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BofA wants to connect bond issuers with banks run by minorities

(Bloomberg) – Bank of America Corp. held a conference last week to connect minority-run banks with companies borrowing in bond markets to increase diversity in debt underwriting. The Charlotte, North Carolina-based lender – consistently one Andrew Karp, the bank agent, also plans to increase the percentage of fees companies pay to minority traders who join their syndicates for the sale of bonds, said Andrew Karp, the Bank Head of Investment Grade Capital Markets. He refused to give specific figures. Last week’s event featured more than 200 minority, women and veteran-run companies and 27 banks. “It is important that we do our part to increase diversity, inclusion and equality in the financial sector, and we are serious about that,” said Karp. “There’s a broader goal here and an overall perspective that goes beyond just thinking about the last dollar in sales, even if it means making less in one transaction.” Bank of America has taken steps to expand its reach to minority communities to improve and help promote gender equality, including pledging $ 1.25 billion over the next five years to eradicate racial and economic inequality. The CtW Investment Group, which promotes shareholder activism on behalf of union pensions, has tabled a shareholder resolution to force the bank to conduct a racist stock review. Bank of America urged shareholders to vote against the measure, saying an audit was unnecessary due to the progress the company has made in racial equality. Minority, women, and veteran companies have done more business since George Floyd was last killed by police The year U.S. companies like Verizon Communications Inc., Allstate Corp. and State Street Corp., all of which spoke at the event, sparked greater racist reckoning, led to prominent bond offerings, some of which were run by minority banks. Companies are working on more transactions and are often hired in more prominent roles to sell more banknotes while earning more fees. “It is a self-fulfilling vote of confidence for banks to be at the forefront of the conversation,” said Annie Seelaus, managing director of R. Seelaus & Co., a women-owned broker. Progress has been slow, however, and although minority companies have been in the corporate bond market for decades, their share of corporate bond underwriting has been a fair 2% to 3% as of 2020. some of the most common bond sellers have made their syndicate groups more diverse. Citigroup Inc. worked exclusively with black-owned companies in January to sell $ 2.5 billion in bonds, while Deutsche Bank AG paid one of its largest fee stocks to minority insurers in a bond sale last month. Bank of America has also partnered with the companies on its own offerings, including a $ 2 billion bond in September, the proceeds of which will be used to promote racial equality through activities such as mortgage lending and finance deals in black and Latin American communities. Large banks have paid minority companies around $ 17.8 million in fees this year through the middle of last week for helping them subscribe to bonds issued by dealers in the US. That is close to the $ 23.8 million they paid for all of last year, according to Bloomberg. Outside the banking sector, more and more companies are embracing diversity in their debt operations, a trend Bank of America’s Karp is expected to continue becomes. Verizon named a lead underwriter in the last two dollar-denominated bond sales, certainly enough emphasis has been placed on taking business from diversity companies, and there are fair allocations, especially if the deal is oversubscribed. Last month’s $ 25 billion supply peaked at $ 109 billion in demand. “We will consider our major banking partners to take on this role,” said Scott Krohn, the company’s treasurer. “And if you don’t, it could mean fewer business opportunities with Verizon.” More articles like this can be found at bloomberg.com. Sign up now to stay up to date with the most trusted business news source. © 2021 Bloomberg LP

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