Activity in the international bond market has been surprisingly frantic so far this year. Even allowing for the January spurt that, as expected, followed the lull at the end of 1997, volumes of issuance are unusually high. "We have seen a staggering amount of issuance in the market place" says Paul Richards, managing director of investment grade syndicate and secondary trading at Merrill Lynch. Says Jerome Lienhard, corporate treasury manager at Toyota Motor Credit: "It is surprising how much volume there has been, even though a lot of issues were withheld in the last quarter of last year."
Up to February 17, bonds worth $155 billion had been issued in 599 deals this year. This compares with $126 billion in 780 issues during the same period in 1997. Growth of almost 20% is surprising given market uncertainty since October last year.
While conditions are more favourable than at the end of 1997, "it continues to be a relatively challenging market for any issuer", says Linda Knight, senior vice-president and treasurer at Fannie Mae. She attributes any anxiety to "the ongoing effects and changing nature of the Asia crisis, and thoughts of the onset of Emu".