Selling a new high-yield bond for a company usually involves conducting a full investor roadshow. It is an integral part of the deal marketing process and can be of pivotal importance in terms of lowering a company’s cost of borrowing. London-Paris-Frankfurt-Milan-Madrid is a typical European circuit, often traveling by private plane, always dining at the best restaurants and staying at the finest hotels. This might sound exciting and glamorous, but I can assure you, it’s anything but.
In a nutshell, a roadshow involves taking borrowers—the bond issuers—to meet and sell their story to potential investors, who range from hedge funds and asset managers to insurance companies and pension funds. The issuers and their bankers go through a scripted PowerPoint presentation; address any structural, disclosure, or financial issues in the offering prospectus; and finish with a Q&A.
Each day is a series of back-to-back meetings and group investor lunches, flanked by market update and strategy conference calls and punctuated with mad dashes to the airport. Roadshows can be arduous, grueling, and often stressful.
So far, this particular roadshow has been a breeze. Investors love the deal. The client is happy, and the bankers are all playing nice. Heading into the home stretch, the day starts off just like the others. My BlackBerry alarm clock goes off at 6:45 AM The auxiliary wake-up call comes at 6:50 AM, and the “waffle wake-up call” arrives at 7 AM sharp. A “waffle wake-up call” is more or less exactly what it sounds like. Upon first checking into a hotel, I prearrange breakfast room service with strict instructions for the butler (their term, not mine) to come in and make sure that I am awake and/or still alive. You can’t risk waiting to arrange this until right before you go to sleep in the likely event that you won’t have any recollection of getting back to the hotel at night.
A 6:45 AM wake-up isn’t particularly early by my standards, but it is after the typical night out on a roadshow—wining and dining the client over dinner and enough drinks to recover from an exhausting and tedious day of nonstop meetings. Banks generally pay for the roadshow expenses out of deal fees, which are typically in the region of 2% for a decent high-yield deal. So the client wants and expects to have a good time, especially if the deal is going well. In many cases, it’s the most exciting thing they’ll do all year, so they want to make the most of it.
Corporate executives are just not cut from the same cloth as investment bankers, so the client festivities usually wrap up by midnight. From there I’ll get into the elevator with the clients, talk about what a pivotal day we have coming up, drop them off on their floor, and then double back downstairs. (Never stay on the same floor as a client; a shared stroll to the elevator at 7 AM with a well-known corporate executive and two prostitutes taught me that lesson, a situation that was made even more awkward by the fact that the hookers were his.) By the time I manage to shed the deadweight, I’ve already arranged to meet anyone I can—friends, colleagues, competitors, or even buy side clients for more drinks. Having played the part of babysitter all day, this is my chance to blow off some steam. My mission is to push myself to the limit of what I can handle and still be able to function the following day, a formula that I don’t always get quite right. I generally try to work my way back to the hotel for a civilized nightcap before 3 AM, when I can sit back in the lobby bar and watch the whores on parade as they escort the drunken businessmen back up to their rooms. I don’t think there is anything in this world quite as brazenly entrepreneurial as a prostitute soliciting me in the corridor of a hotel, just as she’s leaving some guy’s room and I’m staggering toward mine. I know a few guys who have made that trade, but the “hot pocket” isn’t my thing.
To kick off a roadshow day, the client breakfast ordinarily starts downstairs at 7:30 AM Having already scarfed down two coffees and some waffles in my room, this is when I’ll deliberately order a jasmine tea and a fruit plate just to make a point to the client that I’m a serious and disciplined professional. I usually accompany that with a quick line about how terrible the hotel gym is. “The treadmill shakes too much at high speeds” is a fan favorite.
Our first investor meeting, and my third coffee of the day, starts at 9 AM Four hours, three meetings, one investor group lunch, and an unknown number of coffees later, we’re just halfway through the day. Come 6 PM, it’s finally time to head to the airport. It is the end of yet another tedious day of the roadshow. Thankfully, all that stands between me and the warm embrace of an evening in Madrid is a two-hour flight.
For this roadshow, given the schedule of meetings and travel logistics, it makes sense to travel by private plane. On a commercial flight, with some basic preparation, you can make sure you aren’t seated anywhere near a more senior colleague or a client. Instead of working or reading the latest issue of Institutional Investor, you can watch a movie, get some sleep, and, most important, have a few drinks. The best part of any airport lounge or first-class cabin is that no matter what time of day it is, it’s generally socially acceptable to drink. Sadly, our travel arrangements today afford me no such opportunities for a much-needed elixir.
I’m a really nervous flyer to begin with, and I am immediately reminded of the endless number of statistics that say flying private is substantially more dangerous than flying commercial. As exhausted as I am, I try not to think too much about it and quickly settle into my seat for the easy jaunt to Spain.
