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This article focuses on Japanese bankers' business exposure in Mexico. Over the weekend, Japan's business daily, the "Nihon Keizai Shimbun" had obtained and published a confidential list of individual banks' exposure in Mexico. Top of the list were four banks with total exposure of $1 billion each--Bank of Tokyo, Fuji Bank, Dai-Ichi Kangyo Bank Ltd. and Sumitomo Bank, closely followed by the Industrial Bank of Japan, with almost $900 million at risk, and Mitsubishi Bank, with $850 million. The numbers were highly embarrassing for Japan's top international banks, but more embarrassing still were the paper's estimates of Mexican exposure as a percentage of the banks' equity. The Bank of Tokyo was shown to have over 80% of its equity at risk in Mexico. Yasuda Trust and Banking's exposure was 77% of its capital. And other banks--the Long- Term Credit Bank of Japan, Tokai Bank, Mitsubishi Trust and Banking and the Bank of Yokohama --stood to lose over half of their equity if Mexico were to default.

The article focuses on financial regulations in Japan. The Japanese Ministry of Finance (MoF) is unforgiving towards lead managers who fail to support the price of Japan government guaranteed bond issues. But the right pricing insisted on by many Japanese borrowers is so unrealistic that the most established lead managers are now prepared to risk Japanese wrath. Some have let tightly-priced deals slip to their own market level and are now in the MoF's bad books. Others have turned down invitations. The latest Eurobond from Japan Air Lines (JAL), for $100 million announced on May 21, showed signs of a purge by the MoF, which owns 35 percent of the airline's equity and its syndicate. The bond market is awash with Japanese Eurodollar paper, much of it still unplaced. The majority of it is concentrated in the 10-year maturity sector. Toshiyuki Kozeki, deputy general manager of JAL's finance department, discounted any suggestion of a purge. There are indications that the cir- circumstances of the JAL deal imply a change in the syndication approach of some houses.

This article discusses issues related to corporate takeovers in Japan. Contrary to received wisdom, mergers and acquisitions have long been a feature of the Japanese business scene. The local business landscape is littered with the debris of takeover coups some successful, others not by predatory Japanese companies. Nevertheless, takeover activity, in Japan is expected to intensify over the next few years with local companies generally becoming more aggressive raiders. The principal reason for this is, that the long term appreciation of the yen against the U.S. dollar is likely to force a re-orientation of the Japanese economy away from export dependence. Expert managers will be under tremendous pressure, therefore, to show steady earnings growth in the face of a worsening operating environment if they are to create investor demand for the new paper, they must issue. Indeed, export managers have become desperate men. Exporters would be able to satisfy three major business goals by taking over companies not engaged in such export-linked business.

The article reports that Nomura Tourist Bureau (NTB), a travel agency set up by Nomura Securities Co. of Japan, organizes lecture tours around the major financial institutions and industrial centres of the world. Originally, the NTB provided cheap travel for jet-setting Nomura executives only, but soon anyone could join a touring party, whose size can vary from two to 400. Each trip has a specific theme. Most have a financial flavour, but they can concern any topical issue. ranging from property development in China, or the future of western society, to expansions in specific businesses. Each tour is coordinated with the help of Nihon Keizai Shimbum, a major Japanese financial paper, or Nomura's business associates in relevant countries. A party will expect to leave with an NTB guide, acquire a local interpreter en route and be subjected to a rigorous regime of lectures by academics, economists, representatives of banking institutions and industry and civil servants. The NTB is particularly proud of its Chinese connection. INSET: You American? Read this..

This article focuses on how corporate finance, Kleinwort Benson International Inc.'s major strength in the Japanese market in the bank's representative office days, is also an important part of the new securities company. Kleinwort Benson has been particularly strong in the equity warrants sector, one of the growth areas in the Euromarkets, and claims third spot among foreign companies in the dollar equity warrants league table, having managed deals for over 60 borrowers in 1986. It attributes this not only to traditional corporate finance strength, but also to its market making reputation in London and Tokyo in the equity linked sector, and its swap capabilities. Although a relative latecomer to commercial paper, KBII's corporate finance team has made an impressive start in what is also a new area for most Japanese companies. It is also one of the leading players in Eurodollar straight issues by Japanese borrowers, with numerous co-managements and co-lead managements for such names as Industrial Bank of Japan and Nippon Credit Bank in 1986.

