Monthly Archives: July 2015

S&P Webinar : Best Practice of Credit Analysis for Volatile Sectors: Energy Case Study, Tuesday, 4 August 2015, 830am IST

Best Practice of Credit Analysis for Volatile : Sectors: Energy Case Study
Complimentary Webinar

Please join us for a free Webinar to learn some of the “best practices” being used to conduct credit analysis in volatile sectors through a case study of the Energy Sector.

Clemens Thym and Michelle Cheong from S&P Capital IQ will demonstrate some of the techniques we use in conducting credit analysis on both rated and unrated entities.

Here’s the line up for what is sure to be a very informative presentation:

  • Energy sector trend analysis
  • Overview: Country, Industry, Business and Financial Risk Analysis “the S&P way”
  • Case Study of a rated company: CNOOC
  • Case Study of an unrated company
  • Credit scenario analysis using data from S&P Capital IQ
Tuesday, 4 August 2015

08:30a.m. – 09:30a.m.

China/Hong Kong/
11:00a.m. – 12:00p.m.

12:00p.m. – 13:00p.m.

13:00p.m. – 14:00p.m.

Clemens Thym
Managing Director
Credit Solutions
S&P Capital IQ
Michelle Cheong
Credit Solutions
S&P Capital IQ

Don’t miss this informative presentation! Register now.

Record Supply of Chinese Muni Bonds

The Chinese Ministry of Finance (MoF) recently rolled out another muni replacement program of legacy local government debt, as the previous muni replacement quota of RMB 1 trillion only addresses about half of the local government debt that is due to expire in 2015. With the robust expansion plan, it is expected that the total supply of muni bonds will reach over RMB 2.77 trillion this year1.

– See more at:

All you wanted to know about Masala Bonds,

Indian curry is quite a hit in the West. So can global investors be tempted to try out Masala bonds? That’s something the Indian Railway Finance Corporation, which recently approved the raising of $1 billion through the issue of Masala bonds and other firms such as NTPC, are trying out now. Read more

IFC Issued First Masala Bonds in London to Attract International Investment for Infrastructure in India  Read more


S&P Webinar : Credit Conversations: Hot Topics in Corporate Ratings and Counterparty Risk Assessment, Thursday, July 30, 11am ET

Credit Conversations:  Hot Topics in Corporate Ratings and Counterparty Risk Assessment
Credit ConversationsWebinar Series
Join S&P Capital IQ and Standard & Poor’s on Thursday, July 30, at11am ET for a lively conversation on current trends and hot topics in corporate ratings, as well as the counterparty risk assessment environment.

A panel of thought-leaders and practitioners will discuss:

  • Pertinent issues affecting corporate ratings today
  • Key trends and an outlook for consumer discretionary ratings
  • The credit risk of select private and public companies
July 30, 2015

11:00 am – 12:00 pm ET
Our Speakers:
David Tesher
Managing Director
U.S. Corporate Ratings

Standard & Poor’s Ratings Services

Diane Shand
Senior Director and Analytical Manager,
Consumer Products

Standard & Poor’s Ratings Services
View Bio >

Jim Elder
Director, Market Development, Corporate and Financial Institutions
S&P Capital IQ
View Bio >
Thomas Yagel
Vice President, Global Head of Credit Market Development
S&P Capital IQ
View Bio >


Webinar invite: the Green City Bonds Coalition launches guide for cities on issuing green bonds – July 28, 12pm EST

Webinar invite: the Green City Bonds Coalition launches guide for cities on issuing green bonds – July 28, 12pm EST

The Green City Bonds Coalition, of which the Climate Bonds Initiative is a member alongside CDP, C40, Ceres, NRDC and As You Sow, is pleased to invite you to a webinar to launch a new guide for cities on issuing green bonds.


  • Barbara Whitehorn, Chief Financial Officer, City of Asheville
  • Mark Kim, Chief Financial Officer, DC Water
  • Jackie Dingfelder, Senior Policy Director and Jonas Biery, Debt Manager, City of Portland
  • Mike Brown, Capital Finance Analyst, San Francisco Public Utilities Commission


  • Sharing expert advice and information on green bonds through the launch of the Green City Bonds Playbook
  • Sharing city experiences and future plans to issue green bonds
  • Discussing next steps for North American cities and the Green City Bonds Coalition to take

Please register here in advance for this webinar to receive webinar/log-in instructions

Dial-in details (but registration for the webinar above, highly recommended for access to WebEx)

U.S. dial-in +1 631 267 4890

Meeting # 846 764 366


India Ratings Webinar: Gold, Fifty Shades of Yellow Glitter – Alternate Scenarios of Gold Prices Based on Global Monetary Policy, 29th July 130PM IST

Gold is often considered a ‘hedge’ against an economic uncertainty. Central banks across the globe have remained the net-buyers of the yellow metal. However, despite heightened geopolitical uncertainties, gold prices are now at a 5-year low.

