Are Pfandbrief issuers out of touch with modern rating methods?

ABN Amro is embroiled in its own M&A battle but that has not stopped the bank’s investment banking arm closing some landmark deals for clients.

If, as expected, US regulator the National Futures Association implements a proposal it has sent out to its 43 forex dealer members (FDMs), the result will be that many firms will have to attract fresh funding or close down.

Downgrading tranches and revising criteria will not convince the market that the rating agencies are on top of the sub-prime mortgage crisis.

Investment-grade issuers balk at increased costs.

China study dispels misconceptions about performance.

Satish Selvanathan has left Barclays Capital, where he worked for two years under the leadership of ABS veteran Rob Ford. However, Ford left Barcap just before June to become a partner at Synapse – a credit hedge fund.

Illiquid hedge funds should stop smoothing returns, report urges.

Jim Siracusa is the new global head of DCM and securitization at Calyon. Siracusa previously worked at Dresdner Kleinwort, where he was co-head of client coverage, which included DCM origination and media, telecoms and technology coverage. In his new role he is responsible for securitization, debt principal finance and client solutions. He also covers traditional DCM, including emerging markets. He reports to Guy Laffineur, global head of fixed income.

The newly enlarged CME Group, which now also comprises former rival Chicago Board of Trade, says that its second-quarter 2007 total revenues were up 17% to $329 million and net income up 15% to $126 million on the second quarter of 2006. Commenting on the figures, CME Group chief executive Craig Donohue referred to aspects of the exchange’s growth strategy, including FXMarketSpace. In a web broadcast Donohue admitted that volumes fell off in July but that customer "onboarding" had increased and that the joint venture with Reuters remained on track to break even at some point in 2008.

The sub-prime contagion has now reached as far from the USA, geographically, as it possibly can: Australia. In July Basis Capital, arguably the best-known home-grown hedge fund manager in the southern hemisphere, ran into serious trouble after defaulting on margin calls to several of its creditors. At the time of writing its survival was in the balance.

Dealers are hoping a new-look contract will finally get the European leveraged loan credit default swap market off the ground.

Dear Sir,

Financial sponsors turn attention to the region.

According to a report by Aite Group, Spain’s fund of hedge funds market is taking off following legislation allowing retail investors to put money into the asset class. Spanish investors with more than €50,000 in disposable assets can invest in hedge funds, although it is expected that funds of hedge funds will be the preferred route. Hedge fund managers should be positioning themselves to capture the new influx of capital from the investor base.

Commerzbank has hired Julien Mareschal as its new head of ABS trading and David Hoffman as a senior trader on the ABS team. Mareschal ran ABS trading at BNP Paribas, where he was responsible for ABS/MBS and cash CDO trading. Hoffman joins the team as senior trader with a special focus on developing Commerzbank’s ABS derivatives business.

But there are signs that the supply of suitable targets is contracting.

Country is now a net creditor, paying off external debts and developing local markets.

Peru priced a NS4.75 billion ($1.5 billion) 30-year local currency benchmark bond on July 20, as it raised funds to repay Paris Club debt ahead of schedule. Peru sold the sol-denominated bonds, due in 2037, to yield 6.9% in an offer led by Citi. The Peruvian government has approved a sale of up to $2.58 billion-worth of bonds for Paris Club debt, indicating the possibility of further issuance.

Investment house issuance on private electronic markets relieves them of regulatory burdens and speeds up funding. But poor liquidity remains a problem.

What exactly is causing weakness in the credit markets? The obvious answer is contagion from the sub-prime crisis – the fear is that there will be massive losses from the original securitizations of these poor-quality loans and the CDOs backed by these securitizations.

Independence day for Walsh: The WeeklyFiX

Pension markets in central and eastern Europe will grow at 19% a year until 2015, a report published by investment management group Allianz shows. This will constitute a growth in total funds from €51 billion to €245 billion by 2015, fuelled by gradual governmental reform of pension systems that were once monopolized by the state. The proportion of pensioners to working people in the region, the report says, will grow from about 20% now to about 33% in 2035 and about 50% in 2050.

Argentina appointed Miguel Peirano as its new economic minister after Felisa Miceli resigned on July 16

The recent contraction of liquidity has changed the landscape.

There is a lot going on in the swaps industry right now.

UBS has merged its Scandinavian and UK debt capital market coverage teams for the corporate and public sector. The team is headed jointly by Allegra Berman and Mahnaz Safa. Cecilia Hulten, who previously looked after Scandinavian coverage, is leaving the firm to pursue other interests after five years. The integration does not include FIG, which was already run on a pan-European basis.

It has been the ‘everybody has won and all must have prizes’ market so far in 2007. That phrase was uttered by a (fictional) Dodo. Now it is time for Darwinism to reassert itself.

Nick Evans, editor of EuroHedge, applauds the creation of a hedge fund manager working group.

Row over charges for trades routed through execution system.