http://wolfstreet.com/2016/08/22/ecb-secretly-hands-cash-to-corporations-buys-bonds-private-placements/
According to Apostolos Gkoutzinis, head of European capital
markets at law firm Shearman & Sterling, cited by The Wall Street
Journal: because there is no prospectus or the other formalities
required in a normal bond offering, "there won't be any transparency,
there won't be a press release. It's all done discreetly."
...
Now,
the race is on for eligible companies to wet their beaks in this new,
much more discreet free-money fountain, while so-called "investors"
scramble to divine what the biggest fish in the pond is about to buy
next. If they're lucky they may even get a heads-up straight from the
horse's mouth.The ECB's favorite banks will also get juicy fees
underwriting the deals. The Journal reported that Credit Suisse has
already "reshuffled its coverage of national central banks" in an
attempt to tap into the new market.
...According to The Journal,
Citigroup figured "that bonds eligible for ECB purchases have already
outperformed ineligible bonds by roughly 30% since the bond-buying
program was announced in March."
It's Financial Darwinism writ on a heretofore unimaginable scale.
Thanks to ECB intervention, Europe's biggest companies with the
strongest finances -- including some that are majority state-owned such
as French energy giant EDF -- are gaining access to funds (many of them
public) quicker, more easily, and at cheaper rates than anyone else in
the market. From now on, they may even get the money in secret.
So... isn't the ECB now potentially tripping WTO anti-subsidy prohibitions?
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