The capital markets are something of an open goal for debt issuers at the moment – spreads are tight, and investors want to put their money to work.
So it’s no surprise that fixed income originators are battling hard to persuade issuers to print deals. The post-Easter period is typically very busy, with everyone keen to complete financings before the summer lull that Bastille Day on July 14 normally heralds.
But is there an extra motivation for banks’ urgency to get the deals off the ground in the second quarter?
As early as mid-April, talk of the “World Cup effect” was starting to build. Soccer’s greatest tournament, it should be noted, does not begin until June 9. But syndicate officials are advising that, for best execution on bond transactions, it is probably best to avoid the four weeks of the tournament, which conveniently leads into the traditional summer break.
Bankers say that many investors will be too busy watching the football or propping up the bar to worry about the latest $250 million floater from a European bank. But, given the one-upmanship among syndicate managers at present about the quality of tickets they have for the big matches, could it be they are trying to quieten the markets for their own purposes?
Major football tournaments do, of course, affect the mood of the markets. One veteran Euromoney hack recalls bemoaning his need to work the day after England were defeated (again) by Germany at Euro 96 to a debt syndicate manager. The fellow England supporter replied: “You think you’ve got it bad? Today I’ve got to lead manage a deal for KfW!”
