same group. That hardly qualifies for the title pan-Asian Reit but the proposed $300 million plus proceeds will certainly provide the capital to acquire more properties. The key to the success of the deal will therefore be whether investors believe the deal’s sponsor, Allco Finance Group, has the ability to find and close sufficient deals to warrant the fund’s pan-Asian billing.

Tough regulations hold back trade volumes.

Joaquim Levy, Brazil’s treasury secretary, tells Lawrence White how the sovereign is restructuring its debt management profile.

Online trading platform MarketAxess plans to launch a client to multi-dealer emerging markets CDS index trading system in the second quarter. The system will be the first of its kind and Latin America-related business is likely to be prominent.

Gulf of credibility baulks Aussie banker: Australian banker attempts to avoid jail time and earn enough to repay embezzled funds by taking a position at the National Bank of Kuwait.

Banking sector consolidation continues in Georgia, where Bank of Georgia recently acquired its ninth-largest competitor, IntellectBank.

“I see you have the same problem as in my country: prostitutes everywhere!”

It’s a good job that many US investment banks have had such a strong first quarter. They need the cash to keep the regulators at bay.

CLO facilitates the provision of loans to the world’s poorest citizens.

A report from Ibbotson Associates indicates that the returns reported in hedge fund databases are often much higher than they should be because of backfill bias and survivorship bias.

Chief executive of the Chicago Mercantile Exchange thinks pressure is building for exchange-traded model.

Venezuela’s president is planning to buy assets in Uruguay, according to the local media. Hugo Chávez is considering investing in Pluna, a small Uruguayan airline, through a state-owned Venezuelan airline. Conviasa is mulling over buying Brazilian airline Varig’s 49% stake in the Uruguayan outfit.

Further reformis essential if the region’s stock exchanges are to come under the steadying influence of institutional investors.

Freddie Mac’s new treasurer, Tim Bitsberger, marks a break with agency tradition in being an outsider. But he reckons his US Treasury experience can only enhance Freddie’s transparent approach to raising money and its stringent risk management standards. Bitsberger’s hope is that these will serve it well as it builds out its retained portfolio again. Kathryn Tully reports.

Rising personal bankruptcy levels and an uncertain economic outlook in the UK might suggest that non-conforming and sub-prime mortgage lending is not the smartest business line to jump into at the moment. Try telling that to the succession of new entrants now preparing to try their luck in this sector – one in which veterans might suggest that they are already 10 years too late.

Sheikh Mohammed Al-Thani has many roles. As Qatar’s economy and commerce minister he presides over the world’s fastest-growing economy. He is also chairman of the Qatar Financial Centre and the Doha Securities Market. Al-Thani is considered one of Qatar’s most forward-looking policy-makers, a man who has great ambitions for the Gulf state. Talking to Sudip Roy in Doha, he outlines the economic progress of Qatar and argues that it will become the financial services hub for the Middle East.