As more and more Mexicans are encouraged to buy their own homes, the companies that provide mortgages will increasingly look to the international capital markets to fund their lending. Armando Guzman, director general of mortgage provider Metrofinanciera, talks to Lawrence White about his expansive borrowing strategy and his hopes for the development of mortgage-backed securitizations.

Greece has lagged behind the rest of the eurozone in its use of techniques to free up value in real estate loans and assets. But banks’ needs for capital should fuel securitization, and new legislation will enable public bodies to make sale and leaseback deals. Dimitris Kontogiannis reports.

Investors need to tread with caution as uncertainty surrounds the Federal Reserve’s next move.

The advent of whole-business securitization and the creation of a liquid market in project-related debt has opened investors’ eyes to the rewards available in infrastructure. Governments’ desire for off-balance-sheet funding has also boosted the supply of suitable investments. But what makes infrastructure different? How do you buy it, sell it and manage it?

Andy Abrahams, you’re rubbish...

“It’s so bloody liquid, it’s not even funny.”

Overvalued IPOs give cause for concern. Some bankers are becoming wary of damaging their reputation with rushed or over-valued Russian IPOs. Two banks dropped out of a deal last month and some analysts urge that caution be exercised in further IPOs.

The ability of the US to run a high current account deficit rests on a widespread belief that inflation and the cost of capital will remain low. But the conditions that underpin the deficit and the dollar’s role as the principal source of global capital are unlikely to be sustained for long.

Despite its size and maturity, the covered bond market is fast changing. New countries, new asset classes and new issuers vie for investors. But does the conflict between regulators’ desire for quality and consistency clash with investors’ needs for yield and diversification?

Maverick leader opens arms to international and national investors.

...While Wax wows them

One piece of analysis that is certain to be a fixture on desks this summer is a 59-page report by Goldman Sachs. In preparation for the football World Cup, which kicks off on June 9 in Germany, Goldman Sachs has put together a guide to each participating country and its team’s chances of success.

Yulia Tymoshenko, Ukraine’s former prime minister, says her political coalition is committed to a programme of privatization and economic reform if a representative of her team assumes the top job in the country’s next government.

Saudi petrochemicals company Sabic will issue domestic sukuk bonds with a total value of at least SR1 billion ($267 million), according to the company’s financial vice-president, Mutlaq al-Morished. The bond should be finalized this month or next, with huge demand expected from the paper-hungry local market.

Merrill Lynch has upgraded Tunisia to overweight in response to the government’s announcement of a $1.56 billion debt management programme to be funded by the privatization of Tunisie Telecom. The bank believes this active approach will help bond prices, and categorizes Tunisia as a defensive asset at a time when the global emerging markets outlook is unsteady.

Indian companies have been the largest issuers of foreign currency convertible bonds in Asia. But there could be trouble ahead.

Despite brighter prospects for the Japanese economy, corporate issuers are not rushing back to the international or domestic bond markets. Chris Wright reports.

Why the European government bond markets have failed...and what the European Union would like to do about it

Richard Longmore, head of EMEA FX sales, has abruptly left Merrill Lynch.

Financiers in the Caribbean are planning to establish a region-wide capital markets exchange to create a financial hub with critical mass.

Lebanon puts itself back at the hub

Wondering why everyone in global capital markets is thinking China these days? Look no further than PricewaterhouseCoopers’ Greater China IPO Watch. According to the accountants, the average deal size from the Greater China region (including mainland China, Hong Kong and Taiwan) was $260 million in 2005, an increase of more than 200%. For the first time, it exceeded that of the US ($170 million) and Europe ($100 million).

Troubled emerging markets companies could soon benefit from the development of sophisticated bespoke deals aimed at increasing investor confidence.

After years of unfulfilled promise, there is the whiff of optimism in Indonesia as government tackles tangled economic and political challenges. Euromoney spoke to Indonesia’s finance minister, Sri Mulyani Indrawati, about problems, progress and promise. Chris Leahy reports.

The National Bank of Slovakia is likely to consider a 50 basis point rate increase this month as the koruna’s failure to appreciate in recent months drives inflation, according to analysts at Deutsche Bank. The Slovak Republic enjoyed an acceleration of real GDP growth to 6% in 2005, and the central bank felt confident enough to issue a target inflation rate of below 2% by 2007. But the currency’s disappointing performance has led to higher than expected inflation this year, and the strong suspicion that the NBS will buy crowns if further tightening doesn’t prevent further depreciation.

AXA’s proposed extreme mortality cat bond will set the tone for the insurance securitization sector this year.

UBS has appointed Tom Fox and Matthew Koder as joint global heads of equity capital markets, replacing Lucinda Riches, who has headed the division for the past seven years.

Venture capital in Latin America, led by Brazil, Chile and Mexico, has come a long way since 2003, when the industry raised just $417 million in funds. Last year, the figure reached $2 billion, according to the Latin American Venture Capital Association and, if Brazil can realize its potential, the figure could double by 2008. Brazilian pension funds, with about $120 billion in their portfolios, are making venture capital-linked investments for the first time ever this year, led by state oil workers pension fund Petros.

It is a good job that investors don’t seem to be able to get enough of UK prime RMBS as the pipeline of such paper stood at more than £9 billion ($16.7 billion) towards the end of May. The new RMBS issuers poised to launch into this market (revealed in Euromoney’s April issue) were flexing their muscles mid-month, with Lloyds TSB confirming its RMBS programme and RBS first out of the gate with its £4.7 billion Arran Residential Mortgages Funding. The bank has decided not to set up a master trust but will have securitized £9.2 billion of UK mortgage risk via just two transactions in roughly six months when the deal closes. Arran Residential Mortgages, which accounts for half of the pipeline on its own, should get a rapturous reception, given how buyers responded to Standard Life’s latest Lothian issue, which achieved record tights for the sector with dollar-denominated triple-A paper placed at eight basis points over Libor. Later in the month Granite Mortgages saw triple-B risk sold at an eyewatering 47bp over Libor, which could go a long way to explaining the recent intense issuer interest in this sector.

Hedge fund managers need to realize that many investors will be attracted most by track record and big-name managers.