ADVFN - Advanced Financial Network.
HOME» NYSE » M » MCO Stock Price » MCO Stock News

Moodys Share News

 Moodys Corp. Stock Price
MCO Stock Price
 Moodys Corp. Stock Chart
MCO Stock Chart
 Moodys Corp. Stock News
MCO Stock News
 Moodys Corp. Company Information
MCO Company Information
 Moodys Corp. Stock Trades
MCO Stock Trades

Panamanian Bank Postpones First Latin Covered-Bond Deal In U.S.

By Patrick McGee Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- Global Bank, the eighth-largest bank in Panama, on Thursday indefinitely postponed the first-ever global covered bond from Latin America in the U.S. debt markets, apparently after the deal failed to achieve a low-enough borrowing cost. Deutsche Bank, the sole underwriter, didn't return calls to comment. According to a banker at a competing firm, Deutsche released few details about the postponement and circulated an opaque email saying "documentation changes" were being pursued "to ensure it is economical for the borrower to move forward." Global Bank was supposed to sell $200 million of the mortgage-linked bonds Thursday, offering investors between 5% and 5.25% for bonds due in five years. Covered bonds are a type of secured debt unique in offering investors recourse to the issuer as well as to an active pool of mortgages set aside in the case of default. The extra security typically earns them triple-A ratings, enabling banks to issue debt at lower interest rates. Global Bank's covered bonds, however, were rated Baa3 by Moody's Investors Service and BBB-minus by Standard & Poor's; both are at the bottom of "investment-grade" and nine notches below triple-A. The bank itself is rated Ba1 by Moody's and BB-plus by S&P, both being the top cusp of the "junk" ratings ladder. The low ratings, obscurity of the issuer, and its small issue size all made the issue a difficult sell, according to people familiar with the transaction. Global Bank didn't immediately respond to requests for comment. Global Bank's outstanding six-year debt, issued in Panama, carries a 5.25% coupon, according to an underwriter away from the deal. That indicates the savings from issuing covered bonds would have been minimal, limiting their purpose. Scott Kimball, portfolio manager at the Miami-based BMO TCH Corporate Income Fund, noted the planned deal was to be issued in the 144a/RegS market, which is only open to institutional buyers. It is common for a large manager to purchase $50 million of a deal, he said, but in this case that would mean owning one-quarter of the deal. "Further, I do not know to what extent there has been any collateral analysis done on these mortgages and loans," he added. "Covered bonds make more sense for large banks issuing them with known collateral." Panama was considered to be a natural place for a U.S. dollar market of covered bonds to take flight because its economy is dollarized, meaning its currency, the balboa, is pegged to the dollar and the U.S. currency is widely used. The collateral "covering" the planned bond sale was Panama-based residential mortgages denominated in U.S. dollars. "It's advantageous for them in that it eliminates any currency risk," said Todd Swanson, a covered bond analyst at Moody's, on a conference call Thursday. But Panama, unlike many European countries, doesn't have specific legislation allowing banks to ringfence collateralized assets during bankruptcy. "Instead, the program relies on existing contractual law," a Moody's report said. The lack of governing law on the collateral might have raised questions about the security of collateral and thus deterred some buyers from participating, an investor said. But market participants believe the postponed deal won't have lasting consequences for larger banks from bigger economies such as Brazil and Mexico. Riz Sheikh, head of Americas covered-bond structuring at Barclays, expects covered bonds to play a role in Latin America as their economies move away from housing-finance models subsidized for lower-income classes and toward a privately funded model. A market for covered bonds should help finance mortgage growth and encourage banks to diversify their funding sources. "You're seeing the start of that now in these bigger economies," he said. "The mortgage product is growing in size and the key banks and regulators are thinking longer term. They know the subsidized model can't go on forever." -By Patrick McGee, Dow Jones Newswires; 212-416-2382; patrick.mcgee@dowjones.com

Stock News for Moodys (MCO)
DateTimeHeadline
08/18/201516:08:55Statement of Changes in Beneficial Ownership (4)
08/17/201516:06:50Statement of Changes in Beneficial Ownership (4)
08/11/201518:28:57Moody's Downgrades Brazil to Edge of Junk Territory -- 2nd Update
08/11/201517:47:31Moody's Downgrades Brazil to Edge of Junk Territory -- Update
08/11/201516:06:37Statement of Changes in Beneficial Ownership (4)
08/11/201516:05:02Statement of Changes in Beneficial Ownership (4)
08/10/201516:05:39Statement of Changes in Beneficial Ownership (4)
08/06/201507:00:00Moody’s Corporation Has Posted an Updated Management Presentation f...
08/04/201509:40:00Technical Roundup on Business Services Equities -- Moody's, Vringo...
08/03/201508:30:00Moody’s Analytics Releases New Version of RiskOrigins™ Credit Ris...
08/03/201508:30:00Moody’s Analytics stellt neue Version von RiskOrigins™ vor, der...
08/03/201508:30:00Moody’s Analytics lance la nouvelle version de RiskOrigins™, sa...
08/03/201508:30:00Moody's Analytics rilascia la nuova versione della soluzione...
08/03/201508:30:00Moody’s Analytics lança nova versão da solução de ciclo de vi...
07/30/201506:12:26Quarterly Report (10-q)
07/24/201508:30:50Moody's Earnings Buoyed by U.S. Corporate Bonds
07/24/201508:02:39Current Report Filing (8-k)
07/24/201507:02:00Moody’s Corporation Declares Quarterly Dividend
07/24/201507:00:00Moody's Corporation Reports Results for Second-Quarter 2015
07/20/201508:30:00Moody’s Analytics Launches AutoCycle™ Solution for Car Price For...

Moodys and other New York Stock Exchange stock quotes are delayed by at least 20 minutes.
All other stock price data is delayed by at least 15 minutes unless otherwise stated.
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
Contact Us | Copyright 1999-2007 ADVFN PLC. | Privacy Policy | Investment Warning | Data accreditations | Investor Relations

ADVFNADVFN ItalyADVFN GermanyADVFN FranceADVFN BrazilADVFN JapanADVFN UKADVFN US noad