Against a tough backdrop of central bank rate rises, the withdrawal of their extraordinary market support and a banking crisis that helped bring Credit Suisse to the brink, securitisation issuers in 2023 found themselves groping for every possible tool to achieve their goals. For its outstanding skill handling the entire toolbox, BNP Paribas is IFR’s EMEA Structured Finance House of the Year.
From public RMBS, ABS and CLO distribution to warehousing, private finance, synthetic securitisation, trading and derivatives, BNP Paribas was present in virtually every corner of the EMEA structured finance market in 2023 – and in style.
“We needed to understand clients’ needs in faster moving markets,” said Simon Jones, head of the bank’s securitised products group. “We had to assess all the options to provide a broad and flexible range of products as well as innovative and bespoke solutions.”
The precision financial engineering involved in structuring complex deals and the deft touch required to optimise risk distribution were only parts of the equation. BNPP also came armed with a sledgehammer in the form of its balance sheet, a big chunk of which it committed to the business to support clients.
This combination enabled BNPP to play a consistent role at the forefront of developments, cementing its leading position in areas where it was already at the top of its game while rising to the highest echelons in other areas, such as CLOs.
In public RMBS and ABS for European issuers, BNPP maintained its top-two league table position with a 10.4% market share, having been a bookrunner on 32 transactions. Along with more routine jobs, deals included bespoke projects backed by some of the most esoteric asset classes brought to the market all year, such as a rare transaction backed by UK equipment leases and one underpinned by credit cards issued to small and medium-sized businesses.
In European CLOs, the bank climbed from fifth to second with a market share of 14.3% thanks to an expanded client base. That growth was underpinned not only by the strategic deployment of BNPP's balance sheet but also its top-tier distribution capabilities and investor relationships, as demonstrated when the bank arranged what is believed to be the only euro CLO of the year to be supported entirely (apart from 5% risk retention) by third-party equity.
“Critical this year was the ability to access equity into new issue CLOs,” said Dushy Puvan, head of CLO origination and structuring. “That has really been a game changer.”
In the significant risk transfer market, where BNPP has been a prominent player thanks to its substantial in-house programmes, the team was increasingly active on behalf of third-party clients, notably Canadian banks.
“Over the last few years, we've increased the number of asset classes and we've increased the number of deals that we're bringing to market,” said Jones, referring to BNPP’s SRT issuance. “What we've done this year is we've meaningfully built out our external client business on the SRT side.”
And while the bank has long been one of the dominant franchises for banks and corporate issuers, it has built on that success with a push to expand its financial sponsor client list.
In a year when private credit continued its relentless expansion and alternative asset managers became increasingly interested in asset-backed strategies, the move made perfect sense. And there is perhaps no better example of BNPP’s capabilities in this area than its participation, alongside three other banks, in Project Danube, a landmark transaction that financed KKR’s acquisition of an up to €40bn portfolio of pan-European buy now pay later contracts from PayPal.
KKR is a sought-after financial sponsor client but this multi-jurisdictional transaction was also special because of its size, complexity and novelty – BNPL contracts are a new asset class in Europe and come with their own particular considerations.
Remarkably, the deal was signed during the tumultuous period after the failure of Silicon Valley Bank, one of the major players in BNPL financing, and as Credit Suisse appeared close to collapse.
“Even though there’s market turmoil, our balance sheet is here to support clients,” said Manesh Chandra, BNPP’s head of ABS markets and financing. “We support them through difficult times.”
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