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◆ Insiders assess Scott Bessent's speech on MDB reform 
◆ European Commission's latest attempt to ease capital market access 
◆ Encouraging signs for credit issuers after tariff turmoil

The US administration gave some clues as to its beliefs on how the IMF and the World Bank should change their operations for the first time this week since president Donald Trump signed an executive order in February asking for a review into the country's involvement in international financial organisations.

US treasury secretary Scott Bessant outlined at an event in Washington, DC to coincide with the IMF/World Bank Spring Meetings his gripes with the two institutions. We discuss if and how reform can be achieved and what the bond market and development finance specialists made of what Bessent said.

The EU meanwhile has launched a consultation into removing capital barriers across the bloc. We discuss what it wants to achieve and whether it is likely to do so.

Finally, after weeks of US tariffs causing turmoil in capital markets, we look at credit to see how issuers are finding their way back to the primary market and adjusting to the new level of spreads.

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◆ Running a bond business in a crisis 
◆ Bank issuers find their way back into the bond market 
◆ Can frontier emerging market sovereigns fund themselves?

This was supposed to be a decent year for banks in the debt and equity capital markets. But the uncertainty generated by a chaotic US tariff policy has wrecked investment banks' ability to plan and operate in their markets.

We look at what is grinding the sell-side's gears and investigate how banks should navigate the volatility to meet their budgets.

One area of the bond market where issuance has been slow to resume since the US first announced its new tariffs is the senior unsecured FIG market. Issuers returned this week, so we took the opportunity to examine where FIG borrowers can raise debt capital from covered bonds all the way down to subordinated debt.

The yields on many frontier emerging market sovereign bonds have gapped higher this month to above the 10% level that many consider the beginning of the death zone for debt sustainability. We ask whether this has the makings of a debt crisis, or if issuers are well prepared to weather the storm.

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◆ Did we come close to a full blown crisis before Trump's tariff climbdown? 
◆ Will we face another in 90 days' time? 
◆ UK regulator's astonishing covered bond ruling

We looked this week into whether the US's decision to postpone the imposition of punishing tariffs by 90 days averted a financial crisis, or merely postponed it.

The action in the US Treasury market was not good this week as investors and traders appeared to pile into cash rather than assets. Stock markets were red but the US government bond market caught no safe haven bid and sold off too. 

The peril abated with the tariff postponement on Wednesday but there were signs of a brewing crisis in the run-up to that decision. We ask whether markets will be better prepared in July if the US goes ahead with its trade policy.

We also delve into a decision by the UK regulator, the Prudential Regulation Authority, to disallow non-UK covered bonds from counting as high quality liquid assets for UK banks. We explore the ramifications for UK lenders and the covered bond market.

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◆ How US tariffs will affect bond issuers in the medium and long term
◆ Liberation Day: your funniest quotes 
◆ A funding update from KfW's head of capital markets, Petra Wehlert

US president Donald Trump's imposition of a vast swathe of tariffs on imports bludgeoned stock markets this week and proved the stuff of nightmares for investors as they contemplated the possibility of recession and the return of inflation.

But the reality for the bond market will likely be rather more nuanced. We picked our way through Europe's investment grade corporate and financial institution bond markets to see what "Liberation Day" will mean for credit issuers' immediate deal pipelines and the longer term.

We also discussed the ramifications for the many varied economies and borrowers in the CEEMEA region as we followed the trail of cause and effect from the Oval Office to South Africa and Romania, and via China to Nigeria and Saudi Arabia.

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◆ Farewell, KommuneKredit ◆ Covered bonds advance on SSAs’ territory ◆ Ivory Coast makes funding breakthrough ◆ Romania’s risks

Genuinely useful applications of AI are still rare in capital markets, but UniCredit has come up with an intriguing one. It has built a tool called DealSync that is helping it generate M&A mandates.
The supranational, sovereign and agency bond market was shocked on Wednesday to learn that it would be losing a well known issuer, KommuneKredit. The Danish government has decided it will be cheaper to just issue bonds itself. Could other agencies disappear?
Covered bond spreads have been getting tighter and tighter, while SSA spreads are widening. Might covered bonds actually start pricing inside some of the best public sector issuers such as German states or Dutch agencies?
In emerging markets, heavy issuer Romania’s dual tranche bond this week went well, but there were telltale signs of the funding stress the country could face if it does not resolve its political difficulties and huge budget deficit.
Ivory Coast has a better story to tell — it has become only the second African country to issue an international bond in its domestic currency. This funding technique, widely used in Latin America and central Asia, holds out hope of reducing African countries’ need to borrow riskily in hard currency, exposing themselves to FX risk.

