EMEA Leveraged Finance House: BNP Paribas
Carrying the torch Although the full-blown return of M&A remained tantalisingly out of reach in 2024, the year saw hectic activity. For its leading role in exploiting excellent technical conditions to drive through large, complex trades and help issuers rewrite pricing in their favour, BNP Paribas is IFR's EMEA Leveraged Finance House of the Year.
BNP Paribas worked with both top-tier sponsors and corporates as lead-left or active bookrunner on more than 100 leveraged EMEA loan and high-yield bond transactions through the course of 2024. The deal roster spanned scale and complexity, delivering familiar names in size, relaunching tarnished credits, introducing new issuers and bringing borrowers back for repeat trades.
BNPP was heavily involved in the dividend recap event of the year for UK-headquartered vehicle glass repair and replacement services company Belron, a trade that reset expectations around liquidity capacity in the euro term loan B market.
Belron's jumbo transaction backed a special dividend to its owners of around €4.3bn-equivalent – one of the largest in Europe – as part of a family shareholder reorganisation.
BNPP was lead-left for the €2.05bn TLB, which came alongside a US$4.69bn TLB and €1.85bn-equivalent in senior secured notes.
The deal saw Belron's leverage surge from 2.8 times to 5.5 times and triggered multi-notch downgrades from rating agencies. But with Belron remaining in Double B territory, lenders hungry for new money were happy to absorb the blow and use of proceeds.
Belron generated sufficient support to tighten pricing on multiple elements of the transaction, including 25bp on the euro loan to bring it home at 300bp over Euribor with a 99.75 OID.
BNPP showed it could adapt its playbook for the smaller end of the market, acting as sole physical bookrunner to bring lenders into relatively illiquid €320m seven-year non-call one-year senior secured floating-rate notes from Italian leather and textiles producer Rino Mastrotto. The FRN funded a distribution to shareholders and included an issuer-friendly call schedule and portability.
BNPP was also prominent in the notoriously fickle sterling market, as lead-left for UK forecourt operator Motor Fuel Group's upsized £1.2bn-equivalent deal. MFG's trade backed its £2.5bn acquisition of fuel forecourts from UK supermarket group Morrisons, split between a €500m TLB7 and a £770m TLB6.
For BNPP it was a case of striking a balance between the superior pricing in euros and the issuer's desire for its home currency. MFG placed its euro tranche at 450bp over Euribor and a 99.5 OID. The sterling leg landed at 575bp over Sonia at a 98.5 OID. There was also a marked difference in the underlying risk-free rate, with 12-month Euribor at around 3.75% and Sonia at 5.19%.
While MFG showed that liquidity could be sourced in the sterling loan market, BNPP was one of the physical bookrunners for the debut from UK parcel delivery firm Evri that demonstrated the health of the bond market counterpart.
"Where you really prove your worth as a platform is when you're selling new credits, new names, to the market," said Stanford Hartman, BNPP's head of high-yield and leveraged finance and loan syndicate for EMEA.
Evri opted to raise the majority of its £1.4bn-equivalent buyout financing via an upsized and tightened £725m high-yield issue. The note was the largest sterling bond to support an LBO since 2021.
Although sterling remains a huge point of strength for direct lenders, broadly syndicated pricing in euros proved hard for borrowers to resist in 2024.
Dutch online services company Your.World showed BNPP marrying size, new money and the ability of the syndicated market to steal back market share. With the French bank as one of its physical bookrunners, Your.World replaced several direct lending loans amounting to around €850m with a cheaper, debut seven-year €1bn senior secured TLB that priced inside initial talk at 450bp over Euribor with a 99 OID.
Size was also at the forefront when BNPP was lead-left for an €800m seven-year non-call one FRN for Italian gelato and frozen pastry maker Sammontana. The inaugural borrower eschewed the fixed-rate market, resulting in it pricing the largest single-tranche standalone debut FRN.
The BNPP deal-printing machine was equally adept at handling nuance: French funeral operator OGF, for example, had been earmarked for a potential restructuring following a torrid few years in the face of competition from cremation services and lower-than-expected death rates. But extensive lender work led to a €716m TLB, with BNPP as lead-left, along with €150m of equity from owner Ontario Teachers' Pension Plan, to help the issuer extend a TLB by three years.
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