Investor Relations Advisory Service

The Need

In a world of significantly scarcer capital, where bank lines are being reduced or withdrawn, the private placement market represents a critically important source of medium to long-term funding for Issuers.

Most private placement issuers have not spent a great deal of time cultivating close relationships with their private debt providers.

The private placement market has historically lacked an effective means to ensure that the personal and professional relationships forged by Issuers and Investors at Closing are sustained over the life of the notes.

• Historically, neither Issuers nor Investors have had the time nor inclination to make such efforts.
• The private placement market has neither mechanisms nor protocols guaranteeing such efforts are made.
• Post-Closing, inertia often takes over and few proactive steps are taken to maintain, much less strengthen, the Issuer/Investor relationship.
• Investors are neither staffed, incented nor inclined to engage in "business development" or relationship building.
• For their part, issuers tend to focus their relationship efforts on those who are "near-at-hand" and/or regularly reach out to them: i.e. banks and equity analysts.
• Issuers assume that if private debt investors are not calling them, they must be happy with the credit.
• Lacking firm investor relationships, Issuers who return for additional capital, or seek waivers and amendments, may be shocked and dismayed that investors are not fully up to speed on the company, and/or are not "falling in line" to approve the request.
• Getting agreement on waivers and amendments a cost efficient manner can be challenging in the best of times.
• If an issuer's finances have weakened and/or capital markets are unsteady, reaching successful outcomes may not be assured.

The Solution

Global Capital Advisors works with management to develop innovative strategies to keep investors engaged with the issuer's management and up to speed on the company and its prospects.
Above all, GCA insures that the quality and amount of information transmitted to Investors is not only timely, but also relevant to the specific needs of private debt investors.

GCA serves as a mutual sounding board to facilitate dialogue and engagement between an Issuer and his Investors.

GCA works to insure that the Issuer is positioned as "Best in Class" vis a vis other issuers in terms of its willingness to engage investors and develop strong relationships.

GCA designs communications techniques to help grow and sustain the relationship, ranging from one-on-one or group meetings; to periodic conference calls or webcasts; To e-mails specifically addressing matters of interest to private debt Investors.

For off-shore Issuers, GCA provides a point of contact in a convenient time-zone where investors can call with questions/concerns regarding the Issuer's activities, performance or industry trends.

Resolving Problems

Issuers and Investors often need resolution to administrative issues, such as

• changes in note holdings;
• questions about compliance certificate calculations; or
• issues surfaced by the NAIC in their periodic reviews.

GCA works to facilitate the resolution of these issues to the satisfaction of all parties.
Based on its market experience and the expertise of its Ratings Advisory professionals, GCA is well placed to assist Issuers and Investors in working to overturn adverse rulings on the part of the NAIC. In periods of tight credit markets, retaining a favorable rating by the NAIC can be critical to ensuring continued access to private debt capital.

Enhancing an Existing Investor Relations Program

Listed Companies often have Investor Relations departments.

• These departments are largely configured to meet the needs of equity and public bond Investors.
• As such, they are not in a position to effectively address the needs of private debt Investors for information and color not otherwise available through public filings.
• Given that virtually all private Investors are legally deemed to be "insiders" under U.S. securities laws, they either have no problem being "restricted" in exchange for receiving non-public information; or, have developed protocols to enable receipt of such information.

Experience suggests that listed companies who issue private debt often employ information disclosure protocols geared to the needs of "public" Investors.

• This can result in alienating private debt Investors who both expect and feel entitled to receive more information and color.

For Issuers convinced they will always have ready access to long-term debt capital and/or are certain they will never need to modify their Note Purchase Agreement, a focused Investor Relations program may not seem a priority.

Since 2008, however, few private placement issues assume they will always have access to attractively priced debt capital or never have need for an amendment or waiver.

GCA believes that a program of engagement with private providers of long-term debt capital should be a management priority and that communication strategies should be designed that are appropriate for this target audience.

Strengthening Investor Confidence

Lacking regular personal contact with many of their portfolio companies,

• Investor anxieties often become heightened in the face of sudden negative financial or economic events.
• Private debt Investors are disadvantaged vis a vis an Issuer's banks in terms of their ability to get timely, qualitative information on how the issuer is doing.
• Investors assume (often correctly) that banks are both geographically closer to Issuers and have greater opportunities to gain access to management.
• Investors assume (again correctly) that banks glean valuable insights and perspective making it easier to assess the seriousness of a problem and/or management's plan to address same.
  
  Ultimately, investors may fear that Issuers will first see to the needs of their banks and, only as an afterthought, deal with the needs of "far away" "anonymous" note holders.

The most important step an issuer can take to insure strong investor relationships is to make crystal clear that Investor interests are fully recognized, including the need for timely information.

Through its Investor Relations Advisory practice, GCA creates a positive impression amongst Investors as to their client's commitment to maintaining open lines of communication.

While an Issuer's banks will always have "access advantages", GCA looks to insure Investors are confident that its clients are equally committed to forging strong Investor relationships.

As your Investor Relations Advisor

Global Capital Advisors™ works to insure:

• Investors know that the Issuer recognizes their need to be kept informed;

• That they will take initiatives to insure an on-going dialogue;

• That the personal and institutional relationships formed at Closing do not atrophy with the passage of time;

• That the Issuer will have an "early warning" mechanism with respect to any issues or concerns Investors might have; be they the result of:

• something they've read in the paper;
• concerns re other players in the industry;
• general queasiness with respect to how the Issuer is doing in the current economic environment; or
• specific issues regarding its financial performance.

• That the Issuer sets itself apart from other issuers by "over-delivering" on the promise of engagement and dialogue.
  
  
• Through regular contact with Investors, GCA will be positioned to identify potential sources of "reverse inquiry" interest, facilitating the Issuer's access to incremental capital
  
  
• Should there ever be need for a Waiver or Amendment, GCA is ideally placed to explain to investors the rationale for same and work, either solely or in cooperation with a Placement Agent, to effect the desired change in documentation.