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Friday, 19 January 2018

Europe Financial Bond House: Barclays

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Michelin-starred

Against a blistering backdrop for financial issuers, banks had to fight harder than ever to prove their mettle in 2017. For its market-leading advice in the European regulatory quagmire while proving dominant in league tables, Barclays is IFR’s Europe Financial Bond House of the Year.

Financial issuers were spoilt by an uninterrupted window for virtually the whole of IFR’s awards period, permitting a resurgence in Additional Tier 1 supply, a fresh wave of loss-absorbing senior notes and renewed access for esoteric and lower-rated credits.

And Barclays helped lead the charge. “We were the go-to bank for harder-to-execute transactions,” said Pete Mason, co-head of FIG banking for EMEA and head of FIG debt capital markets for the region.

Geographically, it was undeniably Spain’s year, a jurisdiction that Barclays dominated. The bank was on seven of the 16 public euro AT1, Tier 2 and senior non-preferred bonds priced during the awards period, more than any other bank.

Those deals included Santander’s so-called “second ranking senior” bond issue, a surrogate for senior non-preferred debt, on which Barclays was joint structuring adviser. The deal enabled the issuer to start chipping away at a multi-billion target before Spain’s SNP law was passed – and paved the way for peers.

Barclays reappeared as bookrunner on BBVA’s inaugural SNP offering, also proving a force to be reckoned with in the capital space where Spanish issuance sky-rocketed despite the failure of Banco Popular in June.

The bank helped Santander price a perpetual non-call six-year at 5.25%, the lowest-ever coupon for a Spanish AT1. It also won CaixaBank’s inaugural AT1 mandate, one of four trades executed for the bank alongside a covered, senior and Tier 2 – proof of Barclays’ ability to service clients on a repeat basis, and across the product spectrum.

The year also proved a crucial turning point elsewhere in Southern Europe, where Barclays again emerged as the adviser of choice for banks’ most strategic trades.

Caixa Geral de Depositos picked Barclays for its €500m 10.75% perpetual non-call five, the first Portuguese AT1 and a key element in the state-owned lender’s recapitalisation plan.

“This was the most important trade for this issuer, ever,” said Peter Jurdjevic, head of global finance solutions at Barclays. “We believe clients are confident to trust us with their most important transactions.”

Barclays was also arranger and joint manager on Eurobank’s inaugural euro covered, among the first Greek bank bonds for three years and a crucial step in weaning the lender off central bank support.

After years in the spotlight for all the wrong reasons, 2017 also proved a crossroad for Italy. Barclays started the year on a high with Intesa Sanpaolo’s €1.25bn 7.75% perpetual non-call 10, the first euro benchmark AT1 for seven months, following with Tier 2 trades for BPER Banca and Banco BPM.

The former was BPER’s first bond sale for a decade, while the latter was the first euro Italian sub since the liquidation of two small regional lenders and evidence that the country’s lesser-known players still had access to capital.

Barclays also delivered milestone transactions closer to home.

It was bookrunner for Nationwide Building Society’s first sale of Core Capital Deferred Shares since the original transaction in 2013, in what was IFR’s Sterling Bond of the Year.

The bank was also sole financial adviser and debt arranger to Bupa on its acquisition of Oasis Healthcare Group. The group sold its first sterling bonds since 2014, a £400m 5% 10-year Tier 2 issue, returning later with a £300m seven-year, also led by Barclays.

It was sole lead for OneSavings Bank’s inaugural AT1, wall-crossing investors to de-risk the unrated, sub-benchmark trade. It also secured major wins for the Barclays home team, printing two £1.25bn AT1s six months apart, among the largest ever in the currency.

Barclays flexed its muscles beyond Europe, winning debut euro transactions from US Bancorp and XL Group alongside repeat mandates from Wells Fargo, AIG, Met Life and Great-West Lifeco.

Its Asia-Pacific wins included repeat euro deals for Commonwealth Bank of Australia and euro seniors for Sumitomo Mitsui Financial Group and Mizuho, the latter in a Green format.

Its global reach enabled it to sell Reg S US dollar debt from AXA and Legal & General back into the Asian market, a major theme for 2017.

The bank’s covered bond franchise was the final piece of the puzzle, highlighting its flexibility in a year when banks could pick and choose between different markets.

Mandates ranged from a debut €500m five-year for Singapore’s OCBC Bank, UBI Banca’s €1.25bn 10-year – the largest covered deal from a second-tier Italian lender since 2013 – and an inaugural sustainable issue from Caja Rural de Navarra.

To see the digital version of this review, please click here.

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

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