Growth in complex debt hits fastest pace since 2007

Today’s agenda: EU farm subsidy reform; Syrian asylum claims put on hold; FT Business Book of the Year; Christie’s dinosaur auction; and the Gen Z stars redefining philanthropy

Good morning. We start today with an exclusive from Wall Street, where the volume of structured finance transactions has hit $380bn this year, the biggest boom since the lead-up to the global financial crisis in 2007.

How much has it grown? The global volume of structured deals is up by more than a fifth from the same period a year ago and about $1bn more than all of 2021, the previous post-financial crisis peak.

Transactions this year have forged bonds backed by income tied to franchisee fee revenue at US restaurant chain Wingstop, oil sales from ExxonMobil-backed wells and demand for computing power and space provided by data centre operator CloudHQ. Structured deals linked to more arcane corners of the market have already risen 50 per cent this year compared with all of 2023 to $63bn, according to JPMorgan Chase.

What’s driving the surge? The boom in complex — and often riskier — deals highlights how buoyant markets and persistent US economic strength are allowing bankers to sell more esoteric products to investors keen to lock in high fixed returns.

“We have seen standout years with relentless investor appetite and that is what is going on right now,” said Jay Steiner, who leads US asset-backed securities at Deutsche Bank. 

While growth in structured deals has made some investors nervous that investment managers flush with cash are not vetting risk, analysts say the size of the market is still small enough to avoid creating systemic risk. Read the full story.

Here’s what else we’re keeping tabs on today:

• Ecofin: EU finance ministers meet in Brussels, with UK chancellor Rachel Reeves also attending in a sign of the UK’s improving relations with the EU.

• Bitcoin Mena: The two-day crypto conference begins in Abu Dhabi with speakers including Eric Trump, Steve Witkoff and Anthony Scaramucci.

• Economic data: Germany reports November inflation figures, while the UK publishes third-quarter mortgage lending statistics. 

• Nobel Day: This year’s laureates receive their Nobel Prizes in a ceremony in Stockholm.

• Results: Ashtead, AutoZone, Moonpig and NCC report.

Today marks the launch of the FT’s India Business Briefing newsletter, the Indian professional’s must-read on business and policy in the world’s fastest-growing large economy. Sign up here if you’re a premium subscriber or upgrade your subscription here.

Five more top stories

1. Exclusive: The EU’s new agriculture chief is pushing for more generous subsidies for low-income farmers rather than big agribusinesses, representing the most significant overhaul in the history of the 62-year-old programme that constitutes a third of the bloc’s annual budget. Read more from Christophe Hansen’s interview with the Financial Times.

2. A growing number of EU nations and the UK are pausing the processing of asylum claims from Syrians after the fall of Bashar al-Assad’s government. Germany, the UK, Italy, Austria, the Netherlands, Finland and Greece have put applications on hold, while France has said it is reviewing its policy. Read the full report.

• Inside Assad’s police state: On the outskirts of Damascus, the Saydnaya prison holds the secrets to the fates of thousands who disappeared under the dictator’s rule.

• Opinion: The Syrian conflict broke the world and is now proving to be Iran’s Achilles heel, writes Kim Ghattas.

• What to read on Syria: Matthew Williams and Frederick Studemann recommend books that shed light on the conflict and its place in the wider power struggles across the Middle East.

3. Exclusive: Uber will hold talks with UK union bosses today over insurance restrictions that many drivers say have forced them into paying higher insurance premiums. The restrictions, introduced in January 2022, require drivers to get insurance only from a panel of eight insurers. Marianna Giusti has more.

4. Exclusive: European regulators have asked Google for more information about a secret advertising partnership with Meta that skirted the search company’s own rules on how minors should be treated online. Officials from the European Commission have been looking into a series of ad campaigns, first reported by the FT in August, raising the prospect of a formal investigation into the tech giant.

5. Exclusive: AllianceBernstein is preparing to sue Switzerland for $225mn over the decision to wipe out $17bn of debt when UBS took over Credit Suisse last year. The US asset manager will be the first large institutional investor to join the case, which argues the deal was an unlawful encroachment on investors’ property rights.

Join us tomorrow as Financial Times editor Roula Khalaf and other FT experts discuss their predictions for the world in 2025. Register here.

News in-depth

Ukraine is racing to finish multiple lines of defence that could halt Russia’s swift advances, with the Dnipropetrovsk region spending $7.3mn on fortifications from November 2023 to November 2024, according to a freedom of information request. But efforts have so far been marred by delays and lack of co-ordination, putting the area at risk of a breach.

We’re also reading . . . 

• Business Book of 2024: Supremacy, Parmy Olson’s exploration of the rivalry between the founders of OpenAI and Google DeepMind, has won the FT-Schroders award.

• Christie’s dinosaur auction: Scientists have been priced out by billionaires in the global market for fossils, writes John Gapper, as three prehistoric skeletons estimated to be worth up to £13mn go under the hammer.

• Javier Milei: The libertarian president has stabilised a turbulent economy and kept the support of half the population, but big challenges loom for Argentina.

Chart of the day

For the first time, renewable energy from wind, solar and hydropower is set to overtake fossil fuels as the main source of the UK’s electricity output, marking a major shift from a decade ago, when gas and coal accounted for almost 60 per cent of the country’s generation, according to think-tank Ember.

Take a break from the news

As a generation of fans becomes increasingly progressive, critical and globally minded, the newest cohort of public figures cannot just be ambassadors for their chosen causes; they must be philanthropic institutions in themselves, writes Marion Willingham. From actor Storm Reid to footballer Bukayo Saka, meet the Gen Z stars redefining modern philanthropy.