Innovation, coverage bring rewards

  • 01 Mar 2003
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The winners of EuroWeek's MTN awards 2002 were decided based on a series of interviews conducted in February 2003. Our journalists visited all of the top dealers in the EuroMTN market to compile these awards. Here, Jonathan Sibun explains the process.

The EuroMTN and EuroCP markets flourished in 2002. Increased risks in the public bond markets, such as corporate volatility and the threat of war in Iraq, led to unprecedented growth in both arenas as investors were driven into money market funds.

On the EuroMTN side, despite a slide in public outstandings, the market thrived due to rapid growth in private issuance. The MTN market, which allows for gradual and opportunistic fund raising, found itself in the enviable position of being exactly what borrowers were looking for in 2002.

But the star performer of the year was the EuroCP market, where growth eclipsed that seen in MTNs. Indeed, many bankers felt this was the year when the market finally came of age and started to realise its true potential.

The driver of this growth was the asset backed commercial paper (ABCP) market, which increased in size by over 100% in 2002. This growth pushed the market forward to such an extent that realistic comparisons were made with the US CP arena for the first time.

The success of the European Maket was even more impressive considering the fact the US CP market contracted last year because of an over-reliance on short term funding, largely due to a fall in corporate issuance.

With both European MTN and CP markets enjoying such a positive year, dealers, investors and borrowers all profited and this year's awards were especially hard to call because so many market participants performed so strongly.

Battle for MTN plaudits

The battle for Best EuroMTN House was closer than ever with three banks in strong contention. Citigroup/SSSB and JP Morgan both put in impressive performances, but it was Deutsche Bank that clinched the title after remarkable leaps up the league tables.

League table one, 2002
All non-syndicated EuroMTNs under $250m, exclusive of spvs, self-led deals and a term of >365 days
RankBookrunner/lead dealerAmount % eqv mNo of issuesShare %
2JP Morgan20,524.696548.45
3Deutsche Bank18,792.895077.74
4Morgan Stanley16,230.003386.69
5Goldman Sachs14,248.554645.87
7Barclays Capital11,566.862134.76
8Lehman Brothers10,745.971694.43
9UBS Warburg10,654.283084.39
Source: Dealogic MTNWare

Deutsche rose from a lowly 10th position in 2001 to finish third in league table one last year (all non-syndicated EuroMTNs under $250m exclusive of SPVs, self-led deals and a term of more than 365 days). In league table two it leapt from fifth to first. 

Table one volumes were up 100% on 2001, while table two volumes also increased by an impressive 60%. This compared to a EuroMTN market increase in volumes of 4.6% and 5.8%, respectively.

Deutsche showed particular strength last year in its blanket coverage of the market. The German house issued in more currencies and to more issuer nationalities than any other house. It was also appointed arranger and dealer on more EuroMTN facilities than any other bank.

Dresdner Kleinwort Wasserstein takes the award for the Most Enterprising EuroMTN House of 2002. The bank's MTN desk has launched new and innovative structures and led the market in terms of technology.

As well as launching a successful e-bookbuilding site, the bank also published quarterly EuroMTN market reports and a 'how-to' guide for issuers titled Entering the EMTN Market.

DrKW's innovative trades included the puttable deals for German Landesbanks, Landesbank Rheinland-Pfalz and Dekabank. Under current rules, Landesbanks are allowed to guarantee debt issued before July 2005 and maturing before 2015. DrKW launched two deals that allow the issuer and the investor to continue to enjoy the benefit of these guarantees after they have been phased out.

This means the two Landesbanks were able to lock in cheaper funding than they would have otherwise achieved. 

League table two, 2002
All non-syndicated EuroMTNs under $250m
RankBookrunner/lead dealerAmount % eqv mNo of issuesShare %
1Deutsche Bank32,384.241,3099.55
2JP Morgan30,522.409339.00
5Goldman Sachs19,658.527155.80
6Morgan Stanley18,976.844445.60
7UBS Warburg18,199.786515.37
8Barclays Capital16,218.336014.78
9Merrill Lynch15,689.488724.63
10BNP Paribas14,548.311,2404.29
Source: Dealogic MTNWare
In 2001, DrKW re-opened the Hungarian bond markets with the first forint issue in more than 30 years, and they followed this up in 2002 with a second Huf10bn 10 year note.

The award for 2002's Best Yen EuroMTN House goes to Citigroup/SSSB. According to MTNWare, Citigroup printed 73% more paper than its nearest competitor and had a 17.2% market share, compared to its nearest competitor with 13.1%.

JP Morgan wins Best Euro EuroMTN House. The dealer completed trades worth a total of $9.88bn, compared to its nearest competitor with $7.94bn.

As well as taking the plaudits for its yen issuance, Citigroup/SSSB also wins the award for Best Dollar EuroMTN House. Citigroup was active on 49% more volume and 21% more transactions than its nearest competitor. Its volumes were up 143% on 2001.

Commercial paper honours

Deutsche Bank takes the award for Best EuroCP House of 2002. The bank has sustained its position as the highest volume dealer across all sectors with a market share of around 20% of total paper outstandings.

It has also performed strongly on its programmes and led the way in the asset backed sector.

