Magazine article American Banker

Glancing into the Future of the Middle Market and Swaps: Mid-Sized Firms Are Seeking Financial Service Options

Magazine article American Banker

Glancing into the Future of the Middle Market and Swaps: Mid-Sized Firms Are Seeking Financial Service Options

Article excerpt

BOSTON--Bankers who focus on the middle market for commercial leading activity are going to find growing demand from their customers for a host of financial service options, according to Russell Faucett, a managing partner of Barrington Associates, A Los Angeles consulting firm.

Mr. Faucett told Robert Morris Associates' convention last week that two major trends have changed the way companies raise money: It is easier today to go public, and it is easier to raise big chunks of capital.

Because of this, Mr. Faucett said, medium-size companies' feelings about their bankers have also changed.

"Middle-market companies have less loyalty to their banks," he said. "They engage in shopping. Relationship are more transaction-oriented. Companies have access to many different forms of finance."

And there are pitfalls to watch out for in working with these companies, he said. The credit status of these firms changes more often and more quickly. In evaluating some of them you have to "couple their financial strategies to their business strategies and goals."

Because of the way the money markets have changed, he said, middle-market companies have numerous options and banks must adjust to the new flexibility. Companies can go public easier and public offerings are becoming more complicated. The benefit of these things is that more companies are able to raise equity and at attractive prices.

Banks have been slow to develop in those ares where they can be of service to middle-market companies. But Mr. Faucett believes "there are many opportunities to be niche lenders. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.