Just over halfway through the flight, all the coffee in my stomach feels like it’s percolating its way into my lower intestine. It’s nothing out of the ordinary, and my internal body clock comforts me with the knowledge that my next BM should be right around ten minutes after hotel check-in. After all, I haven’t dropped heat on a plane in about ten years, and there’s no reason to think that streak will end on a relatively short trip on a private jet.
I hunker down and focus on other things, like playing Snake on my Matrix edition Nokia. Twenty minutes pass, but feel like an hour. We then experience, even by my standards as a seasoned traveler, some pretty violent turbulence. With each bounce, I have to fight my body, trying not to sh*t my pants. Thirty minutes to landing, maybe forty-five, I tell myself, every jostle a gamble I can’t afford to lose.
On a plane like this, the flight attendant isn’t really as much an attendant as she is someone who keeps the pilots company. Trying not to draw attention to myself, I signal to her and she heads toward me. I start to think about insurance; am I wearing boxers or boxer-briefs? I’ve got no clue; I was still drunk when I got dressed this morning.
“Excuse me, where is the bathroom, because I don’t see a door?” I ask while still devoting considerable energy to fighting off what feels like someone shook a seltzer bottle and shoved it up my ass.
She looks at me, bemused, and says, “Well, we don’t really have one.” At this point, she reads my mind, and preemptively continues. “Well, technically, we have one, but it’s really just for emergencies. Don’t worry, we’re landing shortly anyway.”
“I’m pretty sure this qualifies as an emergency,” I manage to mutter through my grimace. The turbulence outside is matched only by the cyclone that is ravaging my bowels.
I can see the fear in her eyes as she nervously points to the back of the plane and says, “There. The toilet is there.” For a brief instant, relief passes over my face. “If you pull away the leather cushion from that seat, it’s under there. There’s a small privacy screen that pulls up around it, but that’s it.”
At this point, I am committed. She just lit the dynamite and the mineshaft is set to blow. I turn to look where she is pointing and it makes me want to cry. I do cry, but my face is so tightly clenched that it makes no difference. The “toilet” seat she is referring to is the seat occupied by the CFO, i.e., our fucking client.
Up to this point, nobody has observed my struggle or paid much attention to my discreet exchange with the flight attendant. “I’m so sorry. I’m so sorry.” That’s all I can say as I limp toward the back like a drunk Quasimodo. Of course, as soon as my competitors see me talking to the CFO, they all perk up to find out what the hell I’m doing.
Given my fun-loving attitude thus far on the roadshow, almost everybody thinks that I’m joking. She knows right away that this is no joke and jumps up, moving quickly to where I had been sitting, which must have felt like slipping bare feet into still-warm bowling shoes, or the previously mentioned “hot pocket.”
I now have to remove her seat top—no easy task when I can barely stand upright, the small cabin continues to bounce around, and I am valiantly fighting a gastrointestinal Mount Vesuvius. I manage to peel back the leather seat top to find a rather luxurious-looking commode, with a nice cherry or walnut frame. It has obviously never been used, ever. Why this moment of clarity comes to me, I do not know. Perhaps it is the realization that I am going to take this toilet’s virginity with a fury and savagery that is an abomination to its delicate craftsmanship and quality. I imagine some poor Italian carpenter weeping over the viciously soiled remains of his once beautiful creation. The lament lasts only a second as I am quickly brought back to reality, concentrating on the tiny muscle that stands between me and molten hot lava.
I reach down and pull up the privacy screen with only seconds to spare. It’s an Alka-Seltzer bomb, nothing but air and liquid spraying out in all directions—a Jackson Pollock masterpiece. The pressure is now reversed. I feel like I’m going to have a stroke; I push so hard to end the relief, the tormented sublime relief.
“I’m so sorry. I’m so sorry.” My apologies do nothing to drown out the heinous noises reverberating throughout the small cabin. If that’s not bad enough, I have one more major problem. The privacy screen stops right around shoulder level. So I am sitting there, a sweaty disembodied head, in the back of the plane, on a bucking bronco of a commode, all while looking my colleague, competitors, and clients directly in the eyes. “Pay no attention to that man behind the curtain” briefly comes to mind.
I’m so close I could reach out with my left hand and rest it on the shoulder of the person adjacent to me. It’s virtually impossible for him, or any of the others, and by others I mean competitors and clients, to avert their eyes. They squirm and try not to look, pretending as if nothing out of the ordinary is happening—that they are not sharing a stall with some guy crapping his intestines out, vociferously releasing smelly, sweaty shame at one hundred feet per second. “I’m so sorry. I’m so sorry.”