India Ratings is hosting a Webinar on 29 July 2015 at 1:30 PM IST4 PM SG/HK; 9 AM London. In thiswebinar, India Ratings will discuss the following:

  • Price Response to Investment Demand (FY08-FY15)
  • Central Banks Turn Net Buyers following Global
  • Unconventional Monetary Policies
  • Historical USD and Gold Price Correlation
  • Global Demand Supply Situation
  • China-India Jewellery and Investment Demand
  • FY16 Base Case Price scenarios
Ask the Analysts : Do you have a question that you would like India Ratings analysts to address? Send in your questions now and we’ll cover as many as possible during the webinar.

About us : India Ratings and Research (Ind-Ra) is India’s Most Respected credit rating agency committed to providing the India’s credit markets with accurate, timely and prospective credit opinions. Built on a foundation of independent thinking, rigorous analytics, and an open & balanced approach towards credit research, Ind-Ra has grown rapidly during the past decade gaining significant market presence in India’s fixed income market.

Ind-Ra currently maintains coverage of corporate issuers, financial institutions, which includes banks and insurance companies. Finance & leasing companies and managed funds, Urban Local Bodies and Project Finance.

With six offices in India located at Mumbai, Delhi, Chennai, Bangalore, Hyderabad and Kolkata, Ind-Ra is part of Fitch Group, a global leader in financial information services. Ind-Ra is recognised by the Securities and Exchange Board of India, the Reserve Bank of India and National Housing Bank.

About Fitch Group
Fitch Group is a global leader in financial information services with operations in more than 30 countries. Fitch Group is comprised of: Fitch Ratings, a global leader in credit ratings and research; Fitch Solutions, a leading provider of credit market data, analytical tools and risk services; BMI Research, an independent provider of country risk and industry analysis specializing in emerging and frontier markets; and Fitch Learning, a preeminent training and professional development firm. With dual headquarters in London and New York, Fitch Group is majority owned by Hearst Corporation.

S&P : A Closer Look at Indian Bonds

e CPI inflation rate in India rose as expected to 5.0% year-over-year in May 2015(from 4.9% in April), led by a higher crude oil price.  The market is now expecting the Reserve Bank of India to remain on hold, in contrary to their expectation that most other emerging market policy rate decisions will have a more hawkish stance.  This may contribute to the fact that Indian bond funds have recorded moderate inflows in the last couple weeks, as opposed to the outflows seen in most other emerging countries.

In fact, Indian bonds have remained resilient on the back of rising rates and the FOMC announcement. The total return of the S&P BSE India Sovereign Bond Index rose 2.70% YTD, compared with the 0.10% gain of the S&P BGCantor U.S. Treasury Bond Index (see Exhibit 1).

– See more at:

Webinar : When will the next financial crisis start? 23rd July 11am ET

Live online July 23 | 8 a.m. PT / 11 a.m. EDT and available afterward on demand
 Jon “JB” Beckett, Fund Selector, CIO, Author of #newfundorder

If we liken funds to ships, then the largest today would most certainly resemble the largest supertankers.The biggest risk for these funds is liquidity “draft” and “shallow water”. Attend this webinar to explore the concept, liquidity risk and why size matters with Jon Beckett.

Webinar: A Primer on Contingent Convertibles (CoCos) 22 July , 10am ET

A Primer on Contingent Convertibles (CoCos): The New Kid in the Hybrid Bond Neighborhood

Hybrid securities are not new; in fact, some of them, such as convertible bonds, have their origin going back more than 100 years. A recent addition to the family is contingent convertible bonds (CoCos), which just like others, were introduced to the market for specific reasons.

CoCos, hybrids between bonds and equities with distinctly unique triggers and conversion features, came into vogue in 2013 as banks in Europe needed to raise capital. Banks appreciated the flexibility CoCos provided in the event they experience financial difficulty, while investors appreciated the high yields often offered by CoCos.

Date: July 22, 2015 Time:  10:00am EDT

Register Now

However, these hybrids can be complex and are often misunderstood in terms of the risk involved. How can investors – and banks – better understand these instruments, so they know what to expect if the banking sector experiences another meltdown?

