Investor demand for US
corporate debt (2003)
Political divisions over the Iraq war may have
finally led to the much-touted buyers' strike by foreign
investors in US assets, according to recent data from the US
Treasury about foreign purchases of US debt.
Data for February, when tension between countries such as France
and Germany and the US was peaking, showed purchase levels were
well below last year's monthly average. There was net foreign
selling of US treasuries of $4.7 billion, something not seen since
last August. Net foreign purchases of agency debt were almost half
of last year's monthly average at $8.6 billion.
The first indications were that the war was having no impact on
investment decisions. In fact, in January, foreigners purchased
$23.4 billion-worth of US corporate debt - the highest level since
May 2002. This was partly a response to the surge of primary
issuance at the beginning...