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◆ UK fires starting pistol on digital Gilts ◆ SSA market absorbs EU defence funding detail ◆ Credit issuers adjust tactics

The UK has begun a consultation as it looks to issue its first digital Gilt - to be called a DiGit. We discuss what the bond will look like and the UK's route to issuance.

Elsewhere in the SSA bond market, participants took stock of further detail on how the EU plans to fund its Security Action for Europe (SAFE) scheme. We examine the details and the bond market's reaction.

We also revisit the primary credit market where things were starting to turn for the worse last week to see if FIG and corporate issuers have found a way to keep investors happy.

And finally, we bring news of a brand new data product for the medium term note market from GlobalCapital.

Now read on:

UK sets fast pace for digital Gilt, hoping to catch up on DLT

Ipsen blowout lays blueprint for corporate blockbusters

FIG issuers increase new issue premiums to boost volumes

SSA market ‘still unclear’ how EU's joint defence funding could work

EGB market grapples with European rearmament plans

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◆ DOGE threatens US CMBS recovery 
◆ Drill, baby, drill? Borrow, habibi, borrow 
◆ Cracks appear in European credit market

Just when you thought it was safe to go back into the office... or rather back into commercial mortgage backed securities with offices as the collateral.

No sooner has the US CMBS revival begun than US president Donald Trump's administration threatens to ruin it. The Department of Government Efficiency (DOGE) spearheaded by Elon Musk is ripping up government office leases . We explain how that could hurt the CMBS market.

In the Middle East, a falling oil price has set investors and bankers wondering about how much more borrowers from the region — especially Saudi Arabia — will need from the bond market this year.

Cracks are also starting to appear in Europe's previously buoyant credit market. We look at where to find the fissures and how issuers can bridge them.

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◆ EU puts forward €800bn plan◆ Germany screeches into U-turn on debt brake ◆ Bund yield soars 40bp

The spectre of European countries needing to massively increase spending on defence has haunted the capital markets ever since it became clear that US president Donald Trump was really thinking of drastically weakening US military support to Europe.

It had already triggered a sell-off in European government bonds. But this week a vague expectation got some concrete numbers. Germany’s CDU, likely to lead the next government, has turned 180° and struck a deal with the SPD to make huge exceptions to the constitutional debt brake, including €500bn for infrastructure.

Germany’s 10 year bond yield made its biggest leap for decades on Wednesday, but then stabilised, suggesting the market now knows how big the issue is and can digest it.

Meanwhile the EU has also got on the front foot, announcing an €800bn ReArm Europe plan including €150bn of new joint borrowing.

We explore the results for the supranational, sovereign and agency bond market and for central and east European governments, where the security and fiscal concerns are keenest.

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◆ Rob Murray, the Defence, Security and Resilience Bank's creator, explains all 
◆ Why US must be involved 
◆ Three point strategy to augment defence spending

The idea of a new multilateral bank to help fund defence spending in Europe has shifted to the fore in recent weeks. 

European leaders are understood to be discussing the idea this week and a plan for one could be announced soon.

Rob Murray, a former British army officer, is the person who first came up with an idea while working at Nato in 2018. He joined the podcast this week to discuss how it would work, the three things it would do that no other institution could do as well, and who would be part of it.

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◆ German and European spending needs rile SSA market 
◆ GSE reform in the US, green reform in the EU 
◆ Saudi Arabia leads Gulf diversification out of dollars

New German chancellor Friedrich Merz has a lot to tackle when he finally forms his coalition government. Much of it will involve spending more money, which has bond investors on alert for higher borrowing needs.

LBBW's chief economist Moritz Kraemer told a conference in Frankfurt this week that he believes there are five factors dogging the German economy. We discuss what they are, what Merz can do about them and how this is affecting the SSA bond market.

The reform of Freddie Mac and Fannie Mae is on the minds of those in the US securitization market. We delve into whether the pair could or should be put back into private hands after almost 17 years of government conservatorship.

The EU looks set to ease some recently imposed ESG regulations. We ask if the bloc risks relinquishing its leading position in green finance.

