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Matt Levine

Sovereign Bonds and Merger Misgivings

Also bank stress tests, oil debt, scams, politics, the apocalypse, and unicorn anatomy.

Sovereign debt.

If you are an investment banker, your job, more than making money or avoiding risk or anything else, is to not miss deals. That is the measure of your worth as a banker and a person: If deals happen, did you do them? If they make money and are good deals, that is nice, but the important thing is that you were there. "Russia plans to issue at least $3 billion of foreign bonds—its first international issue since the U.S. and its allies imposed sanctions in 2014," and that is awkward for European and especially U.S. banks. On the one hand, there are the sanctions, and a State Department warning that "helping Russia finance its debt would run counter to the objectives of the sanctions" and raise reputational risks. On the other hand, if you are the Eastern Europe sovereign-financing banker at a U.S. bank, how can you miss this deal? War and geopolitics and patriotism don't change the prime directive, which is to not miss deals. Some banks are out, but "other banks, including Goldman and J.P. Morgan, continue to weigh their options."