Kevin Regan, head of MTNs at Merrill Lynch in 1995. One of the market players who knew Kevin Regan in the 1980s says: "He always struck me as a particularly impressive character. I am sure he could sell ice to an Eskimo." Regan smiles on hearing this and insists an arctic sales deal is not on the cards. But he says: "I suppose I am a natural salesman. I get excited by new things. As a banker you can never say you've done it all, because the business is always changing." He still believes this after 22 years as a banker. And he has one of the best sales jobs around. Since 1997 he has been co-head of sales at UBS Warburg. It is a job he relishes. Uncomfortable talking about himself, he only relaxes when he is demonstrating UBS's F-18 sales system. Named after the fighter plane, it is a screen-based tool that links up all the possible information about the 13 different asset classes. He says: "I don't think our F-18 front-end system approach exists anywhere else. There is probably no other trading floor where you click an asset box and all of your screens reconfigure to bring up live information within that asset class, including axes, prices and direct communication with the trader, global sales and global clients." Before F-18, most of the sales team tended to concentrate on two to five of the asset classes. But Regan claims they can now be specialists in all the fields with the help of the system. With MTNs being one of the 13 asset classes, he still keeps a close eye on the market, saying he retains a soft spot for the product. He has long been heralded as the inventor of the Euro-MTN though many feel that Merrill Lynch, where he worked between 1984 and 1996, should share the credit. One of the crucial developments, in Regan's view, was the rapid development of the derivatives market, which allowed aggressive issuers to pursue opportunistic funding. But also important was the deregulation of European currencies, allowing, for example, a UK issuer to issue in French franc. He says: "It was an unusual time. Deregulation was allowing the market to exist rather than the market being pushed by either borrowers or investors. And then it just snowballed. It became easy to allow an issuer to do all its multi-currency needs off one programme." Merrill Lynch realised that if it was the first to work with the central banks to allow deregulation to happen it could dominate the market. And for a while Merrill Lynch did dominate the market, with Morgan Stanley its only real competitor. Regan thinks that this was the most exciting period of the market, because two top houses were competing aggressively and doing what the Euromarkets have traditionally been strong at - innovating. But he insists that the MTN world is far from dull now. He says: "I don't think that the market is less innovative now. It's just that there is less to innovate. But the credit angle is exciting. And there's a lot of work still to be done. Issuers need to be less absolute in their approach. There has to be a halfway house between launching a $1 billion benchmark once a year off your programme and sitting there posting sub-libor levels for opportunistic issuance. This is the most interesting opportunity for the market. And it is the least exploited." And his sales expertise means that he can now see the market from an investor's perspective. He says: "There has been a huge development of the corporate bond market in Europe. It's very exciting. Two years ago many of the large fund managers in Europe still had domestic investment parameters but the need to adopt a credit culture has been compelling." And for the Euro-MTN market, says Regan, this is a good thing.
October 06, 2000
