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◆ Mexico throws Pemex innovative debt lifeline 

◆ Callable ZCs in vogue for public sector issuers 

◆ Why ECB regs update will drive insurance capital issuance

Pemex, Mexico's state-owned energy company, is a storied bond issuer. But lately it has been in a spot of bother. We explain what has been going and what an innovative bit of financing organised by the Mexican government this week — a P-cap — will do to ease the company's debt burden.

Meanwhile, a particular group of investors is buying callable structured notes from public sector bond issuers. We reveal who, the market forces driving this trend and what's in it for the investors, issuers and the banks that put them together.

We also discuss the ECB's latest regulatory update on what is known as the Danish Compromise. The guidance on this piece of regulation that governs how banks treat the capital of the insurance companies that they own is likely to lead to more issuance. Insurance capital is a small, specialist but popular asset class. We debate whether this will be its lift-off moment.

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◆ EU budget ambition to cement issuer status 

◆ French spreads 

◆ Finally, the European bond market's consolidated tape

The European Commission has launched what its president, Ursula von der Leyen has called its "most ambitious" budget proposals. They include a heap of joint borrowing to be done by the EU, cementing its status as a permanently huge bond issuer. We look into the numbers to see what it means for the SSA bond market.

Meanwhile, in France, covered bonds look set to trade through government bonds. Again, the government's budget has a part to play as we investigate what this pricing dynamic means for different groups of investors.

We also herald the dawn of the EU's consolidated tape for the bond market, which aims to bring better price transparency. We explain what it will contain, what it won't and why it matters.

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◆ UK rule change cheers covered bonds... 

◆ ... as it shelves Taxonomy plans amid wider transition shift 

◆ Digital markets: what makes a swap smart 

The UK is going for growth and is making a regulatory revamp part of that programme. Chancellor of the exchequer Rachel Reeves said this week in her Mansion House speech that "in too many areas, regulation still acts as a boot on the neck of businesses" and that she was part of a government that has "swept away" regulations.

Whether it has or not can be debated but there were two key regulatory developments in the UK for the capital markets this week. The first was a decision to set-up an equivalence regime for covered bonds. We explain why that is such a boost for the asset class.

Secondly, the UK said it would not produce a green taxonomy. We examine why that might be and what the benefits and costs are. This is particularly pertinent as the transition to a low carbon economy evolves. We also discuss how that pursuit is changing and how it affects the capital markets.

Finally, with news of an agency issuer and a bank entering into a digital smart swap contract, we discuss what they are, what problems they solve, as well as some that they don't.

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◆ Stellar conditions for issuers across the bond market 

◆ How bond issuance will pan out over the rest of the year 

◆ Dedollarisation discussed

The relatively few issuers that took advantage of the primary market this week were well rewarded. US tariffs were kicked down the road once more meaning low volatility and so investors were happy to chase what deals they could find.

But is the market about to quieten down for the summer just when it seems there could not be a better time to issue bonds? We look at the arguments for and against and take the pulse of primary across SSAs, FIG, covered bonds, corporate bonds and emerging markets.

And we don't just think about when issuance will resume in size but also what the market will look like in the future with dedollarisation a growing topic for investors and issuers alike.

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◆ SSA yields bump up against US government curve with deficit set to spiral 

◆ Waning CEEMEA ESG bond issuance 

◆ Leaner, meaner SLL market

The SSA bond market has enjoyed its fair share of eye-catching relative value inversions of late. Last year, the likes of Portugal and Spain began trading tighter than France in the European government bond market, for example. 

But after US president Donald Trump got his budget voted through on Thursday, it could be about to witness the mother of all RV upsets — bonds trading though US Treasuries for the first time ever.

This week we look at the arguments for and against why this should happen and think about when it might occur.

We also looked at some slowing areas of ESG capital markets. ESG-labelled bond issuance is falling in the CEEMEA bond market despite some recent high profile deals. We examine the theories behind why this is happening.

Meanwhile, he sustainability-linked loan market is a shadow of its former self. We find out why and argue that this might be a good thing, showing a market gaining in sophistication.

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◆ SSA market faces up to escalating defence funding 

◆ Arms company bonds in focus 

◆ Slovenia's landmark SLB

As Nato members agreed — mostly — to ramp up their defence funding to 5% of GDP over the next decade, we asked the SSA bond market how it would handle the extra funding that it will need to provide for that end. 

Some Nato members don't even meet the old target of 2% of GDP, so this week's declaration made at the alliance's summit in the Hague was quite the escalation. It came in the same week that some of the SSA market's biggest borrowers released their latest funding targets too.

