The first Samurai: September survival

Send us Fan Mail◆ Slovenia debut emblematic of issuers tapping Japanese market despite carry trade chaos ◆ Being all things to all investors in the covered bond market ◆ Corporate issuers keep it short and sweetThis week we take an in-depth look at the techniques bond issuers are using in the race to get as much funding done before the US election. Benchmark issuance resumed early this year after the summer lull and it is clear that issuers are keen to get their bonds sold as quickly as possible. We focussed on three tactics.One was investor diversification. Slovenia made its debut in the Samurai market this week but it is not alone among what have traditionally been considered emerging market sovereigns in doing so. Mexico was a recent issuer and there are plenty of countries in the pipeline. We examine the attractions and difficulties of the Japanese market, especially in light of the recent market volatility caused by the Bank of Japan putting up rates and the effect that had on the so-called yen carry trade.We also looked into the diminishing demand for long-dated debt. Bonds with long tenors were a hot ticket all year but demand has dwindled of late. We find out why through the lens of the corporate bond market and what issuers are doing to adjust.In the covered bond market a third tactic was in play: appealing to as many investors at possible at once. TD priced a slug of covered bond issuance in euros this week that you would more commonly find in the dollar market for unsecured debt. We discuss what the Canadian issuer was trying to achieve, whether it succeeded and if the technique will catch on.