Bank bonds: Outdated reaction to market stress creates opportunities Bank bonds: Outdated reaction to market stress creates opportunities

The credit rating agency Moody’s introduced a pivotal change to its hybrid capital methodology back in February 2024, one that is quietly reshaping the corporate hybrid landscape. By allowing certain hybrid instruments to be rated just one notch below senior unsecured debt, Moody’s has not only recalibrated the risk-reward profile of these instruments but also catalysed structural innovation and issuance momentum across both sides of the Atlantic.

Markets are once again high on ‘hopium’. Despite a still-strong labour market, sticky inflation, and an economy that refuses to roll over, rate cut bets have surged back into vogue. The Federal Reserve might be saying “higher for longer,” but investors are dancing to a different beat. Why is the market so convinced cuts are coming when the data tells a different story?

Many have written in recent weeks about outflows from ESG funds and a retreat from ESG investing. From my experience, speaking with a large number of institutional investors, I would not describe it as a retreat but rather a reset. Today, investors are shifting their focus away from fund exclusions and moving capital to where it genuinely matters: into targeted, outcome-driven areas like clean energy and improved health.

By the time this article is published, there could be significant changes to Donald Trump’s tariff policies in ways the market is unable to forecast. However, it remains worthwhile to explore how Trump’s trade wars have impacted Southeast Asian economies and could continue to do so.

Southeast Asian economies are strategically important to both China and the United States (US) due to their roles as trading partners, their geographical interests, and particularly, as military bases for the US.

Warner Brothers Discovery is breaking up and bondholders have been left carrying the baby. Specifically, a US$37bn bundle of debt joy that will essentially now be supported by only one half of the business.

The regulation on the voluntary EU Green Bond Standard has been in effect since the 21 of December 2024, opening the door to the first EU Green Bonds (EuGBs) to be issued at the beginning of 2025. European Green Bonds are often referred to as the “gold standard” in environmental project financing frameworks. This label ensures that 100% of the net proceeds from EuGBs are invested in economic activities aligned with the EU taxonomy for sustainable activities.