Just a few days earlier, the description “explosives maker” next to one Spanish company lining up to sell junk bonds caused a mini-frenzy. The company, Maxam Prill, markets itself as a supplier to the mining industry but investors locked in on the possible military uses for the devices as they piled into the US$1.4 billion sale.
As NATO leaders huddled in The Hague in late June to iron out a plan to radically boost military spending, bankers in London were busy adding up the investor orders for a bond being offered by a little-known Czech maker of armored vehicles and ammunition.
The final tally: More than US$10 billion ($12.84 billion) for a sale that wasn’t even supposed to total US$1 billion. Thrilled, they quickly doubled the size to more than US$2 billion and slashed the interest rates they were offering.
