Brace yourselves, this might come as a shock to IFR readers: not all bankers are brave, courageous and bold, striding onwards and upwards with rhino-like hides, impervious to the whims of the media. Some, in fact, are ego-ridden, paranoid, fragile flowers who constantly worry they are being slighted by agenda-driven hacks obsessed with doing them down. A case in point: when I was a comms person at Deutsche Bank, the head of equities called me to a meeting ostensibly to talk about media strategy. What I got instead was a diatribe about Merrill Lynch’s equities team getting great media coverage while poor old Deutsche kept getting a kicking. And what was I doing about it? A few months later, I had moved to Merrill Lynch. The head of international banking called me to his office. Why, he asked curtly, do journalists write glowing reports about Deutsche’s equities business and the opposite about Merrill’s? And what was I doing about it? Honestly, I haven’t made that up. Indifferent Some bankers genuinely think the media has got it in for them. Crazy, I know. The truth is, journalists are indifferent to banks and bankers, which is how it should be. They will write about both with great verve and purpose but have neither time nor inclination to foment an evil plot to discredit an individual banker or to favour one bank over another. But bankers can be very sensitive indeed. So sensitive, in fact, that at the first sign of a non-fawning journalist on the horizon, they are on the phone berating their PR person. If a story is involved, and the banker’s positioning is not to their liking, they will blame PRs for poor prep, or poor stewardship of an article, for not evaluating quotes more thoroughly, for not exploring the context, or for not knowing who else is being quoted – and even in what order those quoted will appear. In short, for not giving them star billing in an article that reads like the banker had written it. Out of the window goes the confident swagger with which bankers boast among themselves about their media savvy and supposed cosy relationships with senior writers and editors. In its place is insecurity. How will their role in this story look in front of colleagues, competitors, regulators and family? What is their reputational damage? So we PRs mollycoddle. We whisper soothing words. We tell them how great they are and how evil is the media. We point to the positives in an article that inevitably get overlooked by the thin-skinned banker who focuses laser-like on a sentence at the bottom of the article which, they cry, could have been crafted in a more positive style. And despite advising the banker to let the fuss blow over (so to speak), we often find ourselves promising to call the journalist and ask if they can change anything in the online version of the story, knowing a) we probably won’t because it is embarrassing to do so, and b) the journo will probably tell us where to go even if we did. We say things like “they need us more than we need them”, even when it is not always true. We commit to identifying other journalists, so-called friendlies, who might, with a fair wind and a very nice lunch, pen a lovely account of the banker’s team or business. Bluster It is important for PRs to remember that for all their bluster, bankers have feelings too. For those who don’t worry about their image too much and see media interaction as part of the job, do it efficiently and build good relationships, we adopt a similarly pragmatic approach. It is a pleasure to work with such colleagues and the journalists appreciate it too. As a result, these bankers are rarely stung by the media – and take any less-than-ideal coverage on the chin. For those who are super touchy and try hard to groom their image, we put on kid gloves. We select them for media engagements where we figure the likelihood of nasty fallout is minimal. We chaperone tightly and follow up clos

Banking and trading revenue soared in the fourth quarter as the election of US president Donald Trump unleashed euphoria about taxes and deregulation impacting M&A, debt and equity underwriting and markets. And banks expect the performance to continue in 2025. Business bosses are more confident than they have been in a while, said leaders at all top five US banks, and they are in the mood to do deals. Investment banking revenue in the fourth quarter jumped 35% from a year earlier to US$8.8bn across the five US banks of JP Morgan, Goldman Sachs, Bank of America, Morgan Stanley and Citigroup. “While no one has a crystal ball, there are a number of catalysts that we believe will continue to drive activity,” Goldman chief executive David Solomon told analysts. “There has been a meaningful shift in CEO confidence, particularly following the results of the US election.” Morgan Stanley CEO Ted Pick described the changing environment in rates and geopolitical