Financial Market Trends 35 [antikvár]

HIGHLIGHTS INTERNATIONAL FINANCIAL MARKETS The pattern of borrowing activity on the international capital markets has been undergoing major changes in the most recent period. Although the process of securitisation remains the dominant characteristic of international financial intermediation, activity has clearly tended to polarize in the two most dynamic market compartments: the euro-bond market proper and the newly-developing market for euro-commercial paper (ECP). Thanks to the extraordinary expansion of these markets, international borrowing broadly defined to include all types of facilities has been running at an annual rate of around $350 billion during the first nine months of the present year -- which represents a 28 per cent increase on a yearly basis. Borrowing on external bond markets has set a new all-time record of over $230 billion (annual rate), with a 33 per cent increase from last year's figure. The performance of the market is particularly impressive as far as offerings of straight bonds and equity-related issues are concerned, whilst the pace of issuing activity on the floating-rate note market has been on the whole lighter than in 1985, in spite of a significant recovery during the third quarter. Easier borrowing terms have provided a strong incentive to refinance older and more expensive bonds and the volume of early repayments of outstanding bonds has soared to $38 billion (annual rate) so far this year, as compared with $19 billion in 1985. All in all, bond offerings net of all principal repayments are running at an annual rate of approximately $170 billion this year, some $40 billion more than in 1985. New activity on the market for syndicated loans remains sluggish, with a volume of business hovering around $40 billion at an annual rate and negligible net demand for funds by high-quality borrowers. The market for underwritten facilities to back up the issue of other financial instruments has also suffered a major setback, with a decline in volume terms of some 45 per cent to an annual rate of only $26 billion. This decline has been more than offset, however, by the buoyancy of the market for euro-commercial paper facilities, which is currently growing at a rate of over $50 billion on a yearly basis. As a result, the overall share of facilities supporting the issue of money market instruments in total recorded international financing operations remains comfortably above the 20 per cent level first attained in late 1984. In a near-term perspective, the main forces sustaining the growth of the international market remain borrowers' emphasis on debt refinancing and the search for new and more diversified borrowing and investment outlets. In contrast with the experience of a few years ago, borrowing for balance-of-payments purposes is no longer the dominant factor determining the pace of market activity. Indeed, recourse to the international capital 5