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. Heres 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
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.