Jean-François Astier became head of global capital markets at Barclays in May 2017 after a career heavily focused on leveraged finance.
“I started in this business in early 1990s, at the time of the Drexel bankruptcy and the recession in 1992 and 1993,” he tells Euromoney.
“I started in high yield when it was still the creation of Michael Milken and an embryonic business. My coach in those years was Ken Buckfire. He was one of the best professionals in restructuring and I learned a tremendous amount from him. I learned the art of negotiation too.”
Astier was Barclays’ head of global leveraged finance from 2012 until his move to his current role.
“The period from 2004 to 2008 was one of the most dynamic times in investment banking – maybe too dynamic,” he recalls. “I was in leveraged finance and saw mega leveraged buyouts, where banks were committing $40 billion to $50 billion of financing. By the time 2008 came around, banks had close to half a trillion of underwriting on their balance sheets. I also saw a lot of financial innovation and new products, especially in asset-back securities and a lot of problems in those areas, in large part because rating agencies didn’t know how to rate those products.”
The consequences of this became readily apparent after the crisis had hit.
“I spent 2009 pretty much back in restructurings, where we had to be creative in advising clients on how to reduce their debt load,” Astier explains. “Intellectually it was very challenging, taking balance sheets apart, but we saved a lot of companies from bankruptcy in the process. There are clients that I have to this day that look at me and say: ‘You are the person who helped me make it through 2009.’ Every time the CFO at the time sees me, he hugs me and says: ‘I will never forget what you did for me.’ This is what banking is really about, being there for clients when the going gets tough.”
Those skills could again be pressed into service if the current cycle turns: the sheer volume of debt that has been issued since the crisis is staggering.
“The summary of 2010 to 2018 is really the explosion of the debt markets – nobody could have foreseen the amount of growth in debt issuance, in both investment grade and high yield,” Astier says. “If you look at total amount of debt outstanding in the leveraged finance business globally there is close to $2 trillion versus $1 trillion in 2008. The triple-B side of the investment grade market has something like $3 trillion outstanding, versus less than $1 trillion in 2008.”