Market mutterings fail to deter Malaysian bond

Roadshows for a debut euro-denominated bond offering by the Federation of Malaysia have begun, with opinion sharply divided on the merits of the transaction.

The BBBBaa2-rated sovereign's Eu500 million $428 million deal has been roundly panned by just about every DCM professional in Asia, with the obvious exception of its two lead managers Barclays and Deutsche. London syndicate hands, by contrast, report strong demand for the five-year deal, which is said to appeal to European bank buyers and smaller institutional accounts that hold euro rather than dollar paper.

Even in Malaysia itself, there has been a sharp division of opinion between Bank Negara, which has remained opposed to a euro deal from the very beginning and the Ministry of Finance, which wants to set a benchmark and diversify the sovereign's investor base. At issue is whether Malaysia...

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