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  • 17 Aug 2000
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* Allianz Finance BV

Guarantor: Allianz AG

Rating: Aaa/AAA

Amount: Eu333.1m (fungible with Eu766.9m issue launched 15/07/97)

Maturity: July 30, 2007

Issue/fixed re-offer price: 100.268

Coupon: 5.75%

Spread at re-offer: 50bp over the 6% July 2007 Bund

Launched: Friday August 11

Sole mgr: Dresdner Kleinwort Benson

Bookrunner's comment:

Allianz awarded us this mandate so we could offer the market fresh liquidity on an outstanding transaction. There was no pressing need for it, but the borrower wanted to take advantage of this opportunity to add liquidity to one of its issues, while at the same time being visible to investors.

Allianz is not a frequent issuer, but it has a number deals in the market, and most are trading around Euribor minus 2bp. As the previous deals are all firmly placed and their trading levels are quite stable, we were confident we could market this new transaction at the same level.

We premarketed the deal for 48 hours and attracted demand from across Europe. We also found interest from some US accounts, but had to satisfy that with old paper as the new bonds are not seasoned.

Allianz is a name you do not have to market intensely so it was a good credit to introduce at a quiet time. We offered investors a research update, but the credit is very strong and one of only three triple-A rated insurance companies in the world.

An important feature of this increase was that it was officially rated, and the original deal will also now carry official ratings. Allianz was only officially rated last year, even if it was always considered a triple-A credit, and now more investors can take the borrower's paper.

We sold most of the paper before launch at Euribor minus 2bp and since then have sold the remainder. It is now bid at the re-offer against Euribor.

* Bayerische Hypo- und Vereinsbank AG

Rating: A1/A

Amount: Eu100m subordinated debt

Maturity: September 29, 2010

Issue price: 101.40

Fixed re-offer price: 99.80

Coupon: 6.5%

Spread at re-offer: 132bp over the 5.25% July 2010 Bund

Launched: Thursday August 17

Lead mgr: BGL

Bookrunner's comment:

Appetite for this deal was strong due to the lack of subordinated paper in the market, and first day sales were better than we expected. We offered retail investors definitive notes, which always helps demand.

The paper was re-offered at 66bp over Euribor or, more interestingly from a retail point of view, 132bp over the Bund. Clients were able to buy bonds at a yield above 6.3% so they were quite enthusiastic. Syndication went extremely well and we were able to syndicate about half of the deal.

Market appraisal:

"...well timed. There is no other 10 year subordinated paper around so demand should be strong, and placement will be made easier by the experience the lead manager and several members of the syndicate have in placing this type of paper.

We have sold the bulk of our allocation, mainly to institutional investors, and once retail interest picks up, we should have no problems selling the remainder. At a time when yield levels are relatively stable, we would expect a 6.5% coupon over 10 years to attract a lot of support. At an all-in spread of more than 60bp over Euribor, this was priced in line with other paper for the borrower and the cosmetics looked pretty fair for this credit."

"...we may sell more than our Eu3m ticket as retail demand is strong. The last subordinated offering was by Commerzbank in July and a new transaction was overdue.

The size of the syndicate indicates interest was high and selling Eu100m of paper between so many houses should be straightforward.

Rates have been rising at the short end of the curve. At the moment it is possible to generate a 5.75% coupon on five to six year senior paper and this may soon cross the 6% threshold. Subordinated paper, though, still boasts higher coupons than this, so it is still a fairly popular instrument."

* Deutsche Hypothekenbank Frankfurt-Hamburg AG

Rating: Aa3

Amount: Eu100m

Maturity: August 23, 2001

Issue price: 100.05

Coupon: 5.33%

Launched: Tuesday August 15

Sole mgr: UBS Warburg

* Escada AG

Amount: Eu100m

Maturity: August 31, 2004

Issue price: 100.31

Fixed re-offer price: 99.06

Coupon: 7%

Spread at re-offer: 189bp over the 3.25% May 2004 Bobl 131

Launched: Thursday August 17

Lead mgr: HypoVereinsbank

Bookrunner's comment:

These days it is quite hard to place unrated paper, but we have worked on this deal for some time and the size was modest. Had we attempted Eu300m-Eu400m, this would have been extremely difficult to execute.

