Banks' ploys on Gulf bond deals draw attention | Reuters:
"The way in which lead banks put orders into Middle East bond deals is coming under the spotlight, with some bankers arguing the practice is misleading investors as it is not clear how real those bids are. Order books containing lead orders is commonplace in the Middle East as banks use their financial firepower to muscle in on mandates. A $500 million five-year bond last week from Commercial Bank of Qatar, for example, had a $1 billion book with $200 million of lead interest made public during the deal’s execution. Often, though, the size of leads’ support is not disclosed. Furthermore, critics say, there is a distinction between an order from a lead bank’s treasury or trading operation reflecting genuine investor demand and one from the syndicate desk, which in essence is an underwriting position and therefore should not be included in the book."
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