Prolific issuer wins plaudits

  • 23 Feb 2007
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Telefónica demonstrated its maturity as an elite corporate debt issuer with the price management of its January euro and sterling jumbo issue. A $5.25bn deal in July cemented its place in the markets' view as Best Corporate Borrower in 2006.

2006 was the year when the bond market expected an upsurge in merger and acquisition financings. And while several transactions came to the market for a range of issuers, it was Telefónica that stole the headlines, for the benchmark transactions to finance its £17.7bn takeover of UK mobile phone network O2.

But though the Spanish telecom company romped away with EuroWeek's bond award for Best Corporate Borrower, it did not start the year in great fashion.

Corporate issuers held back on bringing deals in January, waiting for Telefónica to launch its anticipated jumbo.

It duly arrived, with two euro tranches — a Eu2.25bn five year and a Eu1.25bn 10 year — led by ABN Amro, Barclays Capital, BBVA and Société Générale, and two sterling trades, a £750m 12 year and a £500m 20 year. Barclays Capital, BNP Paribas and the Royal Bank of Scotland led the sterling tranches.

At the time, some in the market described the deal as a flop, as only Eu3bn was raised at initial price guidance, and this was mostly for the sterling tranches.

The corporate market up to that point had enjoyed eye-wateringly tight spreads and some market participants accused the leads of assuming that they would be able to price the deal accordingly, without taking account of the size of the deal.

"This was the biggest deal in Europe since Autostrade's Eu7.5bn euro and sterling deal in 2004," said Geert Vinken, global head of syndicate at Barclays Capital in London. "Initial guidance was fair, but the issuer was responsible and gave investors a little extra, knowing that it had a lot of financing to do."

The leads soon realised that the deal was not selling at the opening talk and widened guidance, resulting in a blowout.

But it was not just the January issue that convinced market participants to back Telefónica in EuroWeek's poll.

In June the borrower also felt confident to issue in jumbo size, when it sold a four tranche deal totalling $5.25bn. Despite tough market conditions the transaction was sold, albeit at generous levels. Citigroup, Credit Suisse, Deutsche Bank and Lehman Brothers led the deal.

Telefónica also impressed with its consistent use of different markets in 2006. The borrower brought a successful Eu1.25bn bond in July and deals in several other currencies, making it the most prolific corporate borrower of the year and, according to EuroWeek readers, the best.

  • 23 Feb 2007

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 315,565.94 1183 8.89%
2 JPMorgan 288,650.70 1316 8.13%
3 Bank of America Merrill Lynch 284,218.69 988 8.01%
4 Goldman Sachs 215,758.12 710 6.08%
5 Barclays 207,555.74 805 5.85%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 32,400.29 147 6.76%
2 Deutsche Bank 32,042.83 103 6.69%
3 Bank of America Merrill Lynch 28,820.43 84 6.02%
4 BNP Paribas 25,608.74 143 5.35%
5 Credit Agricole CIB 22,617.86 130 4.72%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 18,067.92 70 9.12%
2 Morgan Stanley 15,215.44 76 7.68%
3 UBS 14,195.29 55 7.17%
4 Citi 14,014.57 86 7.07%
5 Goldman Sachs 12,113.98 67 6.11%