Content area
Full Text
TAIWAN'S banks have been hesitant to tap the international markets this year. Some banking analysts believe that the local banks have missed an excellent opportunity to raise low cost debt, equity and equity-linked finance overseas while Taiwan remained relatively isolated from the general misery throughout Asia's financial markets.
But other market professionals point to the liquidity available to Taiwanese banks in the domestic capital markets and therefore see international fund raising by the local banks largely as an occasional alternative, not a necessity.
Says David Kao, director at Merrill Lynch in Taipei: "Taiwanese banks are in general well capitalised which is a tribute to the sound regulatory framework and stable economy. The main motivation of the local banks to tap the international markets is therefore diversification of investor base and source of funding."
Merrill Lynch has led the two key banking sector transactions of 1998, achieving tight pricing for Chiao Tung Bank's $300m floating rate note (FRN) in late April and successfully establishing in early July the $750m Euromedium term note (Euro-MTN) programme for Chinatrust Commercial Bank.
Chiao Tung's $300m subordinated FRN was...