How 2012 regulation has changed syndicate deal execution

Author: Gemma Varriale | Published: 29 Nov 2012

2012 may have been a positive year in terms of deal size, pricing and structure, thanks to significant levels of oversubscription, it was also a year in which the market faced significant regulatory challenges. Here’s how that has impacted deal execution.

BNP Paribas’ head of the emerging markets (EM) syndicate business, Nick Darrant, has warned high-profile Financial Services Authority (FSA) penalties had hampered the efficacy of so-called pre-sounding.

Pre-sounding refers to discussions with investors that take place before the announcement of a transaction to gauge their interest in a potential structure or transaction. According to a recent briefing from Linklaters, one risk of these discussions is that non-public, price-sensitive or inside information may be disclosed to the investor.

“A lot of investors have been unnerved this year and are not willing to be pre-sounded, a lot of them decline to be wall-crossed,” said Darrant.