In the wake of the global economic crisis there are victims on both sides. Investors have excess cash but are afraid to move it. Issuers need to raise capital but are afraid to sacrifice their hard-won reputations with issues that flop.
What is the solution to this stalemate? Barclays Capital thinks it might be to build a book for floating-rate notes.
As the leader in sterling bonds and FRNs, Barclays Capital thought a little customer care was needed to start things rolling. Much as in the process of building a book for an equity deal, it has spent pre-launch time talking to investors in order more precisely to tailor deals to the risk-return appetite. And it is convinced that it has come up with some winners.
UK bank Alliance £ Leicester's three-year issue, launched on October 12, was initially expected to be issued at between £125 million ($212.5 million) and £150 million, yet ended up being oversubscribed at £200 million. Finance for Danish Industry (FIH) launched a £150 million two-year issue on October 28 that was also oversubscribed. And Barclays Capital has been mandated to lead-manage an FRN for insurer Irish Permanent, which is expected to be launched at the beginning of November.