But in the calm of their gaze there is something akin to the “eye of the duck”, a motif made famous by legendary film maker David Lynch. Below the surface, the duck’s legs churn the water with powerful motion, allowing the visible part of the bird to glide across the pond with barely a ripple and no hint of strain in its tranquil visage.
Or, in the banker’s case, we’re talking about client meetings, credit approvals, insurance and documentation.
So in one of the quietest weeks for loan deals that the market has experienced for some while, loan bankers were also closest to being stressed. Last week found their erstwhile philosophical ruminations give way to more syncopated conversation, with meetings and documentation aplenty to keep them from lingering on the phone.
Little wonder though, when it turns out that the absence of deals belies a burgeoning pipeline that everyone in the market is working frantically to bring to fruition.
In Western Europe, we hear of a wave of project and renewables financing, while Central and Eastern Europe has drums pounding in Czech Republic, Hungary, Kazakhstan, Romania, Serbia, Russia and even Ukraine. In Africa we are promised this is the “calm before the storm” and in leveraged loans the auction pipeline is on its way.
This is taking place under greater secrecy than before, given loan bankers’ fears of deals getting pulled, the ever-changing conditions around Russia and Ukraine, and tightening regulation around deal discussion.
But while some speak of loans becoming more like the bond market, let’s hope it is just in reference to the visible execution time rather than the stress levels. The difference in tensions between the two markets was illustrated last week, with Loan Ranger hearing that one emerging market bonds official got so worked up over a debate on new issue premium that he had to go for a walk.
That might not be an issue for loans, where price talk is much less advertised anyway, but we must hope that such stresses are not brought to bear on the overall state of the loan market duck.
The bond market’s relationship is akin to the faster moving, more frantic alter-ego of the duck in Wittgenstein’s duckrabbit – an ambiguous image where either animal can be seen, but not at the same time. Loan bankers would do well to resist that transition.
“A duck is one of the most beautiful animals,” said Lynch, in contemplative words befitting of the loan market. “If you study a duck, you’ll see certain things: the bill is a certain texture and a certain length; the head is a certain shape; the texture of the bill is very smooth and it has quite precise detail and reminds you somewhat of the legs (the legs are a little more rubbery).”
“The body is big, softer and the texture isn’t so detailed. The key to the whole duck is the eye and where it is placed. It’s like a little jewel.”