Friday, May 24, 2013

Links 20130524

1. Basel III-compliant Tier 2 capital:

Malaysia is poised to host Asia's first public issue of loss-absorbing bank debt, so-called bail-in bonds, since the region began the transition to Basel III standards earlier this year.
Under the new, stricter capital requirements, subordinated bonds require loss-absorption features if they are to count towards a bank's capital ratios, ensuring that holders are "bailed in" through writedowns or conversion to equity before any public funds are used to bail out a bank.
Banks across Asia have until now held back from replacing their old-style Tier 2 debt, in part due to concerns over the cost of doing so.
Australia's Suncorp in April sold the country's first retail Tier 2 to comply with the new rules. The 10.5-year non-call 5.5 notes had a successful run in the yield-driven retail investor market, allowing Suncorp to pay a premium of just 85bp-90bp over old-style Tier 2 notes from the Australian major banks.

2. Great dynamic chart showing private and public debt ratios. (The WSJ mentions McKinsey Global Insitute as the source. In the past few years the institute has been publishing a yearly report on the debt ratios of several large economies. Get the 2012 report here. However, I don't see an update in 2013. I'll keep an eye on the website.)

3. Singapore: How does a small, over-populated island get all the potable water it needs?
Singapore's five sources of fresh water: imports, rain, desalinization, recycling, and now (possibly) aquifers.

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