Debt Capital Markets

Banks are facing higher cost of capital and the tightening regulatory environment of Basel III. They now prefer to arrange and distribute debt to third parties rather than use their own balance sheets. This is limiting the availability of bank debt, encouraging borrowers to access the bond market. In addition, the issuer friendly covenant structures of bonds makes them increasingly popular for long-term funding. Furthermore, bonds enable issuers to diversify their sources of funding to many institutional investors.