Europe Financial Bond: UBS' €3.15bn-equivalent triple-tranche AT1

The 10-tranche issue was the second-largest on record, behind only Verizon’s US$49bn record-setter in 2013, and the biggest ever for a company teetering on the edge of junk – and one that had proven to be very acquisitive just months before. Swooping in to save Allergan from a hostile bid from rival Valeant, the deal followed two other major acquisitions – of Forest Laboratories and Warner Chilcott. Yet investors poured more than US$90bn of orders into the trade – including for the longest dated 20 and 30-year bonds that bore more duration risk...

A successful year in the bond markets can be measured by any number of metrics. Volume of business is one obvious way, although qualitative considerations are equally important. HSBC managed to combine these elements, not only adding to its league table tally but also notching up an impressive list of debutants as well as a string of repeat mandates. “Our key strategic objectives were threefold,” said Jean-Marc Mercier, global co-head of DCM at HSBC. “They revolved around strength, innovation and access.” Long since a force to be reckoned...

Total pre-empted any potential financing shortfalls from suffering oil prices and locked in the lowest-ever coupon for a corporate hybrid, despite it being under no pressure to raise capital or defend its balance sheet. Lead-managed by Citigroup and Barclays as joint global coordinators and HSBC and Societe Generale as bookrunners, the deal also attracted the largest order book for a corporate hybrid transaction to-date. The dual-tranche offer – rated Aa3/A by Moody’s/S&P – drew in a whopping €20bn of orders, with investors attributing demand...

Japan’s push to stimulate economic growth kept yen rates pinned to the floor in 2015, stoking demand for higher-yielding assets among the country’s conservative investor base. Mitsubishi UFJ Morgan Stanley Securities seized the opportunity to introduce new structures and first-time issuers to the yen market, doing the most among its peers to raise the currency’s global profile and deepen liquidity at home. MUMSS arranged three of the four debut international issues in yen during IFR’s review period, more than any of its rivals. It also...

Bankers saw Rabobank as the ideal candidate to introduce the new asset class, having built a first-class reputation over a long track record in the yen market. Even then, success was far from guaranteed: Japanese investors were only just getting comfortable with Basel III structures from their local mega-banks, let alone with an issue under Europe’s far tougher banking regulations. Kazuhide Tanaka, Rabobank’s head of long-term funding for Japan and its chief Japan representative, recalls broaching the idea with local investors almost two...

In many ways, the sterling bond market works as a microcosm of its larger global cousins, reflecting the same themes that exercise the minds of participants throughout the rest of the world, albeit on a less cluttered stage. To truly do the sector justice takes a house that can call upon deep international expertise, but also one that has not sacrificed its domestic roots in gaining that capability. HSBC is just such an entity, combining undisputed world vision with local history. The similarities between the universal and the domestic are...

It was the inaugural publicly syndicated bond from Santander UK Group Holdings, the entity set up in 2014 in response to the regulatory push for major UK banks to shift their issuance from the operating company to the holding company. The bank’s private ownership structure and regulatory requirements meant it became the first UK issuer to structure an AT1 bond with a permanent writedown feature. That means investors could see their holdings wiped out completely should its CET1 ratio slip below 7%. The deal coincided with a sterling and US...

Just after Coca-Cola stormed the Swiss market with its triple-tranche deal in September, Ben Heck, director of syndicate at joint lead Credit Suisse, jokingly asked if “there is any way IFR can’t give us the award this year”. The answer, not that we would tell him that at the time, was a resounding “No!”. The deal – Coke’s first in the Swiss market – went down a storm, with all three tranches well bought, and demand on the two-year note such that it printed with a negative yield. The deal was the pinnacle of what has been a very strange year in...

The SNB on January 15 pulled the plug on the franc peg and dropped short-term rates to a deeply negative minus 0.75%. That move stunned – and stalled – the primary capital markets, as participants readjusted to the new paradigm. Just 26 days later, Apple came with a jumbo dual-tranche deal, taking advantage of the new low rates and pent-up investor demand for quality corporates to net total funding of SFr1.25bn. Deals from foreign issuers in excess of SFr1bn were later dubbed Matterhorns, in view of it being so hard to ascend to that size....

UBS’s rise through the ranks over 2015 has been truly meteoric. Having languished in 14th place for all euro-denominated financials business at the end of 2014, by the end of November it had risen to third, taking a 6.4% market share – up from 2.7% – according to Thomson Reuters data. Indeed, 2015 proved a watershed for the Swiss bank. After enduring numerous organisational restructurings and team departures in recent years, this was the year that UBS cemented its position as a major player in the financials space. Its apotheosis came despite a...

Whether it was for regulatory capital, debut issuance or Yankee offerings, when financials needed to come to the bond market this year, Citigroup was often the bank of choice. Citigroup led 99 deals for a market share of 11.1% in Thomson Reuters’s FIG league tables during the IFR awards period. The bank was an appealing choice for issuers, able to leverage its global presence into a strong performance in primary markets in what was by many metrics a very tough year for raising new debt. Volatility, headline risk and macro turmoil were just a...