A guiding light
With markets once again engulfed in crisis, one bank stood out from the crowd, harnessing its unparalleled experience and market knowledge to guide its clients through the economic storm. For being at the forefront of keeping the loan market open and functioning in increasingly challenging conditions, BNP Paribas is IFR’s EMEA Loan House of the Year.
Optimism for a sustained recovery in the loan market in 2022 was short-lived as Russia’s invasion of Ukraine in February precipitated an energy crisis, rampant inflation, rising interest rates and increasing fears of recession across Europe.
BNP Paribas met the challenge head-on, providing strong support for clients through its holistic universal banking capabilities and peerless strategic advice to help borrowers best manage their capital structures.
“We offered the full spectrum of support to our clients both in terms of financing and advice. Steering them to the bank market first, then to the bond, institutional or leveraged markets,” said Nicolas Rabier, head of loan capital markets in EMEA at BNPP.
Throughout 2022, BNPP led a variety of refinancing transactions, providing strategic advice during a turbulent period for borrowers with 2023 and 2024 maturities.
Successes included coordinator roles on an €8bn RCF for Airbus, a €3.65bn RCF for EDP in Portugal and a €1.75bn RCF for Germany’s Evonik.
Liquidity facilities once again came to the fore, as utility and energy companies faced extreme price volatility, challenging even the most resilient and well-funded corporates.
As it did during the pandemic, BNPP stepped up to the plate.
It was an underwriter on a €5.5bn short-term liquidity package for Finnish utility Fortum, navigating challenging negotiations with the borrower, complex documentation and the difficulty of selling down a credit challenged by massive margin calls and a material exposure to Russia.
BNPP also remained ready and willing to support M&A through the year, even as headwinds impacted activity.
The bank was an underwriter on a US$2.5bn bridge loan backing Aker BP’s acquisition of Lundin Energy’s oil and gas business, which closed in January after being underwritten in late December in a remarkably quick turnaround.
As volatility hit and most M&A began to dry up, the bank was still able to support clients in getting their acquisitions over the line.
It provided joint underwriting on prominent deals, including a €1.9bn loan backing Werfen’s acquisition of US-based Immucor, a £600m loan backing Inchcape’s purchase of Derco and was sole underwriter on €465m of loans backing ID Logistics’ acquisition of Kane Logistics.
Sustainability remained at the forefront of much of the activity, and BNPP continued to push forward the green envelope.
It was sole sustainability coordinator for Spanish telecoms giant Telefonica’s landmark €5.5bn sustainability-linked refinancing and secured ESG coordinator roles on deals including Cellnex’s €2.5bn RCF and HeidelbergCement’s €2bn RCF.
The bank showed the breadth of its capabilities as the top non-German arranger of Schuldschein in a record year for the asset class as companies sought an alternative to unpredictable bond markets.
Despite market turmoil, BNPP remained committed to the leveraged market and was able to bring complex deals to the market while delivering the best terms for its clients.
“We found a way to manage through choppy waters with different execution strategies. We tailored our execution approach to minimise risk and to deliver for our clients,” said Stan Hartman, head of EMEA high-yield and leveraged loan syndicate.
The bank proved highly agile by tapping bank liquidity as an alternative to dislocated institutional loan and high-yield bond markets. In August, the bank was sole active bookrunner on a £1.5bn term loan A for Virgin Media O2 and was lead underwriter on a mainly bank-financed €6.6bn debt package for Orange-Masmovil.
BNPP exhibited its ability to adapt with the buyout financing for French IT firm Inetum in September. Originally envisaged as an all-TLB structure, it was amended to include a short-dated TLA as well as senior secured notes to reach a wider pool of liquidity and maximise price tension. Demand dynamics meant the TLB was upsized twice and the high-yield tap was dropped.
Showing exemplary market read, BNPP also successfully placed a €450m-equivalent loan for Armor-IIMAK as geopolitical tensions heightened in February and other lenders chose to pull their deals.
“This was the deal that stood out to me in terms of how we adapted. It required an enormous amount of trust from the buyside,” said Charlotte Conlan, head of leveraged finance capital markets for EMEA.
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