Loan house of the year 2021 – BNP Paribas
After a strong 2020, in which BNP Paribas finished the year with the leading market share, the bank started 2021 with the need to steer itself and its clients back to a more normalised approach.
“We moved away from the focus on liquidity lines back to extending maturities and offering better terms on covenants and pricing,” recounts Nicolas Rabier, the recently promoted head of loan capital markets.
In both years, the bank won GlobalCapital’s Loan House of the Year award. Other 2021 accolades are Best Arranger of Infrastructure and Renewables Loans, and Best Arranger of Western European Loans.
Central to this was BNP Paribas’ 'constellation approach', explains Rabier. “We have a big team, but an individual approach to each deal.”
Every deal counts, and every client gets bespoke advice and attention, adds Charlotte Conlan, head of leveraged finance capital markets, EMEA.
A good example of working as a “constellation of teams” able to secure multiple mandates is Sykes’ $2.2bn takeover of US business outsourcing group Sitel. This was a cross-border transaction focused on a leveraged market distribution, illustrating the connectivity between the European and US teams.
We have a big team, but an individual approach to each deal
Another noteworthy development was the bank’s role in rekindling the refi market, with standout bookrunner mandates including a trio of facilities for the Netherlands’ JDE Peets (€6bn), Germany’s Robert Bosch (€3bn) and Saudi Arabia’s PIF ($15bn).
In the meantime, borrowers are increasingly seeking ESG-driven products, creating “a booming market,” says Rabier. This dovetails with the bank’s own objectives to include this angle in most client discussions, he adds.
To that end, the volume of sustainability-linked loans (SLLs) in the EMEA region tripled between 2020 and 2021 and is set to continue, says Rabier.
In 2021 for example, the BNP Paribas acted as sole ESG coordinator on two SLLs: for Germany’s Bosch (€3bn) and France’s Elis (€900m). “BNP Paribas is supporting the whole spectrum of transactions across geographies and sectors, from midcaps to large corporates, which are both contributing to the SLL market,” says Rabier.
In fact, ESG represents another area of cross-pollination, according to Conlan. “We are well connected to the market on the investment grade side, and are now applying this expertise to the leveraged world with deals such as Elsan (€1.75bn), Virgin Media (€900m Green TLB) and Belron (€840m and $1.62bn).”
Private equity firms are increasingly looking at their portfolios to figure out how to harness ESG, she continues. “If you are going to buy a business today and IPO it in a few years’ time, you want to start looking at the ESG element right away, so that it’s refined and ready for the IPO story.”
We are well connected to the market on the investment grade side, and are now applying this expertise to the leveraged world
Looking ahead, 2022 could bring both negatives and positives, warns Conlan.
“Independent of Ukraine, the market was expecting rate increases in the coming months due to anticipated actions by the Fed and ECB, which were consequently impacting the bond markets and pushing issuance towards the leveraged loan markets. Understanding the impact of both the current crisis and aligned energy price rises is the focus for the market at the moment,” she says.
In M&A, Rabier says the sectors to watch include telecoms, healthcare – especially the fast-growing companies emerging from private ownership – and smaller European software firms.
On both the corporate and leveraged sides, BNP Paribas benefits from the fact that its syndicate team is doing deals every day of the week. “This provides all of our origination teams with the most appropriate terms to support clients - and importantly, with the best-informed view on liquidity,” says Conlan.
“We are able to use this massive deal flow, and tailor it to that client, at that one moment,” conclude Rabier and Conlan.