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 on the bond syndicate desk.
07.00 GMT (08.00 in Madrid): One of the advantages of being based in Madrid rather than London is that I get to sleep in late. I still work UK hours, and Madrid is an hour ahead, so here I have another hour in bed!
I wake up at 8.00am Madrid time and am out of the door within 15-20 minutes. The office is a seven-minute walk away. I grab a Starbucks and a coffee, get to the second floor and login.
07.30 GMT: I like to have 30 minutes to familiarize myself with what’s happened in the markets overnight. I look at how the US closed, how Asia is going and how the client companies on our book are affected.
I work on primary bond deals: we bring bonds to the market. I focus on emerging market bonds; we also have desks that specialize in European corporates, European financials, high yield issuers and sovereign and supranational issuers.
The early morning is when we decide whether the deals that we’re working on should go ahead. It’s a decision that’s very much based on markets, which is why I first need to understand the factors that will influence the go or no-go call. In some cases, I’ll talk to our Asian syndicate team to see how their deals went overnight. I’ll also buzz our traders on the desk intercom and get some market colour from them. If the market is selling, it’s clearly not a good time to announce anything but if the market is quiet, we are more likely to advise issuers to go ahead. It can be a grey area and is partly about judgement.
08.00: This is when my calls begin. The early morning calls with issuers are when we help them to decide whether to go live with a deal. When we have multiple deals, we might have several of these calls with issuers back-to-back, but this year is a lot quieter than usual.
When we get the green light from the bond issuer to announce a deal on Bloomberg then we will inform our salesforce who will make investors aware that the issuer intends to issue a bond.
In most cases, several different banks are mandated on a single bond issue, and they will each play a different role. Sometimes we will oversee logistics (setting up meetings with investors, most of which are now on Zoom), sometimes we’ll be in charge of documentation, or of billing and delivery. Other times we’ll be on “screens”, which means drafting all the information on the issue that goes out on Bloomberg.
09.00: What I do next therefore depends upon the role we’re taking. When I work on logistics, I spend the next few hours setting out the schedule for the issue and putting the investor presentation together. We need to amass all the information on the health and financials of the issuing company so that investors can make a well-informed decision on whether to invest.
Working in syndicate can seem quite administrative, but there’s also an important strategic element. Clients come to us and say they want to raise money through a bond issue and our job is to advise them about how best to go about it. – Depending on market conditions, it might make sense to raise multiple small amounts and to split 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 deal has gone live, it’s necessary to build a book of orders and to firm up the price. When a deal is announced, the price isn’t fixed. We will announce the intended price of the bonds being issued, but will try to tighten that throughout the day until the price is fixed – usually later in the afternoon.
We tighten the price during our conversations with investors, and a lot of my day involves these calls. I you start with a very high coupon, a lot of investors will be interested and you’ll get a massive order book that can’t be fulfilled. It’s a question of reducing the coupon until you get to an equilibrium. You don’t want to cut the coupon too much though, or investors won’t be interested in the next bond issue.
12.30: I usually have lunch now, which is late in Spain as it’s 1.30 CET. I don’t have many options for takeaway lunch in Madrid as most people here like to sit down and eat. When we are in live execution mode and are pricing deals it can be difficult to leave the desk even for five minutes. In this case I usually let my boss know and he will cover for me and talk to clients while I go downstairs and get a sandwich.
13.00: During a live deal, I have back-to-back calls in the afternoons. The early afternoon is spent continuing to build the book and continuing to tighten the price. When New York opens, we usually get a good idea of the level of demand and might tighten the price further and release a second official price to the market.
14.30: By now we usually have all the orders in, and we have an idea of the final price. We take stock of the orders in the book and talk to investors to see if we can tighten any further. We will then talk again to the issuer and present our recommendation for the final price. When this recommendation has been accepted, we will tell the market the final terms of the deal. This is usually done between 2.30pm and 3pm London time.
15.00: We now run through the allocations. We may have $500m of bonds to allocate and insufficient bonds to go around. It’s therefore necessary to decide how much to allocate to each investor. If we’re the B&D (billing and delivery bank) we’ll usually do the first draft of this. Then we’ll get onto a call with the other banks in the syndicate and will go through the allocations line-by-line.
When we’re making the allocations, we consider how the bond will trade. – We want it to trade well and we will therefore allocate it to investors who are long-only (likely to buy and hold) as a priority. We want to incentivize loyal investors. There are strict guidelines in Europe laid out by MiFID, so we are careful to ensure we operate in compliance with all the appropriate regulations. It’s a question of justifying each allocation individually.
17.00: By 5pm, the allocations are usually finished. We now send the book to the issuer for them to agree the allocations we’ve made. Some issuers will sign in 20 minutes, but I’ve also waited for three hours for issuers to agree allocations.
In many cases, there’ll be discussion again with the issuer on the allocations and they may ask for changes to be made. Sometimes we’ll caution against these changes and advise that an investor will simply sell the next morning if they receive the amount the issuer wants to allocate. Ultimately, though, it’s the issuer’s decision. The process can take a long time and the B&D bank is in charge of the discussion.
18.00: If everything has gone smoothly, I will usually leave the office now. But on a day when there are long discussions with issuers about the allocations I can be in the office until 9pm, or sometimes even 10.30pm if we have multiple live deals. This is unusual though.
On a day that I don’t have deals I leave at 7pm CET, or 6pm UK time. I love cardio exercise and when it’s not too hot I try to go to the gym for spinning. I’ll then go and eat outside at 10pm. I moved to Madrid in 2020 and have a better social life here than in London - there’s more going on in the evenings and I spend less time travelling to and from work.
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