Best at EMTNS
Salomon Smith Barney
Salomon Smith Barney's alliance with Nikko in Japan has been a key to its success over the last two years in the Euro medium term note market. Japanese investors have become large and eager buyers of credit in recent months and they have been takers of large numbers and absolute volumes of EMTN trades, mainly in yen. The EMTN market has changed from one based largely on structure risk - with popular trades ranging from simple interest rate plays such as capped floaters to more esoteric currency and cross-market bets - into a credit market. Japanese buyers, facing new mark to market rules, have lost much of their appetite for exotic structures which at any time might produce violent losses or gains if properly valued.
Japanese buyers account for over one third of the entire privately placed EMTN market, with a liking for European corporate and bank names. And SSB has something of a hammer lock on that distribution. Many dealers can tap the five or so huge Tokyo-based investment trusts that have provided large volumes of shorter-dated funding to EMTN borrowers, like BT, KPN and Vodafone, this year.