We also expect the ECB to announce new support for the banking sector via its non-standard measures as the ECB views bank liquidity as the key issue that needs to be tackled. We continue to expect the ECB to announce extended liquidity operations via a new 1yr LTRO. If re-introduced, this would be the fourth 1yr LTRO conducted by the ECB. Spreads indicate that banks might take up large sums through the one-year operation, perhaps up to Eur 300-400bn, although some of this might be solely reallocation from other repo facilities.

As our colleagues have noted, covered bond supply has dried up as issuers appear to be waiting for more clarity before tapping the market. Since CBPP2 has come into focus as a possible policy response by the ECB, secondary market spreads have stabilised while a few issuers have accessed the market, though failed to get momentum behind the deals and reach benchmark size (of Eur 1bn).

The brewery, led by Brazilian Jorge Paulo Lemann , Carlos Alberto Sicupira and Marcel Telles , negotiates the purchase of SABMiller, the second largest brewery in the world.

The business revolves around U.S. $ 80 billion.

If it is closed, trading will give Anheuser – AmBev’s controlling – a third of the world beer market.

AB InBev and SABMiller are complementary. Only China and the United States there may be overlapping business. But in other regions of the world, the activities of the two giants are complementary.

Three years after buying Anheuser-Busch owns the Budweiser brand, the company has already paid off the amount that was due to be paid over five years.

With that, the company has cash for new acquisitions.

One of the characteristics of the trio who runs the brewery is an appreciation for doing business in times of crisis.

The first major step was the purchase of the shareholders of Brahma, on the eve of the first direct election in the country Terrified at the thought of Luiz Inacio Lula da Silva won the election, the owners of the Brahma sold the brewery at a price below the market.

But that year, Lula was defeated at the polls by Fernando Collor de Mello .

In 1999, amid a sharp devaluation of the real, Brahma joined Antarctica, creating Ambev.

Five years later, the company closed the acquisition of Belgian brewer Interbrew.

In 2008, amid the bursting of the global crisis, AmBev closed the purchase of Anheuser-Busch.

And now, while developed countries find themselves in a new global turmoil, the company can close the biggest deal in history.

If AB InBev buys SABMiller it could be the biggest cash takeover in history and would create a group brewing a third of the world’s beer. Analysts and bankers suggest 2013 as a likely time frame for a takeover that is seen as the final play in deal making in big world brewing.

They say the world’s No 1 brewer AB InBev will not be deterred from making a move for SABMiller even after the No 2 brewer swallows up Australia’s Foster’s by the end of 2011 in a $10.2 billion deal.

“Over 90 percent of AB InBev’s earnings come from America, so a move for SABMiller would create a real powerhouse with big operations on six continents,” said another banker.

“AB InBev has been built by a string of good M&A deals over the last decade so the market is likely to support one final deal based on its impressive record especially with the Anheuser-Busch deal,” the banker added.