Sterling Bond House: Barclays
Top of the tree Far from taking for granted a position of dominance in its domestic bond market, Barclays opted to employ a strategic approach to grow its franchise, and, in doing so, climbed away from the competition. Barclays is IFR’s Sterling Bond House of the Year.
While a place in the leading pack in any business year after year could be a recipe for complacency, with the danger being that the situation is simply accepted as the norm, Barclays spent 2024 looking to build its sterling bond credentials rather than resting on its laurels and settling for consolidation.
“We grew our business from an already strong position,” said Lee Cumbes, head of debt capital markets for EMEA, pointing out that the initiative was not undertaken in a scattergun manner, rather that there was a targeted approach.
“We have been consistent and we did it our own way. We didn’t go for breadth for the sake of it. We said: ‘where can we make a difference?’ and what we ended up with was a business that was simpler and better balanced.”
The results were plain to see, with Barclays lead managing a greater number of deals than its competitors and accelerating away in terms of volume achieved.
The success was realised across the various asset classes, from investment-grade corporates, through the public sector borrowing fraternity, banks and insurance companies, and to leveraged finance and the high-yield sector.
“We can offer advice across the piece,” said Matthew Thomas, head of EMEA corporate DCM.
Within the corporate space, Barclays was quite prepared to make use of its balance sheet, although, as Thomas said: “There is more to it than just lending. It’s a classic value-add from DCM; it’s not just a balance sheet one for one.”
This approach led to the bank ticking all the important boxes when it came to issuance type, from debuts from the likes of Traton and South West Water (not to mention other assorted water-related flow at a challenging time for the sector) to market reentries such as Hammerson, Unite Group, Haleon and Iberdrola; and other international supply from Engie, Nestle, BMW, Mercedes-Benz and JR East, as well as reverse Yankees from Ford Motor, General Motors, Realty Income and Comcast.
The subordinated world of corporate hybrids was firmly in Barclays’ sights as it helped BP engage on its multicurrency issuance spree, while there were also a couple of notable firsts along the way in which it played a central role. Centrica returned after a long absence to become the first issuer to take advantage of the revised methodology of Moody's that meant its hybrid was rated just one notch lower than senior paper, while EDF sold a pioneering green nuclear deal.
Those two issuers also fitted into the liability management arena in which Barclays was deeply involved and that included other issuers such as the AA, RAC, KPN and Annington, as issuers looked to manage their debt obligations and turned to Barclays for its expertise and execution skills.
The story was similar when it came to public sector borrowers, with the bank boasting a wide-ranging roster of international clients underpinned by a strong relationship with domestic institutions, not least the UK DMO, for which the bank was active a couple of times, most notably on June’s £11bn 10-year – outgoing chief executive Robert Stheeman’s final syndication – which racked up a record order book.
Aside from the usual – but crucial – fare from the likes of the World Bank, the European Investment Bank and KfW, Barclays also notched up a pair of important debuts from Saudi Arabia’s Public Investment Fund and CAF, the Development Bank of Latin America and the Caribbean.
In the financials arena, the bank delivered strong advice and execution across the product suite. At the most subordinated point, Nationwide Building Society’s £750m perpetual non-call six AT1 boasted the currency’s tightest reset spread and priced flat to fair value at worst. That deal followed a highly sought-after Tier 2 from Aviva, a sector in which Barclays had also been active for lesser-known names such as Schroders and Rothesay Life.
In addition to a rollcall across senior debt, both preferred and non-preferred, that permeated throughout Europe and beyond, Barclays also led the charge in ensuring that the covered bond sector remained relevant.
But behind the success and the bulging list of deals lies what is probably most relevant: building and maintaining contacts on all sides of the industry over long periods of time. “Ultimately, this is still a people business,” said Cumbes. “Relationships really matter; people matter.”
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