Eurobond Buyers Recoil as News From Iraq Muffles Bundesbank's Surprise Cut in Rates

The volatility hindered demand for the Canadian Province of Nova Scotia's $500 million offering of floating-rate notes, although the deal was seen as fairly priced. Lead manager UBS Ltd. was praised for bringing the five-year notes at a yield to investors of 27.5 basis points over the three-mon...

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Bibliographic Details
Published inWall Street journal. Europe
Main Author This article was prepared by Chui-Ling Tam, Justin Pugsley, Dan Weeks, George P. Bayliss, Henry E. Teitelbaum, Nicholas Elliott, Eric Van Zant, Allison Bisbey And Axel Bugge of Capital Markets Report
Format Newspaper Article
LanguageEnglish
Published Brussels Dow Jones & Company Inc 15.04.1994
EditionEurope
Subjects
Central banks
Discount rates
Eurobonds
Futures
Government bonds
Institutional investments
Interest rates
LIBOR
Monetary policy
Prices
Volatility
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Summary:The volatility hindered demand for the Canadian Province of Nova Scotia's $500 million offering of floating-rate notes, although the deal was seen as fairly priced. Lead manager UBS Ltd. was praised for bringing the five-year notes at a yield to investors of 27.5 basis points over the three-month London interbank offered rate for dollars. Interest floats at 0.1875 point above Libor. Initial response was positive for $250 million of three-year floating-rate notes by Banco Nacional de Comercio Exterior SNC, said a syndicate official at lead underwriter J.P. Morgan Securities Ltd. Bancomext, Mexico's national development bank, brought its notes at a reoffer price of 99.722 and a coupon of three-month Libor plus 75 basis points, a discount margin of 85 basis points over Libor. The official said most of the bonds have been placed and J.P. Morgan only has "a tiny residual position" left. Elsewhere, the Council of Europe Resettlement Fund joined the run on ECU bonds with 300 million ECU 10-year notes via lead underwriter Swiss Bank Corp. The bonds were to be priced early Friday at an indicated yield margin of between three and five basis points over the 6% ECU French Treasury of 2004. Underwriters said there is some demand for 10-year ECU bonds, but the spread looks tight.
ISSN:0921-9986