Leading the way
Success navigating the corporate bond market in 2013 meant responding to new trends quickly while safeguarding business in an increasingly competitive environment. Its efforts to spearhead the resurgence of the hybrid market, and nurse Europe’s reputation as an international DCM platform back to health makes BNP Paribas IFR’s European Investment-Grade Corporate Bond House of the Year.
During the IFR awards year, BNP Paribas was involved in the execution of 144 investment-grade bonds across the EMEA region, including trades from 20 countries and 117 different corporates.
The French bank made its biggest mark in the hybrid space, where it was bookrunner on 19 deals – garnering more than 10% of the hybrid market – and ending comfortably ahead of the runner-up at 12.
“This year we witnessed a true explosion in the hybrid market, and we were able to set the stage and tap into issuer needs at the same time as educating investors consistently,” said Rupert Lewis, head of corporate syndicate.
He emphasised the bank’s role as bookrunner on Electricite de France’s three-currency, four-tranche €6.4bn-equivalent subordinated bond. “It was the game-changer that redefined the whole product – something that everyone had been waiting for,” Lewis said.
Not only was EDF’s transaction the largest ever hybrid from a company, but it also included the biggest single tranches for each of the three currencies in the format: US dollars, euros and sterling.
Other notable hybrid bonds led by BNP Paribas this year included Enel’s dual-tranche €1.25bn and £400m offering as well as America Movil’s €1.45bn and £550m transaction. The latter was the first three-part hybrid from a corporate ever executed intraday.
BNP Paribas was also a bookrunner on Telefonica’s dual-tranche hybrid, which was designed to strengthen the telecommunication giant’s balance sheet in the light of its acquisition of E-Plus from Dutch rival KPN.
“That deal showcased that hybrids can be an excellent way of enhancing a company’s funding tool kit in an M&A situation,” said Fred Zorzi, the bank’s co-head of global syndicate. “It paved the way for more to come.”
BNP Paribas was also able to take full advantage as overseas borrowers found renewed appeal in the euro as an issuance currency.
Thanks to the bank’s agility, it was able to detect the changes in the marketplace swiftly – and pip many of its rivals to the post.
“For some periods in 2008 and 2009, the US dollar market was the only viable funding option for many corporates,” said Anthony Bryson, the bank’s European head of corporate debt capital markets. “This year, though, the tables have turned – and the euro market has shown its competitive edge. At some points of the year, borrowers were even able to fund cheaper in euros than in other currencies.”
The bank led transactions for Toyota Motor Credit and Korea Gas out of Asia, Asciano and Melbourne Airports out of Australia, and Oracle and AT&T out of the US.
In July, BNP Paribas’ expert knowledge and strategic excellence was showcased when an activist investor bought a 9.8% share of US group Air Products & Chemical during the book-building process for a new seven-year bond.
“We were able to reassure investors and make them feel comfortable enough with the paper, despite this highly unexpected and unprecedented situation,” Lewis said.
While it seized on larger trends in the marketplace, BNP Paribas also kept an eye out for detail, displaying as much passion for bespoke niche trades as for jumbo vanilla issuance.
The French lender secured its hold on the Schuldschein market through transactions for the likes of Fromageries Bel – the world’s leading branded cheese manufacturer. It also ran US-style private placements for Italian auto parts manufacturer Sogefi and Brussels Airport, and executed project bonds for Castor and HS1.
In the meantime it earned its keep as one of Europe’s best bookrunners for long-dated transactions through managing a €750m 20-year bond for global miner BHP Billiton and a €350m 20-year offering for Nordic telecoms provider TeliaSonera.
“We’ve always prided ourselves on being able to develop custom solutions for a wide universe of clients,” said Christopher Marks, the bank’s global head of DCM. “This year has been no exception. We have demonstrated flexibility, discipline, product sophistication and unparalleled expertise – while always remaining true to our roots and disciplined enough to always put our clients’ needs first.”
To see the full digital edition of the IFR Review of the Year, please click here.
To purchase printed copies or a PDF of this report, please email email@example.com