Programme debt: 3 IPA lessons learned through experience

It may not seem like there’s much difference between IPA service providers. But in a competitive marketplace, our experts assert, clients can and should be more selective.

Organizations that issue bonds on a regular basis often set up debt programmes that enable them to access the market easily, efficiently and securely. Doing so can provide a consistent, cost-effective way of issuing commercial paper, CDs, medium-term notes and other debt instruments that avoids unnecessary duplication.

Debt issuance programmes require an issuing and paying agent (IPA). Since this is a standard and relatively uncomplicated product offering, it may not seem like there’s much to consider when choosing a partner. But is that really the case?

We spoke with several of our programme debt specialists here at U.S. Bank to uncover what lessons we’ve learned from our many years of experience in the IPA business and, ultimately, what clients need from their provider.

• Cameron Munden, vice president of European sales for U.S. Bank Global Corporate Trust
• Darren Mockus, vice president of conventional debt operations for U.S. Bank Global Corporate Trust
• Kevin Warren, assistant vice president of conventional debt operations for U.S. Bank Global Corporate Trust

Here are their three key takeaways.

Lesson 1: Clients want a well-resourced and competitive service offering.

Technology is always advancing, which means there are always new and better ways of doing things. Clients with debt issuance programmes want a provider with a solid infrastructure. But beyond that, they need a partner with the curiosity and commitment to provide flexibility and updated solutions to meet evolving needs.

“Because the market is always in motion and volumes keep increasing, it’s crucial for service providers to stay on the front foot – making enhancements, improving operations and not getting stuck in old methods and outdated processes,” says Cameron.

At U.S. Bank, we provide an end-to-end platform solution – from issuance to maturity. Our team recently enhanced our system to give clients comprehensive access to manage their transaction activity, compile reports, schedule tasks and handle high volumes.

“We’ve completely updated the way clients can access our resources,” says Cameron. “Clients now have more refined and robust access to our online portal, so it’s easier and quicker to review and approve transactions.”

Part of this overhaul included adding additional modules to our in-house platform and vendor system to improve efficiency and provide more straight-through processing (STP) capabilities.

“The new modules enable us to improve the efficiency of asset servicing, which significantly benefits our customers and their clients,” says Cameron. “It also helps to reduce the level of risk by removing a number of manual touch points within the process.”

As we refined our system, our teams were initially focused on settlement efficiency. But on further assessment, we saw the need to expand our efforts to asset servicing as well – so clients now benefit from efficiency at every step in the process.

“The IPA space is a competitive marketplace, so how do you stand out? What makes one provider different from the next?” says Cameron. “I think a lot of that lies in continuous improvement and keeping your finger on the pulse of today’s needs. We’re generating a lot of traction in this space. We’re able to offer a tailored client experience and a flexible system where clients can customise their report timings and tailor their trade confirmation process – it’s things like that which our clients really appreciate.”

Lesson 2: Quality client service always stands out.

One of the key points of differentiation among service providers is the level and quality of client service. Where offerings might be similar, exceptional client service adds a layer of engagement, ease and confidence that’s hard to quantify.

“At U.S. Bank, we work with our clients from the initial stage to execution,” says Darren. “And at every step of the process, we put client service at the forefront – not just as a talking point, but in the very way our teams and organization are structured.”

Size and scalability make a big impact on client service.

“We’re able to provide such agile, bespoke treatment because we can adjust and adapt,” says Darren. “We’re ideally sized where we can put a focused team together and tailor our services to meet client needs.”

High quality service connects closely to how much a provider can shape solutions to meet a client’s unique requirements.

“There’s a tendency for providers, as they scale, to become less flexible and more locked into a fixed operating model,” says Darren. “This can really bog down steps like know your customer (KYC) and onboarding, which more agile firms can usually handle more quickly.”

Agile providers that put service at the forefront see their function as one of being a true partner to clients. From this perspective, they apply their experience and expertise to advise clients of the best approach to take in relation to trade activity, market mechanics and asset servicing.

“Clients often present us with specific requirements,” says Darren. “We then tell them what’s possible, and we work with them via regular onboarding touchpoints to manage those efforts all the way through to the go-live date.”

Lesson 3: Reputation and proven success instill confidence.

When managing your debt issuance programmes, you need an IPA you can rely on. A provider’s reputation and a track record can provide a strong indication of what to expect.

“Working with a reputable team gives you the comfort of knowing your trade will be settled as outlined and as agreed,” says Kevin.

A global footprint and wide network of resources offer additional confidence.

“Clients who work with us often tell us they know they’re in good hands,” says Kevin. “We have a highly skilled team of trust professionals located across London and Dublin – backed by the reputation and resources of U.S. Bank.”

The IPA team at U.S. Bank has taken major strides forward over the years, partnering with teams in the U.S. to support global clients and expanding our agent servicing capabilities into other EU markets.

“We’re very experienced in processes and have a wide, established network,” says Kevin. “We actively engage with our trade counterparties to ensure we’re operationally ready for the go-live date, and we have a robust escalation process in place to resolve any potential issues in advance of the settlement date.”

Our model for success

At U.S. Bank, we understand the importance of your transactions and are positioned to deliver the responsive support you need. As your issuing and paying agent, you’ll benefit from:

• Timely settlements
• Prompt payments
• Knowledgeable and responsive team of experts
• Exceptional client service levels

Our customized platform brings you the tools you need to easily manage the details of your transaction.

• 24/7 online access to programme data
• Multicurrency capabilities
• Intuitive navigation
• Continuous system enhancements
• Ability to extract data in multiple file formats
• Automatic data file transfers via FTP