JOIN NUMERIX on Wednesday, July 22nd at 10am EDT as featured speaker Dr. Meng Lu, Senior Vice President of Strategic Product Initiatives at Numerix, provides an overview of CoCos by placing them in the capital structure and reviewing the necessary modeling framework to price and measure the risk of these financial instruments.

Dr. Lu will cover:

  • Reacquainting with the old-timer: convertible bonds
  • Introducing the new kid on the block – CoCos
  • A bird’s-eye view of the hybrid neighborhood in the capital structure
  • Some considerations on how to model CoCos
  • A case study example
Dr.                   Meng Lu, SVP and Head of Strategic Product Initiatives, Numerix

Dr. Meng Lu, SVP and Head of Strategic Product Initiatives, Numerix
Dr. Meng Lu is Senior Vice President and Head of Strategic Product Initiatives at Numerix, responsible for researching, identifying and implementing strategic product development initiatives that can leverage the Numerix CrossAsset…Read more

Jim Jockle, CMO, Numerix

Moderator: Jim Jockle, Chief Marketing Officer, Numerix
Mr. Jockle leads the company’s global marketing efforts, spanning a diverse set of solutions and audiences. He oversees integrated marketing communications to customers in the largest global financial markets… Read more

Register Now

Webinar : With Growing Economic Uncertainties, What’s Next For Asia-Pacific Sovereign Ratings?. 20th July, 12pm IST

With Growing Economic Uncertainties, What’s Next For Asia-Pacific Sovereign Ratings?

Live Webcast And Q&A


Date & Time:

20 July 2015

Hong Kong/China
2.30 p.m.

1.30 p.m.

Japan/South Korea
3.30 p.m.

12.00 p.m.


With China’s continuing slowdown and the ongoing uncertainties in the Eurozone, how may Asia-Pacific sovereign ratings be impacted? Please join us for a webcast on the rating and outlook trends for Asia-Pacific sovereigns.

Register now

You will receive a link to access the replay as long as you register, regardless if you attend the webcast on the actual day.

Key discussion points:

  • Have economic slowdown and external uncertainties slowed credit improvements for sovereign ratings with positive outlook, including Korea and Indonesia?
  • What are the sovereign credit implications for China given the recent developments?
  • Is a potential US monetary policy normalization still a threat to emerging market sovereigns in Asia-Pacific?

Speaker: Kim Eng Tan, Senior Director, Sovereign Ratings
You will need computer speakers or headphones to listen to the webcast. You may submit your questions for the speakers in real time via the web interface. Please test your system here at least 15min before the scheduled start time.  If you are not able to view a short flash video play with audio on both Internet Explorer and Firefox, you can still join the webcast via dial-in numbers provided in the confirmation email you will receive once you have registered online . Participants who listen by phone only will NOT be able to submit a question over the phone. Please email us your questions instead.


Lenders Empowered to Take Control over Distressed Firms


The Reserve Bank of India (RBI) yesterday conferred a significant power to banks to acquire control of borrower companies which fail to achieve prescribed milestones as part of their restructuring. Under this arrangement, the Joint Lenders’ Forum (or JLF, formed for the purpose of addressing distressed assets) may “convert the whole or part of the loan and interest outstanding into equity shares of the borrower company, so as to acquire majority shareholding in the company”. In other words, the lenders will collectively acquire legal control of the company as they are able to control the entire board by obtaining majority of equity shares in the company. RBI has also prescribed the mechanism for determining the price of conversion of the loan into equity. Earlier this year, the Securities and Exchange Board of India (SEBI) had also amended its regulations to remove constraints pertaining to issue of shares and also to takeovers so that such conversion of debt could occur smoothly.

Read more

Howard Marks’ New Memo: Risk Revisited Again

Oaktree Capital’s Chairman Howard Marks is out with his latest memo entitled “Risk Revisited Again.”  In it, he expands upon a previous memo on the subject.

He harps on an important point that risk is not necessarily defined as volatility, as academics would argue.  Instead, Marks points out that instead of fearing volatility, investors fear the possibility of permanent loss of capital.  This is an important distinction.

He also touches on the subject of uncertainty, noting that, “The answer lies in the fact that not being able to know the future doesn’t mean we can’t deal with it.”  He says that the best way to deal with this is to construct a range of possibilities and the probability of each occurring.

His memo also details the various types of risks and is really worth reading in full below.  The main takeaway here is that he says, “Today I feel it’s important to pay more attention to loss prevention than to the pursuit of gain.”


