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How Japan tips money down the drain

Japan's public-sector institutions have the luxury of borrowing with a guarantee from their government. But they waste the opportunity, paying as much as 10 basis points more than they should for funds. The reason: lack of professionalism and bureaucratic meddling. Garry Evans reports.

How Japan borrows too dearly
(Spreads, in basis points, over US treasuries ofselected fixed-rate dollar bonds in 1996)
Five-year issues
United Kingdom 5
World Bank 7
Inter-American Development Bank 8
General Electric 8
Crédit Local de France 11
NTT 11
Toyota 11
Bayerische Landesbank 13
Canada 14
Export-Import Bank of Japan 14
France Telecom 15
Toyota 15
10-year issues
European Investment Bank 17
World Bank 18
Österreichische Kontrollbank 23
Kansai International Airport 27
Japan Highway 28
Metropolis of Tokyo 28
Canada 29
Trans-Tokyo Bay Highway 29
Japan Highway 30
Kansai Electric Power 32
Metropolis of Tokyo 34
JFM 34
Finland 36
JFM 37
East Japan Railway 39
(Japan government guaranteed issuers are in bold)
Source: CapitalData Bondware

Japan's 12 public-sector borrowers have become a bit of a standing joke among investment bankers in London.

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