The one to beat
UBS continued to lead the way in Australian equity issuance in 2020, reacting quickly to the Covid-19 pandemic with tailormade solutions for clients despite increasing market competition.
The Swiss bank continued its run at the top of the Australia/New Zealand equity and equity-linked league table after a run of high-profile departures in 2019, including former country head Matthew Grounds, head of investment banking Guy Fowler and equities co-head Chris Williams. Robbie Vanderzeil, chairman of capital markets, also left in early 2020.
UBS reinforced its reputation as a trusted adviser to clients with 47 deals during IFR’s awards period for a market share of 16.2%, 2.8 percentage points ahead of its closest competitor, according to Refinitiv data.
“We had another strong performing year which was characterised by us being really quick in evolving around the market conditions to make sure we were providing our clients flexible solutions,” said Alex Dignam, head of equity capital markets and structured equity solutions for Australasia.
In February and March, with the coronavirus spreading around the world, UBS, as joint bookrunner, captured the market window to help retail-to-chemicals conglomerate Wesfarmers raise A$2.2bn (US$1.7bn) through the sale of two blocks in supermarket operator Coles, whose business benefited from stockpiling of necessities and increased consumption of food at home.
The two underwritten blocks (A$1.1bn each), the country’s largest sell-downs last year, came with no pre-deal sounding, demonstrating UBS’s risk appetite in treacherous market conditions.
The Swiss bank was also one of the first in the market to help travel and travel-related companies raise funds to buttress their balance sheets. It raised A$701m for Flight Centre Travel Group from an institutional placement and an accelerated rights offer.
UBS’s signature deal of the year was a A$2bn underwritten fundraising for Sydney Airport Holdings in August – the largest sole-led capital raising in Australia for five years – that brought back a structure last used in mid-2018. The pro-rata accelerated institutional with tradeable retail entitlement offer (PAITREO) format is seen as the most equitable way to raise money for all shareholders but comes with added complexity.
The structure satisfied the airport operator’s need for a speedy fundraising while at the same time allowing its broad retail shareholder base to either take up their entitlements or sell their rights for cash, avoiding any unwelcome dilution of small shareholders at a low share price.
UBS again solely underwrote another PAITREO a week later, raising A$600m for gaming firm Tabcorp Holdings.
In New Zealand, UBS’s impressive book of business included a sole-led NZ$250m (US$178m) placement for infrastructure company Infratil in June and a NZ$338m block in pharmaceutical and medical products group EBOS in November.
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