Australia/New Zealand Equity House: UBS

IFR Asia Awards 2022
3 min read
Sunny Tse

Risk taker

UBS reclaimed the top spot in Australasian ECM in 2022, supporting clients through challenging and volatile markets with its unrivalled appetite for risk.

The Swiss bank topped the Australia/New Zealand equity and equity-linked league table for IFR’s review period. It raised A$4.7bn (US$3.2bn) for its clients through 10 transactions with a market share of 18.6%, 8.1 percentage points ahead of its closest competitor, according to Refinitiv data.

Boutique firms have expanded aggressively in Australia in recent years. But in a year when issuers needed absolute assurance for their deals’ success, they picked UBS.

UBS, acting as a joint lead manager, underwrote the four largest entitlement offers in Australia and New Zealand in 2022. They were Australia and New Zealand Banking Group (A$3.5bn), Atlas Arteria (A$3.1bn), (A$1.2bn) and Air New Zealand (NZ$1.2bn or US$829m).

“We kind of like difficult periods that we can really demonstrate the strength of our balance sheet and the strength of the equity side,” said Matthew Beggs, co-head of equity capital markets for Australasia until February 2023 (he has since become sole head).

A month after Russia invaded Ukraine, UBS, as a joint lead manager, on March 30 helped Air New Zealand launch a renounceable rights offer to raise NZ$1.2bn as part of a NZ$2.2bn recapitalisation package.

While wall-crossing processes were critical in most equity raisings last year to assist in price discovery and de-risk transactions, UBS decided to take on the hard underwriting risk even though no market sounding was done before the launch. The deal is the largest ever follow-on offering in New Zealand.

“Part of the strength of our business over time has been our willingness to take a view on hard underwriting risk and deliver that hard underwriting risk value to clients to afford them more flexibility,” Beggs said.

The other unsounded deals that UBS underwrote last year included the A$225m placement of Steadfast Group, the A$180m entitlement offer of Domain Holdings and the A$39m block of Megaport.

Another signature deal in 2022 was Australian toll-road operator Atlas Arteria’s fully underwritten entitlement offer raising funds for a 66.7% stake in a Chicago toll road.

The offer was clouded by IFM Investors, which owns a 19% stake, as it opposed the acquisition and the equity raising. The Dow Jones index also plunged 3.9% on September 13, the night before the deal launched.

UBS, as one of the two lead managers, assisted Atlas in navigating the complex shareholder dynamics. It specifically structured the deal as a non-renounceable entitlement offer so the rights could neither be transferred to other investors nor sold in the market, effectively guiding the shareholders to participate instead of losing the value from the rights – and delivering a 93% take-up rate.

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