Borrowers: Borrowers start to play a strategic game
Borrowers have become aware that high-profile issues offer more than just finance. They are also a good advertising medium. When the City of Moscow recently launched its debut Eurobond, the effect was as much to publicize Russia's ancient capital, celebrating its 850th anniversary this year, as to raise finance. Bond launches attract the kind of people politicians and local government want on their side.
The Russian delegation may have overdone it when likening the discovery of Russia's financial marketplace to the discovery of America. But ironically this city authority is more highly regarded by rating agencies and the markets, than is the US capital, the District of Columbia.
Although the larger-than-life mayor Yuri Luzhkov failed to turn up to the city's roadshow, his efforts in imposing business-style on Moscow's finances have played a key role in providing investor comfort for the bonds.
