Conference Magazine - GoingPublic.de - Deutsches Eigenkapitalforum
Conference Magazine - GoingPublic.de - Deutsches Eigenkapitalforum
Conference Magazine - GoingPublic.de - Deutsches Eigenkapitalforum
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is already room for improvement.<br />
Laarveld: It’s a new world for some previous issuers. It is<br />
not obvious everywhere that these bonds also have to be<br />
refinanced at some point in the future. Very few companies<br />
are able to do this from the cash flow alone; but doing that<br />
wouldn’t make any sense, either. A good relationship with<br />
investors, based on continuous and up-to-date information,<br />
forms a good foundation for future issues.<br />
<strong>Conference</strong> <strong>Magazine</strong>: What about placement? Some<br />
bonds sell like hotcakes, whilst others are placed in an<br />
awfully long period of time post the inital subscription<br />
period.<br />
Hoffmann: I think the ongoing placement of bonds after the<br />
inital subscription period is preposterous. Just imagine<br />
subscribing at the start and then learning that only 30% has<br />
been placed. Things don’t work this way anywhere else,<br />
neither with syndicated bank loans nor with IPOs. As a<br />
bond investor, I am looking for the upsi<strong>de</strong>, making bonds<br />
that are difficult to place a taboo. Ongoing placements<br />
practically <strong>de</strong>activates the market mechanism.<br />
<strong>Conference</strong> <strong>Magazine</strong>: Does this mean the direction will<br />
move towards a bookbuilding procedure in future, so that the<br />
bond volume does not represent an outlet for the market?<br />
Heun: That would seem to<br />
be the path that’s mapped<br />
out. The price must be an<br />
outlet, through which supply<br />
and <strong>de</strong>mand are compared.<br />
The book building procedure<br />
is an established practice for<br />
placing almost all institutional<br />
bonds on the world’s capi-<br />
Photo: Deutsche Börse AG<br />
tal markets.<br />
Laarveld: Some bonds issued recently even started trading<br />
with stock exchange prices over 100%. The issuers’ question<br />
is thus certainly justified. Shouldn’t the coupon have<br />
been fine-tuned, as it was when the book building procedures<br />
were conclu<strong>de</strong>d? The issuer would probably have<br />
been able to offer a return amounting to several basis<br />
points less. Sooner or later, the book building procedure will<br />
also come into play for SME bonds, just as certain<br />
covenants only establish themselves at a later date.<br />
<strong>Conference</strong> <strong>Magazine</strong>: Gentlemen, I can see that there is<br />
also plenty for us to talk about in the future. Many thanks for<br />
the interesting interview!<br />
The interview was conducted by Falko Bozicevic.<br />
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Bond Issuance
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