How to kill a deal

Email conversation this week between myself and a client's analyst on a deal. We had told them through the night and into the morning that the $500M+ debt they were looking for was, well, a tad high for a business they had done zero due diligence on, and which they gave us a 2-day deadline for. We said low 300's via securitising the debtors was as good as they can get with what they had given us. They asked us to sharpen our pencils again (who uses pencils these days???). Let's pick up from this point...

Me: "Hi [deal analyst], just checking if we can have a chat to you about the deal this afternoon - if not, let me know what time we can call you."
Analyst: "Is it a discussion about a number with a 5 in front of it?"
Me: "It starts and ends at 5." [Imaginary response I wanted to send back, but out of respect for his boss and mine, I didn't.]

I realise it's a negotiation and everyone's trying to get an upper hand, and maybe I am a bit of a nice guy, but getting lip like that from an analyst (whose fault it was that no due diligence had been done in three weeks) is uncalled for, doesn't improve his negotiating position, and lastly doesn't even answer the question. Did he mean he's not interested in talking if we don't give up 500 big ones? Who are you, Linda Evangelista?

Sometimes it pays to know what your real bargaining position is before you lord it over someone. His boss eventually called up and said they'll take the $300M.

Rockett Trails:
Like the recent (well, for Australia anyway) episode of "Heroes", we go forward in time to see the aftermath of the Blackstone Group's IPO. Hiro Nakamura isn't happy.

In shocking and unexpected news, good times encourage more risk-taking, as evidenced here.

Good primers for CDO's and CLO's, which are helping drive the appetite for riskier debt.