Drexel Makes Glitzy Pitch for Junk Bonds in Tokyo

Drexel Burnham Lambert Inc., whose Beverly Hills office pioneered high-yield bonds, rolled out a bit of Hollywood glitz in Tokyo today to try to breathe life into the sagging U.S. junk bond market.

Japanese investors hold only about 5% of outstanding junk bonds and analysts fear that share could erode in the wake of highly publicized problems in the market.

Eight junk bond issuers, led by Drexel Chairman John Shad, made private pitches to local investors who were enticed to come to a conference by the attractions of a sports clinic and dinner with a top Japanese television star.

Drexel provided artificial golf-putting greens and miniature driving ranges for its guests. Later, women pros held a short seminar.

And at dinner, popular Tokyo TV host and singer Akiko Wada performed for about 300 persons attending. Waitresses were decked out in traditional kimono or Playboy-bunny-like outfits and fishnet stockings.

At some of the presentations, a team of technicians sat perched behind a bank of TV monitors and light controls worthy of a rock concert.

“It is a very entertaining program,” one Japanese investor said. “Nobody went to sleep.”

But Japanese investors may not have been impressed enough to increase their holdings of the high-yield bonds. “We are very cautious and a little worried,” said another investor.