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Sidestepping the Risks of Corporate Debt Deals

Start-up advisory firm Aequitas argues CFOs need help dealing with underwriters conflicts of interest. (Michael Biehl of Chart Industries)

By Katherine Heires | Updated on July 30, 2012
Issuing debt can be a daunting and time-consuming effort, especially for CFOs at small or midsize companies that go to market infrequently. David Pritchard and Jonathan Cunningham, founders of Aequitas Advisors in Stamford, Conn., argue that while CFOS at large public companies with well-staffed finance departments might handle such tasks on their own, a CFO at a company with fewer resources or less experience in this arena should consider working with an independent capital markets advisory firm. 

“The vast majority of corporate CFOs only approach the public markets very intermittently, coming to raise capital every three, four to five years,” Pritchard points out, adding that it behooves such companies to seek help in getting the best deal possible in what can be a highly conflicted and complex marketplace.

Pritchard, pictured at right, says the practice of hiring advisers for corporate debt issuance is common in Europe but is only now starting to gain traction in the U.S. Independent advisory firms such as the Rothschild Group, based in Europe, now offer these types of services to U.S. companies, along with M&A advice, as do a growing list of U.S. boutique investment banks, such as Greenhill & Co. and Moelis & Co.

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