We first discussed the transaction last autumn, but there were big problems with the documentation. We renewed work on the deal in April and were pleased to be able to launch the issue this week.

There are several different opinions from credit analysts about Escada's credit quality. One bank, for example, views it as a BBB- name, but we view it as a BB+ issuer. It makes sense for us, the leads, to be more conservative as we don't want to sell the paper on the basis of too optimistic a research piece.

The deal has gone well. Sales were almost all to Germany, with only two international accounts buying paper. In Germany, Landesbanks were the main buyers, but we sold some retail tickets and also found some regional banks that were interested. The international tickets were to an Austrian corporate bond fund and a French regional bank.

We priced the transaction at Euribor plus 160bp. This is in line with the BB+ rating we consider Escada would carry and comparables, such as FAG Kugelfischer, which is of a similar credit quality and which has been trading at around Euribor plus 150bp-160bp.

Since launch we have only bought back two Eu2m tickets and the deal is now (Thursday afternoon) trading at Euribor plus 162bp.

Market appraisal:

"...not overly exciting. They tried to get it away last year but failed, and now it has emerged as a four year deal. Since they first talked about a bond issue, the price talk has been steadily widening, but it has gone OK at the eventual re-offer spread.

German Landesbanks will take the bulk of the paper for the yield it offers over what they already have in their loan portfolios. Had they wanted to market it to international investors, they would have needed to offer a more juicy spread, something in the Euribor plus 190bp-200bp area.

At Euribor plus 160bp, the pricing is not wrong for a domestically targeted transaction. HypoVereinsbank was marketing the company as a strong double-B, or even a weak triple-B credit, but we view it as more like a mid-double-B credit."

"...we sold our Eu5m of bonds, but only into Germany. I doubt they made any sales outside the domestic market as it is unrated and international accounts may not be as optimistic as HypoVereinsbank about the credit quality of the borrower. Additionally, the industry sector of the company is not great, being more fashion than retail.

According to the bookrunner, Escada is a double-B credit, and the pricing is right for that quality. The deal was re-offered at Euribor plus 160bp, and that is a sufficient pick-up over some of the other weak triple-B or strong double-B German credits in this part of the curve.

Distribution will have been helped by the fact that HypoVereinsbank was working on the transaction for a long time and because the deal is so small."

"...this was a difficult issue for us. It was first rumoured in the spring of this year at a spread of 90bp over Euribor, but there were difficulties and the spread was widened to about 120bp over, and then in the end to 160bp over.

It was not easy to place. There is inherent risk in this type of issuer, although it is a large reputable company. The borrower is in a difficult industry sector, fashion, and that makes it hard to attract traditional German investors. Another major problem in selling the paper is the sub-investment grade rating of Escada.

We sold our Eu5m ticket to German funds and banks. There may be some international accounts involved, but in general it was restricted to the domestic market."

* Fortis Finance NV

Guarantors: Fortis (B), Fortis (NL) NV

Rating: Aa3/A+/A+

Amount: Eu100m

Maturity: September 19, 2005

Issue price: 101.713

Coupon: 5.75%

All-in spread: 71bp over the 5% August 2005 Bobl 136

Launched: Friday August 11

Lead mgr: Fortis Bank

Bookrunner's comment:

In recent weeks there has been little supply of five year paper for retail investors so we decided to launch this transaction.

Initial sales have been a little slow, but this is due to people being on holiday and we expect placement to pick up at the start of next week. There was good feedback from the syndicate and none of the houses declined their invitations to participate. Since launch we have not seen any flowback and the deal is going well.

Market appraisal:

"...we sold the bulk of our paper and went back to the lead manager to try and buy more. Many of the other syndicate members reported similar success. The deal may yet be increased, as the consensus is that there was enough demand for a Eu200m transaction.

Fortis is a great retail name and a particular favourite with clients in the Benelux region. The pricing looked quite generous for such a good borrower, while the five year tenor is still popular with investors. Initial demand has been strong, and all of our tickets have been sold within fees."

