If Asian investors are feeling queasy about the prospects for the Eurozone, they did not show it in early September when the European Investment Bank (EIB) launched its latest euro-denominated benchmark. Bank of America Merrill Lynch, Deutsche Bank, HSBC and Nomura led this 10 year, €3 billion transaction, 51 percent of which was placed in Asia, with 47 percent of the bonds taken up by central banks, traditionally the lynchpin of Asian demand. It would be tempting - and comforting - to interpret this warm response as a strong vote of confidence in the prospects for the single European currency and as a signal that Asian institutions may be increasing their euro holdings. Eila Kreivi, head of capital markets at EIB's Luxembourg headquarters, confirms that Asian demand for top-quality European SSA bonds remains robust. Asian distribution, she says, has accounted for about 30 percent of the €71.5 billion that EIB had issued by mid-October, which represents a small increase in percentage terms compared with 2010.
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