Meanwhile, extra defence spending is a boon to arms companies. They have been spectacular performers in equity markets but we took a look at what all that extra business and revenue will mean for their bond issuance.

Finally, Slovenia this week became the first European sovereign to price a sustainability-linked bond. We examined the deal, how it was priced and marketed, and ask whether this is a credible avenue of funding for other governments.

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◆ Issuance abounds despite Iran-Israel escalation 

◆ European securitization regulatory proposals unveiled 

◆ A digital first for sovereign bonds

If you only consumed mainstream news, the escalating conflict between Israel and Iran — and potentially the US — might lead you to assume that such global turmoil would make it a bad time to be issuing debt.

But if you only observed the capital markets to the exclusion of all wider news, you'd be forgiven for thinking the world was a stable, peaceful and certain place.

Issuance in credit markets has boomed even as the prospect of a wider war ramped up this week. We examine why investors are so keen to take on risk at such an uncertain time and how long it can last for.

Meanwhile, the European Commission has revealed a raft of proposals with which it hopes to boost the EU's securitization market. We pick through plans to see which the market likes, and which it doesn't.

Finally, Luxembourg achieved a digital bond first this week; pricing a bond using distributed ledger technology that was sold to investors. We explain what this advance means for digital debt issuance, and ahead of our GC Live event in September on the same subject, look at where digital capital markets are at versus where they need to get to.

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◆ How can the EU capitalise on US mistakes? ◆ New US insurers head to euros  ◆ The greenest of green

The good and the great of Europe's capital markets gathered for the International Capital Market Association conference this month, and the overwhelming consensus among the speakers was that this was a rare chance for Europe to chip away at US bond market dominance.

But it won't be easy, with myriad regulatory and idiosyncratic problems that can only come when 27 countries try to agree on a complex set of rules. 

Elsewhere, US insurance firms have fallen for the allure of printing bonds in euros. We discuss what is driving this spate of debut issuance and whether more might be coming.

And in the sovereign, supranational and agency market, CAF sold a hybrid deal this week. This unusual structure for the esteemed SSA market is still finding its feet, but there was plenty to pick at from the CAF deal to get an idea of what is coming next.

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◆ How worrying is Section 899? ◆ A summer of toil for public sector issuers ◆ Seesawing curves in FIG

The bland outpourings of ChatGPT could not be further from the penetrating, critical advice big companies, governments and investors want from investment banks.
But could one foster the other? That is the ideal banks are striving for with a plethora of projects to use artificial intelligence — not for the hard stuff, they say, but for the easy stuff.
Automating tiresome work like compiling presentations could free up time — especially for junior bankers. But what are the juniors going to do with their free time?
Sir Siegmund Warburg, founder of SG Warburg in 1946 and father of modern European investment banking, had a few ideas…
One task human intelligence is struggling with is understanding Section 899 of President Trump’s One Big Beautiful Bill. Clearly intended as a revenge tax to penalise investors in countries whose tax policies the US considers unfair, its scope of implementation is very unclear. So far, debt capital markets have paid little attention, but it could bite them hard.
And this week in the market, supranational, sovereign and agency borrowers were packing in the funding. Could June be another January, stuffed with deals? And could January stretch into July? 
The curve balls Trump is hurling at the economy are leading to weird dynamics in the financial institution bond market, with the curves for covered bonds and senior debt undulating differently. Can issuers and investors make sense of it? 

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◆ EU’s securitization plan leaked ◆ The first new EM sovereign issuer for years ◆ Who can be sued for climate change?

Interest rates coming down was supposed to be a sure bet. Now it’s not. Long government bond yields are rising, and not just in the US. Investors are worried — the term premium is climbing, which means it’s not enough now. It’s safest to stay away from duration.
We try to diagnose this queasy market for high quality bonds. Are there any silver linings?
MLex, a regulatory news service, has leaked two crucial draft proposals from the European Commission for how it will reform rules on securitization. Will they ease what the market feels is regulators’ stranglehold?
It’s six years since the last new sovereign bond issuer appeared from a true emerging market, but the Kyrgyz Republic came this week. The bond was a hit — we explore what it means.
You may not have heard of Huaraz — or Hamm. But you’ve probably heard of RWE, the German power company which has been called Europe’s biggest carbon emitter.
This week an appeal court in Hamm, Germany denied a lawsuit by a farmer from Huaraz, Peru. He had sued RWE for damages for the risk to his home from global warming-induced flooding. 
But his supporters believe they achieved their aim: establishing that carbon emitters can be held liable for climate change.