MTN bonanza tempered by rising yen

  • 30 Jan 2004
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The yen EuroMTN market enjoyed another exceptional performance in 2003, hitting record levels of issuance.

With Japanese interest rates still low, yen investors are eager for yield enhancing instruments that do not involve extra credit risk. Japanese investors were the hungriest for yen paper as many buyers elsewhere remained largely underweight.

Yen issuance in the private EuroMTN* market 2003
PeriodVolumes ($ bn)No of tickets
Q1 200210.41,008
Q2 2002141,181
Q3 200212.81,227
Q4 200214.41,206
Q1 200314.31,280
Q2 2003161,432
Q3 200315.81,829
Q4 200311.91,216

Source: Dealogic

*non-syndicated deals for less than $250m excluding SPVs, self-led deals and issuers with terms under 365 days

The world’s top credits continued to enjoy heavy demand from Japan. KFW’s head of capital markets Frank Czichowski says: “As with 2002, we faced a constant demand from Japanese investors.”

The World Bank is another big issuer of yen MTNs. Doris Herrera-Pol, its manager of capital markets operations, said in September that in the past 12 months the bank had raised about 20% of its funding in yen, mostly from the private market.

Structured issues dominated the market, with deals often incorporating a variety of currencies, coupons or call features.

The central pillar of the sector is the power reverse dual currency (PRDC) structure, which offered cost effective funding.

“Plain vanilla deals do not offer any arbitrage due to tight swap spreads and the high cost of the basis swap,” Horst Reinhardt, treasurer at Rentenbank, said in October.

In July, Kensey Green, head of fixed income syndicate at Nomura in London, estimated that PRDC issues accounted for roughly 90% of the market.

However, the rise of the yen later in the year, coupled with a steepening yield curve, sucked some of the vigour out of the market. Some of the callable deals were not being called, leading to lower demand for new issues. 

  • 30 Jan 2004

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 253,106.92 930 8.89%
2 JPMorgan 230,914.50 1036 8.11%
3 Bank of America Merrill Lynch 221,389.46 762 7.78%
4 Goldman Sachs 171,499.26 554 6.03%
5 Barclays 169,046.60 646 5.94%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 21 Jul 2017
1 HSBC 25,385.87 103 7.10%
2 Deutsche Bank 25,125.19 81 7.03%
3 Bank of America Merrill Lynch 22,023.57 59 6.16%
4 BNP Paribas 18,766.65 109 5.25%
5 Credit Agricole CIB 18,157.63 105 5.08%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 18 Jul 2017
1 JPMorgan 12,578.87 55 8.17%
2 Citi 11,338.07 71 7.36%
3 UBS 10,682.06 44 6.93%
4 Goldman Sachs 10,419.53 53 6.76%
5 Morgan Stanley 10,194.88 57 6.62%