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The US dollar bond markets were sizzling with issuance activity again in 2014 as companies capitalised on low interest rates to refinance debt, buy back stock or embark on M&A. Morgan Stanley responded to opportunities faster than its rivals and led many market-defining transactions, making it IFR’s US Dollar Bond House of the Year.
Royal Bank of Canada flexed its muscles as a leader and an innovator in the Canadian debt capital markets in 2014, pioneering the development of a new market for non-viability contingent capital for Canadian banks.
Dynegy’s high-yield acquisition bond had it all: a huge US$6.35bn underwriting commitment that took nerve from banks, an innovative structure that ensured the company could pay for two major acquisitions and a tremendous execution in a tough market.
For leading complex acquisition financings, winning market share with innovative ideas and having the right read on conditions to guide clients through some of the toughest periods, Morgan Stanley is IFR’s North America High-Yield Bond House of the Year.
The US$21.9bn-equivalent financing backing French telecoms operators Numericable and Altice’s acquisition of rival firm SFR used multiple markets on an unprecedented scale to achieve a stand-out result for the borrowers.
To lead manage the largest high-yield bond issue in history is impressive, as is the ability to bring companies from across the globe to the European high-yield market while pushing boundaries on structure. As a result, JP Morgan is IFR’s EMEA High-Yield Bond House of the Year.
Issuance of capital by banks around the world was one of the big themes of 2014 in the US market, and Citigroup grabbed the lion’s share of the business, while at the same time expanding its client base among US financials. Citigroup is IFR’s North America Financial Bond House of the Year.
In a year when bank capital dominated the financials arena, a transaction had to provide something extra to stand out from the pack.
Whether it was peripheral banks returning to the market, insurance companies seeking to issue grandfathered Tier 2 capital, banks raising landmark AT1s, or lenders preparing for TLAC, one firm was there to offer a steady hand. Deutsche Bank is IFR’s EMEA Financial Bond House of the Year.
When it came to convincing fund managers to buy notes issued for the sole purpose of placating equity holders, no one was a smoother talker than Apple.
Altice and Numericable’s record-breaking deals cemented Goldman Sachs’ global high-yield franchise, but it was a focus on small European companies that got them to the top. For seeing which way the wind was blowing earlier than most, Goldman Sachs is IFR’s High-Yield Bond House of the Year.
KfW’s Green debut set the bar higher for the flourishing SRI sector, trumping other such deals both in terms of size and transparency.
Nationwide achieved what many thought was impossible in 2014. As the UK’s largest building society, the firm was in a unique position to test the sterling Additional Tier 1 market.
In a year that saw many institutions engrossed in multi-tranche jumbo deals in US dollars and euros, one house did not let its eye stray from the importance of its domestic market, chalking up an impressive list of transactions across asset classes. Royal Bank of Scotland is IFR’s Sterling Bond House of the Year.
Swiss confectioner Chocoladefabriken Lindt & Spruengli hit all the high notes with its bumper triple trancher in late September. The combination of SME financing, M&A activity, multiple tranches, huge size and rarity ensured that Lindt beat off stiff competition in one of the more interesting years for the market to be IFR’s Swiss Franc Bond of the Year.
Reclaiming its crown in a challenging year of ongoing negative rates and ever-more draconian regulations, one bank held its head high, providing innovative solutions and maintaining its lead in the face of stiff competition. Credit Suisse is IFR’s Swiss Franc Bond House of the Year.
In a year when covered bonds shone, Nationwide Building Society shone brightest of all with its rare long-dated dual-tranche jumbo, which heralded the issuer’s return to the euro covered market after more than two years away.
Navigating a market increasingly at the mercy of regulatory forces is far from simple. For its consistency, credibility and global coverage, BNP Paribas is IFR’s Covered Bond House of the Year.
With the eurozone crisis that had so dominated the previous few years finally easing, the Kingdom of Spain began 2014 with its 10-year yields at their lowest in eight years.
The public sector funding arena is by its nature dominated by large vanilla fundraising exercises in a few core currencies. One bank showed that it was possible to add a little variety to the mix – and that your existing franchise can thrive at the same time. HSBC is IFR’s SSAR Bond House of the Year.
Almost a year to the week after its previous multi-faceted fundraising exercise, Electricite de France stormed back into the markets in January, raising more than €9bn-equivalent across three currencies in hybrid and senior issues that included fixed and floating formats, as well as not one but two eye-popping century bonds.
Issuers from across the globe were lured into the European corporate debt market during 2014, enticed by favourable cross-currency basis dynamics and the breadth of investor appetite. BNP Paribas stood at the forefront of a fast-paced market, making it IFR’s European Investment-Grade Corporate Bond House of the Year.
The shock and awe from Morgan Stanley’s ¥150bn (US$1.5bn) Samurai bond is impossible to ignore. The deal deserves praise for its ballsy execution, and it set the tone for this year’s Samurai market, helping some of the world’s most prestigious banks access the market in large sizes for months to come.
The Samurai bond market had not been as robust as it was in 2014 in years. But that only made for increasingly intense competition. For bringing the most notable deals and leading the way in volume, Daiwa is IFR’s Yen Bond House of the Year.
Deutsche Bank’s commitment to its home market remains undiminished, but in 2014 the firm leveraged its global reach to introduce a number of fresh faces that might not have considered issuing to the euro market. It is IFR’s Euro Bond House of the Year.
Investment banks have had to tear up decades-old strategies and rethink their purpose since the financial crisis. Their leaders tell IFR about the shape they are in now, what they think will happen next, and what the industry will look like after all the upheaval.
As a watershed year for global derivatives reform, 2014 saw one of the most ambitious strands of the Dodd-Frank Act finally come to life. Large swathes of the US$691trn over-the-counter swaps market were pulled out of the OTC shadows and into the bright lights of regulated exchanges.
Fines for previous misdemeanours reached all-time highs in 2014 as regulators became more assertive in extracting large settlements that, while eye-popping, wouldn’t break the banks. But with the last of the big scandals reaching a close, banks are hoping the era of penalties may be behind them.
Equities sales and trading is yet another area of European banking in the midst of upheaval. Regulators want banks to be more open with the way they price equity services, including research.
Holdout investors in recent years have done better than those that accepted the terms of sovereign debt restructurings. That has prompted renewed efforts to change the system, level the playing field and bind in defiant creditors. But can the reforms actually work?
Investors in banks could be forgiven for longing for simpler times. On established metrics banks look incredibly cheap. But a host of new rules around capital requirements and resolving failing banks, not to mention a host of untested debt structures, have left investors attempting to evaluate an unpredictable new world.
Japanese retail investors have tended to leap on the opportunity to buy foreign equity in public offerings without listing, yet relatively few IPOs end up including such a tranche. As investors from the country gear up to invest more abroad, Tokyo could become a more frequent stop for IPO roadshows.
All for one and one for all – that seemed to be Alibaba’s motto when it came time for the internet giant’s record-setting IPO. Levelling the playing field turned out to be good business for all concerned in the US$25bn deal.
The curious governance structure of Alibaba, the Chinese internet retailer, has focused attention on dual-class shares and how stock exchanges around the world should view corporate efforts to keep control at the top.
They may not quite be all the rage just yet, but Green bonds are an increasingly popular funding option for borrowers keen to do, or at least be seen to do, the right thing. They’re great PR and (usually) good finance. But do they actually help to make the world more green?