Its triple currency multipede of a deal demonstrated to issuers that any coverage bankers telling them to wait until September to print are either lazy, wimps or both.
Of course, there are more staff on holiday than usual during August, but the summer slowdown cliché is at best a self-fulfilling prophecy. Buy-side firms are staffed and buying bonds.
BAT’s beast was not the only evidence of that. Indebted Gabon tapped a deal too, while one financial institutions investor told GlobalCapital he practically welcomed the escalating diplomatic crisis between North Korea and the US because it might widen spreads to resemble something sensible.
Years of easy money — the result of a crisis that began a decade ago this week — mean assets are bid to the moon. That is why Greek banks can consider covered bonds, why their sovereign only pays 4.375% for €3bn of five year money, and why one pays to lend to a whole host of credits in better, if not perfect, financial health.
Ah, but what about summer illiquidity, the cautious DCM banker with one eye on an old school City lunch will caution? Well, liquidity has been screwed for the best part of the last 10 years and still assets have rallied beyond all comprehension. The cash is out there; it must be put to work.
Summer offers not a minefield but an opportunity for borrowers out of the ordinary. Greece, Gabon and BAT have shown us already that extraordinary deals can fly when investors can catch their breath and carry out proper credit analysis.
August’s issuers have nothing to fear.