Capital MarketsD&I

Opening Doors: Keys to Using Diversity Firms in Bond Deals

By September 7, 2022September 8th, 2022No Comments

Takeaways from a D&I working group session sponsored by Fitch Ratings featuring Loop Capital.

At a recent meeting of NeuGroup for Diversity and Inclusion sponsored by Fitch Ratings, Sidney Dillard, partner and head of corporate investment banking at Loop Capital Markets, moderated a discussion featuring the experience of a corporate treasurer whose company made Loop Capital a joint active bookrunner on a large bond offering in 2021.

  • Loop’s involvement in the deal is an example of providing more meaningful opportunities to diversity firms in addition to giving them meaningful economics for their roles in capital markets transactions.
  • Unlike some deals involving diversity firms, this transaction did not involve a so-called D&I coordinator—one of the lead managers on a deal whose role is to support and facilitate active participation by diversity firms.
  • The benefits of using law firms owned and run by minorities on deals was discussed by corporate attorney Gopal Burgher, a partner at BurgherGray.

Key takeaways. Here are some insights from the discussion that may aid other corporates that want to expand or improve their use of brokerage firms owned by Black people, Hispanics, women and members of other minority groups.

  • Wallet issues need to be discussed proactively with the banks in a corporate’s credit facility when diversity firms that are not in the revolver are given active roles in bond offerings. The corporate in this case made use of Loop’s partnership with Bank of China, which is part of the company’s facility but doesn’t participate in deals.
  • While this deal did not include a D&I coordinator, Morgan Stanley and Goldman Sachs received high marks from members and panelists for performing the role in other transactions.
  • Track and measure your allocations to D&I firms and communicate your benchmarks.
  • Speak loudly about your use of diversity firms with investors who are equally committed to D&I.
  • Consider using diversity law firms as co-counsel on deals.
  • Move the needle now and don’t wait to be perfect.
Justin Jones

Author Justin Jones

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