Toiling through legal documentation can be a slow, tedious process for an issuer, as anyone who’s ever tried to cancel a TNT sports subscription will tell you.
In banks, working in legal or compliance can feel like a thankless task. Do it slow and you’re holding everyone up. And even if you do it fast, you’ll always be viewed as a cost centre and never a profit generator.
Yet legal departments deserve our encouragement and gratitude, never more so than at this time of year when European banks emerge from blackout and documents must be updated before roadshows can commence and new bonds syndicated.
What’s more, there is only a narrow window left for issuance ahead of the US election on November 5. Straight after, the primary market is expected to shut down, though for how long remains uncertain.
An optimistic syndicator (is there any other type?) will tell you that tomorrow’s event is yesterday’s news. For the European primary market for FIG issuers, in particular, they argue the US vote is a likely non-event regardless of the result.
But if Donald Trump loses, big or small, he’s sure to contest the outcome and do his best to turn it into an event, although whether legal objections will be launched once again from such hallowed legal turf as Four Seasons Total Landscaping remains to be seen.
US politics aside, other risks remain.
For one, Israel is committed to retaliation against Iran and any attacks on its oil terminals cannot fail to have an impact — China is Iran’s oil market, accounting for over 90% of exports.
Closer to home, the future of net inflows into credit funds has been questioned by some: Bank of America flagged a “weakening narrative” amid rich valuations in its research published on Tuesday.
They say a bad lawyer can let a case drag out for months, while a good lawyer can make it last even longer.
But in this case, acting swiftly and having legal documentation in place could be the most profitable tactic for financial institutions when it comes to taking advantage of what could be scant openings for bond issuance.