uncertainty as “paradigm shifts juxtaposed against renewed investor and corporate confidence”, which he said present significant opportunities. Pick said Morgan Stanley is positioned to take advantage and its M&A pipeline is perhaps the strongest it's been in five to 10 years. “I think as we move through the year, if we continue to have reasonably constructive markets and reasonably predictable interest rates and reasonable sort of geopolitical backdrop, we are going to see increasing activity as the year goes on.” For investment banking, covering advisory and underwriting, JP Morgan was once again at the top in the fourth quarter with revenues of US$2.48bn, up 49% from a year earlier. It was followed by Goldman, whose revenue rose 24% to US$2.05bn. BofA just edged out Morgan Stanley for third, with investment banking revenues rising 44% to US$1.65bn and 25% to US$1.64bn, respectively. Citi was some way behind with revenues of US$951m, up 35% on the year. Tip of the spear M&A is often described as the tip of the spear in investment banking as it can lead to debt and equity underwriting deals, lending and trading opportunities. Goldman remains the champ, although it lost a little ground in the last quarter. JP Morgan pushed past Goldman in the fourth quarter to record the highest M&A revenues of US$1.06bn, up 41% compared with a year earlier, as it benefited from large deals and share growth in a number of key sectors. Goldman's advisory revenue dipped 4% to US$960m. Goldman still finished the year as the top M&A house, but the stage is set for a battle in 2025. “There is a significant backlog from sponsors and an overall increased appetite to dealmaking supported by an improving regulatory backdrop,” Solomon said. “There's been a meaningful pickup in large-cap M&A dialogue and enquiries; there’s been a meaningful pickup in sponsor dialogue.” Pick called M&A the “top of the waterfall, the highest margin product”, and Morgan Stanley's advisory revenue rose 11% to US$779m in the quarter. BofA's advisory revenue rose 43% to US$556m and at Citi it rose 23% to US$353m. Across the five banks, M&A fees were up 18% in aggregate to US$3.7bn, despite the dip at Goldman. “The fourth quarter saw strong momentum as the election results provided a lifted sentiment for a more pro-business climate and expectations for more deals to be completed,” said BofA CFO Alastair Borthwick. While bank analysts were encouraged by the quarter, some were not sure if the release of so-called animal spirits will be sustained or could be fleeting. “There were some extraordinary circumstances that all came into play in the third and fourth quarters,” said Chris Whalen, chairman of Whalen Global Advisors. “In the third quarter we were expecting a recession, then the narrative changed – then: 'nah no recession'. The underwriting numbers were great for everybo

Unitranche syndications are picking up in Europe from a very low base on the back of the growing private debt market, following the more developed US market and allowing established direct lenders to free up capital, diversify their portfolios and earn lucrative fees. KKR Credit is syndicating part of its £1.3bn-equivalent underwritten unitranche loan to support the refinancing of TDR-backed car auctioneer Constellation Automotive, marking the latest example of direct lenders selling their position to other private lenders. The selldown is expected to be completed in the next two to three months. Elsewhere, SMBC, a major player in middle-market direct lending, sold a partial €680m credit facility in December to several credit investors after the bank and Park Square Capital underwrote the financing package for Aspen Pumps. The facility was used by the UK-based supplier of air conditioning pumps to refinance debt and back its acquisition of US tools manufacturer Malco. Unlike the US market, unitranche syndications are rare in Europe, where most direct lenders remain focused on originating their deals and holding paper until maturity. However, the unitranche syndication market is on the cusp of breaking out, in tandem with the rapid growth of the private credit market in the region. Some smaller lenders that don't have the scale to invest in big tickets or have origination capabilities are increasingly sourcing paper from other bigger and more established private lenders. "Whether it's overt or quietly done, over the last year there have been more of these situations where some private credit providers agree to do the whole deal but are taking the view that they can syndicate it to other people," said a leveraged finance banker. "It's possibly going to become more common as the market develops. There are more parties now, and people can take the view and say: 'Well, this is a good loan, and I can sell it to others'." Competitive edge In some cases, the option to syndicate the loan gives