US Mid-Market Equity House: BMO Capital Markets

In 2014, Hawaii became the first state to tap the securitisation market to do so, coming up with an innovative solution that is now expected to be replicated elsewhere. A securitisation platform was set up to provide funding to bridge what the state legislative order establishing the bond and loan programme called the “divide between those who directly benefit from clean energy technologies and those who cannot”. Goldman Sachs structured and led a two-tranche US$150m financing that securitised a monthly fee (roughly 1%) attached to the...

Pitching a company when representing a bulge-bracket firm with an established track record and leading league table position is one thing, but simply getting through the door when one has none of these credentials is quite another. So for RBC Capital Markets to convince 18 companies to trust it on convertible bond issues (with a deal roster of just five from the previous years) is impressive. RBC ran deals earning league table credit of US$3.3bn in the IFR Awards year for a 6.5% market share. Key was a platform that offered clients customised...

The opportunity for the funding was apparent, even if the structure was not. At the time of the offering in July, Pinfra’s stock traded at close to 20-times Ebitda, presenting a chance to sell equity more cheaply than issuing debt and use the proceeds to invest in future growth. Underlying that premium valuation were expectations that Pinfra would benefit from historic reforms to open up the telecoms and energy sectors. The company has highways, ports and airports that will grow in lock-step with a revitalised economy. The fact that it was...

The US$25bn New York Stock Exchange listing of Alibaba Group transformed the Chinese e-commerce giant into one of the world’s best-known – and most valuable – companies. But its significance goes far beyond that. The IPO lifted valuations across the emerging Chinese technology sector. It prompted a review of listing rules in Hong Kong. And it showed just what is possible with the right approach to the capital markets. Alibaba’s performance since listing – its shares ended IFR’s review period up 69% – made the IPO’s success look like a...

The jumbo US$7.25bn credit facility sneaked through a turbulent market and was priced in September just before spreads blew out due to a combination of regulatory issues, loan fund outflows and intensifying global capital markets volatility. “The interesting thing about it is that Burger King is a well-known commodity, [the deal] traded well, with way more leverage, and not much lower rating, and still got done in a tough environment,” a buyside trader said. JP Morgan and Wells Fargo led the deal, which included a US$6.75bn term loan and a...

Not only was the deal one of the largest unsecured financings for a single-asset mining company in Latin America, but it was also the biggest syndicated loan by a Peruvian borrower in recent years. Marking a turning point in what has become an increasingly borrower-friendly market, the Cerro Verde loan saw a total of 22 institutions come on board before it closed in March, including what was then a rare appearance from Intesa Sanpaolo. Starting with an initial US$1.3bn size, the transaction increased as banks from Asia, North America, Europe...

Alpha is the juice, or excess return, on instruments relative to benchmark returns. Event-driven financing is where investors find these returns in loans, particularly when teaming up with financial partners. “Event financing is the area in this environment where investors make money. They’re barely treading water buying flow refinancing paper or trading on the secondary market on very thin volumes,” said Jim Bonetti, head of Morgan Stanley’s US leveraged finance syndicate team. “Where the buyside makes money is right here. This is the place...

Not only was the bond the first ever from a Latin American REIT (or Fibra as they are known in Mexico), but it included a 30-year tranche – a rare event for an inaugural issuer. “It opened the gates for a new asset class,” said Carlos Philips, executive director, Latin American debt capital markets at BBVA, which helped manage the trade along with Credit Suisse and Deutsche Bank. “It is not going to be the last one.” Mexico’s market for REITs came into its own in 2014 as a string of issuers sold stock, but Fibra Uno (Baa2/BBB) led the way...

In 2014, structured finance was back on full form. It had its biggest year of issuance since the peak of 2007, before the asset class came crashing down in the financial crisis. ABS issuance, for example, had already bettered its full-year 2013 numbers by mid-November. Credit Suisse led the charge, topping the structured finance league table with 96 deals in the awards period – thanks in part to its strengths in both legacy and new prime jumbo RMBS. While plain-vanilla ABS unsurprisingly accounted for a lot of the action – cookie-cutter auto...

The US$5.1bn trade was the largest domestic dollar high-yield deal of the year. And with proceeds used to help finance the US$2.8bn purchase of Duke’s non-regulated Midwest business and the US$3.45bn acquisition of EquiPower from Energy Capital Partners, it was a game-changer for the company. “These two acquisitions will double Dynegy’s generation capacity, more than triple adjusted Ebitda and quadruple free cashflow,” said CFO Clint Freeland. Lead-left Morgan Stanley was key to the financing, which also included mandatory convertible preferred...

In a year that saw corporate M&A finally make a long-awaited comeback, Morgan Stanley shone. It was lead-left on six of the 25 largest event financings of 2014 and was a bookrunner on 16 of them – more than any other bank. The firm built on that success with lead positions on large refinancings, grabbing a 4% market share and leaping five spots – up to third place – in IFR league tables ranked by lead-left positions. Crucially, it got good results for some of its biggest clients in volatile periods following massive outflows from the high-yield...

The past year has seen a surge of bank issuance in the US market, not only by US financials but also Yankee banks, as jurisdictions around the world finalise regulations dictating capital, leverage and liquidity ratios. Bond as well as preferred issuance in US dollars by financials (excluding self-led deals and issuing entities of corporates) had surged to more than US$415bn by November 15 2014, eclipsing what was a record US$311bn in 2013, according to Thomson Reuters data. Citigroup was at the front of the highly competitive pack of...