In building a strong orderbook for a new bond issue, underwriting banks may wish to draw upon interest from certain large investors, including investors who may have an existing relationship with the issuer, or development banks or other public international bodies with a mandate to support entities such as the issuer. The underwriting banks may seek, together with the issuer, to obtain a firm commitment of interest from an investor, in advance of the public marketing of the bond (i.e. a cornerstone investment), or to speak with certain key investors as a pre-marketing exercise but without any firm commitment or agreement that they will invest (i.e. potential anchor investments).

There are a number of considerations relating to such situations, including with regard to compliance with the Market Abuse Regulation, equal treatment of investors, whether any disclosure of a cornerstone or potential anchor investment needs to be made in the offering documentation, and whether any disclosure should identify the particular cornerstone or potential anchor investor.

This Quick Guide presents a short summary of these considerations where there are cornerstone investors or potential anchor investors in the DCM context.

Download the Article