Читать книгу Financial Cold War. A View of Sino-US Relations from the Financial Markets онлайн

90 страница из 137

As a result of their painstaking efforts, the Autostrade bond was finally launched on 1 July 1963. The issue was for $15 million and had a term of 15 years, paying a coupon of 5.5 percent per annum. So pleased with the issue was the Autostrade executive who signed the deal that he promised Fraser a gold badge that would entitle him to lifetime free travel on all Italian motorways. However, such was the excitement of the issue that the Italian executive had a heart attack and died, so Fraser never received his badge.

Intrepid British bankers had gotten the ball rolling, but the growth of Eurobond issuance in London thereafter was accelerated by a development on the other side of the Atlantic that same month. The capital outflow from the US that had created the Eurodollar pool was raising concerns. American authorities began to exhort European borrowers to desist from raising capital in the US and to do so in their home markets instead. Nevertheless, Yankee bond issuance grew from $1.2 billion in the whole of 1962 to over $1.5 billion in the first half of 1963.ssss1 On 18 July 1963, President Kennedy announced a range of measures to Congress to address the balance of payments situation, key among which included the imposition of an Interest Equalisation Tax (IET) for a period of two years. The IET was levied on the purchase price of a foreign security bought by a US citizen, and was set at levels that ranged from 2.75 percent on bonds with a maturity of less than three and a half years up to 15 percent for long-dated securities.ssss1 The IET was eventually signed into law by Lyndon Johnson after Kennedy's assassination, but it was applied retroactively from the date of its announcement to Congress and had an immediate chilling effect on Yankee issuance. Morgan Guaranty Chairman Henry Alexander commented to colleagues at the time that ‘This is a day you will remember for ever. It will change the face of American banking and force all the business off to London’.ssss1 US investors’ purchases of foreign securities fell from $1 billion in the first half of 1963 to $250 million in the second half of the year. Meanwhile, new dollar-denominated Eurobond issuance grew from $35 million in the second half of 1963 to $545 million in 1964.ssss1