Corporate hybrid has moved beyond investment grade. The development is significant for the leveraged finance community – it’s one thing persuading buyers to invest in the subordinated debt of an investment-grade company, but finding investors receptive to one from a BB/Ba2 credit is quite another. Hedge funds and certain other institutional investors were reluctant to get involved. Yet German tourism and shipping company Tui was able to raise €300 million of perpetual (non-call seven) debt rated B+/B1 via Citigroup, Deutsche Bank, HVB and RBS. The coupon was 8.625%. Those going for the issue, of whom a big proportion are retail investors, certainly deserve that coupon given that this is a highly cyclical business. The deal was part of a €1.3 billion offering to refinance short-term acquisition funding of CP Ships.

The European Bank for Reconstruction and Development is helping to develop securitization structures in central and eastern Europe. Sudip Roy reports.

Technicals will turn negative and valuations widen this quarter.

Kazakhstan’s three biggest banks dominate the industry, but there are opportunities for the country’s second-tier institutions. Patrick Gill reports.

Europe may have one currency, but it still has many payment systems. What will be the impact of SEPA on banks and their clients? What opportunities exist in emerging Europe? Leading cash management professionals debate the confusion over standardization and the pros and cons of payment factories.

Euromoney might have found the ultimate gift for the finance nerd in your family. An interesting posting on Ebay appeared just before the festive season – a white Fender Stratocaster guitar signed by well-known names in finance including Warren Buffett, George Soros and Bill Gross. The guitar had been shipped around the US for two months to be signed by 19 industry figures and was being auctioned by hedge fund manager Todd Harrison for charity.

Last month’s cover story received a lot of feedback. It seems sell side is in a state of flux and running scared of algorithmic trading.

Most analysts got it wrong in 2005, who says they’ll get it right this time?

Acceptance as asset class and Ucits III mean new retail currency funds.

In an open letter to market participants, the New York-based Foreign Exchange Committee has warned about some of the dangers posed by the advent of retail FX products. The committee says technology often separates “the wholesale foreign exchange dealer from the end user, perhaps by multiple intermediaries”. This makes it difficult for banks to “know their customer”, and possibly hampers such compliance measures as anti-money-laundering and counter-terrorism obligations.

Europe is in better shape than a cursory examination of its politicians might suggest.

Hedge funds are main drivers into insurance underwriting. An increasing number of hedge funds and private investors are looking to the insurance markets as a source of attractive returns and diversification.

The bond market might have underestimated the troubled issuer’s ability to realize investment-grade ambitions.

Malaysian retail bank Southern Bank had its expansion plans scuppered in December by Bank Negara Malaysia, the country’s central bank, after BNM refused to approve Southern Bank’s proposed acquisition of Asia General Holdings, a Singapore general insurance company.

EMEA to see further growth in asset-backed transactions.

Scotland’s richest man, Sir Tom Hunter, plans to pull out £100 million ($177 million) he has invested with UBS Wealth Management after falling out with UBS executive Jon Wood, according to the UK press. The two have been battling it out in a court case in connection with their personal involvement in The Gadget Shop.

Rash of strategic sales and IPOs planned.

Siegfried Jaschinski has a grand ambition for Landesbank Baden-Württemberg to be a regional, if not a national, champion of wholesale banking in Germany. A year after he became the bank’s chairman, Philip Moore spoke to Jaschinski about the realistic prospects of a self-proclaimed house bank.

A close ally of Hugo Chávez has claimed that the CIA plotted to assassinate Venezuela’s president in the run-up to last month’s legislative elections. Nicolas Maduro, president of the National Assembly, says that the CIA wanted to disrupt Venezuela’s democracy by killing the country’s leader. “They planned to suspend the elections,” he said. “They planned to attack the head of state, assassinate top officials and carry out massive killings – all these charges are backed up by conversations between the very participants.” The CIA has denied all the allegations. “It’s nonsense,” said a spokesman at the agency.

After months of complaints from debt syndicate managers, UK regulator the Financial Standards Authority has responded to their complaints about the Market Abuse Directive’s stipulation that supposedly stopped new issues being over-allocated by more than 5%.The requirement, which originally targeted mispriced equity issues in southern Europe, was limiting the ability of lead managers to control aftermarket performance, particularly on volatile credits. The FSA has now said it was feasible for firms to document their reasons for over-allocating beyond the 5% but that such action would not be automatically regarded as market abuse by the regulator.

Telecom Egypt kick-started the Egyptian government’s privatization programme by completing the biggest IPO from the Middle East and North African region in 2005 in December.

The general picture’s good and the four biggest economies are simultaneously on a growth path.

Latin American banks have come a long way since the financial crises of the 1990s and ordinary citizens are bringing their savings out from under their mattresses like never before.

Hybrids will drive investment-grade issuance this year. The emergence in mid-December of Burlington Northern’s $500 million hybrid debt transaction via Merrill Lynch and Goldman Sachs indicated that the first US corporate hybrid, issued by Stanley Works the previous month, was not a one-off.

ABN Amro bit off more than it could chew when it tried to sell a 4.9% stake in Dutch Telecom company KPN for the Dutch government in December. The bank was unable to offload the entire €883 million block and was left with stock on its books that rivals estimate could be worth hundreds of millions of euros. At least ABN Amro was in good company. Lehman Brothers and HVB also bungled a pre-Christmas trade. Lehman and HVB Corporates & Markets tried to sell an €804 million block of Munich Re shares, equivalent to about 3% of the company’s outstanding shares, at a price range of €116.75 to €117.50 a share, but the deal, on behalf of HVB’s parent, closed at just €116.30. Rivals believe the two might be facing seven-digit losses.

Tougher financing conditions are now making it harder to execute.

Investment banks Nomura and Mediobanca are about to close Italy’s largest ever securitization of regional healthcare receivables, according to market sources in Italy and London. “This is the largest ever deal of its type, and it has unique structural features that have never been used before in this asset class,” says a source close to the €2 billion transaction.

The investment manager reckons there is a wider market for its products.

Speculation continues about the value of funds of hedge funds. A recent survey of 146 European institutional investors by research firm Investor Source and law firm Clifford Chance revealed a significant drop in interest in funds of hedge funds. Only 50% were investing or considering investing in such vehicles in the third-quarter of 2005, down from 65% at the beginning. And of those investing in both funds of hedge funds and single hedge funds, 18% have switched to invest in just the latter.

Calpers, the largest US pension fund, is on the prowl for a new chief investment officer to replace Mark Anson, who stepped down in October to become chief executive officer of Hermes Pensions Management Ltd. The $200 billion fund says it has appointed a recruitment firm and hopes to fill the position in the next six to eight months.