hard · Debt Capital Markets secondary-trading-liquidity
A corporate issuer is considering a 'Reverse Yankee' issuance.
Which of the following conditions would most likely favor this strategy?
- Euro-denominated interest rates are significantly higher than US Dollar rates.
- The issuer only has operations and revenue in the United States.
- The cross-currency basis is negative, making it cheaper to swap Euros back to Dollars.
- The US secondary market is currently undersupplied and trading at record-tight spreads.
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