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The year began with optimism but next to no issuance. In the second half BNP Paribas executed transactions of varying structures at a moment's notice and outpaced its rivals to be IFR’s EMEA Structured Equity House of the Year.
The year started promisingly, with BNP Paribas leading a €250m exchangeable bond into Irish dairy and nutrition business Glanbia in late January.
All that followed until September, however, was a €175m CB from BE Semiconductor Industries in March and a €50m tap by France’s Voltalia in July, both away from BNPP. The French bank in May issued a €375m synthetic convertible helping to keep the market alive. Capturing a strong bid for FIG stocks seen during 2022, the non-dilutive was tapped for €75m at the start of 2023.
After just US$600m of paper was issued in the first eight months of the year, nearly US$4.75bn was printed in the final four, two-thirds of which went through the BNP Paribas desk.
In truth, there were only two windows in the year – September and November – but when the deals came, they came thick and fast. “We were in the market four times in 10 days in September and then after a quiet October, printed nearly another €1.5bn over a few weeks in November,” said Thierry Petit, head of EMEA equity-linked at BNPP.
Despite the short windows, BNPP deployed a wide variety of equity-linked structures, including exchangeable bonds, a mandatory, green CB, liability management exercises and a premium redemption structure.
“I’m not sure there was a single structure that was not seen in the market this year,” said Petit.
When issuance was so sparse – and then so intense – BNPP's regular dialogue with investors was vital, and helped by an active sales and trading function.
"Some of this year’s deals were the result of reverse enquiry," said Meryem Bouchama, a managing director in the equity-linked team.
Deals were rarely easy and a €470m six-year CB in November for Ubisoft showed the flexibility required to get issuers and investors engaged. Launched on the back of a strong share price response to its latest results, the deal employed premium redemption to keep the coupon down for the issuer and gave investors full dividend protection and a put, a rarity in equity-linked. Pricing came through the range. Notably Ubisoft had launched and then pulled a four-year straight bond in June.
Having been a joint bookrunner on the French gaming company’s €500m CB in 2019, the bank was upgraded to joint global coordinator this time.
SGL Carbon’s €102m five-year paper at the start of November, the first from a high-yield issuer since TUI in April 2021, was deemed by Petit as only possible in that window, while providing cheaper funding than high-yield markets could offer. Again, the bank improved its syndicate position from the previous trade.
A €380m seven-year CB from French laundry business Elis in September achieved the highest conversion premium in more than 15 months at 42.5%, as well as including a put.
BNPP has led seven equity-linked transactions for Belgian holding company GBL since 2005, including a €500m exchangeable into drinks company Pernod Ricard at the end of November, tapping into heavy demand for investment-grade names.
It also broke into other long-standing relationships, finally getting mandated by RAG Stiftung on its €500m exchangeable bond into Evonik. “RAG did five without us but entrusted us in a difficult year and got better results,” said Petit in reference to pricing five vol points above the previous deal.
And even when markets were shut, the focus was on servicing client’s needs. A convertible mandate for Dutch EV charging business Fastned, bruised badly from a public raise in 2021, pivoted to an accelerated bookbuild and ultimately became a €75m private placement to Schroders Capital.
By year-end, BNPP was top of the league with a share of proceeds 40% ahead of the next best bank and having more than doubled its market share from 2021.
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