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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.

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.

Investment banks are thinking of setting up their own alternatives.

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?

UBS has bought Banco Pactual, one of Brazil’s leading financial services firms. The Swiss bank will pay $1 billion upfront and as much as a further $1.6 billion in five years, subject to performance conditions. In addition, UBS will establish a retention pool of up to $500 million in UBS shares for Pactual and UBS employees payable beginning on the fifth anniversary of closing. Pactual has a highly successful proprietary trading desk, a strong franchise in equity capital markets and a sizeable asset management business. Earlier this year it broke off negotiations over a possible joint venture with Goldman Sachs.

The Chinese property company impressed investors with its deal and its story.

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.

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

Europe’s government bond auctions are a classic example of market failure. The department of Charlie McCreevy, the EU’s markets commissioner, knows this but can do nothing until it receives an official complaint. If banks are subsidizing the auction process to the tune of €600 million a year, as some claim, why don’t they make the call to Brussels?

Banks in the Philippines are set for more consolidation as new regulations threaten weaker lenders in a fragmented market. High valuations have dissuaded some from deals, but economic recovery might force them to reconsider. Chris Leahy reports.