Debt Ceiling Debate: IR Teams Should Prepare for Potential Market Downturns

As the debt ceiling debate intensifies, uncertainties in the markets are increasing. At S&P Global Market Intelligence, we understand the importance of preparedness during such turbulent times. Allow us to guide you through these challenges and help you navigate potential outcomes in order to create opportunities. Consider the following:

• Review your recent meeting notes to identify investors who expressed concerns about valuation. Many investors want to be shareholders and it’s a matter of timing, often related to valuation. In the case of US default, there would likely be an opportunity for investors to take advantage of a valuation that matches their profile temporarily.
• One best practice for some clients is to utilize S&P’s Investor Relations platform BD Corporate to leverage Activity Defined Field (ADF’s) and quickly tag activities with categories such as margin, capital allocation, and particularly valuation, which is important for taking advantage of volatility. This workflow creates reports based on the tagging system to quickly mine the data for investors looking for an opportunity to take advantage of a temporary dislocation and more attractive valuation.
• Evaluate and update your top target list to ensure readiness for significant market movements. Volatile markets are the best time to conduct outreach to top targets.
• Prepare a proactive plan for reaching out to target investors in the event of a market downturn caused by debt ceiling uncertainty, presenting them with a time-sensitive opportunity to purchase your stock at a discount. This should be in the form of a playbook that is easily repeatable as volatility often appears unexpectedly. In the case of the debt ceiling, we have a bit of visibility on timing, but this is rare.
• Take advantage of our digital and analyst-based targeting tools to identify potential investors.
• Revisit our 2023 preview piece, "The Big Picture", which highlights offensive and defensive strategies for investor outreach.
  
  

While the resolution of the debt ceiling issue remains uncertain, it is prudent for all IR teams to have a plan in place for potential market downturns. By doing so, you will be prepared regardless of the outcome, equipped with an updated outreach strategy for future IR activities.