August 15 2017-A Special Editorial from BrokerDealer.com: Most Fortune CEOs, as well as leaders of Investment Banks and Broker-Dealers (aka BD) are typically loathe to take a political stand. For the former, making pronouncements that will raise the ire of the current president are likely to be met by “injury by twitter,” or worse still, federal agency scrutiny of the company, which could prove devastating for public company shareholders. For the universe of corporate leaders with a conscience and also recognized thought-leaders, only a few have yet to prove unequivocal when reacting to the equivocal comment made by President Trump when framing his first view of what US Attorney General Sessions labeled as a”domestic terror event.” We’re referring to the white supremacist rally that led to 3 deaths and multiple injuries in Charlottesville, VA this past weekend.
For investment banks and broker-dealers, let’s face it-politics and business mix best with each other when done over cocktails or discrete ‘off-site’ meetings to discuss new capital market initiatives, deal issuance and/or asset management mandates. After all, most traditional broker-dealers eschew taking a political stand that opposes the federal government administration, simply out of fear that the long lips of the current WH CEO will whisper to administration-appointed SEC bureaucrats with a message akin to ‘the right industry regulator might want to make this [firm] go away..” Most, but not all is the catchphrase that compels a re-distribution of a capital markets desk commentary that focuses on fixed income markets and along with a smidgen of geopolitical observations and delivered to a captive group of leading Fortune 500 corporate treasurers, as well as a select group of sell-side syndicate desk ‘book-runners’. Here’s the extract of the day’s piece, titled Risk On, Risk Off, US-NOKO Tensions Subside; Ugly Heads of Racism Take Top Headline…
Investment Grade Corporate Debt New Issue Re-Cap – A View About Charlottesville and the Aftermath
Risk was clearly back on in the financial markets today, as U.S./NOKO tensions fell to the wayside. Unfortunately prejudice and racism reared their ugly heads in the Charlottesville, Virginia riot over the weekend. On Monday, Fortune 500 thought leaders Ken Frazier, CEO of Merck & C0., Brian Krzanich, CEO of Intel, and Kevin Plank, CEO of Under Armour each took a stand by protesting the ‘equivocal’ comments made by President Trump in his first response to the domestic terrorism acts in Charlottesvile, which were advanced by self-proclaimed alt-right and white supremacist neo-Nazis. Our firm stands with every corporate executive who stays true to their own right-minded beliefs and their company’s dedication to doing right and doing good, many of whom also maintain proactive Diversity & Inclusion initiatives. For those corporate executives who spent all of their undergrad time in finance and accounting classes, and perhaps not as familiar with the history of the United States as they could be, racism and bigotry are diseases, and cancers that every generation of this country has been working to eradicate.
To the above point, one only need to re-read the Constitution and the Bill of Rights to appreciate that D&I is actually part of our country’s DNA. It is also part of the cultural foundation of many Fortune 500 corporations, including Intel, including Merck, including Under Armour and including many others! D&I means respect for and appreciation of differences in ethnicity, gender, age, national origin, disability, sexual orientation, education, and religion. But it’s more than this. We all bring with us diverse perspectives, work experiences, life styles and cultures and we presumably all share a disdain for anyone and any group that attempts to dismantle, disrupt and or destroy. Kudos to Mssrs. Frazier, Krzanich and Plank for putting themselves in harm’s way and risk of “injury by Twitter” for being true leaders and staying true to their convictions and their constituents. Kudos also to the many Fortune executives who have raised their own voices and to those who, like Jamie Dimon, have opted to protest by remaining that much more proactive in the WH-appointed roles in which they serve as volunteers.
Today’s VIX closed 3 bps tighter versus Friday’s close. Also a reminder that tomorrow is August 15th – “mid-August” – that’s when North Korea’s illustrious “bad boy” proclaimed that he’d have his master plan ready to bomb Guam developed by. One week from today on Monday, August 21st begin joint U.S-South Korean military exercises referred to as Ulchi-Freedom Guardian. The exercise began in our Bicentennial year of 1976. North Korea has annually perceived the joint exercise as “preparation for war.” It is the world’s largest computerized command control implementation. Up to 80,000 American and South Korean troops have participated in this exercise in the recent past. The game will go on for two weeks before concluding on Thursday August 31st. Enjoy the show Mr. Jong-Un. You’ll have front row seats though I recommend binoculars. Here’s lookin’ at you kid!
If you ask me this is the perfect time for corporations to issue bonds. Not a bad thing will really happen, risk is back on and summer vacations are quickly approaching. My prediction – expect Amazon to the hit the tapes first thing tomorrow morning. Free market enterprise at work. Ya gotta love it!
Today’s IG Corporate dollar DCM finished with 5 issuers that priced 7 tranches between them totaling $4.10b