Monday, 19 August 2019
OUT ON ITS OWN - In the intensely competitive investment banking industry, one firm has a hold over its peers like no other. Rivals are as entranced by its iconic image as they are bewildered by its ability to make money. A benchmark for excellence and achievement, the firm stood out even more in 2006 as a trend-setter that is redefining how the business is conducted. Goldman Sachs is IFR’s Bank of the Year for 2006.
MTN LEADER - Eksportfinans, the Norwegian export credit agency, had a busy year in 2006 raising US$8.2bn in the period to November, a record amount for the borrower. But even more striking was the fact that by late November it had written 495 EMTN trades as a result of 4,000 price enquiries, almost certainly more than any other capital market borrower. For its innovative approach, Eksportfinans is IFR’s Borrower of the Year, as well as the Sovereign/Supranational/Agency/Regional Borrower of the Year.
REDISCOVERING THE FOCUS - Few houses can boast a franchise that truly encompasses the whole gamut of asset classes and jurisdictions. A number have tried, but few have succeeded. The one example to which they aspire is that of Citigroup with its global reach and business expertise. Citigroup is IFR’s Bond House of the Year.
BREAKING THROUGH - RBS has finally broken into the top flight of European securitisation houses, fulfilling an important element in the bank’s plans to become a capital markets powerhouse. Using the group’s own business to develop a powerful distribution franchise, it has also completed significant non-group deals, including Arsenal. RBS is IFR’s European Securitisation House of the Year.
SMART MONEY - M&A financing and structured lending came to the fore in 2006 and for the first time in a few years banks needed to be smart to prosper rather than just lending cheap money. For its unmatched geographical presence and for its leadership in structured and acquisition lending, Citigroup is IFR’s Loan House of the Year and Asia-Pacific Loan House of the Year.
BANKING ON BUYOUTS - In a year defined by an extraordinary buyout spree, it made sense for debt arrangers to stick close to sponsors whose newly raised funds brimmed with equity capital for highly leveraged transactions. For proving that it took more than willingness to deploy cheap capital to ascend the top tiers of these buyout financings, Deutsche Bank is IFR’s US Leveraged Finance House of the Year.
HERE THERE AND EVERYWHERE - In 2006 Citigroup issued the largest number of bonds in the most countries. It did deals for corporates, banks and sovereigns in US dollars, euros and yen, as well as a plethora of local currencies. The US bank was also active in high-yield and project finance, and made its first moves into EM securitisation. For stretching to all corners of the market, Citigroup is IFR’s Global Emerging Market Bond House and EEMEA Emerging Market Bond House of the Year.
SUPREME LEADER - Rarely has one firm dominated global ECM market share as Goldman Sachs did in 2006. The bank has been the leading bookrunner in all regions for almost the entire period under review, and has been at the forefront of most industry trends, particularly in its US business. For its supreme presence in all areas, Goldman Sachs is IFR’s Equity House of the Year and US Equity House of the Year.
MARKET LEADERSHIP - Convertible bonds are generally not an asset class that rewards market leadership. Novel structural or funding solutions are quickly replicated, commoditising any intellectual advantage that may have been gained. But this was not the case in 2006, when one bank pushed the limits on deal sizes and issuer type. For market leadership, Merrill Lynch is IFR’s US Structured Equity House of the Year.
SPANNING THE ASSET CLASSES - The exponential growth in derivatives showed no sign of slackening in 2006, with low rates, spreads and volatility only increasing demand for tailored investment and liability solutions. For market leadership in every asset class and an unparalleled structuring ability, Deutsche Bank is IFR’s Derivatives House of the Year.
As the world’s major economies square up to operating under more “normal” short-term interest rates, what are the implications for borrowers and global financial markets looking into 2007? Is there more fall-out to come? Vanessa Rossi, director of international economics at Oxford Economics and associate fellow of Chatham House, London, looks forward to the new year, and in particular at the yen.
Following a period of deleveraging, 2006 marked a turning point in the credit cycle as companies adopted shareholder-friendly strategies to boost earnings amid the threat of an economic slowdown. With M&A topping the agenda, bond issue volumes increased, but the resulting spread widening failed to materialise as technical factors prevailed. Helen Bartholomew reports.
Buyside survey Though the debate between issuers and investors about what constitutes fair pricing is endless, borrowers with firm fundamentals, strong credit metrics, low leverage and good growth potential are the clear favourites with bond investors. Malini Menon reports.
In the absence of a major market reversal in the US, Europe looks destined to remain the junior market in global securitisation. But Europe continues to see robust annual growth and retains enormous potential, from RMBS to CDOs. William Thornhill reports.
Non-bank investors have transformed the European loan market over the past year. Their influence has been greatest in LBO financings but they have begun to affect the investment-grade loan market as well. While banks once dominated the market, institutional investors have brought in bucket-loads of new liquidity and driven demand for innovative and exotic new structures. Nachum Kaplan writes.
MiFID’s introduction on November 1 2007, will forever change Europe’s capital markets, but not with the big bang that some pundits have predicted. Increasingly, banks are viewing the directive as a tremendous commercial opportunity. That said, implementing and reading the rules are two entirely different activities, and regulators and banks have a lot of work to do in the coming months. Jean Haggerty reports.
Chinese ECM The US$21.1bn listing of ICBC – the world's largest ever IPO – was clearly a transaction of the highest significance. But might it mark the high point of the China IPO business, with deals from private mid-cap firms, rather than jumbo state privatisations, likely to dominate the China markets from now on? David Lake reports.
Spurred by economic recovery and receding fears of deflation, Japanese capital market activity, led by equity and securitisation, surged to new heights in 2006. But the harvest was not evenly shared, as other areas, particularly the bond markets, fell victim to regulatory snags, making the year one of haves and have-nots. Brad Frischkorn reports.
The happy combination of a burgeoning Middle Eastern pool of liquidity, fuelled by high oil prices, and a growing community of national, institutional and high net worth personal customers wedded to Islamic principles, has ensured that Islamic finance is in greater demand than at any time in its young history. The last piece in the jigsaw is the structures needed to enable these customers to convert their funds into financial products, but these are also developing apace. Nick Kochan reports.