Seasoned success
UBS continued to lead the Australian equity market in 2019, introducing innovative structures and helping clients raise funds in volatile market conditions.
UBS topped the Australia/New Zealand equity and equity-linked league table for IFR’s review period. It raised a total of A$6.9bn (US$4.7bn) for its clients through 37 transactions with a market share of nearly 24%, way ahead of the 15.6% for its closest competitor, according to Refinitiv data.
“(Our) ECM performance and activity are really driven by the quality of people that we have in the investment banking and advisory business, the relationships we have on that side and the strength of our equity businesses. Our equity businesses continue to lead the Australian market in terms of secondary trading,” said Alex Dignam, executive director, equity capital markets.
As usual, UBS was a feature in almost every sizable equity offering during IFR’s review period. In September, it helped Ramsay Health Care’s largest shareholder, the Paul Ramsay Foundation, offload part of its stake in a tightly priced A$1.36bn sell-down, Australia’s largest block trade since Royal Dutch Shell sold a A$3.5bn stake in Woodside Petroleum in 2017.
UBS also offered innovative solutions, leading two placements with a novel pro-rata placement structure during the review period.
The bank introduced the structure in August as a joint lead manager on a A$500m deal for toll-road operator Transurban Group.
Entitlement offers are a regular feature in the mature Australian market, where long-term relationships with local fund managers and retail investors are seen as extremely important. Instead of a traditional placement, where existing shareholders may feel disadvantaged by the discount on offer to new buyers, the structure guarantees a pro-rata allocation for existing institutional shareholders who bid for the placement shares.
The overnight placement also helps reduce market risk compared to a traditional entitlement offer, which can take weeks to complete.
Westpac Banking Corp endorsed the structure in November, when it raised A$2bn in the institutional portion of a A$2.5bn capital raising. After disappointing results and a dividend cut, the format allowed Westpac to solve its capital requirement while minimising market noise.
UBS also reacted quickly to market trends, helping REITs and real estate clients to take advantage of the low interest rate environment. Highlights included a A$800m placement for GPT in June and Mirvac’s A$750m placement in May, as well as multiple repeat issues for Cromwell Property Group, Charter Hall Long Wale REIT and Centuria Industrial REIT.
In New Zealand, UBS sealed the largest ECM deal of the year. As sole lead manager, it helped infrastructure investment company Infratil raise NZ$400m (US$256m) from a placement and an entitlement offer to fund the acquisition of Vodafone NZ.
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