A Zug Investigation
The Blind Squirrel's 'Monday' Morning Notes. Year 3; Week 28.
A Zug Investigation
The 🐿️ has always been strangely intrigued by the resource giant Glencore. Two decades ago, I recall frequent trips to Baar, the heart of the commodity trader’s operations nestled in the Zug Canton foothills of the Swiss Alps. Back then, we bankers were working to assist a secretive company that was quickly outgrowing its cap table to delay the inevitable - a public listing of its shares.
Glencore was turning to the hybrid debt capital markets (fixed income securities that score some equity credit from the ratings agencies) in order to shore up its lending capacity among the world’s commercial banks. My team at Citi was fleshing out the terms of a pre-IPO convertible bond, a deal that did not end up happening until 2009, but which did end up being a very good deal for the participants.
By nature, investment bankers are a confident crew. Dealing with the management team at the ‘Billionaire Factory’ Glencore was most certainly a match for that confidence. One would rather cancel a notoriously ‘hard to obtain’ meeting with the executive team than visit their non-descript low-rise alpine HQ without being 110% prepared. This management team had heads of state on speed dial and would have a bull-sh*tting corporate financier for breakfast!