Dollar EuroMTN table, 2002 All non-syndicated EuroMTNs under $250m
RankBookrunner/lead dealerAmount % eqv mNo of issuesShare %
1Salomon Smith Barney11,993.8335312.34
2Deutsche Bank9,643.753069.92
3HSBC Holdings8,260.545258.50
4UBS Warburg8,133.253088.37
5Morgan Stanley7,209.861967.42
6JP Morgan6,616.993046.81
7Goldman Sachs5,429.802545.58
8Merrill Lynch5,406.603175.56
9Barclays Bank4,982.532255.12
10BNP Paribas4,774.544234.91
Source: Dealogic MTNWare
The house was appointed arranger on 11 programmes in 2002, ahead of its nearest competitor on eight.

Deutsche also led the market technologically. The house was one of the first dealers to use EPIMS in a normal two day context and the first to issue overnight paper for a third party issuer.

The growth of the asset backed sector was the most remarkable feature of the EuroCP market in 2002 and for this reason Lehman Brothers has taken the award for Most Enterprising EuroCP House.

Lehman Brothers was at the forefront of the asset backed drive and originated more ABCP programmes in 2002 than any other house. With an 18% market share, based on pro-rata allocation of outstandings, it is the market's leader in this sector.

The US house also hosted an ABCP credit conference, continues to lead the field in terms of research and was a founder of TradeWeb.

A number of issuers have performed strongly this year but EuroWeek has chosen Rabobank as the Best EuroMTN Borrower of 2002. The Dutch borrower issued Eu11.5bn of notes last year and has been praised by issuers across the market.

Textbook issuance

Euro EuroMTN table, 2002 All non-syndicated EuroMTNs under $250m
RankBookrunner/lead dealerAmount % eqv mNo of issuesShare %
1JP Morgan15,931.5126113.73
2Deutsche Bank10,307.993988.89
3Morgan Stanley8,515.011277.34
4Goldman Sachs7,963.761816.87
5Lehman Brothers7,940.881576.85
7Merrill Lynch5,952.921725.13
8BNP Paribas5,829.392775.03
10Crédit Agricole Indosuez4,517.12463.89
Source: Dealogic MTNWare
"Rabobank was close to a textbook example of how a AAA financial should have issued in 2002," said one dealer. "What makes it a real success is the percentage of its volume which was issued in structured notes and private placements."

Dealers also spoke of Rabobank's flexibility to factors outside of the market, such as low interest rates, poor stock markets and credit downgrades. 
  Nordrhein Westfalen wins EuroWeek's award for Best New EuroMTN Borrower. The German state has shown great flexibility and efficiency in closing new business and is a favourite among the market's dealers. (For a full profile of the borrower's first year in the market see page 9).

Lake Constance Funding Corp, sponsored by Landesbank Baden-Württemberg, wins the award for Best New Borrower in the EuroCP market. The issuer took the market by storm when it signed its Eu8bn facility in September last year, taking outstandings up to $1.4bn equivalent within the first month.

"It was prepared to listen to dealers, was flexible on pricing and tenors and quickly established an enthusiastic investor base," said one banker.

Bankers cite the issuer's pricing consistency and discipline as laudable, while others point to its successful communication of level changes according to market evolutions.

Citi and Deutsche: top paying agents

Yen EuroMTN table, 2002 All non-syndicated EuroMTNs under $250m
RankBookrunner/lead dealerAmount % eqv mNo of issuesShare %
2Deutsche Bank8,303.5847612.59
6Merrill Lynch3,300.533345.01
7Barclays Capital3,064.09654.65
8JP Morgan2,932.341934.45
9Goldman Sachs2,820.601934.28
10BNP Paribas2,731.344584.14
Source: Dealogic MTNWare
Among the international paying agents (IPAs), Citibank/SSSB wins Best EuroMTN IPA and Deutsche takes the award for Best EuroCP IPA.

Citibank topped the table for the highest market share for debt issued under MTN programmes signed in 2002. It also came third in the number of EuroMTN programmes signed last year and the share of the market based on the size of those programmes.

Deutsche Bank was market leader by three separate categories - programmes won over the whole market, programmes won in the asset backed sector, and excluding self-led facilities. The bank's dominance of the ABCP sector is such that the IPA has 65% of outstandings. *

  • 01 Mar 2003

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 417,761.51 1606 9.02%
2 JPMorgan 380,362.89 1737 8.21%
3 Bank of America Merrill Lynch 364,928.71 1322 7.88%
4 Goldman Sachs 269,252.76 932 5.81%
5 Barclays 267,252.43 1082 5.77%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 45,449.36 196 6.56%
2 BNP Paribas 38,734.80 217 5.59%
3 Deutsche Bank 37,615.10 139 5.43%
4 JPMorgan 34,724.19 118 5.01%
5 Bank of America Merrill Lynch 33,835.53 112 4.88%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 22,475.46 105 8.65%
2 Morgan Stanley 19,057.00 101 7.34%
3 Citi 17,812.08 111 6.86%
4 UBS 17,693.89 71 6.81%
5 Goldman Sachs 17,333.10 99 6.67%