The participants
Paul Bide, head of debt markets research, Bankers Trust
John Gerli, head of debt capital markets, Salomon Smith Barney
Wayne Hoy, head of capital markets, Commonwealth Bank of Australia
John Keith, head of origination, Nomura
Paul Umbrazunas, director, global markets, Deutsche Bank
Has the ADB damaged the kangaroo bond market?
[An Asian Development Bank (ADB) five-year issue for A$ 1 billion was launched in September 1998 at a spread of 39 basis points over the government bond. It widened by up to 25bp in the aftermarket.]:
Paul Bide: It's done damage to ADB's issuing prospects. But not to the market.
What was wrong with the deal?
Bide: They changed the coupon after the issue had been done.
Wayne Hoy: There were three things that went wrong with the deal: size, size, and size. [Commonwealth Bank of Australia was a joint lead manager on the deal. The lead manager and bookrunner was Warburg Dillon Read. A representative from lead manager Warburg Dillon Read was invited to the barbecue but declined to attend.]
Paul Umbrazunas: It was too big.
Hoy: A billion is a lot of money. I heard from your guys they were comfortable with x.