Carmen Bereincua graduated from King’s College London with a degree in business management. She joined Citi’s debt capital markets team after graduating in 2014 and is now based in Madrid, working in the bond syndicate office.
07:00 GMT (08:00 in Madrid): One of the advantages of being based in Madrid rather than London is that I go to bed late. I always work long hours in the UK and Madrid is an hour early, so I still have an hour in bed!
I wake up at 8am Madrid time and I’m out within 15-20 minutes. The office is a seven-minute walk away. I grab a Starbucks and a coffee, go up to the second floor, and log on.
07:30 GMT: I like having 30 minutes to familiarize myself with what happened in the markets overnight. I’m looking at how the US has shut down, how Asia is doing, and how our portfolio client companies are affected.
I work on primary bond transactions: we bring bonds to market. I focus on emerging market bonds; we also have desks specializing in European corporates, European financials, high yield issuers and sovereign and supranational issuers.
It is early in the morning that we decide whether the agreements we are working on should go ahead. This is a decision that is largely based on the markets, therefore I must first understand the factors that will influence the option to accept or not to accept. In some cases, I’ll speak to our Asian syndicate team to see how their transactions went overnight. I will also ring our traders on the office intercom and get market information from them. If the market is selling it is clearly not the right time to announce anything, but if the market is quiet we are more likely to advise issuers to go ahead. This can be a gray area and is partly about judgment.
08:00: That’s when my calls start. Morning phone calls with issuers are when we help them decide whether to set up a transaction. When we have multiple transactions, we may have multiple such calls with consecutive issuers, but this year is much quieter than usual.
When we get the go-ahead from the bond issuer to announce a deal on Bloomberg, we will notify our sales force who will notify investors that the issuer intends to issue a bond.
In most cases, several different banks are mandated on the same bond issue, and they will each play a different role. Sometimes we will take care of the logistics (setting up meetings with investors, now mostly on Zoom), sometimes we will take care of the documentation, or the invoicing and delivery. Other times we’ll be on “screens,” which means writing up all the information about the issue that comes out on Bloomberg.
09:00: So what I do next depends on the role we take on. When I’m working on the logistics, I spend the next few hours setting up the show schedule and preparing the presentation to investors. We must gather all information about the health and finances of the issuing company so that investors can make an informed decision on whether to invest.
Working in a union may seem quite administrative, but there is also an important strategic element. Clients come to us and tell us they want to raise money through a bond issue and our job is to advise them on the best way to do this. – Depending on market conditions, it may make sense to raise several small amounts and spread their funding needs throughout the year. In other circumstances, we advise them to raise as much money as possible now if we think the market will deteriorate later.
11:00 : Once a trade is in progress, it is necessary to build up an order book and firm up the price. When a deal is announced, the price is not set. We will announce the expected price of bonds issued, but will try to tighten it throughout the day until the price is fixed – usually later in the afternoon.
We tighten the price in our conversations with investors, and a big part of my day involves these calls. If you start with a very high coupon, many investors will be interested and you will have a huge order book that cannot be filled. It is a matter of reducing the coupon until an equilibrium is reached. However, you don’t want to reduce the coupon too much, otherwise investors won’t be interested in the next bond issue.
12:30 p.m.: I usually eat lunch now, which is late in Spain as it is 1:30 am CET. I don’t have many options for lunch to go in Madrid as most people here like to sit down and eat. When we’re in live execution mode evaluating offers, it can be difficult to leave the office even for five minutes. In this case, I usually tell my boss and he will cover me and talk to customers while I go downstairs to get a sandwich.
1:00 p.m.: During a live transaction, I have consecutive calls in the afternoon. The early afternoon is spent continuing to build the book and continuing to tighten the price. When New York opens, we usually have a good idea of the level of demand and can tighten the price further and post a second official price to the market.
2:30 p.m.: By now we usually have all the orders and we have an idea of the final price. We are taking stock of pending orders and talking to investors to see if we can tighten further. We will then speak back to the issuer and present our recommendation for the final price. Once this recommendation has been accepted, we will communicate to the market the final terms of the agreement. This is usually done between 2:30 and 3:00 p.m. London time.
3:00 p.m.: We now review allocations. We may have $500 million in bonds to allocate and insufficient bonds for everyone. It is therefore necessary to decide on the amount to be allocated to each investor. If we are the B&D (billing and delivery bank), we will usually do the first draft. Then we will make a call with the other banks in the syndicate and go through the allocations line by line.
When we make the allocations, we consider how the bond will trade. – We want it to trade well, so we will allocate it primarily to long-only investors (likely to buy and hold). We want to entice loyal investors. There are strict guidelines in Europe set by MiFID, so we are careful to ensure that we operate in accordance with all relevant regulations. This involves justifying each allocation individually.
5:00 p.m.: At 5:00 p.m., allocations are usually over. We now send the ledger to the issuer to accept the allocations we made. Some issuers will sign up in 20 minutes, but I’ve also waited three hours for issuers to accept allocations.
In many cases, there will again be a discussion with the issuer about the allocations and they may ask for changes to be made. Sometimes we will warn against these changes and advise that an investor will simply sell the next morning if they receive the amount the issuer wishes to allocate. Ultimately, however, it is the issuer’s decision. The process can be long and the B&D bank is in charge of the discussion.
6 p.m.: If everything went well, I’ll usually leave the office now. But on a day when there are long discussions with issuers about allocations, I may be in the office until 9 p.m., or sometimes even 10:30 p.m. if we have multiple live trades. It is unusual though.
On a day when I have no offers, I leave at 7:00 p.m. CET or 6:00 p.m. UK time. I love cardio exercises and when it’s not too hot I try to go to the gym for spinning. I will then eat outside at 10 p.m. I moved to Madrid in 2020 and have a better social life here than in London – more parties go on and I spend less time commuting to and from work.
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