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We reveal why capital markets often barely flicker even when there is the sort of huge political disruption that took place in the UK this week, when prime minister Boris Johnson said he would resign following a series of scandals and a rebellion within his own government.

Closer to capital markets, we take a look at the next leap forward in sustainability-linked bonds. Chile may have brought the first sovereign deal but Uruguay could be next. It has been considering issuing once since not long after the first ever version of the product arrived from Italian energy company Enel in September 2019. We explain why Uruguay’s bond could be such an important one for this nascent asset class and what the consequences could be for other sovereign issuers.

We also see how a revival of an esoteric corner of the US securitisation market is helping power companies in the country increase their ESG spending and whether the same market could develop in Europe.

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In the same week that the Green and Social Bond Principles provided a ton of new guidance on how to apply its formula to different types of security, which we discuss, we take a look at how the capital markets are offering investors different way to fund the green transition.

Green capital raising is a rare bright spot in the equity markets these days but it is not all plain sailing. We look at what went wrong with Plenitude’s IPO, the listing of Eni’s renewable business. It was supposed to be a banner event for the market but instead, it got pulled. The listing of De Nora, another jumble of activities under one roof with an ESG flavour, did get done. We take a look at what it takes to raise equity capital for a green company and what deals may be round the corner.

But it isn’t just public equity markets ploughing money into the green transition. Private funds are buying up various unglamourous companies — bins and buses — and helping them on their green journey. We look into what is driving this trend and what the funds’ motivations may be.

Finally, it was a shocking week in the primary bond markets with deals getting hooked left, right and centre. We reveal what market experts told us were the best ways to navigate the primary bond market when it is in this state and discuss whether a pulled deal is anything to be embarrassed about any more.

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It was not that long ago that we ran a number of stories and podcast episodes about banks battling for staff so that they could get record volumes of deals through the capital markets. With inflation rampant, recession looming and interest rates on the rise, some markets have dried up as M&A grinds to a halt. Now bankers fear for their jobs, with one likening the situation to the dotcom bubble bursting two decades ago.

Tech firms don’t have to go so far back in time to recall a torrid spell in financial markets. As the world emerged from the Covid pandemic, tech companies went from being the belles of the ball to being the empty beer bottles. As their valuations plummeted, they kept away from raising equity capital. But this week, Ocado, the online grocer, brought a deal to market. We discuss why it had to come in such a terrible market, whether other tech firms will do the same and what their options are.

Finally, we discuss what went down at Euromoney’s Global Borrowers and Investors Forum this week, where the ECB’s plans to control government bond spreads was the subject of some very lively debate. We look into why some find the idea of yet more bond market intervention so objectionable.

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Last week the ECB laid out its plans for its monetary policy. That surely was enough to convince bond markets that it had a grip on both rampant inflation and government bond spreads, right? Wrong.

This week it had to convene an unscheduled meeting of its governing council so that it could figure out how to manage spreads in the government bond market. Dealing with inflation is the bank’s core mission; dealing with spreads is something it has had to take on during many years of crisis. In some ways, the two objectives are mutually exclusive. So we discuss what the ECB is up to and what the consequences will be.

We also talk about the much more immediate consequences of the US Federal Reserve’s historic 75bp rise for emerging market bond issuers. Their market is shut but will that lead to financing problems for a number of economically vulnerable countries?

We also dissect what incoming EU regulations that demand investment firms get a read on what their clients’ sustainability ambitions might be for their portfolios mean for the asset management industry. This is a huge piece of rule making that will require a mountain of work on the buy-side and it is due to come into force in August. But the industry appears to be far from ready to deal with it.

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We wouldn’t normally talk about a capital markets conference on the podcast but next week sees one of the biggest — Global ABS, the biggest gathering for the European securitization market — resume its pre-pandemic full, physical form at its regular haunt, Barcelona. It comes just as the securitization markets in Europe are in a rough state.  

We discuss what the thousands of delegates at the meet-up will be talking about and where their market is headed — which is also the topic of our newest podcast which is about securitizaton, Another Fine Mezz, available now on globalcapital.com.

There are also changes afoot in the leveraged buyout market, as private lenders muscle in on business that has traditionally been run by banks. We examine what this means long term for LBOs. 

And in the corporate bond market, we investigate the rise of the glocos — global coordinators that is, a title banks in a bond syndicate are taking on, what it means (if anything) and why the term has started to appear.

