Bonds in turmoil, a glimmer of hope for bank equities — and rhino bonds

Send us Fan MailA month into Russia’s war on Ukraine, capital markets are getting more used to the risk it poses, and a wider range of issuers are able to raise money. But riskier types of deal — emerging markets, high yield and equities — are still virtually impossible.Emerging market bond issuance did resume with deals for Nigeria and Turkey, but then the brakes were slammed on again this week when Jay Powell, chairman of the US Federal Reserve, startled bond aficionados by hinting that some of the Fed’s rate hikes this year could be double-sized: 0.5% in one go. On this week’s GlobalCapital podcast, George Collard, EM bonds reporter, explains how this is affecting countries from Latin America to the Middle East, and gives an update on the efforts by Russian borrowers to pay interest on their bonds — while Western authorities try to stop some of them.Mike Turner, public sector bonds reporter, says even some of the highest quality borrowers in the world, such as the European Union and German state bank KfW, are finding the bond market full of traps at the moment. What investors liked one day, the next they hate.A good equity deal got done in Iceland, however, where the government sold $400m worth of shares in Islandsbanki, one of the three banks it had to nationalise in 2008. Victoria Thiele, equities reporter, asks if this could lead to more privatisations of former zombie banks in Iceland and elsewhere in Europe — such as Spain, the UK and Ireland.Occasionally capital markets produce something truly cheering. Jon Hay, sustainability editor, explores the World Bank’s ‘rhino bond’, issued this week, which enables investors to finance rhino conservation in South Africa in an innovative way – by giving up their interest payments.