Companies and financial institutions that frequently issue bonds typically set up a debt programme that enables them to access the market efficiently and securely on a regular basis.
The benefits of issuing through a debt programme are compelling. Establishing a programme will lead to a consistent and cost-effective means of issuance for commercial paper, shelf registration debt or medium-term notes that avoids unnecessary duplication.
However, there are specific features you want to look for when selecting an issuing and paying agent (IPA) partner.
1. 24/7 access
When choosing an IPA provider, 24/7 round the clock access to data is crucial to any business. Though issuing into the European market is typically done via the Euroclear and Clearstream securities clearing houses (instead of the U.S.-based depository trust company system,) European clients still want a consistent experience – no matter where they’re based.
“24/7 access to their programme data is critical irrespective of clients’ location, no matter where the transactions take place,” says Darren Mockus, programme debt product manager at U.S. Bank. “Look for a system that’s real-time and allows you to access your data at any time, from any location.”
2. Ability to enhance systems
While many European providers’ systems are long-established and therefore difficult to update, a new entrant can start from scratch and take advantage of cutting-edge technology to make digital enhancements. This ability to enhance systems can prove critical to delivering the right service.
“We have the benefit of building a system for today’s markets – taking into account all the current operational, technological and regulatory challenges that exist today and building a system to meet those head on,” says Cameron Munden, a London-based sales manager at U.S. Bank. “We’ve designed it in such a way that it can easily adapt to meet the inevitable new challenges of tomorrow.”
In practical terms, systems can be enhanced through the ability to extract data in multiple formats, as well as the ability to set up an extract of automatic data files transfer via FTP. The IPA service you choose should come with these capabilities and use technology that can grow with clients to meet increased demands in the future.
“We’ve created our IPA service to be scalable, so that if clients need to issue with increased frequency, the programme can easily adapt,” says Mockus. “And we’ll hand hold each of your transactions for as long as you need with dedicated support.”
3. Exceptional customer service
With any IPA provider, don’t underestimate the need for quality customer service. “Clients want exceptional service,” says Mockus. “They want us to take action on their behalf in a timely manner; they want smooth and timely settlements.”
While U.S. investors have been enjoying IPA partners with this level of customer service, European investors have been looking for offerings of equal calibre. Now, providers in Europe are starting to offer solutions to the EU market that come with swift and attentive customer service so clients can issue in a quick and cost-effective way.
The logic behind the push for more IPA options is simple: Investor appetite for prompt payment and settlement is growing in Europe. “Clients are looking to achieve a consistent international model for issuance,” explains Munden.
Given that global issuance volumes have increased exponentially over the last 20 years, it makes sense that the demand for programme debt has risen as well.
U.S. Bank is an experienced corporate trust provider with a solution for programme debt that provides 24/7 access, excellent client service and a future-proof mindset. Learn more about our European trustee solutions.
