Euro Bond House and Reverse Yankee Bond House: Deutsche Bank
True to its roots Older than even its home nation, Deutsche Bank has spent more than 150 years adapting to changing circumstances and importing and exporting ideas and expertise so as to best benefit its clients. Deutsche Bank is IFR’s Euro Bond House and Reverse Yankee Bond House of the Year.
When Deutsche Bank was founded in 1870, it was very much with an outward-looking view. Its statutes placed great emphasis on foreign business, stating that "the object of the company is to transact banking business of all kinds, in particular to promote and facilitate trade relations between Germany, other European countries and overseas markets".
Indeed, even the name Deutsche Bank demonstrated great vision, given that its birth came a year before Germany had been officially established as a nation state.
Many years may have passed but the plan remains the same: Deutsche is committed to transacting business of all kinds, not least in bond markets where its influence flows from and back into its home arena.
“It’s quite simple,” said Mark Lewellen, co-head of capital markets in EMEA. “We want to be a leading international bank. Our franchise has gone from strength to strength and we’ve been expanding in specific areas.”
That’s not to say that this objective is in any danger of spilling over into over-ambition, however, as may have previously been the case. “The years of ego-banking have definitely gone,” said Ade Ademakinwa, head of debt capital markets syndicate for EMEA. “This bank is now so rational.”
And where better to start than in areas in which there is already a solid foundation on which to build.
Deutsche has long been at the forefront of the euro market when it comes to corporate issuance, both investment-grade and high-yield, and it is perhaps also here that its prowess in the reverse Yankee market was best displayed. “What made us stand out from the pack was our diversity of thought,” said Helene Jolly, head of EMEA IG corporate syndicate.
The results were plain to see during a particularly busy period in May for the IG sector. Deutsche helped numerous clients navigate their way through the market, leading deals for the likes of Johnson & Johnson, Novo Nordisk, Merck of the US, Finnair and Warner Media, laying claim to involvement in some 60% of the supply.
J&J and Warner Media were good examples of the reintroduction of US issuers that had been absent from the market for some years, a list that also included T-Mobile US, while there were repeat mandates from Verizon, Ford Motor and Booking Holdings.
“US issuers pay fees and therefore there’s competition, but we’ve managed to baulk the rotation trend and get repeat business: deals beget deals,” said Marc Fratepietro, co-head of global DCM.
This ability to claim multiple mandates was also on view in the public sector arena, with a number of transactions from supranationals such as the European Union, the World Bank and the European Investment Bank, not to mention agencies like KfW. Throw into the mix a string of sovereign underwriting roles and duration management positions for the likes of Austria and Greece and then scroll down to the sub-sovereign municipal and provincial state categories and Deutsche Bank occupies a seat at the top table of every component part of the SSAR market.
This "through-the-asset-class" capability was also visible in the financials sector, where almost unrivalled volumes saw Deutsche firmly ensconced in the upper echelons when it came to bookrunning duties.
In a year that witnessed a large amount of supply generally encounter an enthusiastic reception, it was the less run-of-the-mill exercises requiring a more bespoke advisory-led approach that stood out, including with deals such as NordLB’s first Tier 2 in more than 10 years or OLB’s inaugural deal in the asset class.
Southern European issuers took full advantage of the encouraging backdrop and Deutsche was there to help with their rehabilitation, with deals of varying degrees of seniority, subordination and colour, such as Piraeus Bank’s T2 and Bank of Cyprus’ green senior preferred, not to mention Novo Banco’s selection of deal types that marked its return to the public arena.
Closer to home, the under-pressure German commercial real estate sector had created market access problems for institutions such as Aareal Bank, which Deutsche again reintroduced across the capital structure. Elsewhere all bases were covered, from bank AT1 to covered bonds and insurance capital to funding agreements-backed issuance from US borrowers that again underlined the bank’s transatlantic credentials.
“Deutsche Bank was created to export Germany,” said Ademakinwa. Sometimes, though, it could almost be argued that Germany was created to export Deutsche Bank, such is the history and depth of its franchise that is looking reinvigorated and here to stay.
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