This article focuses on Chase Bank's investment banking operations in Japan. Chase has placed considerable strategic emphasis behind its investment banking activities in Japan because of the Japanese markets increasing attractiveness to overseas borrowers. Another important reason is that more Japanese corporations have started to look beyond their own domestic capital markets to overseas markets such as the Swiss francs to finance their international expansion. In Japan, Bank's investment operations are headed by senior managing director Hasan Askari. Askari and his team are able to offer a complete range of investment banking products and services. The most recent addition to Chase Japan's capabilities, a trading and distribution capability through securities trading license awarded to LM Securities earlier this year, supports the investment banking thrust. The Chase Investment banking arm had already moved to establish itself as a leader in a number of fields particularly those of leasing, private placements and Eurocommercial paper. INSET: Hasan Askari..

This article focuses on Japan's increasing influence on world market. International bankers and borrowers are well aware of the need to keep up to date with developments in Japanese finance. The problem is that deregulation in Japan proceeds in bursts, most of the time it's at a standstill but, when it moves, it does so at lightning speed. Signs are that a period of rapid deregulation is about to hit Japan. The auction system for government bonds is soon to be extended to six,15, and 20-year maturities. Domestic commercial paper looks set to start in October this year; significantly because this knocks the first big hole in the barriers between the banking and securities industries both banks and securities houses will, be dealers. And the government is discussing ways of breathing life back into the domestic bond markets. Whatever happens, Japan is going to play an increasingly important role in world finance. One Japanese newspaper went so far as to use the expression "Pax Japonica" to describe Japan's future position in the world economy. The newspaper argued that Japan looked set to take over the leading role at present occupied by the United States.

This article reports that a push came to shove for Connecticut-based GTE Finance, which did its first shogun issued in February 1987 after being courted by Japanese bankers for nearly six months. William P. Benac, president of the company said that, the company had a tremendous increase in the number of Japanese banks visiting it in Stamford. Of course, this captive finance subsidiary of GTE already had extensive relationships with a number of those banks, and it was natural, said Benac, to pick one to lead the deal. This single-A borrower, however, is no stranger to financial innovation abroad. It has borrowed extensively in the Euromarkets, through dual currency bonds, and through foreign currency issues denominated in Swiss francs and Ecus. Benac said he had been looking at the Japanese markets since summer 1986, but held off until the U.S. Internal Revenue Service clarified the tax status of bonds issued in Japan. When that came last winter, the company hopped in, filing the appropriate papers, and, having chosen the Industrial Bank of Japan as its lead commission bank, made sure in covenant negotiations that there would be no provisions in the shogun issue that the company had not encountered in similar Eurodollar deals.

The article discusses the trend among Japan-based warrant-bond issues to gravitate to the market in London, England in spite of observers' views that the London's warrant-bond market is too small to accommodate the Japanese issues. Since 1986, London has handled nearly 1000 Japanese issues--compared to only 14 in Tokyo. Yet on the face of it, Tokyo is the logical underwriting city because the final demand for the paper is in Japan. The Tokyo underwriting business has become hamstrung by regulatory red tape. all that can have changes as the Japanese Ministry of Finance is showing signs to maneuver the trend to bring the entire business onshore. However, players from London are unworried. Companies such as Barings Securities maintains that issuers will keep coming to the city because they have had good experiences with previous issues. The bureaucrats' real concern, as Tokyo-based fund managers point out, is that if the London flood continues unabated it might destabilize the entire Tokyo stock market.

The article informs that Japanese investors, led by Tokyo's huge life insurers, are generally seen as the key swing foreign investors in Australian paper over 1992. While the range of holdings among individual life companies varies, industry estimates suggest that on average they keep one tenth of the 20% of their total assets allocated to foreign securities in Australian dollar bonds. Even on a conservative basis this indicates life company holdings alone of around A$20 billion. Increasingly the Japanese life companies and trust banks are being joined not only by other institutions like the fire and marine insurers, but also by retail buyers. Most of the big eight life companies have subsidiaries in Sydney to manage their extensive portfolios. But despite what is plainly a long term commitment, the fear is that life companies will face official pressure to repatriate funds to bail out the stricken domestic stock market. At the same time life company bosses are known to be tired of the endless foreign currency losses they have made on their foreign investment.

