In a highly unusual, although not unprecedented, move, Japan's Ministry of Trade and Industry (MITI) agreed earlier this week to guarantee a roughly ¥70bn ($510m) loan to the country that will be repackaged as a bond for international investors. The deal will be led by two Japanese houses - contrary to market expectations that any future international debt issuance from the country would start funding a restructuring of the banking sector, via mandated advisers JP Morgan and Salomon Smith Barney.
September 25, 1998