Advent of the non-deal roadshow
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Advent of the non-deal roadshow

What's the best way to promote an issue? Yesterday's world-touring roadshow is too slow and cumbersome in today's volatile markets. Latin borrowers are meeting investors one on one or holding non-deal roadshows to get the message out. They launch the deal when conditions are right. This and other features of the new capital-markets environment - reopenings, reverse enquiry, speedy execution - could be more than just a passing fad. Brian Caplen reports

Back in the euphoric days of Latin American issuance the roadshow was a seminal event, taking credits across the world to meet investors who had never dreamt of owning Argentine or Brazilian paper, let alone that of Ecuador or Venezuela. Cross-over investors were being wined and dined and given serious economic data on countries they had never visited and only knew about in cliché terms. Such was the search for yield that the strength of an issuer's story was sometimes less important than an investor's belief that he was not acting alone and would not look stupid in a crisis.

But then the crises came - first in October 1997 following the Asian downturn and again in August as Russia collapsed - and Latin America's new investors turned out to be fair-weather friends. The cross-over investors deserted in droves, as did the hedge funds, apart from those with short positions they couldn't cover or arbitrages that couldn't easily be unwound. Once again Latin America was being treated by many as just carnivals and samba rather than as a serious capital-markets prospect. Issuers were appalled that even such structures as 1998's spread floaters designed to withstand volatility had failed them.

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