Banks heading for profit decline in 2013; Stock market continues strong performance

Petrobras’s business plan to develop the pre-salt oil fields anticipates that the number of rigs and drillships with drilling capacity greater than 2,000 metres will increase to 65 by 2020 from 15 in 2010. Many of these deliveries will be financed by Petrobras suppliers through the capital markets. Since 2010, Moody’s has publicly rated around $5.4 billion in project bonds associated with the operational phase of offshore drilling and production equipment to be deployed off the coast of Brazil for Petrobras. These secured bonds use special purpose vehicles, but the main ratings component is Petrobras’s long-term operating contract for the rigs or drillships. These off-balance-sheet structures enable Petrobras to use its investment-grade rating to support these deliveries without an impact on its credit rating.

Five global coordinators named on deal; Investors look for detail on company activities

Investment banks have taken heart from more buoyant equity capital markets, but they are probably putting too much store by potential blockbuster deals such as an Alibaba IPO.

When Brazil’s national oil and gas champion raised $70 billion from a capital increase in 2010, it was trumpeted as a once-in-a-decade event. But as Petrobras nears its self-imposed leverage thresholds, its capital position looks compromised. A sharp cut to its rating or a return to the equity markets looks likely. So why is Brazil’s banking community so scared to discuss it?

Rush to open free trade zone; aim to facilitate China’s entry into TPP.

At its Third Plenum, the Communist Party communicated its commitment to economic change. The country’s first free trade zone, in Shanghai, will act as the test bed, but without clarity on any number of policies, will international firms rush to set up shop?

In November, the European Central Bank published the findings of its latest survey of SMEs in the euro area. It contacted over 8,000 firms, the vast majority with fewer than 250 employees, and concluded with the headline that the dominant concerns for these companies was finding customers and access to finance.

Bankers discuss the progress made so far and the potential for Turkey to become a vibrant financial services hub.

A long, debilitating battle over the position of its chairman has led to much soul-searching and investigation at Ecobank, one of Africa’s leading banks. But the direction of the business is the most pressing issue for its bullish chief executive, Thierry Tanoh.

Europe’s policymakers hope a new programme to facilitate securitization will help set free lending to small and medium-sized enterprises. But ABS specialists doubt the initiative will work – and if it is needed at all.

Europe’s leaders are desperate to kick-start lending to the small and medium-sized businesses that are crucial to the continent’s economic recovery and see asset-backed securities as the key. But the entire sector is constrained by post-financial crisis rules. In an era that will be remembered for the unintended consequences of bank regulation, will the need for SME finance finally unleash Europe’s securitization markets?

Convinced that reviving the moribund securitization market is the best way to channel funding to small and medium size enterprises, the ECB is now championing the financial technique at the centre of the systemic collapse five years ago. Convinced any U-turn is justified to support the small companies that might drive Europe's economic recovery, the ECB now finds itself at war with regulators still determined to clamp down hard on securitization.

As growth slows, Russia needs to become less volatile as a market.

Citi markets new deal; CDS at post-2007 tights.

The IMF warns that corporate loan losses for banks in Spain, Italy and Portugal could hit €282 billion over next two years, highlighting the scale of the challenge for the ECB’s asset-quality review amid continued financial fragmentation.

Asset managers are traditionally the biggest users of the foreign exchange daily fix. As Euromoney Market Data shows, the top banks in this area are not quite the same as the leading trading houses for overall market share.

Voice traders are already being sidelined by the big banks as the investigation into fixing the fix gathers steam. How far-reaching will the fallout from the fix scandal be?

Bondholders will vote on a revised offer by November 29; failure to pass resolution will trigger insolvency.