I was once called away from a lunch with a former editor of this magazine by a very senior banker at Deutsche Bank, my employer at the time. The banker was furious. One of the newswires had published something he had said at a conference and he felt it was damaging a deal he was trying to complete. I should flag that this banker had form. He was known to be tough and had once temporarily pulled all credit lines to another large German bank after it had tried to poach a member of his top team. He wasn’t to be trifled with. So it was with some trepidation that I stepped into his office. He was behind his desk, slightly flushed of cheek and, as usual, smoking a cigarette. “I want you to get them to take [the quote] down,” he barked. “This story is costing me.” I found myself in a situation that rears its head often enough to remind me that most bankers don’t really understand how the media works. It is partly our fault. We PRs take some pride in giving the impression we can influence journalists and editors. Occasionally, in some small way, we can. So bankers look to us to rectify stories they don’t like. They think a quick call to the editor will straighten it out, an offending quote will be removed, lines either side dethorned, etc. If only. We may have a chance if a journalist has reneged on an understanding, such as an off-the-record agreement during a one-on-one meeting. But if a comment is made in a public forum in front of an audience, then it is fair game. Even if a banker has been misquoted, sometimes it is better on balance to roll with the punches rather than push back. It is not always worth drawing further attention to the matter. Often a quote is said to have been “taken out of context”, but even then it might be better to leave it unchallenged. Journalists will instinctively resist re-editing, quite rightly requiring a clear explanation as to why they might even consider it. Describing the “true” context for which an allegedly misused quote was meant can be fraught with its own risk (including triggering another story). Plus, it is rare that a comment is fully taken out of context. Frustrating Sometimes a journalist will take a free-to-use comment about a particular topic and use it in a different story on a related subject. This can be frustrating. The context may have changed but not necessarily in a meaningful way. And there is no rule saying this can’t be done. When asked, my angry banker colleague confirmed he had made the comments. They were reported accurately, they were used in context and they were said publicly. I advised him, in so many words, to take a deep breath, roll with the story and let the moment pass. I said no, don’t push for an edit. Seeking to change something that to the outside world seems relatively innocuous can send all the wrong signals, I explained. The wire journalist will suspect there may be more to investigate if we start asking for edits. With luck on their side, they might discover a deal was in the balance and they would definitely write about that. Which, of course, the banker didn’t want. On top of this, as a PR I would be uncomfortable seeking to change something that was sourced openly and fairly. It wouldn’t reflect well on the bank, and certainly not on me. My job is to advise appropriately and, if required, challenge a banker who asks for something unreasonable, particularly after the fact. If really pushed, one way to close off this line of conversation is to offer to make a few calls, which buys a bit of time in which passions can cool off. Was there nothing we could do, enquired my now-deflated banker. There is a lot that can be done, I said happily, relieved that my advice was being heeded and my head still attached to my neck. Not in this particular situation, I continued, but going forward. Time to pounce For PRs, these are moments in which to pounce – when a banker is fe

The first 19 days of US president Donald Trump's second term in office have not heralded the pickup in dealmaking (and investment banking fees) that bankers had hoped for, and worries about a tariff war and resulting inflation have contributed to a 20% fall in M&A activity so far this year. Bankers said the drop in activity was a surprise given the strong finish to 2024 and hopes that reduced regulation and greater focus on economic growth under Trump 2.0 would fuel a pickup in activity after two slow years. But tariffs imposed on China and the threat of extra levies on Canada, Mexico and European countries has dampened appetite for deals – at least until there is greater stability in policy. “January is typically a slow month for activity levels. I do recognise, though, that the newsflow that we're experiencing every day as it relates to tariffs and the like ... will take some time to clarify,” said Paul Taubman, CEO of US advisory firm PJT Partners, speaking to analysts on an earnings call. "I do think that it is having a short-term impact. In my expectation this is the storm before the calm.” UBS CEO Sergio Ermotti said an M&A revival could be dented if a tariff battle unfolds. "If you go to the next level or an unexpected level of tariff war then the consequences for inflation and economic outlook would probably not support M&A activity globally," he told reporters on a call after UBS announced its Q4 results. Drop off Announced M&A deals from the start of the year to February 5 totalled US$224.3bn, down from US$280.9bn at the same stage of 2024 and down 29% from the 10-year average at that stage, according to LSEG data. There have been 3,232 deals announced, 38% fewer than a year earlier. Significantly, announced deals for US targets totalled US$127.3bn, down 26% from a year earlier, and the deal count is down 31% to 961, the lowest tally since 2012. Cross-border deals for US companies has plunged 63% by value to US$12.7bn, the LSEG data showed, and although inbound deals are often only a slim share of overall US activity, that low level signals a lack of appetite to expand in the