Yankee Bond House: Barclays

IFR Awards 2023
4 min read
John Doran, Sunny Oh


In 2023 the US bond market contended with a damaging banking crisis, the end of Credit Suisse, a possible recession, interest rate gyrations and political and market turmoil. For providing experience, creativity and gumption to issuers navigating a challenged Yankee bond market, Barclays is IFR's Yankee Bond House of the Year.

The US Federal Reserve's campaign in 2023 to crush inflation was not without its casualties, including a handful of regional banks suffering portfolio rate shock which in turn triggered a crisis that bordered on systemic. For a few weeks in the spring of 2023, the world watched in shock as the Fed and banking regulators rushed to prevent a banking crisis from undermining markets and the economy, both domestic and international.

That turmoil was only one of series of quakes to shake the US and global markets in 2023, and in the process forcing Yankee issuers to either proceed with extra caution or avoid the US market altogether.

Yet even in a dislocated and volatile market that had prevented European and other non-US banks from borrowing in greenbacks for large parts of last year, Barclays still did plenty of business in the Yankee financial space.

"It's been a pretty tumultuous year," said Kenneth Chang, managing director at Barclays. "But there [was] a lot of opportunity that was hidden in the year."

The first quarter of 2023 saw US$103bn of Yankee bond offerings priced, but that dropped in the second quarter with the banking crisis unfolding and Yankee issuance retreating to US$68.6bn, according to IFR data. And the second half of the year wasn't much better, with neither the third nor fourth quarter reaching US$100bn.

In such a tricky environment, global multinationals saw the UK bank as an important partner when they dipped their toes back into the Yankee market.

Meghan Graper, global co-head of DCM for Barclays, said: "I think time and time again ... Barclays served in the role of creating a supportive case as to why certain windows were opportunistic."

Barclays had a starring role in BHP’s return to the US dollar market in February, serving as both sole global coordinator and billing and delivery agent for the trade. Marking the Australian miner’s return after a nine-year absence, the US$2.75bn three-part senior unsecured bond helped reestablish the borrower in the US dollar market and paved the way for its subsequent issuance in September.

In 2023, Barclays also showed it could underwrite offerings across the entire bank capital structure, notably in the US dollar Additional Tier 1 market that was hit hard by the wipeout of Credit Suisse’s AT1 bondholders in March.

The market for deeply subordinated capital holds great strategic value for banks. The fact that its peers were willing to lean on Barclays for their AT1 trades – arguably their most important transactions – despite the tremendous volatility of 2023 showed clients trusted the bank to deliver on execution in both good and bad times.

Barclays worked as a lead for BBVA’s US$1bn AT1 issue in September, the second Yankee AT1 trade from a European bank since March. The bank was also a bookrunner for Swedbank’s US$500m AT1 issue in February.

Other European banks have trusted Barclays with repeat business in 2023, giving it mandates across US dollars, euros and sterling in the knowledge that the lender could deliver on execution in different geographies.

Barclays served as joint leads for Rabobank’s US dollar offerings on three separate occasions, delivering on a US$1bn two-year senior preferred trade in January, a US$1bn six-year non-call five senior non-preferred note in February and a US$1bn two-part senior preferred issue in September.

For Intesa Sanpaolo, Barclays helped lead the Italian bank’s US$1.5bn 31-year non-call 30 senior non-preferred trade as part of an overall US$2.75bn transaction in June. Despite the unusually long maturity of the senior non-preferred tranche, the offering was a smashing success, collecting orders of over US$10bn and attracting more than 240 investors.

Barclays was also able to lead a diverse group of transactions for the captive financing entities for Japanese and South Korean carmakers. In a demonstration of Barclays’ strength in the sector, the UK bank was a joint bookrunner for Yankee offerings for three carmakers in January alone, which included senior note issuance from Toyota, Honda and Hyundai.

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