North America Investment-Grade Corporate Bond House: Bank of America

IFR Awards 2020
4 min read
William Hoffman

Bank of first call
For leading companies through a frantic grab for liquidity during the onset of the Covid-19 pandemic and its leadership in social bonds, Bank of America is IFR’s North America Investment-Grade Corporate Bond House of the Year.

North America Investment-Grade Corporate Bond House

When fears surrounding the Covid-19 pandemic were at their height and companies needed liquidity fast to protect against the fallout, more companies turned to Bank of America than any other adviser.

Between March and June – which were the most stressed of the year and will go down as four of the six busiest months in the history of the US bond market – BofA was the lead horse to take these companies into an embattled market.

BofA was lead bookrunner on deals totalling US$570bn, more than any other bank over that period and US$27bn more than the next closest bank, JP Morgan.

A previously unfathomable US$970bn of supply priced over those months and BofA led nearly 60% of all those deals.

“The March to June period is the story of 2020,” said Andrew Karp, head of global investment-grade capital markets at BofA. “As companies needed liquidity to finance their operations and fortify their balance sheets at the outset of the health pandemic, they turned to their most trusted advisers to help them navigate the capital markets and achieve their funding goals. We benefited from that.”

It was during this period that BofA helped lead eight of the 15 largest deals of the year, including deals from blue chip names such as Walt Disney, AT&T and two different jumbo deals from ExxonMobil.

BofA even led the two largest deals of the year: a US$25bn five-part trade from Boeing and a US$20bn five-part deal from Oracle.

Boeing in particular was heavily stressed even before the pandemic grounded flights worldwide and created supply chain issues.

Earlier models of the company’s flagship aircraft – the 737 Max – were involved in two crashes in 2018 and 2019 that killed 346 people, led to billions of dollars in fines and settlements and tarnished its once sterling reputation in the aviation industry.

Despite those challenges Boeing built a US$70bn order book for its bond deal that allowed the company to upsize to US$25bn from initial talk of US$15bn.

BofA also proved to be a leader in the growing ESG space in the US, which took big strides in social bond funding in 2020.

The bank was the first to raise funds in the bond market for Covid-19 relief. A US$1bn bond priced in May and financed loans and lines of credit to BofA's commercial banking clients in order to fund treatment of Covid-19 patients at non-profit hospitals and skilled nursing facilities, according to the SEC filing.

Then in September, BofA returned to the ESG space with a first-of-its-kind sustainability bond designed to help Black and Hispanic communities through a variety of financial products that help business owners and families. The deal raised US$2bn.

Funds went towards mortgage lending and construction loans for affordable housing projects in Black and Hispanic communities; financing for medical professionals looking to establish practices in Black and Hispanic communities; and green initiatives such as wind and solar power generation.

Importantly, those funds were forward looking and ensured continued investment into the space for years to come.

“The purpose of the bond is to affect social and environmental change by advancing racial equality, economic opportunity and environmental sustainability, and you can’t do that looking to the past,” Karp said. “With that transaction, we made a statement about our desire to affect positive change to the environment and support financial empowerment within the Black and Hispanic/Latino communities.”

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