"...everything was right about this retail deal. While it is certainly easier for a lead manager to sell its own name to investors, Fortis also sought to lure investors with attractive cosmetics.

The paper was offered at a decent price and boasted a typically high coupon, which retail clients prefer.

Like the recent five year transaction for Artesia, which is now sold out, this deal carried a 5.375% coupon, representing a yield at issue price of 5.35%.

This should be a fairly straightforward sell, although sales may not pick up properly until next week. The market is closed tomorrow (Tuesday) for Assumption Day, and with many investors taking an extended break there may not be a lot of interest in this paper for some days."

"...retail demand from Germany accounted for our Eu1m ticket and the break-even spread of 71bp over the Bobl allowed us to make a little money.

On the whole, though, the paper was not that attractive and this was mainly something for the lead manager.

The absence of a fixed re-offer price creates problems on the trading front and there has been no secondary market in the paper. Fortis will not be too concerned, however, as it will have sold the bulk of the deal within its network."

* Kreditanstalt für Wiederaufbau

Guarantor: Federal Republic of Germany

Rating: Aaa/AAA

Amount: Eu1bn

Maturity: 2008

To be priced: Friday August 18

Launched: Thursday August 17

Lead mgr: CDC Marchés

Euro Jumbo Pfandbriefe/

covered bonds:

* Allgemeine Hypothekenbank AG

Rating: Aa1/AAA/AAA

Amount: Eu133.6m (fungible with two issues totalling Eu766.9m issue launched 06/11/95 and 26/04/96) Öffentlicher Pfandbrief series 460

Maturity: September 16, 2002

Issue price: 101.322

Fixed re-offer price: 101.247

Coupon: 6%

Spread at re-offer: 24.5bp over the 4.5% August 2002 Bobl 124

Launched: Friday August 11

Joint books: Deutsche Bank, Dresdner Kleinwort Benson

* BfG Hypothekenbank AG

Rating: AAA

Amount: Eu500m Öffentlicher Pfandbrief series 291

Maturity: August 25, 2003

Issue price: 99.7945

Fixed re-offer price: 99.657

Coupon: 5.5%

Spread at re-offer: 34.5bp over the 3.75% August 2003 Bobl 128

Launched: Wednesday August 16

Joint books: BfG, CDC, Commerzbank, Dresdner KB, GZ, Merrill Lynch

* Westdeutsche Landesbank Girozentrale

Rating: AAA/AAA

Amount: Eu466m (fungible with five issues totalling Eu1.534bn first launched 15/01/97) Öffentlicher Pfandbrief series 7503

Maturity: October 14, 2005

Issue price: 98.28

Fixed re-offer price: 98.11

Coupon: 5.25%

Spread at re-offer: 37bp over the 6.5% October 2005 Bund

Launched: Wednesday August 16

Joint books: Balaba, CDC, Commerzbank, Deutsche, DG, DGZ-Deka, LB Rheinland-Pfalz, LBW, SSSB, WestLB

  • 17 Aug 2000

All International Bonds

Rank Lead Manager Amount $bn No of issues Share %
  • Last updated
  • Today
1 JPMorgan 92.59 388 8.96%
2 Citi 85.30 278 8.25%
3 BofA Securities 63.15 265 6.11%
4 Barclays 58.01 223 5.61%
5 Deutsche Bank 55.74 184 5.39%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $bn No of issues Share %
  • Last updated
  • Today
1 BNP Paribas 60.87 123 14.06%
2 Credit Agricole CIB 28.59 93 6.60%
3 Santander 25.41 90 5.87%
4 JPMorgan 23.88 61 5.52%
5 UniCredit 21.51 103 4.97%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $bn No of issues Share %
  • Last updated
  • Today
1 Goldman Sachs 2.07 11 10.42%
2 BofA Securities 1.40 6 7.01%
3 Citi 1.37 7 6.87%
4 Morgan Stanley 1.36 6 6.85%
5 JPMorgan 1.31 7 6.59%