Issuer: Svensk Exportkredit
Amount: €10 billion
Programme launched: June 10 1991
Arrangers: BNP Capital Markets/SEK
The sudden reversal of dollar-yen rates in early May caught many investors by surprise. For the Japanese retail investors who had been profiting from dollar-bullish MTN structures for the preceding year it came as a rude awakening. "What has happened is very serious. There are a lot of investors who have lost large amounts of money," says Per Akerlind, executive director and treasurer at Svensk Exportkredit (SEK). "But then that is part of the game. Previously they may have been gaining."
Most had been gaining a lot. The dual-currency structures that had tempted them into the MTN market provided limited foreign exchange exposure to take advantage of the depreciating yen. By redeeming a yen-denominated principal in a foreign currency such as US or Australian dollars, investors were achieving yields of up to 25%....
