Dollar swap spreads continued to crumble this week as the issuance remained at a brisk pace. There appears little let-up in the debt being brought by well-rated borrowers. Yesterday, it was confirmed the Republic of Italy was poised to bring a $2bn five year global via Lehman Brothers and JP Morgan. Swap dealers agree this is likely to be swapped to floating dollars. It should price in the low 50s against Treasuries, and yield about 56/57bp over all-in. With swap bids about 61bp, the borrower could just make it into sub-Libor territory.
January 28, 2000