a competitive edge to win transactions. For instance, in a UK take-private transaction in which a buyer can only speak to a maximum of six parties outside its advisory team before an announcement, a lender with private loan syndication capability could act as an anchor lender to take up all or the majority of the loan to provide certainty to the sponsor buyer. Then they could sell down a partial position once the buyout is announced. In August, KKR Credit was among four lenders to commit to a £1.75bn unitranche package that backed CVC Capital Partners' take-private bid for the UK's largest retail investment site, Hargreaves Lansdown. KKR Credit committed a £750m senior loan then sold £400m to around 10 other lenders and kept £350m on its book. Aside from the KKR platform, Goldman Sachs and SMBC, not many market players have direct loan underwriting and syndication capabilities. "Those people in that crossover like KKR, who obviously have a capital markets function and a direct lending function, could follow that [path]," said the leveraged finance banker. Goldman's leveraged finance team have also run some unitranche selldown deals. Alongside KKR Capital Markets and Jefferies, the bank underwrote a €650m unitranche backing Goldman Sachs Asset Management's acquisition of pharmaceutical company Norgine during the market dislocation in 2022. They sold down the loan to several credit funds. Money spinner The fees on unitranche syndications can be lucrative. “The risk-reward for unitranche underwriters is clearly going to be quite high, in particular on more difficult credits. If the syndication goes well, they will skim others on fees and make some good money. However, if unsuccessful, they could get stuck with the name for a long period,” said Floris Hovingh, head of EMEA debt advisory at Perella Weinberg Partners. Those higher fees come with more risk as there is no pricing flex in a unitranche t

Aareal Bank underlined the recovery of investor sentiment towards commercial real estate lenders since its spreads skyrocketed early last year, as it priced a US$425m perpetual non-call July 2030 Additional Tier 1 on Wednesday, albeit at a high price. The aim of the Reg S US dollar AT1 offering, which is expected to be rated BB– by Fitch, is to finally refinance a euro AT1 that Aareal has kept outstanding for almost five years after its first call date. That the German lender has at last been able to access the AT1 market and price a comfortably subscribed deal, even at an eye-catching price, was taken as a positive sign for bruised CRE lenders. "It's a good trade, clearly very high beta in nature considering the history of the AT1 and the volatility around CRE, but investors appreciate the journey they have taken and this is clearly a sign of confidence given they are refinancing the most subordinated part of their capital structure," said a banker close to the deal. The issue launched alongside a tender offer for the €300m note, which is Aareal's sole AT1 and is next callable on April 30. Aareal opted not to redeem the bond at its first call date in 2020 when the pandemic constrained smaller banks' access to the AT1 market, and it has skipped each subsequent annual call date due to the high cost of replacing it. The bond's coupon reset to 10.806% after the last skipped call. Aareal's funding costs rose sharply last year due to investor concerns over the US commercial real estate sector, to which Aareal is heavily exposed – North America makes up 26% of its CRE financing portfolio. When investor concern over the US CRE sector was at its height last February, Aareal's senior unsecured bonds peaked at spreads as wide as the low 400s. Its AT1 tumbled to a cash price of 64, far lower than when it was extended during the pandemic or during the selloff of 2023 following the wipeout of Credit Suisse's AT1s. As sentiment towards CRE lenders improved in the course of 2024, thanks to lower rates, so too did Aareal's secondary market performance, with its AT1 trading steadily back up towards par by year-end. In September, the bank took advantage of the receding of CRE worries to sell its first subordinated bond in more than a decade, a €400m December 2034 non-call 2029 Tier 2 that paved the way for a return to the AT1 market. Even so, Aareal's bonds still trade wide of similarly rated lenders and the CRE risks and the bank's smaller size dictated that it had to pay up relative to less exposed and more diversified banks. Lead managers Bank of America, Citigroup, Goldman Sachs, Morgan Stanley and UBS opened books with initial price thoughts of 10% area for an expected size of US$400m. Leads set the coupon at 9.875% and the size at US$425m after demand passed US$725m. That move led to order book attrition, with demand above US$550m at the final count. Some bankers away from the deal suggested the limited price tightening