Second-guessing the rating agencies

Last year saw a shake-out among fixed income e-trading The capital structures adopted by companies or foisted on them by market conditions are today the subject of intense scrutiny. In turn, debt capacity advisory services provided by banks are increasingly in demand among borrowers. But the advice from banks and the ratings that are subsequently awarded can lead to some unpleasant surprises. Graham Field reports.

The term ‘debt capacity advisory services’ may not trip off the tongue, but increasingly, there is a small corner of just about every investment bank that answers to that description.

At Barclays Capital, which has developed its debt capacity advisory service over the past couple of years, “the very existence of the team reflects the extent to which this is a hot, hot issue with clients”, according to the team’s leader, Steve Francis, managing director for financial strategy. “Debt used to be