US by international firms. Transactional Bankers (and everyone else) are grappling with how serious Trump's threats are. They said it is clear he will push the envelope to get a reaction, and it may take time for countries to adapt to a more transactional relationship with the new US administration. “The tariff story is very volatile – the new US administration seems to be using the threat of tariffs to get a reaction," said Trevor Allen, head of sustainability research at BNP Paribas Markets 360. "This volatility is making everyone risk averse in that regard and probably the effect that it's had on global markets is to derisk. It is feeling like a risk-off period.” The worry is that a tariff war could be far reaching and increase costs, add inflationary pressure, disrupt supply chains and see interest rates raised. It could also see governments adopt more isolationist policies, which in turn deters companies looking at cross-border deals. Of the US$37.6trn value of announced M&A deals in the past 10 years, US$13trn – 35% – was cross-border activity, LSEG data showed. The US is at the heart of dealmaking, and targets there accounted for US$16.5trn of the deals in the past decade, or 44% of the global tally. There were US$3.57trn of deals in which overseas companies bought US targets, and US$3.19trn where US firms bought overseas targets. Don't panic yet M&A isn't the only area in which January was disappointing for bankers. Investment banking fees were down 31% in January from a year earlier, with equity capital markets fees down 37% and marking the worst January since 2009. Debt underwriting fees were down 19% year on year, albeit against a record start to the year in 2024. That was a shock after US banks posted bumper fourth-quarter results and were bullish that goo

US president Donald Trump’s on-again/off-again tariff policy has reignited volatility in foreign exchange markets and is sowing confusion among corporate treasurers and traders, bankers say, discouraging companies from making big investment decisions or adjusting FX hedging programmes amid the chaos. Tail risk in euro-dollar options markets has risen to its highest level in two years by some measures, according to analysis by Societe Generale, suggesting traders are concerned about sharp swings in the world’s most traded currency pair. That comes as investors have struggled to parse the implications of the fast-paced tariff announcements coming out of Trump's White House. Sweeping penalties on Canadian and Mexican goods were announced on February 1 only to be shelved two days later, causing those countries' currencies to whipsaw on Monday before settling down later in the week. A 10% tariff on some Chinese imports has remained, however, and Trump has threatened to target the European Union next. All that has left companies and investors with large FX exposures scratching their heads: on one hand concerned about the potential for tariff-related market moves, but also reluctant to take any action given Trump’s unpredictable approach. “One hour there are tariffs on Mexico, the next there aren’t – this uncertainty isn’t the right environment to be making big decisions or changes to how you’re positioned,” said Amol Dhargalkar, managing partner and chairman of the board of directors at hedging advisory firm Chatham Financial. “Markets are standing on very unstable ground right now and clients are highly unlikely to make any meaningful investment decisions or changes to their hedging strategies in the face of this uncertainty.” Canadian dollar volatility on Monday hit its highest level since 2022, according to CME Group, while the Mexican peso swung wildly following the political seesawing in Washington. Even countries not yet singled out for penalties have seen increased currency volatility this past week as FX traders have treated tariffs more as a global shock than as a contained series of country-specific episodes. Euro-dollar saw “the highest levels of minute-by-minute volatility in years” on Monday, according to Kristjan Kasikov, global head of FX quantitative investor solutions at Citigroup, who said that market choppiness has made it “hard to take directional views on the back of tariff announcements". Storm after the calm The rise in FX market volatility follows a sustained period of calm in currency markets for much of last year when central banks became less active after hiking interest rates aggressively. The dilemma now facing companies and investors is that the FX implications of tariffs can be significant depending on how they are enacted – and whether they’re kept in place. The euro has already fallen from US$1.12 in September, before financial markets started to bake in a higher chance of Trump’s election, to about US$1.04. FX strategists said the euro could fall to parity or below depending on what happens with tariffs and central bank policies. China’s closely controlled onshore renminbi market has also weakened against the US dollar in anticipation of tariffs, from about Rmb7 before the election in November to just below Rmb7.30 now. Strategists at Barclays believe it could move to around Rmb7.57 based on a 10% tariff and Rmb8.50 based on a 60% tariff. FX market volatility is expected to continue “at least into spring, as tariffs threats are now moving towards concerns of currency war escalation", Olivier Korber, research analyst at Societe Generale, wrote in a recent report. China has already announced retaliatory tariffs on around US$20bn of annual US imports, according to research firm Capital Economics. Such “announcements might be trade negotiation tactics, but they are significantly increa

