Debt investments include things such as bonds and mortgages, with fixed payments to the investor that include interest. Equity investments, such as stocks, are securities that pay investors dividends on the earnings of a company. While debt investments usually offer a lower return than equity investments, they represent a consistent return and are less risky for investors.
Creating a Well-Managed Debt Investor System
Clear, consistent communication with debt markets is vital when a company seeks to ensure liquidity and funding. Regular communication will also reassure investors and build confidence.
For a large company, there are multiple points of contact with capital markets. Consistency of a message across all investor groups is essential. We will produce the core investment message that can then be communicated with the main investor groups, including:
- Institutional equity investors
- Institutional debt investors
- Fixed income or equity analysts
- Retail equity or bond investors
- Employee shareholders
- Bank lenders
- Commercial paper investors
- Financial journalists
- Rating agencies
We are uniquely positioned to take on the role of crafting investment messages, which also serve as an important compliance requirement and helps to ensure proper disclosure. This is especially important when communicating sensitive topics, such as the outlook of a company.
Questions to Ask Yourself
If your company frequently issues bonds, you may need a dedicated debt investor relations program. Two key questions should be addressed.
- Has the issuance program grown to a size that requires a dedicated team to handle interaction with debt investors?
- Could a dedicated debt investor relations team play a part in making the issuance program more effective, improving access to the markets and reducing the cost of funding?
We have the technical expertise to address the specific questions of fixed income investors. Just like equity investors debt investors have an interest in the health of a company.
Deliverables for Debt Investor Relations
We will provide the following deliverables for debt investor relations:
- Servicing the information needs of fixed income investors
- Engagement with the rating agencies for instruments that are rated
- Marketing new debt issues, including preparing materials and participating in roadshows
- Building long-term relationships with key investors
- Building an understanding of the potential investor world, which can support decision making on corporate finance and capital market activity, as well as providing the basis for targeting investors
- Mastering new social media to broaden exposure to investors across multiple platforms
- Providing internal feedback and education to the board of directors about debt markets and debt investors