Search results for

Russia will probably default on its Eurobonds. Other sovereigns may well do the same. That's not such a big deal, say the markets. It's all in the price. But are they ready for the consequences? The Euromarkets have grown up with the idea that Eurobonds are immune from rescheduling. But every debt crisis in history has been messy; the instruments involved have been discredited for years. What happens when international bond default becomes normal again? Antony Currie reports.

Since the beginning of the international financial crisis the Turkey premium has gone up and the availability of credit has declined, leaving many banks with liquidity problems. Foreign investors in Turkish stocks and bonds have fled, joining the general stampede from emerging markets.

Article 64 of Turkey's banking law, which can be invoked to supervise ailing banks, provides sweeping authority over shareholders, including firing the general manager and the board and making demands for a capital injection. But in practice article 64 interventions have ceased to have any meaning. The government cannot or will not get the shareholders to improve the balance sheets of their banks. And the banks have no qualms about being placed under article 64 since the identity of banks affected is not made public.

Since 1927, when the first American depositary receipt was launched by JP Morgan for UK department store Selfridges, thousands of non-US companies have used ADRs to list in New York. This has enabled them to sell their equity to US institutional and retail investors in a manageable form. In 1990, global depositary receipts (GDRs) were created for companies that wanted to list and trade on other exchanges, notably London and Luxembourg.

Russia's freeze on payments to creditors overseas raises the usual questions asked when a country defaults. Christopher Stoakes gives some answers.

Shielded from the full force of international competition, suckled by a government with a voracious appetite for debt, banking in Turkey has long been a very profitable business. But the country's big family-owned banks know this state of affairs can't last for ever. They are investing in technology and broadening their business mix. And any foreigner with a $2 billion appetite for Turkish risk might find a welcome in at least one bank boardroom. Metin Munir reports.

When Meriwether invited Union Bank of Switzerland to eat a special dish with him at high table, it seemed too good to be true. It was. Why did a bunch of Swiss bankers rush in where the rest of Wall Street feared to tread? By David Shirreff.

Citibank has had correspondent banking relations with Turkey since World War II. It had an interest in Turkey but not a substantial business until 1975 when a representative office was opened. After this, outstanding loans grew very rapidly until 1977 when Turkey defaulted on the so-called CTLDs (convertible Turkish lira deposits). Under this scheme Turkey had attracted foreign-currency deposits with high interest. In the following three years Citibank played a prominent role in rescheduling the CTLDs and, more important, together with a small group of international banks that included Banca Commerciale Italiana, Deutsche Bank, JP Morgan and UBS, providing the trade finance that allowed Turkey to maintain international trade. These banks ended up intermediating virtually all of Turkey's trade.

In the wake of the global economic crisis there are victims on both sides. Investors have excess cash but are afraid to move it. Issuers need to raise capital but are afraid to sacrifice their hard-won reputations with issues that flop.

Many market participants in Asia reckon the region is overbroked. Nomura is more sanguine, continuing apace its recruitment drive. Its latest hiring is veteran research star Bill Overholt to head Asian strategy.

It's a tough time for issuers in the Eurobond markets. So tough that only the big agencies and supranationals are getting much of a look in. Even they, though, are having to bend to the wind, issuing at wider spreads, making quasi-private placements and reopening existing bonds. Are nervous investment bankers offering them poor value? Marcus Walker reports.

Oyak Bank is unusual in two ways. It is one of the few banks in the world wholly owned by an army and it is the only Turkish bank run by an American. But that American, Mark Foley, considers himself to have gone more than a little native.