The extremely tight pricing of the three year transaction due August 25 2003 has provoked sharply differing reactions among Yen bond players. On the one side, outside observers argue that a launch spread of 65bp over Yen-libor is at least 10 to 15bp too tight, while lead managers Nikko Salomon Smith Barney and Nomura respond that a combination of factors enabled the deal to sell out even though it might initially appear aggressive.
Indeed in their efforts to convince the market that they had got it right, the two banks accompanied a tightening of the launch spread from 70bp to 65bp with a widening of fees from the customary 45bp to 50bp level...
