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Investment banks take their branding very, very seriously. The agonizing over choice of name, fonts and colour schemes can be endless – and extremely costly.

The UK’s Financial Services Authority is working on rules for UK covered bonds. Bankers hope that the regulator will announce at the February 7 Zurich meeting of the European Covered Bond Council plans for a framework for UK financial institutions. Abbey, HBOS, Northern Rock, Nationwide and Bradford & Bingley have all issued covered bonds using UK contract law. But because the UK has not introduced a special public supervision, UK covered bonds attract a 20% risk weighting for BIS restricted investors as opposed to the 10% enjoyed by investors for bonds issued where there is such supervision or specific covered bond law. This puts the UK issuers at a disadvantage as their bonds price wider. This development is a volte-face by the regulator. It initially had a conservative stance on the structure, placing an unofficial limit on the proportion of their overall balance sheets UK issuers could sell as covered bonds.

KfW inaugurated its 2006 euro benchmark programme with a blowout €5 billion 15-year deal, the first time the German agency has issued in this maturity. The deal is able to take full advantage of demand from pension funds and insurers for long-dated assets. Citigroup, Deutsche Bank and Merrill Lynch had a €10 billion order book after just one day. Pricing was 2 basis points through the 15-year swaps rate or 11bp over the April 2021 OAT.

Emerging market sovereigns that issue heavily in debt markets should prepare for higher borrowing costs.

Second-tier triple-A issuers have an opportunity to close the funding gap on KfW and EIB.

The borrower makes disappointing start to wave of telco financing.

Ask any of London’s famous black-cab drivers which investment bank they think is best and chances are they will vote for Deutsche Bank.

Mixed message in mix-up?

If anything symbolizes how far emerging markets have come over the past five years, it’s the growth of their domestic capital markets. Few would dispute that emerging markets local-currency debt is now an established asset class, despite its relative youth. Local-currency debt is the way of the future, but further reforms are necessary.

The country’s director of public credit came up with an idea that could transform emerging market sovereign debts.

Vanilla deals fell out of favour in equity-linked issuance in 2005, with highly complex, structured transactions building unprecedented dominance. Despite higher volatility levels than in 2005 and a very promising M&A outlook, this trend is likely to continue in 2006. Peter Koh reports.

New cash and synthetic ABS indices will give European market participants the tools to express subtle directional views that have been the preserve of total-return funds and synthetic credit specialists.