MTN bonanza tempered by rising yen

  • 30 Jan 2004
Email a colleague
Request a PDF

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 352,540.12 1323 9.09%
2 Bank of America Merrill Lynch 315,574.44 1093 8.13%
3 JPMorgan 314,826.88 1433 8.11%
4 Goldman Sachs 234,193.07 776 6.04%
5 Barclays 226,473.92 879 5.84%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 33,723.41 160 6.58%
2 Deutsche Bank 33,605.53 115 6.55%
3 Bank of America Merrill Lynch 30,523.81 93 5.95%
4 BNP Paribas 26,890.30 166 5.24%
5 SG Corporate & Investment Banking 23,393.38 135 4.56%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 15 Oct 2017
1 JPMorgan 19,536.02 78 8.92%
2 Morgan Stanley 16,323.54 83 7.45%
3 Citi 15,667.80 92 7.15%
4 UBS 15,208.47 58 6.94%
5 Goldman Sachs 13,487.36 72 6.16%