Mexican issuers sold more than US$3.5bn in bonds and equity last week, taking advantage of a brief pause in the tariff hikes that US president Donald Trump has threatened to impose on the country and that have rattled investor confidence in recent days. More such deals could be on the way. Electric power utility Saavi Energia, miner Minera Mexico and Spanish-owned bank BBVA Mexico seized their chance in the days following Trump’s decision on Monday to grant a 30-day reprieve in exchange for efforts to tackle drug smuggling and illegal immigration. Between Tuesday and Wednesday, those issuers garnered a combined US$3.1bn, nearly doubling the US$1.8bn of bonds sold by Mexican companies in January, according to IFR data. Grocery chain BBB Foods also rode improving sentiment with a US$593m follow-on stock sale on Wednesday. After standing down amid market turmoil on Monday, Saavi Energia, rated Ba2/BB–, returned on Tuesday with US$1.1bn inaugural bond designed to migrate its subsidiary debt to the holding company level. Books reached US$2.5bn before launch. Minera Mexico, rated Baa1/BBB+/BBB+, quickly came in Saavi’s wake on Wednesday to price a US$1bn 5.625% seven-year senior unsecured note to fund the expansion of its El Pilar and El Arco copper mining projects. And BBVA Mexico the same day saw order books swell to US$5.4bn on a US$1bn Tier 2 10-year non-call five offering, rated Baa2/BB. Seizing the opportunity "I think [issuers] are being preemptive. They waited until yields eased a bit recently and are taking advantage of the 30-day pause," said Beth Morrissey, managing partner at EM research firm Kleiman International Consultants. More corporates from Mexico – a major exporter to the US – are likely to follow suit in the coming days before conditions potentially worsen. "We will see an active February, with issues by [Mexican] companies that have their paperwork ready, taking advantage of the more stable backdrop," a banker said. "There is a great amount of volatility expected in the upcoming months and even years." Indeed, experts warn there is no guarantee that Mexico’s tariff troubles are over, and fast-forwarding deals may be the best strategy. S&P warned last week that the 25% tariff hike that Trump proposed would pose significant challenges to corporate credit quality in Mexico, impacting sectors such as mining, auto suppliers and oil and gas companies. "We don’t think Trump’s U-turn necessarily means he’s bluffing about other tariffs," Paul Ashworth, chief North America economist at Capital Economics, wrote on Wednesday. Several Mexican companies have US dollar bond maturities this year and into 2026, according to LSEG data, and could be potential candidates for new issuance. These include restaurant operator Alsea, utility Electricidad Firme de Mexico and chemical company Orbia, formerly known as Mexichem. Debt-laden oil company Pemex also has looming bond maturities though government support in this year’s budget is sufficient to cover those. "Treasury rates are unlikely to come down, and who knows what is happening with this tariff situation,” said a second banker. “With the improved backdrop from the delay, it’s better to get the deals done now."

A group of banks that provided debt financing to back Elon Musk’s purchase of X when it was still known as Twitter have sold US$5.5bn of term loans that formed part of the original debt, freeing the underwriters from a sizeable portion of the original US$13bn that has been sitting on their balance sheets since the acquisition completed in October 2022. The sale marks a significant development for the banks, led by Morgan Stanley, as the debt has been a heavy burden. The lenders, which also include Bank of America, Barclays, MUFG, BNP Paribas, Mizuho and Societe Generale, had been unable to sell the debt as investors in the leveraged loan market were turned off by governance concerns surrounding Musk and X’s struggling business. However, the tide has turned as Musk has gained political influence as an adviser to US president Donald Trump and as the head of the Department of Government Efficiency, known as Doge. That increased clout has renewed interest in X as a communications platform, bankers said. “People on the Street told me they had excess demand on top of that US$5.5bn,” one of the bankers said. “I think there is a bit of FOMO associated with that deal. [The sale] had a lot of momentum and went quite well.” The US$5.5bn term loans, which were allocated on Wednesday, sold at 650bp over SOFR with an OID of 97. Investors will earn a yield of 11.75%. By midday on Thursday, the loan was quoted at 99.25–99.5 by at least two dealers and 99.375–99.75 by a third. Just a week ago, banks were marketing only US$3bn of the loan at a much wider discount, in the range of 90–95 cents on the dollar. In spite of a frosty response from traditional investors, the debt found a home with a small number of accounts that committed large orders, an investor said. One of those buyers is the hedge fund Citadel, another source said. The original financing for X comprised a US$6.5bn seven-year senior secured term loan, a US$500m five-year revolving credit facility, a US$3bn one-year bridge loan and a US$3bn one-year unsecured bridge loan. With the market lacking liquidity in late 2022, even offers of leverage through derivatives and other types of financing failed to entice investors to take the debt from the bank group. Bankers reportedly proposed replacing some of the X acquisition loans with margin loans backed by Tesla shares and which Musk, who is chief executive of both companies, would be responsible for repaying. That still didn’t sweeten the debt enough to attract a robust buyer base. However, Wall Street’s view of X has become rosier over the past few months. An investor who is familiar with X but did not participate in the debt sale, said that though the company’s revenue has declined, its costs have also fallen significantly, which makes the debt more attractive. “The key free cashflow over the next five years is what you are thinking about, and the key variable is what kind of revenues come back that you lost,” the investor said. “And it appears like there are some big people. Call it whatever you want – political reasons – there are some big names coming back [to X].” Additional reporting by Kristen Haunss