The Absolute Return Letter, June 2015 – Are bond investors crying wolf?

The Absolute Return Letter, June 2015

Are bond investors crying wolf?

Since we last wrote to you there has been quite a dramatic increase in interest rates in most markets and in Germany in particular. In this letter we look into whether this is the beginning of something much bigger.

For those of you with too little time on your hands we conclude that it is NOT. Economic growth will stay low for many years to come, and central banks have no intention of suddenly flooding the bond market with sell orders.

Enjoy the read.

Get this issue now


Let them eat more credit

Let them eat more credit

China’s economy has slowed because it has tried to scale back its frenetic investment spending fuelled by debt
As Prime Minister Narendra Modi was winding up his three-nation tour of China, Mongolia and South Korea, Gulzar Natarajan, an official in the Prime Minister’s Office, wrote a blogpost saying on offer from China is mostly finance and it is the least preferred option. Unfortunately, in domestic or foreign policy, it appears China is nothing if not about financing. Read more

How the Fed and Markets Are Not in Sync on Interest Rates

After seven years of zero interest rates, the Federal Open Market Committee (FOMC) is preparing markets for rate hikes, likely to start in September. The FOMC has not decided on the precise timing of the first rate hike but has stressed that interest rates will be increased gradually over an extended period so as not to disrupt the recovery. In other words, interest rates will remain low for a long time. The FOMC’s forward guidance has included the so-called dot plot [pdf], which shows, for each FOMC participant, the path of interest rates compatible with its growth, unemployment and inflation forecast. It is the path of interest rates that the FOMC would like to see. Read more


S&P Asia Fixed Income Index Dashboard – June 2015

  Download this month’s dashboard
The S&P Pan Asia Bond Index, which tracks local currency bonds in 10 countries and is calculated in USD, was down 0.02% in June, while its yield-to-maturity widened by 2 bps to 3.87%.
The S&P Indonesia Bond Index continued its decrease and fell 0.18%, bringing the YTD return to 2.75%. The index’s yield-to-maturity widened by 16 bps to 8.36%.
The S&P China Bond Index added 0.41%, bringing its YTD return to 3.21%. Its yield-to-maturity was unchanged at 3.65%, with no significant or immediate effect following the rate cuts announced on June 28, 2015.

Search for Yield Leads to More Risks in Credit Funds

Search for Yield Leads to More Risks in Credit Funds
Link to Fitch Ratings’ Report: Credit Funds Dashboard April 2015
Fitch Ratings warns of the temptation that fixed income fund managers may have in current market conditions to overreach for yield, potentially loosening credit selectivity and leading to excessive credit and liquidity risk-taking.
Fund managers may be tempted to look for opportunities in lower-rated, less liquid, off-benchmark or longer-maturity bonds. This can lead to excessive risk-taking – there is a growing consensus among asset managers that the risks are beginning to outweigh the rewards, due to an overall increase in liquidity, re-pricing and idiosyncratic risk.
The inability to maintain discipline in credit selection and liquidity risk management, or the inability to de-risk the portfolio in a timely manner may put pressure on some fixed income Fund Quality Ratings. Furthermore, a potential change in market regime or market re-pricing (exacerbated by poor liquidity) may lead to more differentiation between funds’ performance, which in turn could lead to select rating actions.

The Morality of Debt : A History of Financial Saints and Sinners

Credit and debt are more than just rational material exchanges within a market economy. They are socially constructed and center on matters of hard moral judgments about character, equity, and “good conscience.” These judgments are, in turn, bound up with powerful emotions of resentment, shame, and humiliation. Changing and conflicting representations of personal credit and debt deeply affect the power and welfare of states.


A diversity of social meanings has been attached to debt over time. And yet certain patterns do recur. In various European languages debt co-occurs with “bondage,” “freedom,” “gratitude,” and “honor,” as in “freedom from debt,” “debt of gratitude,” and “debt of honor.”


Read more

Counting cranes, hidden debts

When visitors to Chinese cities are trying to take the pulse of the local economy, they often do a very simple thing – they look out the window and count the cranes.

Crane counting is a trick used by analysts fromLondon to Sydney to get a real-time sense of economic activity: Cranes mean construction, construction means jobs, jobs mean people have money to spend, and so on. In China, however, crane counting can be hard – sometimes there are so many you lose count. That was especially true in the years following the financial crisis, when China launched a massive investment programme, estimated at the time at around $560 billion, to stimulate the economy.

 Read more