Australia/New Zealand Bond House

IFR Asia Awards 2012
4 min read
John Weavers

In the competitive Antipodean marketplace, one bank continues to stand above the rest. For maintaining a clear league table lead and dazzling with its ability to raise funds in multiple formats and currencies, JP Morgan is again IFR Asia’s Australia/New Zealand Bond House of the Year.

JP Morgan has long been acknowledged as the house of choice for Australia’s blue-chip issuers seeking to tap overseas markets. These enviable credentials were, if anything, reinforced in the review period as the bank held off determined challenges from the likes of Citigroup and Deutsche Bank to retain an 11% market share, more than any other bank. It is the fourth year running that the bank has won this award.

It was not just the number (over 45) and size of deals that impressed, but also the range of products and currencies that JP Morgan facilitated in a global marketplace that recovered impressively from a near shutdown in the second half of 2011.

The bank boasts a long list of debuts and repeat businesses, thanks to its strong client relationships, especially among Australia’s four major banks and leading corporations. Indeed, JP Morgan was on the ticket at home and abroad for six trades from Westpac, five from ANZ, four from National Australia Bank and two from Commonwealth Bank of Australia.

Making full use of JP Morgan’s range of products, Westpac printed a US$2.0bn three-year covered floating-rate note in July, a US$800m Tier 2 10-year non-call five the following month and a US$2.25bn three-year senior unsecured floater in September.

However, the standout US-dollar transaction was CBA’s innovative US$4bn five-year covered and three-year senior bond issue in March. Syndicate bankers were initially sceptical as to how the dual-tranche offering would be received and raised concerns about the dangers of overlapping investors.

However, CBA was able to sell its US$2bn five-year covered bond at 115bp over mid-swaps, along with a US$2bn three-year senior unsecured note at 155bp wide of US Treasuries.

JP Morgan also helped Australasian financials tap the euro market and the transactions include January’s debut €1bn (US$1.27bn) 2.625% five-year covered bond from NAB.

Across the Tasman, JP Morgan arranged BNZ’s 2.625% €500m long three-year covered bond in January and ANZ National’s €750m 1.375% five-year covered in September.

Outside the majors, JP Morgan was also a joint bookrunner on Macquarie’s US$250m Tier 1 hybrid.

On the corporate scene, JP Morgan’s longstanding association with BHP Billiton was extremely fruitful in a year when the world’s largest miner raised more than US$12bn-equivalent from the US dollar, euro and sterling markets.

With JP Morgan’s help, the A1/A+/A+ rated mining giant – still headquartered in Melbourne – managed to issue a record-breaking US$5.25bn five-tranche SEC-registered Yankee in February made up of a two-year floater, as well as three-, five-, 10- and 30-year fixed-rate prints.

This was followed in September with an audacious four-part, dual-currency bond totalling almost €3.5bn.

BHP Billiton ended up issuing a €1.25bn eight-year and a €750m 15-year bond, before quickly following up with a £750m (US$1.89bn) 12-year and £1bn 30-year. All these were launched and priced on the same day, a remarkable achievement, especially for the only bookrunner involved in all tranches.

Other corporate highlights include Telstra’s 3.5% €1.0bn 10.5-year in March.

JP Morgan also arranged Origin Energy’s euro-denominated debut in September. It also led all three of Goodman Group’s forays to the US dollar 144a market.

The bank emphasised its execution capabilities by resetting Westfield’s existing US dollar curve through September’s US$500m 10-year Yankee and US$300m tender offer.

Australian corporations have also called on JP Morgan’s services to access the US private-placement market, where CitiPower, Port of Brisbane, Foxtel, Newcastle Coal and Envestra raised a combined US$1.725bn in 2012.

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