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FOREIGN ISSUERS INCREASED USE OF U.S. PRIMARY MARKETPLACE SINCE MIDDLE OF LAST DECADE, SIA STUDY SAYS

 /ADVANCE/ NEW YORK, Jan. 5 /PRNewswire/ -- A widening spectrum of foreign corporate securities issuers since the mid-1980s has been joining what had largely been Canadian issuers and a few foreign governments in the U.S. primary capital market, a Securities Industry Association researcher said today.
 In addition, many of the issuers have significantly changed their method of issuance, using the private placement market more extensively rather than making offerings via Securities and Exchange Commission- registered securities, George R. Monahan, assistant vice president, research, said in the current International Capital Markets Review.
 Foreign new issuance in the U.S. public primary markets will continue to grow, but the advance is likely to be at a slower pace than in the private placement sector, he said.
 The costs and hurdles of government registration requirements will limit foreign growth in the public markets mainly to the additional capital needs of issuers which long ago chose to comply with these requirements to be a player in the United States, or to a few large issuers willing to absorb the costs of public ownership in the United States, he said.
 Since 1986, about 50 percent to 70 percent of total foreign new issues have been through private placements. Overall, foreign issues currently account for nearly 30 percent of the U.S. private placement new issue market, compared to about 4 percent of the registered new issue market.
 Use of Primary Market Now Seven Times 1985 Level
 Meanwhile, indicative of the growing number of foreign companies and governments using the U.S. primary market, annualized data suggest total foreign securities sold in the United States in that market in 1992 will approach $67.9 billion, seven times the $9.7 billion sold in 1985, Mr. Monahan said.
 After a relatively stagnant first half of the decade, when foreign sales in the primary market ranged from a low $7.4 billion in 1983 to a high $9.7 billion in 1985, foreign issuance, except for a decline in 1990, has increased every year from 1986 through 1992, SIA said.
 Recent use of the U.S. primary market reflects a variety of factors, including the overall attractiveness of the U.S. marketplace, the largest and most efficient market anywhere; a lowering of some regulatory barriers, including introduction of SEC rule 144A; low interest rates relative to the Euromarkets; and a favorable dollar exchange rate.
 Further, these factors occurred at the same time U.S. institutional investors sought to substantially increase foreign holdings, Mr. Monahan said.
 British Issuers Most Extensive Foreign User
 Currently, in terms of equities, the most extensive use of the U.S. primary market is by British issuers, followed by Mexican issuers. Combining 11 months of underwriting data and six months of private placements, British issuers sold over $2.5 billion in equities in 1992, while Mexican issuers sold nearly $2 billion.
 From the second 1990 quarter through mid-year 1992, at least 145 issuers have privately placed more than 270 issues through rule 144A alone.
 And, in the second quarter 1990 to second quarter 1992 period, issuers from 33 nations and at least one supranational, Eurotunnel, have utilized "144A" to bring privately placed securities to U.S. investors.
 In the primary market, proceeds from the sale of securities usually go to the securities issuer, compared to the secondary market, such as an exchange market, in which the proceeds of a sale go to a shareholder. Most investors in the private placement market are large institutions which are considered highly knowledgeable about the marketplace and its risks.
 Rule 144A relaxes restrictions on issuers if they place securities -- which aren't publicly traded in the United States -- only with sophisticated institutional investors. As a result, the equities side is largely used by foreign issuers. U.S. issuers still dominate the debt side.
 Among foreign debt issuers, the Canadians have been the largest issuers, alone matching the total of all European nations including the United Kingdom.
 ICMR is an SIA subscription-based publication.
 SIA is the securities industry's trade association, representing the business interests of nearly 700 securities brokerage and investment banking firms in the United States and Canada. Collectively, they account for more than 90 percent of securities activity in North America.
 -0- 1/5/93/1830
 /CONTACT: Art Samansky or Karen San Antonio of SIA, 212-608-1500/


CO: Securities Industry Association ST: New York IN: FIN SU: ECO

SH-GK -- NY060 -- 1812 01/05/93 14:17 EST
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