Banks and other financial companies accounted for about three-quarters of the $31 billion-plus of new bonds floated in the U.S. last week. Foreign financial firms pulled out their passports and traveled to U.S. markets for the majority of that total.
Rounding out last week's U.S. bank billion-buck borrowing club is BB&T
Foreign financial companies were busy loading up their credit cards on Wall Street last week. Nearly $15 billion, just under half the new bonds for the week, was from firms based outside the U.S. The six companies listed below made up most of that borrowing.
Home Country or Region
Bank of Nova Scotia
|Nordea Bank||Northern Europe||$2.75 billion|
|Bank Nederlandse Gemeenten||The Netherlands||$2.5 billion|
|Mizuho Corporate Bank||Japan||$1.5 billion|
|Itau Unibanco||Brazil||$1.25 billion|
|DBS Bank||Singapore||$750 million|
Corporate borrowers continue to bring plenty of bonds to market and foreign borrowers, especially financials, have been taking up sizable chunks of the low-rate dollars on the table. I haven't seen a good explanation for the uptick in foreign company activity in U.S. credit markets. Maybe it's just a coincidence that overseas borrowers are borrowing more greenbacks. Perhaps European bond markets are under some pressure from the sovereign debt drama, but that wouldn't explain Latin American and Asian companies' borrowing. My theory is the Fed's Operation Twist has made long-term U.S. interest rates too low to pass up and companies are funding operations and investments with cheap-to-borrow bucks. If so, it's nice to know the Fed is providing liquidity to the world.
Add a comment below to chime in with your thoughts on why U.S. credit markets are attracting borrowers from around the world.