Gumersindo Oliveros, director, treasury finance department
How challenging has the funding environment been in 2000 compared with previous years?
There has been a strengthening in the trend towards more open and dynamic markets. We have seen a stream of new issuers and new investor needs, and at the same time greater volatility and fragility in certain market segments. Overall, it is a situation that favours flexibility and diversification in the funding operation, and we tend to do well in this kind of environment.
What have been the most attractive market segments?
The dollar market and structured financing have been strongest for us. On the dollar side, the great performance of the economy has garnered interest for US dollar products.
Your largest public euro transactions this year have been only Eu100m. Why have you not raised more funding in the currency?
The swap relationships in the euro market are not yet pricing a triple-A credit like ours at fair value. We think the time will come for larger euro issues as the euro swap market further develops. The euro market has only recently begun to see issuance across the full credit spectrum and as that progresses, we will see a truer relationship between the swap curve and the underlying benchmark, as we do in the US.
How surprising has the re-emergence of yen as an international currency been?
There should be little surprise: the yen is the third mayor currency block and it had been under-utilised for some time.
What have been your most significant deals this year?
The ones coming from innovation: the e-bond, and the opening up of the Mexican and the Chilean peso markets for foreign issuance.
We have also worked on a number of interesting structures in the private placement market.
Compared with your expectations at the beginning of the year, how impressive has been the use of the internet in the bond markets?
The e-bond we launched in January saw the light despite technological barriers and vested interests in the industry, so that in itself was a milestone for us.
We see the fully integrated e-bond concept as a catalyst for change - we showed how it could be done with the help of the more technologically advanced houses in the fixed income market, and the opportunities it can offer.
Now it is up to the market to make the most of it - we are moving on to new areas where we can make a difference with the new technology. There have been about 60 e-bonds so far since January, covering the full spectrum of issuers.
We might expect more to come now that most global firms have come up to speed on the technological requirements.
Who stands to gain most from increased use of the internet in the bond markets?
We think it is a winning proposition for all market participants: it increases dramatically the reach and efficiency in distribution and trading, and provides greater control in the bookbuilding process and pricing. Investment banks that were afraid of disintermediation now begin to see it as a powerful tool to leverage their high value resources.
There are still large institutional investors that fear losing their privileged access in deals as the internet democratises the bond sales process. But it is a misplaced fear - banks continue to give exceptional coverage to large accounts for the obvious reasons. *