The Treasury Department

The Treasury Department needs to refinance by either restructuring their bonds or issuing new ones. To assess cross-ownership risks and opportunities the Treasury Department needs a clear understanding of who are also shareholders.

  • Are there common debtholders and shareholders?

  • Are there shareholders not yet invested in debt?

  • Are there any activists who would build a position across assets?

Original order books provide inadequate information for refinancing.

Implications to the IR Department

The IR Department must provide an investment case for the company and not just underlying securities, debt and equity are both critical. They need to be aware of cross-ownership, plans of refinancing and the impact to the ownership structure.

  • Are there common holders of both the debt and the shares whom may rotate out of both?

  • Are there Hedge Funds and Activists building positions across both equity and debt?

Failure to have a holistic IR approach could lead to reputational risk and increased activist threat.