let's bond

I saw today that Mauritius Commercial Bank had launched a bond on the London market raising $300m. This will undoubtedly bolster this well respected bank's core liquidity at a time of tightening correspondent bank credit lines, reduced loan syndication and all round choppy waters after the Credit Suisse debacle.

Of course raising money through a bond or equity issue requires a formal prospectus to be approved by the UK Listing Authorities - something I went through in the early 1980s when I administered issues of UK Government Securities (also known as gilt-edged stocks). A formal prospectus or notice in lieu of prospectus was needed. We recognised that the listing rules were complex and difficult to reconcile with the deposit-taking restrictions placed on non-banks an created a "professionals-only" market for sterling corporate bonds less than five years in maturity. These would be backed by a truncated prospectus to enable companies to raise short to medium capital. Later we introduced the exemptions for medium-term notes and commercial paper programmes.

I wonder if we should now create a similar market to attract issuers from around the globe, through a slicker regime that enables banks and other companies of size to issue without the mass of legal and audit officialdom that is currently to tied to a capital raising.

Professional investors do not need to be molliecoddled.