Global Capital Markets Perspective

Issuance across most capital market instruments improved in 1H13 over 2H13 due to strong investor confidence and ample liquidity in the market. Further signs of improvement in the U.S. and European economies, record-low interest rates worldwide and infusion of capital by central banks, such as the Fed, European Central Bank ("ECB"), and Bank of Japan ("BOJ") lent stability to the market.

The early part of the year witnessed diversification of funding sources due to retrenchment in bank lending. Refinancing and repricing by issuers also saw an uptake during 1H13, and the trend is expected to continue for the remainder of the year.

Despite the initial hints of stability in the market, the Fed’s decision to taper the QE (Quantitative Easing), the continuing Eurozone crisis, upcoming regulations such as Basel III, Solvency II, and Alternate Investment Fund Manager Directive (AIFMD) in Europe, depreciation in the value of emerging market currencies, and the slowdown in China will likely impact issuance.

The report represents a joint effort of the Global Debt & Capital Advisory practices of seven DTTL member firms to provide insights into key trends shaping the capital markets.