My brain raced. Over the previous couple of days I had read some back copies of the trade press from 1992 when Argentina had negotiated its Brady plan. I had particularly focused on the genesis of the Discounts.
‘It might be US Commerce Bank.’ My voice was hoarse, almost a squeak.
They all turned to me. They were listening.
I cleared my throat. ‘US Commerce Bank. They were the biggest holders of Argentine bank debt in 1992. During the Brady plan negotiations, they insisted on swapping all their bank debt for Discounts, which they preferred to the other classes of bonds for some accounting reason. They may still have them.’
There was silence. Ricardo was watching me closely.
‘Hey, Carlos! Over here!’ Carlos Ubeda stuck his head up from his desk, and hurried over. ‘US Commerce have been trying to break into our market for a while now, haven’t they?’
‘Yes. But they have no credibility. They were only in two deals last year.’
‘So how would they respond to co-lead-managing the biggest deal of the year?’
‘I think they’d jump at it.’
‘I hope you’re right,’ said Ricardo grimly, and he picked up the phone.
I rushed off to make a copy of the Bloomfield Weiss fax for Charlotte. She was sure it was crap and she said she had a pet nuclear physicist who would be able to prove it. I went back to the square, to find everyone subdued, waiting. Frewer and Alejo called back, asking what was going on. Jamie stalled them charmingly. Pedro was getting hit with more and more bonds. The rest of us were lying as low as we could.
It took Ricardo several phone calls. Pedro was holding his price at sixty-six, but he was hurting.
Then, at about six o’clock, Ricardo put down his phone and clapped his hands. The room fell silent, as all phones went on hold.
‘It turns out Nick was right. US Commerce Bank have seven hundred million dollars of Argentine Discounts, all of which they’ve been happy to lend to Bloomfield Weiss. Until today, that is. In an hour, Bloomfield Weiss will receive a demand to deliver seven hundred million dollars of discos back to US Commerce by twelve o’clock tomorrow. And there’s only one place they can get them. Here.’
You could feel the glee around the room.
Dekker Ward bought bonds long into the night.
Seven fifteen the next morning. I had slept little and I suspected few of the others had. But we all felt fresh, and ready to work. We gathered round Ricardo.
‘OK, compañeros, we’re up to a billion two,’ he said. You could hear the collective intake of breath. This was big, even by Dekker’s standards. ‘The bonds are still sticking at sixty-seven. Bloomfield Weiss have been happy to sell us all we can buy, until just before the market closed last night in New York. Then they suddenly went quiet. We’ll see what happens this morning.’
There were grins all round
‘Now what about this Mexican deal?’
‘The price talk seems to be ten and a quarter per cent,’ said Miguel. ‘And Bloomfield Weiss sound confident.’
‘Well, we need to win this one,’ said Ricardo.
Charlotte coughed slightly.
Ricardo held up his hand. ‘Don’t worry, Charlotte. I know Mexico’s looking a little precarious right now. And this isn’t the time I would choose to sell two billion dollars of their debt. But we’re splitting the deal with US Commerce, which reduces our exposure. And today might just be the day we finish off Bloomfield Weiss in Latin America for good. So we go in at nine and three-quarters and we win the deal. OK?’
I saw Jamie wince. He would have to sell this Mexican deal. Even I realized it would be difficult at that yield. He half opened his mouth and then closed it.
‘Good.’ Ricardo rubbed his hands. ‘Now, let’s make some money.’
There was a lot of noise and activity in the room that day. But only two phone calls mattered. The first came through for Ricardo at eleven thirty. It was Bloomfield Weiss’s head trader. It was rare for head traders to talk to each other like this, but he had no choice. He wanted to know where Dekker would offer seven hundred million dollars of the Argentine Discounts.
The room knew instantaneously what was happening. We were all quiet, all watching Ricardo.
‘Seventy-two.’
A pause.
Then Ricardo put down the headset. ‘Seven hundred million Argentine Discounts sold at seventy-two!’
A huge cheer met his announcement. In that second, thirty-five million dollars flowed into Dekker Ward’s profit and loss account.
The second call was much later, about seven o’clock London time. Dekker Ward and US Commerce Bank had been awarded the mandate to sell two billion dollars of five-year United Mexican States eurobonds at a yield of nine and three-quarters per cent. The issue was to be launched the following Wednesday.
The Marketmaker had shut Bloomfield Weiss out of his domain. And we had a lot of bonds to sell.
12
The Brady battle tempted Lord Kerton out to Canary Wharf to inspect his victorious troops. He was Chairman of Dekker Ward, a post he had effectively inherited from his father twelve years previously. He and Ricardo had come to an arrangement. Ricardo had independence, his own offices in Canary Wharf, and fifty per cent of the profits he generated for himself and his people. Kerton had the other fifty per cent, and the satisfaction of seeing Dekker Ward grow to be the most successful brokerage firm in London. He and Ricardo treated each other with a mixture of civility and circumspection.
They strolled round to where I was sitting with Jamie.
‘Jamie you know,’ said Ricardo. ‘But I don’t think you’ve met Nick Elliot, one of our new hires. He was the one who worked out where Bloomfield Weiss were borrowing their bonds.’
My chest swelled with pride. I couldn’t help it.
Lord Kerton shook my hand, and looked me in the eye. He was a tall, athletic man of about forty, with fair hair that curled over his ears and down the nape of his neck. He wore a double-breasted suit with a broad stripe. ‘Jolly well done, Nick. Good to have you on board.’
‘I’m enjoying it here.’
‘Excellent, excellent,’ he said, and then he was off, looking around curiously, as if he would suddenly discover the key to our extraordinary profitability lurking under a desk, or behind a screen, if he only looked hard enough. He was gone within half an hour.
‘That was a bit like a royal visit,’ I said to Jamie.
He laughed. ‘That’s about it. Kerton is just like a monarch. A useful figurehead with no power, who knows that if he makes a nuisance of himself he’ll be overthrown. He’s no fool. He realizes if he leaves Ricardo well alone he can just sit back and watch the profits roll in. Nice job, if you can get it.’
The phone light flashed. It was Alejo. He sold his Argentine Discounts back to Jamie for a four-point profit. Although most of the conversation was in Spanish, Alejo didn’t sound very grateful. Chris Frewer had been much more enthusiastic that morning.
‘Alejo’s a miserable sod, isn’t he?’ I said.
‘Yeah,’ said Jamie. ‘But he does some pretty big trades so I don’t complain. You’ve seen what we’ve done over the last few weeks.’
It was true. Alejo had been in and out of the market many times in size. Big size. Like two hundred million sometimes. A customer well worth keeping sweet, however grumpy he was.
It only took me a few minutes to pedal the mile or so from the office to the bar where I had agreed to meet Isabel. It wasn’t exactly a secret assignation. Isabel just didn’t want to draw attention to us by leaving together, or by meeting up at the more convenient Corney and Barrow, a wine bar in Canary Wharf that some of the Dekker crowd used on a Friday night.