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Wednesday, 22 November 2017

IFR: how it all began

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  • Christian Hemain

Donald Last, the man who typed the first issues of what became IFR, remembers the foundation of what was then the Agefi Bondletter – and the man who started it all.

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Every Friday evening Christian Hemain would come down to Sevenoaks with his Eurobond notes stuck in his pocket and catch a cab up to my small publishing office in the high street of this small town in Kent, southeast of London. After a cup of coffee and without further ado we would sit ourselves in front of an IBM “golf ball” correcting typewriter – an essential and crucial piece of equipment given our time constraints and my typing – and in his fractured Franglais Christian would dictate the week’s Eurobond issues.

“Ze deal of ze week was IBM Eurodollar US$100m seven-year wiz ze cinq … err … 5% coopon, prix 99, lead banque Citi and ze selling group ABN AMRO, SocGen and Banque Lux. The issue sold ‘plus vite’. Rating Triple A. Terms: bearer bond, pari passu, ‘lois Anglais’…”

And so we continued in those early days in March 1974 working through the night until sun-up – with me converting the dialogue into a spare and compact English prose, a style that was the essence of my own business newsletter, the Transterra Brief, and that emulated that of my German backers and partners in Detmold, the Schmitt-Brief. Such was the parentage of Christian’s Bondletter, a newsletter, by Sevenoaks out of Detmold, Germany – a suitably “Euro” debut for what was to become the beacon of the Euromarkets.

The notion behind the style was simply this: take any random newspaper story and a highlighter pen and go through colouring the key points and you probably end up with four or five lines – the essence of the story. And that is how we wrote the Agefi Bondletter; and that is why, after six months in Sevenoaks, Christian was ready and able to write his own copy in London. As he said himself, he didn’t pretend to be Shakespeare, though he was certainly polished in French. Building on that base, Christian later expanded and enriched his English prose but in those early days simplicity was crucial. 

When finished, the waxed four pages of copy went down to the print room for the printer who came in around 6am to produce 200 four-page newsletters (a folded sheet of A3 paper), which he inserted into ready-stamped envelopes and took them to Sevenoaks’ post office to arrive on readers’ desks on Monday morning. Later, when there was a large Continental clientele, Christian used to hire a Mercedes to take copies to Paris for posting – so there was also a free ride up for grabs to Paris for the weekend.

Christian would pick up his copies and return to London and without pause would then use his Bondletter to dictate his weekly report on the Euromarkets for Agence Economique et Financiere in Paris. Hence the Bondletter’s name, Agefi Bondletter, a title that puzzled and bemused quite a few Anglo-Saxon bankers in the City, who discovered for the first time that Paris produced a financial newspaper roughly equivalent to the Financial Times.

This description, while accurate, flatters Agefi as much as it profanes the FT, for while the FT was typically replete with features, pundits, comment and editorials, Agefi was written and produced like a railway timetable. As such, it was admirably suited to its purpose: to keep investors throughout France, Belgium and Luxembourg fully informed each morning on French, Continental and world financial markets, plus forex, metal and commodity prices. Agefi was sent to bank branches throughout these countries and posted up in bank foyers each morning.

Manna from heaven

The newspaper was owned by the “Patronat” – a group of top-tier French companies – and the absence of editorial and a Lex-type column was for them Agefi’s chief merit: there would never appear a comment on, for example, Michelin’s annual results that in any way impugned its excellence; nor any questioning of Michelin’s assumed supremacy in the global tyre market.

For Christian, the Euromarkets were manna from heaven for it gave a point and purpose to his role as Agefi’s London correspondent. He had a desk in the Daily Telegraph’s city office, which is how we met, I being deputy city editor of the Sunday Telegraph, and we kept in contact when I left the Sunday Telegraph in 1972 to start my own business newsletter.

Christian knew I was very interested in the Euromarkets (I had attended the first ever press conference on this new international capital market – held by Hambros in the City) and I penned occasional articles for the Sunday Telegraph. They had to be “occasional” since Eurobonds were hardly the stuff of breakfast reading on a Sunday morning.

Still, there were plenty of readers who saw the irresistible allure of Eurobonds, an allure helped by the fact that they were untraceable, anonymous, high-quality bearer securities with coupons attached paying interest gross that one could post to the paying agents from anywhere in the world – from the Amazon forest if need be.

Christian, of course, knew these faceless high-quality Eurobonds made his weekly feature in Agefi compulsive reading for wealthy investors, a group Christian collectively dubbed “the Belgian dentist” – indeed a phrase coined by him, which has now become a cliche.

Just the facts

Christian’s Eurobond coverage was way beyond anyone else in the field. His prime sources were a limited circle of American, French, Luxembourg and Swiss bankers. From them, he learnt of the deals ahead of everyone else, and got all the details, plus each bond’s take-down. In other words, his contacts effectively gave him the bond term-sheets.