The article informs that investors and stock analysts will be playing a key role in reshaping corporate accountability, as Asian equity markets become more open. Many chief executives in the region are fast realizing this. Much needs to be done. In the emerging markets, there is a broad sweep of companies that still operate very much as if they were privately-held entities. In these markets, investors do not hesitate to use sharply critical language when describing the management. Even in the more developed markets, a handful of corporates are notorious for their constant paper shuffling. The article produces separate rankings for companies which investors and analysts consider as having the most deficient senior management and three of the smaller companies with the brightest outlook for profits growth. Where there is a consensus view, results are also presented in the following pages. A total of 143 returns were received by the authors over a four-week period. Of this total, 98 forms were sent in by institutional investors. About two-thirds of the returns were from Asia-Pacific investors while the balance came from those based in Great Britain, continental Europe and Japan. Equity analysts based in the Asia Pacific region submitted 45 returns. One of the biggest drawbacks of ranking companies in this poll is that it excludes all non-listed companies.

The article presents information on the world bank's obsession for liquidity. Kenneth Lay, director of the bank's financial operations department, thinks nothing of calling up dealers in his outstanding yen global bond issues and asking them whether they have noticed widening of their spread to Japanese government bonds. He badgers his largest investors to make their bonds available by repurchase agreements and bond lending. Liquidity concerns dictate the structure and timing of the bank's deals. The bank believes its paper can outperform larger Eurobond issues because the global structure gives it a diversity of demand, in terms of geography and investor type. To promote the greatest possible liquidity the bank had not only to reduce these costs and make it easy for us investors to trade the paper, it also had to ensure that the deal remained well grounded in the German domestic market. World Bank paper has remained in the top 10 bonds traded through Euroclear for up to 20 months.

This article focuses on Ryoei Saito, the former honorary chairman of Daishowa Paper Manufacturing Co. Ltd., who is awaiting trial for allegedly paying Y100 million in bribes to a government official. The central bank of Japan, the Bank of Japan, the Ministry of Finance of Japan and the public prosecutors who are fighting the case against Saito, maintain that Saito is one of those who were responsible for Japan's bubble economy in stock and property markets and the subsequent collapse of the Japanese financial system. According to the author, Saito has long been viewed as a figure who has flouted traditional Japanese business and social practices and, in the process, earned the wrath of the nation's conservative ruling elite. It is worth mentioning that Saito is unlikely to face serious punishment for his alleged crime. This is because in Japan, symbolic victims of the bureaucrats' purge have been given less than severe sentences, despite extensive defamation in the official press and at the hands of prosecutors. INSET: Searching for scapegoats..

Japanese banks are stepping up their lending to North American borrowers, seeking a higher profile in the us syndicated loan business and in a few select cases, entering the active secondary market for bank assets. A small group of Japanese long-term credit banks and city banks are now regularly being invited into large, high-profile deals. These include Fuji Bank Ltd., Industrial Bank of Japan, Long-Term Credit Bank of Japan, Bank of Tokyo and Sumitomo Bank. Japanese bankers remain cautious lenders in the us, according to many market sources. They are not interested in the junk end of the business, such as leveraged buy-out refinancings for below-investment-grade borrowers. The Japanese banks are keener on investment-grade credits, preferably single-A rated or higher. And they are more attracted to revolving credits raised to back up commercial paper issues than to fully-funded term loans. It is a safe but limited strategy. The drawback for Japanese lenders is that enormous competition for this business between the leading us banks has squeezed loan margins. The U.S. banks' response has been to underwrite investment-grade loans aggressively, pick up primary market fees and then sell down to over-capitalized, asset-hungry regional banks.

The article focuses on Nomura International PLC. Nomura International PLC (Hong Kong) yearns to be taken seriously. After 33 some what pedestrian years in Hong Kong and the region, it wants to shed the image of being a mere branch office of its Tokyo head-quarters. No effort is being spared. Already, by moving its Asian regional offices to Hong Kong and Singapore less than two years ago, Nomura International PLC has done what no other Japanese securities company has attempted before. In the early 1980s, Nomura International was little more than the sales office for Japanese securities in Asia. Then, as the Nikkei 225 plummeted towards the end of the decade, it ventured offshore and dabbled in debt and equity origination. Its poor understanding of Asian risk and the quick boom and bust cycles of emerging markets, however, bruised it badly and left an inventory of expensive paper. In Taiwan, Nomura International Inc. arranged a US$45 million Euroconvertible bond for Acer Inc., which bombed following its launch. The bond was launched despite uncertainties about the company's fundamentals.

