Getting The Most From Your Primary Issuance Provider

The market for new issues isn't as robust as it was a few years ago. When you begin to plan a new issue of debt or equity, it is important to make sure that your company chooses the right primary issuance provider to partner with. There are many options out there to choose from, but not every provider will offer your new issuance the same level of market knowledge.

Let's face it, the world economy and European regulatory environment are changing at a rapid pace. A decade ago the United States was one of the best places for primary issuance, but today, it is lagging behind both Europe and Asia. Getting the most from your securities issuer is a big part of accessing liquidity at the best possible rates, and in the markets that will give you the most for your new issue of debt or securities.

As a result of regulatory changes that are ongoing in the European Union, reaching a broad range of markets is much easier today than it was even a few years ago. The Target2-Securities (T2S) program has created a centralized pan-European liquidity pool, which is great news for companies who want to tap the liquidity markets in Europe. While the settlement systems across Europe are still being harmonized, this move towards centralized liquidity is extremely positive.

Flexibility Counts For Primary Issuance

The last thing you want is for your new issuance to be pigeon holed into a market because it is the most convenient for the company you choose to work with. If you want to find liquidity on the best possible terms, you need to work with a primary issuance specialist that knows the markets, and can find the best place for your new offering.

Investment banks are a widely used choice for primary issuance, but there are other options to consider as well. Market clearinghouses offer some clear advantages over an investment bank for primary issuance, as they offer unparalleled access to the liquidity centers that investment banks use. In addition to having a good feel for where a new issue may find the best reception, clearinghouses will be completely up to date on any regulations that may affect how an issue will trade after it is initially sold.

Unlike a broker or investment bank, a clearinghouse won't have trading channels that it favors. This means they will be able to best advise your company on where to begin selling a new equity or debt instrument, without any preference for their commissions, or favored trading partners. Your new issuance needs to go to where it will raise liquidity on the best possible terms for your company, not where it is the most profitable for the company that is bringing it to market.

Open Channels

There are a myriad of ways to market your company's debt or equity, but finding the most profitable ones isn't as straightforward as one might hope. Before you decide to use a primary issuance provider without looking into unconventional channels, think about what your company may be losing out on. Innovative thinking can lead to new advantages, so don't limit your company by failing to embrace change.

Liquidity is becoming increasingly centralized, so working with a company that understands all of the changes that are happening is a good way to stay one step ahead. There are a number of regulations that will come into effect over the next few years in the European market, and in some cases, your company will want to make sure that new securities take advantage of strategic positioning within the evolving market environment.

Make sure that whoever you deal with can offer your company a range of markets, currencies and liquidity providers, and if you feel like you are being limited, keep looking. There are a range of options out there, no matter what your primary issuance needs are. Quality primary issuance and liquidity go hand and hand, so don't overlook options that can create advantages today, and also in the future.