They mean business at HSBC. The house is fifth in MTNWeek's bookrunner league table for private placements, but the team is not content. In the same period last year HSBC was slumped in 10th position and its rapid movement up the league table has given the desk a taste for success. Fergus Kiely, head of Euro-MTNs, at HSBC, says: "It's good how we have turned around our position in a year but one would expect, given the size of HSBC and our global capacity to distribute, that we would be doing a lot better than fifth. It is an impressive turnaround but our ambition is to be a lot further up those league tables. We expect to be first or second within the next couple of years." Kiely, who has been involved in MTNs for seven years, will have to work hard to push Salomon Smith Barney off the top spot. But the head of desk has suceeded in building up a well-matched team. And he insists that the two new additions to the MTN team will help them to become more proactive. Dirk Hoffmann recently joined the bank's German operations and Amaury Gosse joined Evie Christodoulidou and Annemarie Ganatra on the London desk in August. Kiely says: "We are in the areas we want to be in. It's now just a case of building up our penetration in those areas. We now have the team and the coverage. If we kick over a stone at HSBC five sales people jump out and wave at us. But we have to continue educating our sales people, from North America through to Asia, on how to sell our product." Evie Christodoulidou, assistant director, Euro-MTNs, has worked at HSBC for seven years. She joined Kiely on the MTN desk in 1999 and believes that the communication between the team has been paramount to its success. She says: "There is a buzz generated from our office. We don't stop talking all day about what we are working on, about whether we have spoken to a particular account or if that account needs a fresh pair of legs to get the project moving. And that is great as it keeps everything very liquid and fluid, which is why things turn around quickly." But despite HSBC's impressive performance in the bookrunner league tables the house still has its work cut out on the arrangership side. HSBC has arranged just three programmes this year for HypoVereinsbank, Coventry Building Society and Swire Pacific. It lies joint-ninth in 2001 arrangership tables, in terms of the number of programmes signed, but Kiely does not see this as a problem. He says: "The product to me is about distribution. And rather than going out and trying to win arrangerships and then not performing on that programme, which is an insult to the issuer, we have honed our distribution strengths. We do arrange programmes, but have we made a major push to do so? No. Will we? The answer must be yes." Kiely continues: "I would question whether the top houses in the arrangership table have kept their eyes on the ball in terms of distribution. Anyone can arrange a programme. We have a dedicated transaction development team and if they are given a programme to arrange then they can do it as well as anyone else. It is not a gauge of how successful you are. We will continue to move up in terms of our distribution skills and on the back of that we will arrange more programmes." Christodoulidou agrees with Kiely and maintains that winning arrangerships does not illustrate competence in the market. She says: "We don't see arrangership league tables as an indication of what our abilities are in the Euro-MTN market. And we don't try to use that as a marketing tool because it doesn't show clients that you are able to place paper or do structures. We like to talk about the deals we have done rather than our arrangership league table position." Another long-term recruit on HSBC's MTN desk is Annemarie Ganatra. She has worked on the team for nearly three years and found her way into MTNs via HSBC's graduate training scheme. Ganatra believes that HSBC's merger with Credit Commercial de France (CCF) in April 2000 has been influential in the team's success as it has allowed the desk to tap into a group of issuers and investors that were not being served. She says: "The merger with CCF has helped to imbed our position. MTNs are a new product for CCF but I went out there for four months to educate their sales team and meet with their issuer base and this has given us access to clients in southern Europe that we were not covering before." Although CCF's desk does not have a history in MTNs it does operate a small CP desk. But Kiely does not think the CP side will be expanded at the moment. He says: "We can never say never about having a CP desk. But the idea is that we are concentrating on trades of one year and out. CCF has a CP capacity that takes care of what we want to do right now." Kiely's real push will be on the MTN side but he is adamant that HSBC will not buy paper to increase its league table position. He believes that the team's main focus is professionalism and that buying paper does not benefit the issuer in the long-run. He says: "We do not subsidize paper. We find the right deals for the issuer and the investor. We will not be out there buying league table positions - we will achieve our position by rights. Subsidizing does not achieve anything for the issuer or HSBC. If you get wrapped up in buying league table positions then you are in danger of taking your finger off the pulse." And in Kiely's push to take HSBC to the top he is very mindful of the bank's reputation. He says: "Our issuers and investors are people we need to keep relationships with. We are not just one-hit dealers. We don't lead them into markets where they shouldn't be playing. We as a group at HSBC are very conscious of how we conduct ourselves in different countries."
October 12, 2001
