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Non-Core Bond Markets Roundtable 2007

Throughout 2006 and the early part of 2007, the non-core currency bond markets have continued to offer opportunities to borrowers and investors alike to enter arenas away from the mainstream markets. While some, such as Australian and Canadian dollars, can now boast strong domestic demand buoyed by interest from international investors and all the incremental size possibilities that confers, others have relied on local buyers, while the use of the market to gain a speculative currency position has added yet another layer. With the markets...Read more

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Non-Core Bond Markets Roundtable 2007: Participants

Holger Kron - Deutsche Bank Holger Kron is a managing director and head of niche currency Eurobonds and corporate credit retail at Deutsche Bank. He joined the bank in 1989 in the equity trading business before transferring to fixed-income trading in 1991. In 1998 he started to develop a market in Eurobonds denominated in Eastern European currencies and since then the number of other currencies has steadily grown into other regions to become an integrated niche-currency Eurobond book. In 2005 he took on additional responsibilities for the bank...

Non-Core Bond Markets Roundtable 2007: Part one

IFR: Issuance in non-core currencies has historically tended to be dominated by large, generally supranational and agency borrowers. Will they continue to dominate, or is there a possibility that banks or issuers lower down the scale could begin to investigate the opportunities to a greater degree? Michael Gower (Rabobank): Speaking as a bank, a non-supranational or agency borrower, I have to state that it is not purely an agency and supranational market. That being said, it is clearly a market that has been developed and dominated so far by...

Non-Core Bond Markets Roundtable 2007: Part three

IFR: There is a wealth of difference between some of the currencies we are talking about. Australian and Canadian dollars, for example, are going to be far more liquid than the smaller currencies, are they not? Michael Gower: I would not classify – either internally or publicly – Canadian and Australian dollars as niche currencies any more. I would call them the tier two currencies compared with euro, US dollars and yen – and sterling, we can discuss. But certainly, the markets are now mature enough domestically. Canadian dollars are a bit of...

Non-Core Bond Markets Roundtable 2007: Part two

IFR: Has the investor experience been positive as a result of involvement in the non-core markets? Holger Kron: If you take all non-core markets together, they have had a fantastic phase. Currencies performed much better than the theoretical forwards, so they earned the pick-up plus the currency performance. But in some – Icelandic kronor and Turkish lire, for example – the yield was not enough for the risk you took. And, basically speaking, people rely on additional performance because otherwise they would not get involved in those markets....

Non-Core Bond Markets Roundtable 2007: Part four

IFR: Back in Europe, why do you think the rouble market has been so disappointing? David Smith: A lot of the sophisticated investors have access to local sovereign issues. Yes, you have to remove some of the restrictions, but invariably we are looking at Russia as an investment-grade credit and therefore you do not necessarily need to buy a Eurobond. But also, I do not think you have seen the same growth in the domestic investor base for external assets. I think people would rather buy domestic credits in the form of equity as opposed to the...