THE LONG AND THE SHORT OF IT . . .
The first development - at the short-term end - was the opening of the sterling commercial paper (CP) market. That was announced by the Bank of England (BoE) on April 29. Under BoE rules, sterling CP consists of promissory notes with maturities of between seven days and a year. CP is usually issued at a discount to face value, but it can be interest-bearing. Sterling CP is an extension of the move made by the BoE in March last year to allow issues by UK companies of sterling domestic bonds with maturities of between one and five years.
The second development - at the long-dated end - was the spate of sterling Eurobond issues with maturities of between 17 and 21 years made by UK companies between March 19 and April 24. The first of these, for ICI and lead-managed by Lloyds Merchant Bank and Morgan Grenfell, was on the launch pad when it received an unexpected boost following the imposition by the Chancellor of the Exchequer of stamp duty on transfers of loan stock (sterling registered debt securities) during his budget on March 18.