Depressed equity prices have already twice delayed the listing of Japan Tobacco Inc. (JT). The launch is now scheduled for October 27, 1994, and when it does come, it is unlikely to be a success. There is fear that JT might absorb liquidity from the market in the same way as the listing of East Japan Railways Corp. (JR East) last year. JT is regarded as a much lower-quality stock than Nippon Telephone and Telegraph, which in 1987 became the first government monopoly to be listed. Although strictly speaking a spin-off from JR East rather than a privatization, Japan Telecom deal tested the capacity of Japanese equity markets to absorb a sudden addition of expensive new paper. Shortly after Japan Telecom was listed, Nikkei index fell below 20,000 for the first time since May 1994. Securities industry is trying to warn the ministry of finance to keep its needs within bounds of the market. Japanese dealers are also said to increasingly favour British approach of selling off state assets to the public at reasonable prices.

On March 28 1995, the Japanese press got one of its rare scoops. Mitsubishi Bank and Bank of Tokyo, the papers announced, were preparing to merge and form the world's biggest bank. The news was a godsend for the country's banks, just three days away from the end of the financial year. The Nikkei 225 rose 3.6% the day the story broke, giving them a chance to sell equities just in time to boost their profit figures. As one group of analysts marvelled at the "synergy" and "farsightedness" of the deal, another camp was questioning whether the merger was driven by commercial considerations at all. David Snoddy, a financial analyst at Jardine Fleming Securities in Tokyo, was quick to describe the leaking of the news - a week before the official announcement - as "the short-term part of the finance ministry's Tokyo-Mitsubishi plan". Despite the partners' claims to be creating the world's first megabank, many analysts believe that to call it a bank at all is a misnomer. They see it rather as a giant vacuum cleaner, assembled by the Ministry of Finance to hoover up some of the trillions of yen in bad debts undermining the Japanese financial system. INSET: ... or the world's greatest bank?.

Two years after it was created to centralize borrowing for the state of Victoria's official bodies, Treasury Corporation of Victoria (TCV) has won a special place among Australian issuers. Investors have been wooed by the improvement of Victoria's economic fundamentals, its attention to investor relations, and the creation of liquid benchmarks throughout its maturity profile. Together, these have helped the state narrow the spread between its bonds and those of the Commonwealth from 130 basis points (bp) in October 1992 to 40bp last month. TCV's liabilities amount to about $36 billion, mainly in the form of bonds. About a third of that total is in international bonds and shorter-term paper, with a similar amount in the domestic market. The remainder is in the form of annuities or loans from the Commonwealth governments according to TCV managing director Wayne Jarman. In its foreign borrowing, the state has a strict policy of neutralizing exchange risk through currency swaps. Over the past nine months TCV has raised the equivalent of $1.2. billion in Japan, where it has found a favorable audience with both institutional and retail investors.

The article focuses on the Korea Development Bank (KDB) that has launched US$500-million of Yankee bonds just five weeks after it sold a Dm500-million (US$35 1-million) issue. The fixed-rate bonds carry a coupon of 6.5% and have a seven-year term. Lehman Brothers and Salomon Brothers were joint bookrunners on the deal, which was priced at 75bp over Treasuries at launch. The issue came at a time when the market was feeling the pressure from the higher funding costs faced by Japanese banks in the interbank market. Some Japanese banks had been selling securities in the past month, resulting in spreads widening substantially across the board. Korean paper has been particularly affected, and the larger spreads, known as the Japanese premium, have been reflected in the pricing of new issues as well. The weak market conditions also influenced the maturity that the KDB settled for. The bank had been looking at a 10-year issue, but the pre-market analysis suggested that only a shorter-term issue would be acceptable. The bank then had to agree on a seven-year maturity.

