Lockdown, of course, means no great gathering in London’s Landmark Hotel this year, no chance to see our friends from across the global capital markets in the same place and no chance to share a quick coffee (or something stronger) in one of Marylebone’s many quiet corners.
But fear not! Despite the exceptionally trying circumstances, we’ve sought to bring you in this publication the very best of Borrowers — the crucial interaction between borrowers, investors, bankers and other key market players.
Mirroring the tried and tested formula of our live event, we’ve done this by holding a series of discussions featuring some of the global capital markets’ leading players, inviting some of the best known names in international finance to give keynote interviews and running some thought-provoking and topical articles that analyse the impact, response and early signs of recovery from the coronavirus crisis.
In the digital version of this report, we have also built in videos of some of these key moments.
Whether we bring you a live physical event, or special publication, it matters not — this is an opportune time to bring the market together and we are privileged to do so. The international bond market has grown up with this event and we are determined for it to play a more important role than ever.
Central banks to the rescue
The scale of this crisis means there is no playbook for the capital markets to reach for. Governments and regulators have learnt from previous crises, of course, and knew they had to move at breakneck speed. But they have had to deliver on an unprecedented scale to prevent a health and economic crisis turning into a financial one.
So far, via vastly inflated borrowing, quantitative easing programmes and relaxed capital regulations, they have succeeded in doing so, for which they deserve enormous credit. Capital markets have played an absolutely crucial role in the last three months too, facilitating the fiscal spending, enabling QE programmes to increase the velocity of money and helping companies raise vital financing to see them through this extraordinary period.
But despite these huge efforts, much of the impact of the crisis is surely yet to be felt — including mass unemployment around the world and heavy losses in the banking sector, thanks to a new Covid-19 vintage of non-performing loans. There are even fears of stagflation returning.
Yet those in the capital markets are beginning to turn their attention to the recovery. Many hope it will be green — indeed,the European Union’s €750bn Next Generation plan has the environment at its core.
That would be an example of turning a crisis into an opportunity. Across the markets, players faced with a tough situation have innovated — often at remarkable speed. New ways of working have been devised; none would have dreamt the entire capital markets could move from the glamorous, high tech offices that usually house them to a vast network of private houses and flats equipped only with domestic broadband routers. At times, partners, children and even pets have become unwitting stars of mandate pitches and pricing updates.
Financially, too, there has been innovation. A large market of Covid-19 response bonds has flourished as issuers and investors both wanted to connect in an effort to fight the pandemic and its social effects. New ways of working with social bond norms have been needed to make it possible; now banks and even corporates are getting involved.
For decades, IPOs in Europe have been done to a template: two weeks’ investor education followed by two weeks’ bookbuilding. Despite widespread frustration, no one has ever managed to shake it. Yet during the pandemic, these phases have been compressed to one week and three days.
Market participants are in inventive mood — ideas suggested in this publication include the capital markets providing insurance for business interruption.
Learning from the crisis
At a more basic level, we are also sure to learn from this experience. When lockdowns are fully lifted and people are confident to meet again in person, attitudes towards business travel will have changed. So many capital markets specialists who used to live on aeroplanes have told us what a relief it is not to have to anymore — but that they, of course, miss the human interaction.
We have all had to get used to videoconferencing platforms, and although we might have found them difficult or awkward at first, we have found that they have, by and large, worked. Business travel will still happen, but surely less than before. Instead, market participants will put greater emphasis on the big annual events like this one, where they can do many meetings face to face and take advantage of the critical mass of people.
I would like to thank all who have given up their time to join our panels, deliver keynote speeches and speak to our journalists for our feature articles. And we also thank our sponsors. Without them, this virtual gathering — and therefore the convening of leading borrowers, bankers and investors, as well as rating agencies and market infrastructure providers — just would not happen. We are particularly grateful to them for supporting us this year, a time of real uncertainty, and for backing us in trying something new. Their faith and support for this year’s Global Borrowers & Bond Investors Forum Virtual 2020 will not be forgotten.
And of course a big thank you to the GlobalCapital and Euromoney Conferences teams who have worked tremendously hard from their kitchens, sitting rooms, garden sheds and bedrooms to bring you your event.
The very best of health to you,
Toby Fildes
Managing editor
GlobalCapital | GlobalCapital Events