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ASIAN ISSUERS LOOK TO TAKE ADVANTAGE OF MARKET'S DEPTH AND LIQUIDITY
Over the past several years, the world's financial markets have undergone a great deal of change. Today, borrowers from around the world issue debt in a variety of markets and in an endless array of currencies and structures. With easier access to the world's capital markets and with the development of swap and derivative products, international treasury officers are now afforded a multitude of options to satisfy their funding requirements. In the process of seeking the most efficient means to raise long-term debt, a growing number of non-US borrowers have entered the Yankee bond market and have come to benefit from the market's inherent depth and liquidity. The increasing issuance of Yankee bonds -- bonds issued by non-US banks, corporations, finance companies, governments and supranationals -- has not only been a function of the growing credit demands of international borrowers, but also is a result of the strong interest that US investors have for new names and credits. As these international borrowers and US investors have come together, the Yankee bond market has grown from a US$10.1 billion market in 1989 to a market which has more than tripled in size to US$38.2 billion by 1993. More than 170 borrowers have utilized this growing market since 1988. In the last two years, Merrill Lynch alone has brought 14 first time Yankee issuers into the market. In particular, corporate and government issuers throughout Asia are playing an important role in the expansion and development of the Yankee bond market.
NEW ISSUES
The increasing attractiveness of the Yankee bond market as a fund-raising source for a variety of non-US borrowers is evidenced in the changes in the market over the past three years. In 1991, 57 Yankee bond issues were completed totalling US$17.1 billion. 42 separate borrowers entered the market that year. Much of the volume was concentrated in issuance by Canadian provinces and corporates (48.3%), with the balance coming from Europe (29.0%), Asia (9.2%) and supranational issuers (13.5%). By 1993, Yankee bond issuance volume had grown to US$38.2 billion, an increase of 223% over 1991. This volume consisted of 136 issues for 82 separate borrowers.
While highly rated sovereign borrowers dominated Yankee bond issuance...