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January 2008
by Alex Chambers and Jethro Wookey
Before the summer, almost every deal that came to market was heavily oversubscribed, and all a bank needed to do to attract a flood of subscriptions was to open a book. It was a seller’s market. Now, though, it has become very much a buyer’s market. "It used to be that the power in the debt markets lay with the borrowers," says Demetrio Salorio, deputy head of debt capital markets at Société Générale. "Now we are getting into a market where investors have more power."There are various causes of this new dynamic. Not least are investors’ concerns about the credit quality of financial instutions, which has led to dramatically wider credit spreads for this sector. Furthermore, the decline of leveraged investors such...
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