Ahead of the crowd
Senior and capital issuance sprang back to life over the past year, providing FIG houses with colossal fees if they called the market right. For seizing trends faster than all of its competitors, HSBC is IFR’s Financial Bond House of the Year.
HSBC has long been a frontrunner in the financials market. This year it has managed successfully to separate itself from its rivals by recognising the biggest themes while navigating a volatile market.
“We managed to win the top position in the subordinated league tables, show strength in the Reg S market and dominance in the European flow market this year,” said Christoph Hittmair, head of European FIG DCM at HSBC.
In 2011 and 2012 HSBC ranked fifth in all financials. But in 2013 it became the number one bank in subordinated debt in all currencies, and excluding self-led deals, it jumped to third position for all FIG, according to Thomson Reuters data.
“We’ve moved forward this year and are now leading from the front in capital innovation and flow,” said Hugo Moore, head of frequent borrowers at HSBC.
But it is not all about league tables. In bank and insurance capital and liability management HSBC offered an unrivalled approach. The bank barely missed a trick in the insurance area, selling 18 issues, 15 of which were in the capital space.
Other banks such as Swedbank, Danske Bank, RBI, UBS, Credit Agricole and Societe Generale recognised HSBC’s abilities in selling capital and sought the firm’s help to sell their most complicated and highest profile trades of the year.
In the liability management area where competition was ferocious due to a lack of transactions, HSBC was a trusted partner to the likes of Mondiale, Achmea and Russian Standard Bank and is helpingthe Co-operative Bank with its recapitalisation process, arguably the highest profile LM exercise of the year.
HSBC was clearly outmanoeuvring its competition in capital, but unlike other houses, it did not let its flow business fall by the wayside. HSBC assisted peripheral issuers like BBVA, CaixaBank, UBI Banca and Intesa Sanpaolo find a safe passage to the senior unsecured market. For stronger credits such as BFCM, Commonwealth Bank of Australia, Allianz, Svenska, Pohjola and Rabobank it helped them time deals perfectly to ensure the lowest funding costs. Globally, HSBC was present in 17 currencies for issuers from 32 countries.
Insurance inroads
Although HSBC has taken a cautious approach in the US domestic market, it has managed to make inroads in the insurance space, leading deals for Allianz, AXA, Prudential PLC and Prudential Financial and AIG. It has also broken into the specialty finance and captive finance space, with dealsfor TMCC, Nissan Motor and FMCC.
Closer to home, it flexed its FIG muscles in the euro and sterling markets with deals for Macif, Achmea, Liverpool Victoria and Aviva.
HSBC also demonstrated a dominant position in emerging markets as it became one of the leading FIG houses in the Asian market while also helping Latin American issuers access the capital markets.
The bank, not previously seen as a go-to institution for structuring bank debt, has earned its keep with key issuers, such as Korea Development Bank, by proving it had access to the most important accounts that focus on financial institutions.
It proved its worth by being one of the six bookrunners on the first Basel III-compliant Tier 1 bond out of Asia, the S$850m (US$680m) perpetual subordinated notes that United Overseas Bank priced in July. And it was also one of 10 bookrunners on the US$500m 10-year Tier 2 sold by ICBC (Asia) in early October that constituted the first US dollar-denominated subordinated bonds under the new regime in the region.
“We were very focused on being on the first Tier 1 and first Tier 2 transactions under Basel III in Asia,” said Sean McNelis, head of financing solutions for Asia-Pacific at HSBC.
And in Latin America, Banco do Brasil looked to HSBC to help it sell the largest Basel III-compliant transaction from an emerging markets issuer.
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