I first became involved in convertible bonds about 12 years ago through a boutique convertibles specialist in London called ISM Capital, when I went to inquire about a financing for an emerging producer. As a result of our meetings, ISM asked if I'd be interested in origination of convertible bond deals. I readily agreed, as I found the concept of convertibles truly fascinating, as I've been in the investment banking business for most of my working life, and this was different.

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After a couple of years with them, I decided to "widen my horizons", and started working with KNG Securities (also in London). KNG is a large broker in convertibles and straight bonds. One of the unusual deals I brought in wasn't a convertible, but an instrument known as an Exchangeable Bond.

 

Exchangeables do not convert into shares in the issuer, but into another instrument, normally shares in another company owned by the issuer. In this case, the bonds exchanged into the Gold ETF, thus giving the investor direct exposure to the upside of gold.

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I found over a period of time that it was a question of "horses for courses". Each "horse", or house, has its own speciality, either in structure or size, and so I now work with a number of banks and boutiques, all with their own specialities and strengths.

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Here's how I work. Having researched those companies which appear could benefit from a convertible bond issue, or refi, I then obtain indicative terms from the house I think most appropriate. If they're of interest, I will set up a Zoom-type conference call for the bank to run through its presentation and answer any questions.

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Should the potential issuer wish to proceed, I participate in calls until the deal has advanced to a stage where I can no longer add anything, i.e., it's at documentation stage, which is a lawyering affair.

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Finally (and good for you to know), you don't pay me a cent if a transaction is completed, as I am remunerated by sharing in the fees you agree with the issuing bank.