EuroMTS will launch EuroGlobalMTS, a market for the trading of euro-denominated securities issued by non-European Union governments, in mid-June.
The trading platform says the initiative broadens the scope of EuroMTS benchmark markets for euro-denominated bonds, which began with the establishment of the EUR 5 billion Eurobenchmark Bond in 1999 and continued through European Union enlargement to the launch of NewEuroMTS in 2003 for the euro benchmark bonds of the New EU Member States.
Issuers whose bonds would be immediately eligible for trading on EuroGlobalMTS include Bulgaria, Croatia, Romania, Brazil, China, Mexico, South Africa, Turkey and Venezuela. MTS says the new market will help promote transparent, efficient and liquid trading of these countries’ external euro-denominated debt, which is expected to grow if the euro continues to gain importance as a global currency.
EuroGlobalMTS will be governed by a committee composed of 12 investment banks that participate in the relevant securities markets. Involvement of the issuing entities will also be sought in the organisation of the new market. To be eligible for inclusion on EuroGlobalMTS, bonds from Central and Eastern European issuers must have a minimum outstanding size of EUR 500 million, whilst bonds from Latin American, Asian or other issuers must be outstanding for a minimum of EUR1 billion. Bonds must also have the support of seven market makers, which will commit to continuously quote selected bonds at an agreed upon maximum bid-offer spread and minimum size.
In addition to the dealers, MTS says it consulted all issuers affected, and secured “unanimous consensus with respect to the structure of the market and the expectation of creating the benefits associated with the MTS market model.”
“EuroGlobalMTS gives us an opportunity to increase visibility in the European capital markets and achieve higher investor penetration,” says Dragos Neacsu, Secretary of State at the Romanian Ministry of Finance. “We are very excited about having our bonds included in this new segment as we expect to see their liquidity grow through the established business model of EuroMTS and through exposure to a wider pool of international investors.”
“Turkey’s eligibility for four bonds on EuroGlobalMTS represents an important milestone, given EuroMTS’ status as the benchmark for European government bond trading,” adds Ibrahim H. Canakci, Undersecretary of the Turkish Treasury. “The inclusion of our bonds in this new market furthers our plans to integrate Turkish debt with the European capital markets.”