Finally, we look into a landmark deal from Saudi Arabia, which is part of a developing trend among Gulf issuers to diversify their bond issuance.

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◆ German poll to have far-reaching consequences for bond market 
◆ UK water sector's capital markets tangle 
◆ Corporate issuance picks up in emerging markets

Germany votes this weekend in a general election. Whatever the resulting coalition, fiscal matters will be top of their agenda. With the pressure on to raise defence spending but with the constraints of the country's debt brake to tackle, the strain is already showing in the bond market before a vote has been counted.

The UK water regulator has set out the conditions under which the 10 utilities it governs must operate. But this is a troubled sector of the UK economy and downgrades have been rife. We pick apart these companies' access to capital markets and how well they can raise the funding they need even as one teeters on the brink of default.

Meanwhile, corporate bond issuance in the emerging markets has been shrinking for years. But there are signs of a turnaround. We examine who is issuing and why.

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◆ Using the bond market to boost European security 
◆ Africa nears sovereign debt stabiliser 
◆ Sterling's ESG problem

With the new US government reasserting its belief that Europe needs to provide more of its own security this week, attention has turned once again to how to pay for it.

We discuss the various ideas in play, from setting up a new multilateral development bank to retooling existing SSA borrowers for the purpose, examining the pros and cons of each.

Meanwhile, the African Union may be about to bring to fruition a sovereign debt stability mechanism. Africa is the only continent without one and proponents believe it will ultimately bring down borrowing costs for issuers as well as offering an alternative source of ready capital in a crisis. We delve into how the entity will work.

Finally, we have been investigating why the UK bond market lags others when it comes to ESG labelled bonds and question whether the government and regulators should do more to encourage issuance.

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◆ Trump orders review of US involvement in multilateral development banks 
◆ What's driving Reverse Yankee issuance? 
◆ Deutsche Bank sparks new controversy in AT1 capital

Among many of the executive orders Donald Trump has signed since he became US president for the second time was one which ordered a review of the country's involvement in international organisations. That will include the multilateral development banks, in which it is often the biggest shareholder and which are big bond issuers.

We investigate how seriously the MDBs and the bond market should take the review as there is evidence of support for the sector in Trump's previous stint in the White House but also seemingly a revitalised sense of isolationsim and nationalism this time around. 

US influence was prevalent in the European investment grade corporate bond market this week too. IBM was among a trio of US issuers pricing Reverse Yankee bonds. We look into what is driving the supply and what deals are to come.

Finally, we talked about whether Deutsche Bank's hint that it would not call two of its dollar additional tier one deals this year would rile investors at a time when the market for the product is red hot. 

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◆ Why you got paid what you got paid

◆ Insider reveals what really goes on when bonuses are allocated 

◆ HSBC winds down M&A and ECM

We lift the lid on how bonuses are allocated in investment banking from the top table to the lowliest analyst. 

Our columnist, Craig Coben, who spent many years as a senior equities banker at Merrill Lynch and then Bank of America, has been through the bonus cycle many times and reveals just what goes into someone's number and the bank's true motivation and aims in paying out. 

Meanwhile, HSBC shocked many this week by revealing it will shutter much of its M&A and equity capital markets business. Our Southpaw columnist, David Rothnie joins us as we discuss why the bank is doing this and whether it is a step in the right direction.

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◆ Riso and Ruhl on the development of the market's biggest new bond issuer 
◆ Beyond NextGeneration EU: can the bloc fund defence? 
◆ The campaign for sovereign-like borrower status

The European Union is the highest profile bond issuer in the market. In response to the pandemic, it ramped up its borrowing to fund member states' recovery from the disaster, going from raising around €500m a year to around €150bn almost overnight.

As an issuer, it dominates the public sector bond market and in this episode, GlobalCapital asked two of its most important figures, when it comes to its bond market activities, about what lies in store.

We talked about how the issuer's capital markets presence is developing, why it believes it should be classed as a sovereign-style issuer (and the progress it has made), and its possible future funding needs.

Our guests:

Stephanie Riso is the director general of DG Budget within the European Commission — the department responsible for raising and allocating the money the EU needs to implement policy, including from the bond market. 

She took over the directorate in March 2023, joining from the cabinet of Commission president, Ursula von der Leyen, where she oversaw the creation of the €800bn NextGenerationEU programme that the EU's bond issues fund.

