Bond Origination

Key players of bond markets

• Issuers: classification
• Investors: investor diversity for different needs
• Intermediaries

From the Issuer to the Investor

• Origination, research, rating, syndication, sales, trading
• Work of a bond issuer: sales, financial analyst and structure
• The originator: a privileged link between corporate and trading bank

Elements Involved in a Bond Issue

• Sector, political, economic factors
• Market factors: interest rate, spread, issuing volume
• Corporate finance and strategy
• Rating and credit events
• Constraints and liquidity of investors
• Strategic approach vs. opportunist approach

Characteristics and Objectives of a Bond Issue

• Currency: economic needs or arbitrage opportunities
• Size, liquidity, electronic trading platforms
• Documentation (Eurobond, 144 A, SEC, Kangaroo)
• Referred market: public/private, retail/institutional
• Specific covenants
• Type and rank:
• Secured / unsecured: securisation
• Covered bonds
• Senior / subordinated: financial institutions specificities

Schedule of a Benchmark Issue

• Mandate, credit research, selling memo, compliance, black out period, roadshow, book building, pricing and primary trading, settlement and secondary trading
• Indicative timetable

Syndication technique

• Role of syndication and organisation
• Structure: Book building or bought deal / Ebook / Pot system / Retention / Split economics / Success fee

Pricing an Issue

• Benchmarks and Govies
• Swap curve
• Notions of primary pricing: coupon, reoffer price, fees, all in
• Legal costs/roadshow, super all in
• Issuers’ final needs
• IRS
• CIRS

• Practical workshop:

• Price in EXCEL™ swapped corporate and bank issues (from current market data)

After-Sales Monitoring, Dynamic Debt Management

• Buy-back (arbitrage, legal framework)
• Exchange offers
• Market making commitment

• Practical workshop:

• Real market case study