Wednesday 22 September 2021 by Daniel Jones FIIG_origination-process-900 Trade opportunities

FIIG origination process


FIIG is active in arranging unrated, over-the-counter bonds for both ASX listed companies and large Australian private companies.

The eight strong FIIG Debt Capital Markets (DCM) team based in Sydney and Melbourne are constantly scouring the Australian debt market for the next suitable unrated bond deal. Since inception in late 2013, FIIG has sole lead arranged more than 60 transactions, raising ~$2.7bn for rated and unrated mid-market corporates across the Property, Financials, Infrastructure and Mid-Market Corporate sectors.

Deal leads are generated through FIIG’s extensive network of advisors, internal referrals, targeted marketing or general marketing / reverse enquiries. From these leads the DCM team will engage in numerous calls and meetings each year which will lead to the most prospective high-quality opportunities finding their way to FIIG’s DCM Pipeline.

Within an average 12 month period DCM will critically analyse the credit worthiness of more than 100 qualified transactions from which 7-8 new deals will make their way through to the final credit approval stage. Inter alia DCM will review stability of earnings, strength of the sector and internal governance of potential issuers to assess whether an unrated bond is suitable.

Credit Process

The deal team will work up an indicative term sheet to commence negotiations with the potential issuer and complete an “Earlybird” credit paper if the transaction is non-standard. The Earlybird or draft Credit Application is shared with key members of the Credit Committee for initial feedback, credit queries and support to proceed. Once support has been provided the deal team will move into a more detailed credit due diligence process with the Issuer, usually taking up to 4 weeks.

During this time, and in collaboration with FIIG’s Head of Syndicate, the DCM team will structure and negotiate the key terms of the bond with the Issuer and the DCM team will finalise the Credit Application paper for the Full Credit Committee. Each bond brought to market by FIIG is the culmination of robust credit analysis, negotiation and collaboration between FIIG and the Issuer with the investors’ best interests always FIIG’s primary driver.


Once Credit Committee supports the Credit Application and provides approval to proceed with arranging the bond the DCM team will work with the Issuer and external ‘tier 1’ legal counsel to draft the bond documentation. FIIG has a small panel of tier 1 legal firms who have worked closely with FIIG to develop an appropriate set of legal precedents which reflect best practice.

Over the next 2-4 weeks FIIG’s Credit Research team will complete their independent due diligence and initial credit research coverage report that will accompany the bond launch. DCM work alongside FIIG’s internal marketing team and the issuer’s legal and internal PR or communications team to prepare the associated marketing collateral for the General Offer.

Syndication – Cornerstone Investor Process

The role of Syndicate is to manage the book build process to ensure best execution for the Issuer and managing the allocation process for investors in line with ASIC guidelines. Best execution is defined as striking the appropriate demand and supply balance to ensure the minimum issuance amount “clears” within a “reasonable” selling period.

To provide this execution certainty Syndicate will “cornerstone” every transaction where possible around 2 weeks ahead of the General Offer deal launch. FIIG will seek to cornerstone (presell before launch) ~25% of the transaction if possible. This process allows FIIG to receive market feedback on terms and pricing and provide increased execution certainty for the issuer.

General Offer

On launch of the General Offer, FIIG will email approximately 5,000 wholesale investors who are actively investing already with FIIG inviting them to participate in the new bond. The offer is generally open across 3-5 days, however, may close early due to strong demand.

The Relationship Management team will field inward enquiry from clients who receive the General Offer email, as well as proactively contact clients who have expressed an interest in unrated high yield Australian credits. This process will continue until the book is sufficiently covered to allow for a high level of confidence in the coverage of the total amount of bonds offered.


After close of the offer period, FIIG Custody, Cash Settlements and FI Settlements teams along with DCM, Finance and Legal & Compliance work closely together in: collecting funds from investors, working through account allocations and ultimate settlement of the bond. Bond settlement will occur only when the Issuer has provided appropriate security for the transaction and legal sign off has been received from the requisite legal teams acting for both FIIG as Arranger and the Issuer confirming the transaction has reached financial close and contractual completion.