Siegfried Ruhl is hors classe advisor to DG Budget and a veteran of the public sector bond market. He initially took the post on a short secondment from the European Financial Stability and European Stability Mechanism — the two bond issuing bailout vehicles for EU member states founded during the sovereign debt crisis, which he helped set up. 

Over four years later he is still at the heart of developing the EU's capabilities as a bond issuer — a task he is well versed in having not only been there since the start with the EFSF and ESM but also having helped to create Germany's Finanzagentur, the country's debt management office.

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◆ How the bond market will drive CCMM to provide more climate tech cash 
◆ Multilateral development  bank hybrid capital — and may have found its niche
◆ Covered bond market roars back to life but will it last?

The CIF Capital Markets Mechanism (CCMM) priced its first bond this week. The issuer is raising money so that the Climate Investment Funds, created in 2008 as a channel for rich countries to finance the green transition in developing states, can do more lending through its Clean Technology Fund. We look into the issuer, its deal and where it fits in the SSA bond market.

The first benchmark-sized publicly sold hybrid since the African Development Bank's deal from about a year ago also surfaced this week. The issuer was the African Finance Corporation. It is, like the AfDB, a multilateral development institution. But it has very different characteristics and these may give a clue as to where MDB hybrid capital deals will succeed in the future.

Finally, covered bond issuance has lagged behind the pace of other parts of the bond market this year but that all changed this week. We examine what the hold up was, why issuers have finally come to the market now, and what could derail the revival.

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◆ Gilts rocked on macro fears but sterling bond issuance booms 
◆ Just how much of a basket case is the UK anyway? 
◆ Debt-for-nature swaps blossom

This has lead to references in the press to the 2022 Gilt crisis, which the Conservative government caused with its notorious mini-budget of tax cuts to be fuelled through Gilt issuance. There have even been comparisons with 1976 when the UK took a loan from the IMF. We find out whether such comparisons are warranted.

In any case, what's bad for UK taxpayers appears to be fantastic for issuers and investors in the sterling bond market with record volumes of issuance being priced this week. We explain what is driving the market if the economic picture is really as bad as it is being painted to be.

We also take a look at the rise of the deb-for-nature swap — a financial package that allows distressed sovereigns to restructure debt and put money towards environmental causes.

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◆ The sheep and the goats in UK water 
◆ How EM loses assets but gains deals 
◆ US corporates lean to euro bonds

Investment bankers feel like they're on the verge of something good: a boom year in 2025 of mergers and acquisitions, by both corporate and private equity firms, and all the debt and equity financing that goes with it.

The US will be front and centre, all agree, as even the prospect of Donald Trump's presidency is quickening the nerves with hopes of deregulation and M&A being waved through without questions.

Even Trump's harsher moves like tariffs could stimulate deals as companies try to position themselves better.

It's a shoo-in that the US investment banks will do well in this climate, but which of the European banks are chasing them hardest, and managing to outrun their peers? We highlight the winners of 2024 and next year's contenders.

Also this week, Ofwat, the UK water regulator, produced its much-anticipated final determination of the financial parameters for water companies for the next five years. We explore what it does for the sector, especially its sickest member, Thames Water.

And the US Federal Reserve made a "hawkish cut" of interest rates this week. That is crushing the hopes of emerging market bond investors, which have been longing for three years for a strong rate cutting cycle to give them some money inflows at last.

But it could be good news for bond bankers in London, as US companies may turn to the euro and sterling markets for funding next year.

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◆ How to fund Europe 
◆ What market experts think is going to happen next 
◆ The EU to embark on biggest six-month funding spree

The European Union shapes up poorly compared to its rivals when it comes to growth and competitiveness. Former ECB president and Italian prime minister Mario Draghi believes the bloc needs €800bn of investment a year, but how to raise it? We reveal all.

That story is just one in our Review 2024 | Outlook 2025 special report. If you register by clicking through to this page, you will not only receive a free printed edition of the report but also 14 days of free access to GlobalCapital.

We also discuss what the most senior debt capital markets bankers think is going to happen in the year ahead, and where they see the threats and opportunities for their business. Clue: good news for those either looking to start out, or who have newly arrived in, their capital markets careers.

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◆ French government collapse scrambles bond market 
◆ What next for French corporate, FIG, covered bond and public sector bond issuers? 
◆ ECB Trials on distributed ledger technology: the verdict

The long-running saga of the peril of the French public purse took a new twist this week as the country's government collapsed over budget wrangling. 

