February 2002
High-grade issuers face up to a year
The world’s elite AAA-rated bond issuers will need to be fast on their feet to get the best deals in 2002. Interest rates are on the way up and investors look set to focus on yield rather than quality. Charles Olivier reports on borrowing strategies.
Quality issuers with AAA credit ratings such as sovereigns,
supranational banks, government agencies and blue-chip corporates
found it easy to raise debt last year. Investors had the jitters
and wanted safe bonds that were easy to sell. But there wasn't much
high-grade paper around for them to buy because many governments
had small budget deficits and were not issuing much debt.
As a result of this imbalance between supply and demand, most
AAA-rated bonds issued last year ended up oversubscribed even when
the rate of interest on offer was extremely low.
Many quality issuers saw the spread between their bond yields and
those of government bonds such as German Bunds or US treasuries
narrow to their tightest-ever levels during 2001.
| European sovereigns: projected capital
markets issuance '02 |
| |
Currency |
Amount (bn) |
| Italy |
euro |
146 |
| Germany |
euro |
136 |
| France |
euro |
83 |
| Spain |
euro |
36 |
| Greece |
euro |
28 |
| Belgium |
euro |
23 |
| Netherlands |
euro |
20 |
| Austria |
euro |
12 |
| Portugal |
euro |
10 |
| Finland |
euro |
8 |
| Turkey |
dollar |
3-Feb |
| |
| Source: market sources |
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