Global banks turn to Japan for easy money raising through Samurai bonds

Discussion in 'Forex' started by ASusilovic, Sep 18, 2007.

  1. Banks are increasingly turning to Japan to raise debt as the credit squeeze in Europe and the US forces them to look to Asia to issue bonds. This month has seen a 600 per cent rise in financial bond issuance in yen-denominated paper, building on a trend since July when liquidity in the money markets began to dry up. Financial new issuance in yen stands at $9.94bn in September so far compared with $1.37bn during the same period last year, according to Dealogic, the data provider.

    A large slice of this has been raised by the big US and European banks, which have issued Samurai bonds - paper issued in yen by non-Japanese entities. Bank of America, Citigroup, Deutsche Bank, Morgan Stanley and Royal Bank of Scotland have all issued Samurai bonds this month.

    One banker said: "With assets migrating off bank balance sheets because of the problems in the money markets as they fund conduits and other structured vehicles - which can't raise money in the commercial paper market - financials badly need to find money elsewhere. Japan is the ideal place with demand still very strong for good quality issuance...Full article: Source

    Carry trade dead ??? Ha, ha, ha...:p :p :p