Issuers engage in a roadshow to promote potential offerings to investors and receive feedback
Dealers and issuers market to investors in the primary bond market in order to introduce the new issue to investors. In addition, the marketing process entails educating investors on the new issue security’s specific features and structure. This process provides dealers and issuers with the necessary information to present the issuer with an informed forecast regarding the demand of the new issue.
An expression of interest is an underwriting expression showing a conditional, non-binding interest in buying a new issue. Investors provide the issuer and dealers with an expression of interest to aid them in the price discovery process. The expression of interest also allows investors to communicate specific needs and conditions to the issuer regarding the new issue.
Road shows are presentations set up by dealers for the issuer to present pertinent information to potential investors. They give the issuer an opportunity to solicit interest from investors and address any immediate investor concerns. There are two types of roadshows:
After the marketing period, investors have the opportunity to express needs and interests, through a reverse inquiry. This is a good-faith gesture that supplements the issuer’s marketing period sentiments. Dealers may also target individual institutional investors to solicit an expression of interest. This is known as soft sounding. This discussion is aimed at gauging specific interest in a potential deal structure and pricing.