It was these bankers that sowed the seed in Christian’s mind of starting his own Eurobond newsletter, for they were pre-eminent in the Eurobond sector at that time, whereas the City’s prime interest was Euro syndicated loans.

Indeed, the one newsletter already out there – International Insider, by an ex-FT man, Bill Low – principally covered Euro syndicated loans not Eurobonds. It was also very aggressive in its commentary, while Christian eschewed gossip and rumour. It might titillate, but good hard information sells and that is the angle Christian took on Eurobonds, with the ascetic English style of writing to match.

So Christian’s weekly trips down to Sevenoaks began. There was some tut-tutting over the fact that he did not inform Paris of his decision to launch a newsletter in London with “Agefi” on the masthead, but financially he did not need to because I took no fees; and since we only sent out some 200 copies, Christian could pay for it out of his pocket if need be. After all, if successful it was kudos for Agefi and extra revenue. If it flopped, so be it.

Paris was pretty intransigent to begin with and at one point I tackled my German publisher to see if he would finance the venture, but he didn’t understand the concept. Indeed, once those in Paris knew about the Bondletter they accused Christian of “raping” them, but then they hurriedly set up a £100 “founder company” in which Christian had one share.

Popping corks

The champagne corks had popped the first week after the launch when the first sub of £40 came in the post from a British bank. And it was only a few months after the launch that a French banker made a memorable remark about the new Agefi Bondletter.

“Christian,” he said, “You have made of the Euromarket a glass house.”

Subscriptions continued to flow in and by the end of 1974 Christian had 50 subscribers. By the third year it was 200. They were a rainbow of banks – American, Continental, British and Japanese. Subscriptions were upped a little every year and by 1977 the Bondletter was making serious money. Thereafter, revenues grew steadily in step with the Euromarkets in all its manifestations. 

Recalling his very early Telegraph days in a 1987 interview by the Institutional Investor on IFR, Christian said: “The Telegraph didn’t like having a French journalist among them so they put me with the switchboard girls. But I was very happy because the girls took care of me and did my laundry.” 

Knowing Christian, I am sure they did.

New title

By the mid-1980s the stage was set for a fully-fledged magazine with a change of title. Christian had an important friend at Agefi Paris, the advertising director Marcel Sainte-Marie, who understood the value of the Agefi Bondletter because he had a son working in international banking in London.

Thierry Naudin, who became an IFR associate editor, explained how the title change came about. “By late 1983 or early 1984, Marcel, frustrated by the unsympathetic attitude in Paris towards the London publication, abruptly swung his vote in favour of Christian, giving him 51% control, and under English company law there was no way this could be subverted. Paris lost interest for good and finally bailed out.”

The consequence was that Christian was no longer able to use the Agefi title. Hence, the reincarnation as IFR, the International Financing Review.

Very French

In later years when his creation became a global name, Christian was often described as flamboyant. This is a misnomer, though an understandable one. In those days anyone non-English and out of the ordinary might be characterised as “flamboyant” compared with your standard, stiff upper-lipped City man.

But flamboyance carries overtones of gesture, display, a certain superficiality, and there was none of that with Christian. Charismatic, yes, but again not a charisma that overwhelms (though they say that even when he walked into the newsroom in Paris they felt the electric pulse of his presence).

Christian was simply very French. He was Jesuit-educated, highly intelligent and very cultured. He had that striking French capacity for stiletto wit and paradox. Yet he bore his intelligence lightly and with a potent egalitarianism, lacking any sense of status or hierarchy. His tone and demeanour never changed, whether he was talking to a Euro-grandee who had dropped by for a chat, or the office cleaner. At the same time, he would not suffer fools gladly: he just ordered them out of the room.

Conversation with him was never dull. That is not to suggest that working life was one steady stream of scintillating talk. How could it be when one is grappling with bond terms and the fee minutiae of syndicated loan tranches (and there was no one more concerned with precision and accuracy than he)?

But the sort of comment he would make is illustrated in the 1987 Institutional Investor article. Talking of the ineffable secrecy of London’s traditional merchant banks, Christian said that if you rang them to ask about a loan you’d heard they were putting together, “it was like asking the pope for the name of his latest mistress”.

In the end, though, Christian had one formidable ally in his battles with bankers and his initial backers in Paris: the Euromarket itself. For there was a flagrant political and cultural dimension to Christian’s enterprise. As a Frenchmen he was exploiting his unique position to invade a world dominated by Anglo-Saxon financial journalism and his Continental banker contacts felt triumphant at his success.

This is Christian’s profound and unique achievement in creating IFR and there ought to be a plaque somewhere in Paris commemorating the fact. But, come to think of it, isn’t the IFR logo and stamp of authority doing just that every single day, in the City of London and across the world?

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