An unsure future
A consultation paper released by the Financial Services Authority, which aims to change the capital allocation practices of life assurers, may have wide ramifications on the bond markets. A particular area of concern is longer-dated paper, as Laurence Neville reports
According to market gossip, Electricité de France’s €300 million 20-year bond in mid-February was originally meant to carry a longer maturity. But investors baulked at the suggestion and the company was forced to opt for a shorter tenor.
The move, if true, reflects a substantial change in sentiment towards longer-dated paper in the sterling market and could herald a major change in primary market issuance. At the root of the change is consultation paper 195 (CP195) published by the Financial
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