EMEA Loan House: BNP Paribas
A dominant force
Borrowers stuck to a regular diet of corporate refinancings, repricings, and amendments and extensions in a frustrating year for loan bankers. Despite that, one bank stood out above the rest. For dominating corporate lending across all sectors, segments and deal sizes, BNP Paribas is IFR’s EMEA Loan House of the Year.
New event-driven deals were few and far between in 2013. Instead, the year was dominated by straightforward corporate-relationship lending, that was perhaps better suited to commercial banks’ ability to commit and provide capital rather than to the wizardry of investment banks.
Liquidity was abundant for borrowers as banks regained their appetite to lend and new institutional investors piled into the loan market, but that also brought its own problems and created aggressive and competitive conditions in a low deal flow environment.
During 2013, BNP Paribas outperformed the market in terms of capital commitment and regained the number one position that the bank lost the previous year – after taking the top spot in 2009, 2010 and 2011 – as the eurozone crisis and subsequent US dollar squeeze took a toll on activity.
“We’ve had a super year and retained our number one position, which is critical for clients, by building a depth of business across all jurisdictions and types of business,” said Charlotte Conlan, BNP Paribas’ head of loan syndications for the Europe, Middle East and Africa region.
Growing a business in a low-volume year was a challenge, but a pan-regional focus saw the bank increase its market share to 8% in the first 11 months of 2013, compared with 5.8% the year before, according to Thomson Reuters data.
This was largely achieved by dominating the corporate space via refinancing, acquisition, structured and crossover loans, supplemented by infrastructure and project finance deals.
The bank played to its traditional strengths of France, oil and gas and M&A lending, which brought leading roles on many of the year’s most high-profile deals.
Stand-out moments included a co-ordinating role on the €9bn loan for German automaker Daimler in the investment-grade space, which was increased from an original target of €7bn, and set the stage for a decrease in high-grade corporate pricing.
The £2.3bn senior secured Term Loan B for Virgin Media was a highlight in the leveraged loan market. The deal was the largest acquisition financing globally in February 2013 and the largest European deal since the financial crisis in 2007.
Frequent contact with investors across the spectrum, aided by the bank bookrunning deals for most weeks of the year, gave BNP Paribas an accurate read on market conditions – what investors wanted to buy, the best terms and where to tap fresh liquidity.
A strong distribution network is at the heart of the bank’s operations, with a powerful domestic and local network including syndication teams in Spain and Bahrain. The bank has reached 300 banks – including Asian lenders – some 120 fund managers and 180 funds so far in 2013.
“As much as we love the jumbo deals, we also do smaller transactions. We’ve sliced the market and covered all aspects,” Conlan said.
BNP Paribas’ focus in 2013 was on bringing institutional investors to areas other than their traditional sphere of leveraged lending to boost liquidity, as economies expand and as banks continue to shrink their balance sheets to meet capital and leverage rules.
Fund investors were introduced on a €480m corporate loan for French publisher Editis, a €450m infrastructure loan for port operator Europort and smaller leveraged loans including a €180m loan for Belgian airfield ADB.
“We are doing this for the long term,” said Alexis Postel-Vinay, head of project finance syndicate EMEA and loan capital markets Middle East at BNP Paribas. “This will stand us in good stead when banks find it harder to lend in a few years.”
BNP Paribas also helped to bring new liquidity to emerging markets with deals including a US$4.75bn loan for Turkish telecommunications firm Oger and also helped borrowers in Southern Europe to regain access to the loan markets.
A leading position in the EMEA corporate loan market and strong distribution capability brought origination success through capital markets advisory work and provided new and innovative structures, including a rare US$330m second-lien facility for Core Energy.
BNP Paribas also bridged the loan and bond markets successfully by underwriting deals such as the £2.56bn financing backing Schneider Electric’s acquisition of Invensys, which was one of the year’s biggest M&A deals.
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