In the white paper we published several weeks after November’s elections, we predicted that a substantial upturn in convertible issuance was coming. We’re heartened to have been proven right, as Kathy Schick details in The Month That Was.
What can we expect now?
The equity markets have been remarkably, astonishingly, resilient in recent days through events that a reasonable person might have thought would cause meaningful declines. There are, as always, at least two ways to look at this. One is to see a powerful tape that shouldn’t be fought. Backing that idea are the notions that a lot of cash somehow remains on the sidelines, having missed a historic bull market, and now looks to get in on any pullback. Perhaps. Another is to see the late stages of a long rally, with moves starting to get choppier.
Either way, but especially in the second view, it makes sense to look for a continued surge in issuance. A chief financial officer or treasurer who fails to cash in on the current market strength only to come up short on cash later this year in weaker conditions will have a hard time justifying keeping his or her job.
It will be interesting. You know where we stand at Hillside—raise money when you can, not when you have to. Otherwise you may find yourself chasing the paper too late on the way down.
(This is the cover letter for the subscription-based weekly Hillside's Hybrid Vigor newsletter. For a complete copy, please contact John Anderson at + 1 (646) 712-9289 x 107).