Tuesday, 18 December 2018
Keep calm and carry on: The global financial crisis has radically changed the world of finance. Navigating those changes and avoiding the pitfalls of the post-crisis environment has been as challenging, certainly from a strategic standpoint, as dealing with the crisis itself. While many banks have risen to the challenge, one stood out above the crowd in 2010. Engineering a transformation from a prop trading-driven manufacturer and distributor of complex and illiquid risk to a client-driven flow and solutions house paid huge dividends for Deutsche Bank, IFR’s Bank of the Year.
Pulling away: With £36bn of funding achieved this year and £25bn of that in the public markets, Lloyds has been a constant presence across asset classes. For the innovative flair with which it has rehabilitated its brand and the bank’s responsible approach to managing its huge requirement, Lloyds Banking Group is IFR’s Issuer and FIG Issuer of the Year.
Warren’s choice: For most of 2010, conditions in the US dollar bond market seemed to get better by the day, offering issuers almost unprecedented opportunities. Credit spreads and coupons were tighter than ever, and liability management exercises turned into windfalls. For being the pioneer in this new low-rate environment, JP Morgan is IFR’s US Dollar Bond House of the Year.
Beating the odds: Arkle 2010-1 was the largest distributed RMBS since the collapse of Lehman Brothers and, vitally, tapped a new pocket of US investors. The deal was also notable for having to wrestle with the beginning of the Greek sovereign debt crisis and having its marketing disrupted by the volcanic eruption in Iceland. For negotiating these hurdles with panache, Arkle 2010-1 is IFR’s EMEA Securitisation of the Year.
Navigating the market: Reduced facilities, broken bank groups, looming regulatory obstacles and lack of supply were just some of the challenges the US investment grade loan market faced in 2010. Negotiating these obstacles was no easy task and only a handful of banks emerged unscathed. For its consistent leadership, expertise and unparalleled results, JP Morgan is IFR’s US Loan House of the Year.
Old kids on the block: There are a few marquee restructuring advisers that the largest companies call on when they are in deep trouble. During the credit crisis, some of the biggest called on Evercore, which not only won the mandates but proved it could shepherd clients through restructuring with undeniably successful outcomes. Evercore is IFR’s Americas Restructuring Adviser of the Year.
Coming of age: Barclays Capital continued its astonishing progress in the EM space in 2010. The bank had a near-zero presence a few years ago but is now the top bookrunner in the EEMEA region. Strong in origination and with a large number of well-executed, high-profile transactions out of the Gulf and Eastern Europe, Barclays Capital is IFR’s Emerging EMEA Bond House of the Year.
A fundamental philosophy: Some financial institutions view equity capital markets as an ancillary service. But equity is at the core of Morgan Stanley’s DNA; so pervasive, in fact, that much of its upper management got their start in equities. For its leadership in a volatile environment and expansion of its equity underwriting platform, Morgan Stanley is IFR’s US Equity House of the Year.
Going global: While maintaining dominance in Europe, Morgan Stanley grew its US and Asian output to make for the only globally balanced business in the industry. Structuring ideas, high-quality execution and a co-ordinated global approach combined to make Morgan Stanley IFR’s Structured Equity House of the Year.
Cementing its position: While other derivative classes saw increased competition in 2010, credit derivatives aspirants were forced to the sidelines, leaving a handful of established players. But as volatility soared on sovereign risk concerns, one bank cemented its recent bid to become a leading global force. For furthering its market share under extreme conditions while leading the regulatory dialogue, Barclays Capital is IFR’s Credit Derivatives House of the Year.
The past 12 months have been arduous. Once again, global capital markets were dominated by the same relatively small set of inter-locking issues that commanded attention in the previous year. In fact, a quick scan of the foreword to IFR’s 2010 Review of the Year suggests little has changed in the intervening period.
European banks can no longer take funding for granted. Investors surveying the credit, sovereign and regulatory environment in Europe have a host of reasons to take their money elsewhere. Until the regulatory picture becomes clearer and the European sovereign crisis eases, life is not likely to get much easier for those in charge of bank funding.
The European sovereign crisis hit ECM hard and nowhere harder than European IPOs. While US$36bn priced in the year, US$26bn launched and cancelled – with far more postponed before launch. European ECM bankers could learn from the US and Asia, but radical change is unlikely, so for 2012 to be any different all market participants will need to be honest and flexible – unlike today.
We’ve reached the end of a pretty momentous year in the markets. It’s been fascinating and captivating, but at the same time it’s also been incredibly frustrating, occasionally frightening, and certainly confounding. Here, Keith Mullin, IFR’s editor-at-large, gives a Mullin’s eye view of a turbulent year.
Assurances of tighter security after the Kerviel scandal did not provide much comfort to UBS when the firm suffered a huge loss – doubts remain that there is a 100% fail-safe system to prevent another rogue trading incident.
The past year will be remembered as less than a banner period for US IPOs, especially in terms of overall performance. One bright spot in an otherwise challenging ECM landscape was the return of hyper-growth offerings – including some of the best and brightest social media companies – as compelling and highly sought-after IPO candidates.
A confluence of factors, notably rock bottom interest rates in the West, has been like a shot of steroids for cross-border local currency bond deals, giving issuers a realistic alternative to the major currencies. But how long will the effect last?
The offshore renminbi bond market is playing an important part in China’s internationalisation of its currency, giving investors a tantalising opportunity to build exposure to the renminbi. Take away the currency game, however, and its development as a genuine credit market has been far slower.
With new issue spreads continuing to lag behind banks’ funding costs by a discomforting margin and the credit environment set to worsen, the sustainability of the syndicated loan business is under intense scrutiny. Will pricing sanity finally prevail?
Since the onset of the financial crisis in 2008, there has been considerable flux in the leadership of the investment banking industry. The change has been considerable in terms of personnel. But has it produced a change of culture, to go with a more humble time for the industry?
As investment banking activity slumped in Tokyo in 2011 – hit by natural disasters, Europe’s sovereign debt crisis and the weak US economy – fresh questions were raised over the commitment of foreign banks – particularly those from crisis-hit Europe – to their Japanese operations. As the end of the year approached, job losses had started to accelerate.