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From bonds to equities, issuers are finding it harder to raise capital. Inflation, invasion and disruption, not to mention rising interest rates, are shortening the times when the financial markets are stable enough to allow issuers to come to the market with deals. 

We look into what that means for the rest of the year in bond and equity markets and discover that it is forcing issuers to crowd into the same, smaller windows for new issuance than they have been used to for the last few years. We highlight the problems that will cause some of them.

We also discuss what may be something of a Martin Luther moment in socially responsible investing. Stuart Kirk, HSBC’s head of responsible investing, boldly went and named his criticisms with the ESG finance industry at an industry event recently. His critique has caused a furore in a part of the capital markets where there is often too cosy an alliance of — at least in terms of what is said publicly — bland, good intentions. We discuss whether Kirk had a point — after all, he is no global warming denier or an outsider to financial markets — and how the ESG finance sector and HSBC should respond.

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There is no doubt that bond markets are becoming tougher places from which to raise money. Even in the public sector bond markets, where issuers flock in times of trouble, what are typically issuers prized for their rarity are now enjoying less demand because investors have come to value highly the ability to sell out of positions easily given the volatility.

But at least borrowers are getting their funding done there. In the emerging markets, which so often bear the brunt of capital markets and economic turmoil, there is a rather different problem. Here, issuers are having to come to terms with rising yields, widening bond spreads and no end in sight to the volatility as they face the prospect of recession, a strong dollar and rampant inflation; all of which makes life tough for them in the capital markets. On the podcast this week we question why more of them aren’t trying to do more to issue bonds before the situation grows even worse.

Elsewhere, travel and tourism sector companies have been making the most of rising passenger numbers and fewer restrictions to raise equity capital to pay down debts. But they too face risks to their recovery from the pandemic. We investigate what they are and whether their capital markets revival will be short lived.

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War in Ukraine, the pandemic and the recovery from it, rampant inflation and the end of the era of cheap money — people in the capital markets have a lot to think about when allocating or raising money. But are they missing the biggest problem of all: China’s slowing economy? 

A growing number of market participants think so. China as a producer of goods sold to the world and a key consumer of plenty of the world’s commodities and finished goods, is an integral part of the global economy and therefore, a driver of what is possible in the capital markets. Hopes of a revival in European stock market listings are now foundering as investors look long and hard at which companies are the most reliant on a Chinese economy dogged by lockdowns and port and factory closures.

We discuss who will be hit and how hard. We also look into how problems in other emerging market countries may effect their ability to raise funding in the bond market and where else they might go for cash instead.

We also take a look at some new bonds that were priced this week in different parts of the market and figure out what they tell us about how borrowers will have to approach a volatile bond market in the weeks and months to come.

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Normally when central banks make policy decisions that they were expected to, capital markets activity carries on unencumbered. But not this week.

The 50bp interest rate increased from the Federal Reserve on Wednesday was long anticipated but while markets appeared to take the news well at first, by Thursday things had gone sour once more making issuance difficult. Certainly, there’s a lot to feel grim about in the economic realm — supply chain disruption, war in Ukraine, rampant inflation and possibly a looming recession. Meanwhile, investors and issuers are dealing with the gradual withdrawal of central bank economic stimulus.

 All of that makes the capital markets a tougher place to navigate and picking the right deal to do at the right time a harder task than it has been for years. This week, we look across debt and equity capital markets to examine how they will respond and discuss whether some borrowers are in for an unduly rough ride or whether this is simply the return of the good old days when investors discerned between the good credits and the bad.

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It’s not just raw materials and components that are hard to get hold of nowadays. The European leveraged finance market is bang on trend and experiencing some supply chain disruption of its own. We explain which parts of the market are just starting to work again and which are about to seize up and how that will proliferate across other parts of the capital markets. 

Naturally, we also find a way to crowbar a discussion of Elon Musk’s planned purchase of Twitter into the mix and examine how the leveraged finance market might help or hinder that deal.

We also look at how the bond market for financial institutions trying to raise funding is changing. We test the idea that it may become a market of haves and have-nots in terms of cheap, easy access to bond market funding. 

Then we turn to sustainable finance. We discuss how investors are making bigger demands of issuers who want to print sustainability-linked bonds and the knock-on effects this will have on their supply chains and on the products and services they produce as the capital markets learn ever more about how to account for and mitigate emissions.