This article informs that the Japanese stock market is being flooded by massive new issues, privatization IPOs and corporations selling their shares in other companies. All as individual and international investors are withdrawing their support. On August 28 the Bank of Japan (BOJ) released an unexpectedly pessimistic assessment of Japan's economic prospects for the next quarter, the most heavily-traded shares on the Tokyo stock market belonged to TYK, a little-known maker of heat-resistant bricks for the Japanese steel industry. In contrast to the BOJ's near-term economic outlook, or "tankan," which stated that an increasing number of Japanese manufacturers foresaw worsening conditions in the next three months. The custom among Japanese corporations of holding shares in other companies, an arrangement that had shored up share prices by keeping more than half of all issues out of circulation, began to unravel, resulting in a flood of paper being released into an already illiquid market. Japan's big banks, still smarting from writing off bad debts, were reported to be ready to launch big new issues in order to maintain capitalization requirements.

The article presents a special report by WestLB AG on the implications of deregulation in Japan. For Japan, the end of 1996 came with the most radical package of deregulatory measures in two generations. It was a belated acknowledgement that the Japanese postwar economic model had broken down and the time had come to chart a new course. The principle goal is to restore international competitiveness by reducing the cost of doing business in Japan. In 1996 July, Shusei Tanaka, then-director general of Economic Planning Agency, identified five major areas in urgent need of reform: telecommunications, transportation, finance, land and housing, and employment. Allowing market forces to prevail in these areas would bring about large price reductions and thus decrease key business costs. This logic was illustrated in 1996 April in a white paper prepared by the Small and Medium Enterprise Agency arguing that a 10% reduction in the cost of distribution, energy, and financial services by the year 2000 would enable small companies to increase output by 3.9%.

Presents developments concerning capital market offerings by Japanese banks as of october 3, 1997. Sumitomo Bank's issuance of the third of three 50 billion yen batches of asset-backed commercial paper (ABCP) from Pegasus Funding Corp.; Sakura Bank's sale of ABCP in the second issue from its Prime Funding Corp. program on September 25, 1997.

Reports that the Industrial Bank of Japan (IBJ) is gearing up to defend its home turf against the world's most powerful financial institutions. Rationale behind Japan's long-term-credit-bank system; Career history of IBJ president and chief executive officer Masao Nishimura; Financial deregulation in Japan.

Reports on the plans of Japanese banks to sell an additional $500 million in paper before April 1998. Industrial Bank of Japan; Sanwa Bank; Mitsui Trust Bank; Hokkaido-Takushoku Bank; Long-Term Credit Bank of Japan.

Reports that Fuji Bank and other Japanese original lenders sold Montgomery Ward bank debt to hedge funds in a scramble to unload the paper before Japan's fiscal year-end in March 1998. Pricing; Bank of Nova Scotia leading the credit.

Reports that a working party formed by the Japan Securities Dealers Association and the Tokyo Stock Exchange has drafted a concept paper outlining rules for the establishment of an onshore securities lending market in Japan. Establishment of reporting and disclosure requirements firms should follow before engaging in lending or borrowing activity; Modeling of Japan's securities lending market after those abroad.

Reports on the Japan Securities Dealers Association's plan to amend its rules to reflect the industry's use of the Internet. Prohibition of firms from sending prospectuses, confirmation reports and research over the Internet under current rules.

Focuses on the impact of Japan's financial crisis on the rest of East Asia. Need for more capital by East Asian economies; Value of United States takeovers in Asia in 1998; South Korea President Kim Dae Jung's belief that foreign investments will solve the financial crisis in the country.

Focuses on the growth of Japanese strategic alliances with foreign companies. Factors driving the growth of mergers and acquisitions; Average transaction of mergers according to Isao Yamamoto, investment banking manager at Merrill Lynch Japan; Details on some merger deals in Japan.

Reports that NTT DoCoMo company could raise up to 19.5 billion yen from a partial listing of the first section of the Tokyo stock exchange in July 1998. Obstacles faced by the company; Market share of the company; Views by analysts on the company.

Points the opportunities open to Japan while facing economic crisis. How the crisis affected the financial industry of the country; Benefits the country will get in restructuring the economy and implementing reforms for market deregulation.

Emphasizes the importance of investment management to Japan as it pursues economic reforms. Investment opportunities in Japan; Deregulation of the capital market; Entry of foreign financial institutions to Japan's domestic market; How can Japan become an international player in global capital market.