That turned the traditional order of relative value between French bond issuers on its head — corporates, including luxury good firm LVMH, now trade tighter than the sovereign.

We look into what comes next for French issuers from the sovereign and public sector agencies, to the country's banks and investment grade companies. Do investors really believe they are more likely to be paid back by LVMH than by the state?

We also revisit the recently concluded ECB Trials of distributed ledger technology in the bond market to see what progress was made and whether capital markets are any closer to going digital.

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◆ French bond issuers' tough time ahead as PM fights to get budget through 
◆ Trump tough talk on tariffs' threat to emerging markets
◆ Investors give IPO sellers the silent treatment

There are barneys - quarrels to those unfamiliar with British slang - breaking out all over the place and capital markets are caught in the crossfire.

In France, prime minister Michel Barnier has a fight on his hands to get his budget passed. It could cost him his job. Meanwhile, French government bond yields are soaring alongside the country's deficit.

We look at the dilemma that poses for French issuers in the public sector and covered bond markets through the prism of a deal from one of them this week.

Where there's Trump, there's trouble. The US president-elect is threatening tariffs. This could spell disaster for emerging market issuers but, as we discover, panic is yet to set in. We explain why.

Our final fight is in the equity capital markets where investors are giving sellers no clues as to their interest in new listings. That makes every deal more risky. We investigate how to break the impasse.

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◆ The challenge for SSA issuers next year 
◆ German banks and the commercial property millstone 
◆ Hybrid hot streak explained

SSA bonds in euros have widened against swaps by quite some way in recent months. That will present a big challenge for the asset class's smaller issuers next year. We explain how the market will find a new clearing level.

German banks - two in particular - have suffered from investor fears over exposure to commercial property. Those fears have abated over 2024 but this week there was a deal that suggested a mild degree of terror lingers. We investigate.

Finally, there has been a spate of corporate hybrid debt issuance lately. We find out why and whether there is more to come.

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◆ Donald Trump’s threat to ESG finance in the US 
◆ Why ‘woke capitalism’ won’t be put to bed 
◆ UK auto ABS faces up to compensation crisis

One of the biggest areas of conflict in US politics over the next four years — and indeed, over the past four — will be over environmental, social and governance matters. Donal Trump’s administration will likely be no fan of what its supporters sometimes call “woke capitalism”.

But whether this spells disaster for environment and for ESG capital markets remains to be seen. Although the Republicans have a firm grip on the federal government, a deep dive into ESG in the US reveals that they are unlikely to be able to have everything their own way.

Meanwhile, a ruling that may entitle UK car buyers to billions of pounds worth of compensation from the banks and other firms that financed their wheels could have negative consequences for the auto ABS market. We take the scenic route in examining the situation. 

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◆ Trump triumphs, Scholz slumps, rates roil
◆ Credit issuers off to the races
◆ Rates issuers contend with unprecedented Bund-swap inversion

The underlying movements between benchmark rates and bond yields are rocking the capital markets. Why? Well, this week the blame could be laid squarely at the door of politics.

Donald Trump's resounding victory in the US presidential race means the world's economic currents are about to shift, turbo charging some areas and threatening others. Meanwhile, the collapse of Germany's government helped to push Bund yields above euro swap rates for the first time ever.

Both these things have driven big changes in the value of one asset class in the bond market against another, affecting how much investors want to buy them. We explain the changes underway in SSA, covered, FIG and corporate bonds and what they mean for issuers in the weeks and months ahead.

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◆ What Trump or Harris mean for EM sovereign issuers 
◆ The outlook for UK capital markets after the Budget 
◆ Creditors turn on each other in Thames Water saga

In a year of elections, now comes the big one — the US votes on November 5 for either Kamala Harris or Donald Trump as its next president. Whoever wins, and whichever of the Democrats or Republicans ends up controlling Congress, the effect of the results will be felt around the world, including in its capital markets.

We focus on one group of borrowers for whom the result can make or break their bond market access: emerging market sovereigns. We discuss the effect a Trump or Harris presidency will likely have on their funding access and why.

The UK's new Labour government revealed its first Budget this week. We examine how the event affected the Gilt market and look more broadly at the outlook for equities, M&A and investment banking in the country.

Finally, an update on the latest twist in Thames Water's debt saga as different groups of creditors launched alternative and competing proposals to lend the company more money.