June 2005

Cover story

The worm of doubt: credit-worthiness of monoline insurers

It's a sure sign of a nervous credit market when even a monoline insurer's spreads can blow out by 30 basis points in a matter of days. MBIA says its triple-A rating is unimpeachable. Most people agree. But the worm of doubt has been released. Peter Lee reports.

Credit downgrades: More or less junk

Everyone expected the downgrade of Ford and General Motors to junk status. Now it has happened, the long-term consequences for the market are unclear. The move threatens to wipe out the trading profits of hedge funds and banks, with CDOs causing particular concern. Mark Brown reports.

Watch out, financial engineers are about

Leveraged buyouts and auto company problems are taxing the minds of bond investors, but there's a more insidious form of event risk they should be wary of. Company executives, under pressure from boards and active investors including hedge funds, are starting to engage in financial engineering to try to boost their stock price. Bondholders are set to lose out. Antony Currie reports.

Real estate

The future's bright for real estate finance

The rapid pace of development in issuance and investment techniques means that the progression of real estate to become a global asset class in its own right is not far away. Clive Horwood reports.

Issuers and investors adopt REIT approach

Real estate investment trusts have helped to drive development of the asset class in countries such as the US and Japan. Now a European-wide market is ready for take off. Helen Avery reports.

Conduits lead to new era in European CMBS

With banks more cautious about straight lending and bond spreads tight, real estate securitization through commercial mortgage backed securities is becoming increasingly popular, with conduit issuance taking a growing share of the market. Laurence Neville reports.

Is Japan's REIT boom for real?

Real estate investment trusts have taken off dramatically in Japan, providing a new way to invest in the property market and an attractive rate of return compared to other investment products. Can the boom last? Andy Wright reports.

Borrower awards

Middle East

Private problems limit Iran's banking system

State banks are geared to an economy that is mainly state controlled and they dominate much of Iran's financial sector. But the six public banks are starting to fund the private sector, while newly formed, privately owned banks are finding their own niche market through better services and funding. Kate Luxford reports.

Iran's business future fettered by politics

Iran's strong headline economic figures are out of kilter with the weakness of its private sector and feeble foreign direct investment flows. Can the authorities boost private sector growth and investment inflows so long as influential ruling groups remain suspicious of free enterprise?

Roundtables

Covered bond debate: Covered bonds continue to seduce

Despite a more uncertain rate and credit environment, new issuers and investors continue to enter the covered bond market. As the boundaries between traditional and structured products blur, Asia and the US are the targets.

Western Europe

Portugal: Eager for innovation

Since the adoption of an enabling law in 1999, Portugal's securitization market has grown rapidly, embracing many of the innovative techniques and influences seen elsewhere in Europe. With a new law allowing issuance of covered bonds expected this year, structured finance volumes look set to grow. And the market remains eager for further innovation. Sarfraz Thind reports.

Greece tries to turn the credit corner

With Greece continuing to run budget deficits that are unpalatable to credit rating agencies and breach EU guidelines, the government must look beyond tax increases to deal with the problem. Dimitris Kontogiannis reports.

Research

Rishi Khosla, Copal Partners: The New Delhi pioneers on Wall Street

As investment banks try to cut the cost of research for clients, outsourcing is taking on an ever-increasing and ever more important role in keeping costs under control. For the providers of these services, such as Copal Partners, the key is to move on from simply crunching the numbers to providing in-depth research for their clients on debt, equity and corporate finance.

Editorial

Front End

Market leaders

Letters to the editor

Debt markets

Structured credit

Foreign Exchange

Corporate finance

Equity markets

Making sense of evolution

The New York Stock Exchange's historic deal with electronic rival Archipelago and Nasdaq's acquisition of rival I-Net dramatically reshape US cash equities trading. But what do they mean for OTC and listed trading, regional exchanges, and users now that the SEC's controversial Reg NMS has been passed? Peter Koh reports.

Fund management

Asia Pacific

A tale of two worlds: China's markets

China's domestic stock markets are a mess, riddled with inefficient companies, gerrymandered by a meddling government and hamstrung by a vast share overhang. Despite these challenges, Invesco Great Wall Fund Management Company has found a way to make money from stock picking. Much of its success rests on simply understanding the realities of its market. Chris Leahy reports.

The changing face of Japanese borrowing

Government-guaranteed issuers have long been a mainstay of the Japanese bond markets. Now the zaito issuers are seen as a market in their own right. Chris Leahy and Andy Wright report.

Latin America

EMEA

Against the tide

Inflation will all end in tears

As the huge US and global debt bubbles burst under the weight of the cost of servicing, the US is certainly not the place for investors to be this year. Look instead to Europe, Japan, cash and gold

Financial Lawyer

Flipside

Tales of the unexpected

Between sessions on liquidity, capital issues and the future of credit markets, the big issues of a conference near Malaga in Spain were played out around the poker table