would have been disappointing. The banker close to the deal said the bulk of investor interest was around the 10% mark and said there had been some price sensitivity below that threshold. The issuer decided to be pragmatic and started marketing close to their targeted landing point. "They managed to get the 9% handle, which is great," he said. Spread opportunity The final coupon offered a sizeable pickup versus US dollar AT1s of issuers such as Commerzbank, which has a US$750m 7.50% perpetual non-call April 2031 note bid at a yield-to-call in the high 7s. Excluding Turkish bank bonds, there is only one European US dollar AT1 with a higher coupon: a 10% Societe Generale transaction priced in November 2023. The bond was priced with a reset spread of 506.8bp. "[Investors] are capable of pricing risk," said a banker away from the deal, commenting on investor sentiment towards CRE-exposed names. "There's an awful lot of US dollar Tier 1 investors complaining about really tight back-end valuations and

Investors are pushing back against the perceived lofty valuation at which LNG producer Venture Global is seeking to price an up to US$2.3bn NYSE lPO this week, raising doubts about whether one of 2025’s most anticipated listings will go ahead. Multiple market sources cited significant buyside resistance to the considerable premium at which Venture is going public versus its closest public comp, Cheniere Energy. Joint active bookrunners Goldman Sachs, JP Morgan and Bank of America are marketing 50m Venture Global shares at US$40–$46 for pricing after the market close on Thursday. The IPO, while nominally large, represents just 1.9% of the company. Venture Global is taking advantage of the opportunity to export gas to Europe in the wake of Russia’s 2022 invasion of Ukraine and is seeking a fully diluted market capitalisation of US$125bn and enterprise value of US$145bn, both extremely large numbers versus typical US IPOs. “Everything has to go right for that valuation to make sense,” one hedge fund manager said. “The valuation is difficult to wrap your head around and, frankly, I think it's going to be a bit of a battleground.” Several investors said they would not be surprised if the IPO was cancelled, given the valuation debate. Venture Global is seeking credit for the future cashflows from five LNG terminals, only one of which has been completed while a second is nearly built. The company believes all five facilities could generate US$66.5bn of annual revenue by 2034 and is assuming a spread of US$6/MMbtu on LNG sales. Only a portion of that LNG has been contracted. “We question whether they can hold that US$6 spread,” said a second buyside source. “Assuming a lower spread dramatically affects the valuation we are willing to pay.” Cheniere, a pure-play US LNG exporter, has an enterprise value of US$80.5bn, valuing it 11 times forecast 2026 Ebitda. Though analysts are modelling faster growth, Venture Global is valued around 65 times Ebitda in the year to September 30 when it generated Ebitda of US$2.2bn on revenue of US$5.1bn. Litigation overhang While it has completed its first LNG terminal, Calcasieu Pass, the company did not achieve commercial operations date approval by March 2024, prompting counterparties to dispute long-term sales and purchase agreements. Venture Global expects to achieve approval by May. The delay has resulted in lawsuits by five counterparties seeking compensation or delivery of LNG under the contracted prices. Shell, one of the counterparties under the Calcasieu SPAs, alleges Venture Global “wrongfully earned” US$3.5bn by selling LNG under cargo commissions permitted prior to COD. Venture Global warned the financial payout could be “substantial” if it is unsuccessful in defending itself. In addition to construction delays, the US Department of Energy in January 2024 paused approvals of LNG exports to countries with which the US does not have a free trade agreement. Venture Global’s SPAs are to FTA nations but it has requested approval to ship to non-FTA nations. Incoming president Donald Trump opposed the DOE pause and his incoming administration is widely viewed as pro gas. Disrupted Venture Global’s modular construction of LNG facilities allows it to begin shipping prior to full completion. "We believe we have fundamentally disrupted and reshaped the LNG industry,” Venture Global CEO Michael Sabel said in the online roadshow. “Our approach, which is both scalable and repeatable, allows us to bring LNG to a global market years faster and at a lower cost than our competitors." Venture Global began shipping from Calcasieu Pass in March 2022, just two and a half years after it began construction. That compares to a six-year timeframe required for the LNG terminals that Qatar Energy, BP and Shell are building. And while it raised US$1.3bn of equity in 2019 from Stonepeak Infrastructure Partne