Top investors are reacting online to the recent news regarding Saudi Aramco’s favourable bond sale. The Saudi state-backed oil producer’s first international bond sale has drawn more than $100bn in orders, prompting the company to increase the amount it will be raising to $12bn. When news of this record breaking occurrence first broke, investment industry experts immediately began comparing the bond sale to that of US pharmacy group’s CVS Health bond sale of $120bn which backed its acquisition of Aetna in 2018.
This was not typed by a robot! Electronic trading is the new norm…the days of traders waving their hands around on open cry markets are gone. Automated trading is fast becoming the new normal in the global fixed income markets. There’s always been an element of programmed trading in the major bulge bracket banks, Merrill Lynch, Goldman, Morgan Stanley and others.
A bank's capital base was the buttress of its assets and its hedge against the risk of lending. Now that balance sheets are swapped and un-swapped, and now that the balance sheet itself is but the surface trace of an enormous well of contingent assets and liabilities, that's no longer true. The leading American banks now shelter assets worth two or even three times the value of their balance sheets --. all of them highly liquid and subject to the increasing volatility of the traded markets. So now there's only one protection against the chill uncertainties today's exposures contain, and that's information