Good use was made of Equity Capital Markets in 2008 as companies, led by financial institutions, rushed to raise funds and secure their futures. As the global economy continued to falter in 2009, that need has only increased, with a broader spread of corporates desperately seeking funds to survive. And most have. It remains a source of wonder that despite the many companies on the brink, in sectors that look set for many months of struggle, equity investors have broadly supported them in their time of need. Deeply-discounted capital increases...Read more
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Equity-linked bankers have seen extraordinary changes in 2009. Companies that once hated convertibles have been forced to return. The dominant investor base – and its method of valuing bonds – has become a price taker, as hedge fund money is outweighed by the outright investors’ dollar. Demand has peeled off and bonds traded down. Yet the market is more robust. Owen Wild reports.
Rights issues returned with a vengeance in 2008 and their popularity for capital raising shows no sign of waning. But in the UK there is some concern about the time they take to complete, leading the Rights Issue Review Group to consider reforms to speed the process up. Jeremy Hill and James Parker, partner and associate respectively at Debevoise & Plimpton, report on the options available.
At-the-market stock programmes have become integral part of the ECM lexicon. Originally developed for REITs and other companies with small, frequent funding needs, open market stock sales have been integral in recapitalising financial institutions and others over the past year. But whether it will prove to be a suitable product over the long term is debatable. Stephen Lacey reports.
Bemis, a packaging manufacturer for the food industry, delivered on a well thought out acquisition strategy. After announcing its US$1.2bn cash acquisition of the North American packaging businesses of Rio Tinto, the company committed to fund the purchase with US$1bn of debt and US$200m in cash in an effort to keep its investment-grade credit ratings. The equity component came in the form of 7.7m shares priced at US$26.00, a 4.1% discount to Wednesday's close, on the heels of a two-part, US$800m debt offering a night earlier. Joint...
It has been a busy first half of the year for the primary ECM market in Asia, with Australian and Chinese issuers leading the charge. Investor demand remains strong despite volatility and recessionary fears and bankers expect it to continue as issuers turn their attention to financing M&As and growth strategies, rather than merely recapitalising balance-sheets. Shankar Ramakrishnan and Fiona Lau report.