Liquidity, liquidity, liquidity
Outside Japan, Asian investors have become a rare breed in recent months. But they still exist, and the one thing they prize above all else is liquidity. Antony Currie reports on attempts to cultivate a group of investors whose importance can only increase.
Ford has a good history as a borrower, so it was no surprise that its $1.5 billion global in February was so well received. But in Asia as well? In the past, bankers would seldom recommend that single A corporate credits try to reach investors in Asia outside Japan. And yet, says Peter Charles, vice-president of fixed-income syndicate at Salomon Brothers, joint lead on the deal with bookrunner Goldman Sachs: "This deal was probably the best-placed corporate paper in Asia this year".
It's not that Asian investors have had a change of heart about the deals which interest them, but that the investor base has diversified beyond the traditional core of central banks and other government institutions. By nature these investors have always been conservative in their choice of paper. They would only consider double or triple A rated bonds issued by either a G10 member state, a borrower with sovereign status or a strong, well-known financial institution.
The favoured currency, unsurprisingly, has been the dollar. European government bonds such as gilts, Oats and Bunds have also been popular. But for borrowers other than the likes of Fannie Mae or the Italian government, it has rarely been worth even picking up the phone, let alone taking a roadshow to Asia.