FDs will need more corporate bond experience to keep up with market trends

For companies looking to recruit an FD, there are many
beneficial skillsets that have been enriched by the experience of managing
through recession. But a dearth of corporate bond issues until recently means
there is a relatively small pool of FDs on the market who can lead a capital
raising in this way.

With the slow, stuttering return of issuance, businesses are on the lookout
for an FD with the right experience to potentially lead a bond issue to raise
growth finance and get out of recession. The corporate bond market is set to
become increasingly popular because of the continued lack of availability of
bank credit and the huge volume of corporate debt due to mature that will need
to be refinanced, says John Bloor, head of finance and business transformation
practices at Alium Partners.

“The bond market could prove to be a key source of funding in 2010 and demand
for experience in this sector is set to soar,” he says. “Companies that wish to
raise capital through issuing bonds need CFOs with experience of tapping the
debt capital markets. Ideal candidates will not only already have gone to market
before but also demonstrate the confidence and gravitas to be able to present a
strong, credible investment case to investors,” Bloor explains.

Simon Walters, managing director at FD Solutions, says this demand is down to
the fact that scarce bank funding is not expected to lift. A bond issue may be
the best way out of a tight spot for some companies.

FDs that don’t have this experience could find themselves at a disadvantage
if the bond market picks up. Perhaps as something of a relief to many FDs,
though, Walters agrees there are not many FDs that have worked on bond issues:
coming at a job involving a bond issue when you have not handled one before may
still be possible if you have the skills to gather the required external advice
from those with this experience.

Beyond experience
Still, there are wider qualities that should also be considered. The ultimate FD
has been portrayed as someone who will enable management teams to make good
financial decisions on their own, enabling a company to reach its financial
goals. Jamil Rashid, managing director at Jara, a management consultancy,
believes this requires a change in skillset.

Businesses looking to recruit would do well to consider CFOs with bond
experience, but he warns companies not to overlook other essential qualities.
“The next generation of FDs must be able to cascade top-level financial strategy
down through the organisation and show people in any department how their
day-to-day actions and decisions are directly linked to the profitability of the
business,” he says. “They must be accessible and able to communicate so they
help people learn, rather than merely dictate.”