SSAR Bond House: HSBC

The deal to help fund the US$110bn takeover of SABMiller was the second-biggest investment-grade bond ever priced, and it was executed with poise, good timing and confidence. “InBev redefined the playbook for acquisition finance,” said Marc Fratepietro, co-head of global debt capital markets at Deutsche Bank, which led the deal along with Bank of America Merrill Lynch and Barclays. “The company got orders from investors in over 45 different countries, and there was no controversy after this deal. It was the optimal size – it didn’t trade up...

For those at the top of their game, the difference between high achievement and dominant performance is small. There is a concept in sport that success can be best realised by the aggregation of marginal gains – that a 1% improvement across every related area adds up to a significant overall advantage. To be able to capitalise on this obviously requires being towards the front of the pack in the first place, though none could deny that BNP Paribas has consistently been a force to be reckoned with in the euro bond market. “The last two years...

Like other banks in Europe, the Danish mortgage lender was aware that it had to raise billions in loss-absorbing debt to satisfy regulators that creditors rather than taxpayers will shoulder the costs of future crises. French banks had been widely expected to pioneer a new type of senior debt to meet those requirements, but Nykredit beat them to it, pricing a ground-breaking €500m three-year senior resolution note issue in June. “This was the deal of a lifetime for us,” said Nicolaj Legind Jensen, head of funding at the Danish lender. The...

SMBC Nikko began 2016 as it ended the previous year, with a series of popular Samurai bonds for global financial institutions, but it was its performance after the introduction of negative interest rates in late January that set it apart from its competitors. After the Bank of Japan’s move, senior bonds from Double A rated issuers such as Pohjola Bank and Westpac no longer offered enough yield to tempt Japanese investors, despite the spread over JGBs. After a period of adjustment, higher-yielding paper was now the focus, whether that was from...

Following the introduction of negative interest rates for short-term deposits with the Bank of Japan, Double A bonds lost their appeal for Japanese investors. Bankers and issuers responded by bringing higher-yielding issuers and instruments to market, as investors showed they were willing to move selectively down the credit curve. That meant high-rated issuers could consider marketing Tier 2 bonds or instruments eligible towards total loss absorbing capacity, balancing higher yields with additional risk, and tempting HSBC to explore issuing its...

Much as it is sometimes viewed as a law unto itself, the sterling bond market does not operate in a vacuum. It is subject to similar factors as other areas, although it also retains idiosyncrasies that require in-depth knowledge to address. Barclays was therefore perfectly placed to play a pivotal role in a 2016 market that experienced ebbs and flows that mirrored events elsewhere in the world. It is a UK-headquartered bank that has long boasted proficiency on a global scale. This means it “is truly currency agnostic”, said global co-head of...

Not that it was plain sailing: the transaction came during a huge transition for the parent company. National Grid announced in November 2015 that it intended to sell a majority of shares in its gas distribution business. “The changing structure of the company was complex and it needed explaining,” said Christopher Lipscomb, managing director at structuring bank and bookrunner Morgan Stanley. “Many investors questioned the risks around buying debt from an entity undergoing so much change.” But despite the complexity, the company managed to...

The negative interest rate environment led to a fall in market volumes of SFr6bn compared with 2015, with international issuance falling by 15% and domestic deals down 11%. Despite this, Credit Suisse held on to its domestic lead with its market share of 29% (excluding the large regular Pfandbrief issuers PfZ and PSHypo, which more closely resemble quasi-sovereign issuance), its largest since 2011. In the international segment, its 36% share was in line with its five-year average, although below the exceptional levels for 2015. The...

The deal made headlines for its name, size and yield. As one of the most recognised brands in the world, McDonald’s was a huge draw for investors, especially as its only outstanding bond in the Swiss franc market, a SFr250m 1.875% deal from 2010, was its last and had matured less than three months previously. Although not the largest deal of the year, at SFr400m it was one of the largest single-tranche trades to come in 2016. The yield, brought in 7bp from initial thoughts at the 0.25% level, made it one of the tightest corporates of the year...

Less than a year after selling Singapore’s first covered bonds in US dollars, DBS printed an upsized A$750m (US$540m) three-year floating-rate note issue at 77bp over three-month BBSW, inside guidance of 80bp area. The Aussie dollar debut made DBS the first Asian covered bond issuer to venture beyond G3 currencies, and the first international bank to sell a covered Kangaroo before visiting the more established euro market – underlining Australia’s growing relevance as a source of funds for global issuers. DBS had considered issuing in the...

BNP Paribas has been at the forefront of this year’s ever-changing and challenging European market, breaking new records and reaching new milestones despite the backdrop of the Brexit vote, shock US election results and ongoing bouts of political volatility.    “Once again we have been firing on all cylinders in all European currencies,” said Martin Egan, global head of primary markets and origination at the bank. “We have really tested the boundaries of the market this year as events like Brexit made investors more discerning.” Throughout...