Global corporations are striking international deals at urgent rates. According to the following Reuters article, the race is on the feed the quacking geese in Taiwan mid-to-high 4% corporate debt:
Liquidity in the Taiwanese bond market is flush, with long-term buyers of debt, primarily life insurance firms, seeking creditworthy names and chasing higher yields. Blue-chip multinationals regularly issue dollar bonds of such size on the island, home to Apple’s supply chain.
In December, U.S. chipmaker Intel Corp sold $915 million of 30-year bonds with yields of 4.7 percent. A month later, global brewer Anheuser Busch InBev SA issued a $1.47 billion bond of the same maturity at 4.915 percent, according to data from the Taipei Exchange, the island’s over-the-counter market.
Cash-rich and yield-hungry investors in Taiwan have made the island a haven for debt financing. These investors tend to hold through maturity, letting issuers lock in cheap pricing.
“Taiwan insurance companies don’t have enough good (quality) fixed-income investment targets,” said an official at a local securities house, declining to be identified as he was not authorised to talk to the media.
“But their funds continue to grow because in this low rate macro-environment. Consumers prefer to buy financial products offered by insurance companies rather than park money in a bank deposit,” he said.
– Source: Roger Tung, Reuters [LINK]
Perhaps the American thirst for corporate debt quenched. But in Taiwan, where times are good, the demand to hold debt is high.
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