A system crying out for reform

With the exceptions of Japan Development Bank and the Export-Import Bank of Japan, no Japanese agency issuer has managed to elevate itself to the top tier of Euromarket borrowers - despite being backed by one of the strongest credits in the world. Spreads are still wider than the credit quality shou...

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Bibliographic Details
Published inEuroweek : the Euromarket's first newspaper no. 481; p. 50
Main Author Evans, Nicolas
Format Journal Article
LanguageEnglish
Published London Euromoney Institutional Investor PLC 29.11.1996
Subjects
Airports
Bond issues
Bond markets
Borrowing
Capital markets
Development banks
Finance companies
Guarantees
Institutional investments
International finance
Investment bankers
Investment banking
Municipal bonds
Public sector
Rates of return
Spread
Japan
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Summary:With the exceptions of Japan Development Bank and the Export-Import Bank of Japan, no Japanese agency issuer has managed to elevate itself to the top tier of Euromarket borrowers - despite being backed by one of the strongest credits in the world. Spreads are still wider than the credit quality should warrant; liquidity in most bond issues is poor; and efforts at greater diversification have been hampered by Japan's arcane public financing rules. Some issuers are working hard to differentiate themselves in the eyes of investors, cultivate better relationships with investment banks and diversify their funding sources. Others are making little, if any, effort. Some bankers blame the issuers themselves; others lay the blame at the door of their guarantor, Japan's powerful and bureaucratic ministry of finance, for not allowing the agencies greater flexibility over their international financing. But one common theme emerges: the system needs to change. If the Hashimoto government is serious about its aim of rationalizing Japan's bloated public sector as part of the country's long-overdue Big Bang, now might be the moment.
ISSN:0952-7036