JUST A FEW years ago, emerging-market bond issue
was a profitable business. Sovereign deals from such countries
as Hungary or Russia would bring in fees of anything between
50 and 100 basis points for the one or two lead managers on
the deal. The business was also prestigious. Banks such as
JPMorgan and CSFB made names for themselves by bringing
emerging-market countries to the Eurobond market. As a result,
it was a business in which most banks wanted a presence, so
they set up desks of five to 10 people for each region to
cover Latin America, Asia and emerging Europe.
However, in the past 12 months fees have come crashing down in
emerging Europe, to the point where Romania, which just last year
paid 65 cents on its seven-year deal, was pitched 10 cents by one
European bank for its forthcoming Eurobond issue. South Africa,
which awarded its Eurobond mandate in late April...