Surveys the views of several international asset management companies that are vying to capture a share of Japan asset management market. Key developments in investment management industry in Japan; Strategies of the asset management companies; Interest of Japanese investors to invest overseas.

Analyzes the trend in the asset securitization market in Japan. Projected growth in the volume of securitized assets in the country; Entry of European and Japanese investors to arrange for deals on asset securitization; Capability of Japanese domestic market; Impact of the trend to domestic and international businesses.

Cites the growth of Japanese asset backed commercial paper (ABCP) market. Status of short-term financing rates of companies from the banks; Difference of ABCP market from the securitization market.

Deals with the challenges facing Japanese debt issuers. Attitude of international investors to Japanese debt market; Companies that are favored by foreign investors; Opportunities in the capital market if reform and deregulation will be implemented.

Interviews the officers of some of the major financial institutions in Japan. Difficulty facing corporate issuers in Japan to find financiers; Impact of the financial crisis in Asia to Japan; Strategies of major financial institutions to deal with the crisis; Their absence in the global capital market.

Discusses the status of Japanese equity market. Increase in demand for stocks; Trend in the market; Opportunities open to fund managers; Opinion of some analysts on the economy.

Focuses on rumours which speculates that Japan will cause financial confusion by transferring its United States government bond holdings. Comments by Kathy Matsuil, Goldman Sach's chief strategist in Tokyo, Japan; Transformation which occurred in the economic relationship between Japan and the US; Reference to the Japanese entities transferring some of their US securities between November 1997 and February 1998.

Reports on the financial conditions of life insurance companies in Japan. Causes of mutual insurance companies' brush with bankruptcy; Threats to the industry's solvency; Solvency test; Entry of foreign capital into the market; Flight from equity investments; Credit ratings of the country's largest life companies. INSETS: GE's unusual route to Japan;The lure of a listing.

Reports on the challenges faced by Japan Financial Supervisory Agency (FSA) Head Masaharu Hino in reestablishing trust in the country's bank inspection system following corruption scandals that hit the Ministry of Finance early 1998. Background on the establishment of FSA; Main responsibilities of Hino; Problem on the lack of experience among the FSA's corps of inspectors.

Announces the return of Thailand to the international bond markets by January 1999, with a bond guaranteed by Japan's Ministry of Trade and Industry (MITI). Details on the offering; Comments from bankers about the issue; Information about the bond markets.

Reports on the bankruptcy of Japan Leasing Corp. Significance of the company to the asset backed securitization market of Japan; Efforts of the government to protect the company from total collapse; Details on the financial problem of the company.

Presents several articles pertaining to international bond issues. Rating of the European Investment Bank; Issue price of Merrill Lynch & Co.; Emerging markets debt at Argentina; Bookrunner's comment on National Bank of Hungary; Market appraisal for the Republic of Turkey; Asset-backed securities in Japan; Guarantor of Countrywide Home Loans; Rating of Bank Nederlandse Gemeenten NV; Bookrunner's comment on General Electric Capital Corp.

Analyzes the status of the real estate markets in Asia. Background information on the market status in Japan; Difference between the Japanese and the rest of Asian markets; Significance of diversification.

Reports on Japan-based Showa Leasing's launch of a securitization in the Euromarkets. Total worth of the deal; IBJ International as the deal's lead manager.

Reports on development related to the securities market in Japan as of January 29, 1999. Includes Ricoh Leasing's launch of securitization of small ticket leases from the country; Mitsubishi Auto Lease Credit Corp.'s securitization of automobile loans through Tokyo-Mitsubishi International.

Reports on the success of the offering of Japanese-government-guaranteed floating rates notes by the Export-Import Bank of Japan through lead manager Paribas Capital Markets. Total amount of issue; Significance of the note issue to other Japanese issuers and the Japanese financial system; Rating of Japanese credits; Other Japanese firms which are expected to issue guaranteed notes.

Provides data concerning international euro-denominated bonds launched by Japan Finance Corp. for Municipal Enterprise on February 16, 1999. Rating and amount; Coupon and maturity; Issue price; Fixed re-offer price; Spread at re-offer; Lead manager; Comments of borrower and bookrunner; Market appraisal.