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Thursday, 23 November 2017

Emerging EMEA Bond House: Deutsche Bank

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  • Bouncebackability

Bouncebackability

Deutsche Bank returned to form last year showcasing its versatility across products and geographies. The German firm was involved in the year’s biggest deals and, crucially, guided clients through the turbulent summer months. It wins IFR’s Emerging EMEA Bond House of the Year.

It is remarkable that in a year of such vicissitudes, bond issuance from Central and Eastern Europe, the Middle East and Africa could still hit record levels.

Rates volatility was the dominant theme after hints in late May from US central bank policy makers about a potential slowdown in their asset purchase programme sent the markets spinning. And yet, through all this, the CEEMEA primary market barely shut.

Competition between the leading arranging banks has never been more intense, with the big three of Citigroup, Deutsche Bank and JP Morgan consolidating their grip at the top of the league tables. In addition, BNP Paribas proved it is now a real force to be reckoned with following several high-quality deals.

The award for Best Emerging EMEA Bond House, however, goes to Deutsche Bank, which bounced back after an indifferent 2011–12 and fought off strong competition from its rivals.

Momentum was with the German institution as it increased its market share by more than any other leading bank in the 12 months under consideration, according to Thomson Reuters data.

Deutsche also executed deals in more countries (at least 23, arguably more, as some clients, such as Tullow Oil, cannot easily be defined by geography) and more currencies in international format (seven) than its nearest rivals.

Anywhere, anytime

Crucially, too, Deutsche was involved in deals for more borrowers in more currencies than any other bank during the year’s most turbulent period between May 23, when early tapering seemed likely, and September 18, when the Fed surprised the market by continuing the pace of its purchases at US$85bn a month.

In that period, Deutsche led deals for all issuer types across the entire CEEMEA region in US dollars, euros, Swiss francs and sterling. No other bank can point to such variety over those four months, though Citigroup was also very active.

”The story of the year has been the resilience of emerging markets,” said Martin Hibbert, head of CEEMEA origination debt capital markets at Deutsche.

Deutsche has played a part in every big theme of the year, bar Russian bank capital (though it has executed Middle East bank capital trades).

After ending 2012 with deals for a raft of issuers, including Rosneft, Latvia and BankMed, the bank began 2013 in fine form. It was, together with BNP, a lead manager on the year’s first two transactions – a euro offering from Poland and a US dollar note from Turkey, which both came on the same day.

Indeed, in the sovereign space Deutsche is peerless, having worked on nearly all of the year’s key transactions: Slovenia’s dual tranche, which was almost sabotaged by a Moody’s downgrade while the Balkan nation was bookbuilding; Hungary’s dual-tranche, which was its first deal in two years; and South Africa’s first deal in 18 months, which came at a crucial time for the troubled country.

Yet Deutsche is more than just a sovereign house. In a big year for corporate supply, it’s the only bank to have sole-led any corporate transactions over the past year – a US$1bn bond for The State Oil Company of Azerbaijan Republic and a R5bn (US$490m) offering for South African logistics firm Transnet.

While execution on that latter deal was tough – it became the only transaction from the region to price wide of guidance – it was also the first rand offering sold internationally by an emerging markets issuer.

And though Citigroup and JP Morgan head the overall corporate league table, Deutsche edges Citigroup for corporates rated below investment-grade in terms of both number of tranches and issuance volumes, according to IFR data.

Its deals for Bulgaria’s Vivacom and Poland’s TVN and PTH are emblematic of one of the big themes of the year as the lines between emerging markets and high-yield become increasingly blurred.

Deutsche was also a lead on pivotal transactions, such as the debut for Borets International, which reopened the market for private Russian corporates following the summer’s travails, the maiden offering from Koc Holding, arguably Turkey’s most important conglomerate, and euro and sterling transactions by Gazprom, the most frequent corporate issuer of the year.

To see the full digital edition of the IFR Review of the Year, please click here.

To purchase printed copies or a PDF of this report, please email gloria.balbastro@thomsonreuters.com

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