Regulation and rating shifts cast shadow over senior market

摘要

Investors looking to buy senior bank debt are facing an ever-more complex environment as shifting regulatory goalposts and changing rating methodologies turn this funding cornerstone into a much less palatable investment. Seven years after the financial crisis, investors are still grappling with the impact of new rules on recovery prospects as regulators move to stop taxpayers from ever having to bail out banks again. While banks have still been able to access the market - over US$316bn of senior unsecured debt has been issued globally this year, according to Thomson Reuters data - the added layer of regulatory complexity is making investors wary. "What is difficult from an investor point of view is that new rules are continuously being drawn up and end up being different in every country. This makes it more complex to invest in bank paper," said Jan Willem de Moor, portfolio manager of Robeco Financial Institutions Bonds.