Search results for

Tenaga Nasional launched its new 10 year bond issue to strong market interest this week, against a background of volatile equity conditions and the uncertainty following the Federal Reserve interest rate cut. However, some observers were surprised at the eventual spread of the deal, which was priced at the outside range of diverse market speculation.

MTNWeek held its MTN, CP and IPA awards party at the Hyatt Carlton Tower hotel in London on Wednesday night, March 21. It was attended by over 150 issuers, dealers and market faces. The awards were presented by the chairman of Euromoney Institutional Investor, Padraic Fallon. Read on to find out why the winners deserved their awards. Best Euro-MTN house 2001 - Merrill Lynch Each of the top five banks had a good reason for winning this award. The top four bookrunners off trades in this period were Salomon Smith Barney, Morgan Stanley Dean Witter, UBS Warburg and Merrill Lynch. Together they account for over one third of the total issuance for the awards period. Despite coming fourth overall, Merrill Lynch was the second highest bookrunner of yen and euro debt. In yen it was second only to Salomon Smith Barney, last year's MTNWeek Best Euro-MTN house winner. And for euro Merrill Lynch was second to Morgan Stanley Dean Witter. For US dollar trades, Merrill Lynch was the third highest bookrunner. No other bank consistently achieved a top three position for these three core currencies. The bank has not neglected other currencies - in total it has managed trades in 12 currencies. Salomon Smith Barney has managed seven currencies, Deutsche Bank, Morgan Stanley Dean Witter and UBS Warburg have traded in nine. Some have accused Merrill Lynch of managing a lot of league table trades for maturities of between one and two years. In a bookrunner league table of trades with MTNWeek criteria and excluding deals with a tenor equal to or less than 18 months, Merrill Lynch is still in fourth place and its position does not change when maturities of and below two years are excluded as well. Merrill also takes second place for programme origination, after Deutsche Bank. It has arranged 19 programmes, including programmes for the corporates Unibail, Bezeq and Continental and it is the leading arranger for local authorities. It was the strengths in both the origination and the trading desk that impressed the judges. Most enterprising Euro-MTN house 2001 - Morgan Stanley Dean Witter It was very difficult to choose the winner in this category, but two houses stood out as innovators in their own ways. BNP Paribas launched MTNMaster in October 2000. It is the first in the market to tackle pricing structured trades in real time. The site will undoubtedly increase BNP Paribas' trading capabilities and market profile in the coming year. The bank has also done some of the most innovative structures to pass through the market. And it arranged a multi-issuer programme for the Spanish savings banks (the Cajas Espanolas de Ahorros Multi-Caja programme). But Morgan Stanley DW traded a higher volume of structured trades and also arranged two programmes that trod new ground. It co-arranged Dexia Municipal Agency's euro25 billion Euro-MTN programme, which allows the issuance of obligations foncieres. And it arranged Pfandbrief Bank International's euro7.5 billion Euro-MTN programme, which incorporates the issuance of lettres de gage. Both of these programmes were innovative. Best Euro-MTN borrower - Svensk ExportKredit Svensk Exportkredit (SEK) has issued 287 non-syndicated trades in the awards period off its euro25 billion programme and its ¥10 billion Asian MTN programme. SEK tops the yen issuance league table, with 235 trades and almost $3.5 billion outstanding. But unlike other high-volume yen issuers, SEK has also been active in other currencies such as Lithuanian lita, Finnish markka, Danish krone and Estonian kroon. It is highly regarded by its dealers and is renowned for being professional and having very quick response times. Best new Euro-MTN borrower - Kommunalbanken "A breath of fresh air for the high-grade sector" is how one dealer described this borrower. Triple-A rated Kommunalbanken signed its euro4 billion debt issuance programme in January last year and since then has raised over $1.68 billion off 58 trades. Six of these trades were syndicated. Over two thirds of Kommunalbanken's trades had a maturity of six years or below. One fifth of its trades have a tenor of less than one year and it is also busy in the five- to seven-year sector, with over a quarter of its trades falling into this maturity bracket. The issuer has also found opportunities in other currencies, such as sterling, Hong Kong dollar and its domestic currency, Norwegian krone. Several other new borrowers gave Kommunalbanken a run for its money. Vorarlberger Landes- und Hypothekenbank, Sun Life of Canada Funding and Linde have all used their programmes opportunistically to tap diversified funding sources. They have tapped a range of currencies, but did not achieve the same volume as Kommunalbanken. Casino and Caisse Nationale des Caisse d'Epargne et de Prevoyance were also hot contenders for the award. But the overriding consensus among several dealers was that no-one could match Kommunalbanken's professional approach. Best IPA for Euro-MTNs - Deutsche Bank Best IPA for Euro-CP - Citibank This year the first MTNWeek MTN and CP IPA awards were given to the agency that best represented each market. Deutsche Bank won Best IPA for Euro-MTNs 2001, for its 35% share of the market in terms of number of programmes it was appointed to in 2000. The 54 mandates it won amount to over $200 billion-worth of potential debt, and far exceeds Citibank's 24 programmes in second place. But Citibank won Best IPA for Euro-CP 2001. It was appointed as IPA on 20 programmes in 2000, and though this is only two ahead of Deutsche Bank the fact that Deutsche Bank arranged 12 of those facilities and Citibank only seven makes Citibank's achievement all the more impressive. Best New Euro-CP Borrower - Landwirtschaftliche Rentenbank Best New Euro-CP Borrower was another of the awards created this year. It was awarded to the borrower who was able to achieve its funding at the levels it wanted but was open to investor desires too. Landwirtschaftliche Rentenbank (Rentenbank) was the dealers' choice, and with outstandings of over $4 billion it has proven to be an attractive option for investors too. Its euro5 billion commercial paper programme was signed in February 2000 and from the start its flexibility was key. It raised euro9.1 billion in 2000 and though 88% of this was in US dollar the maturities ranged from 24 to 365 days and deal size ranged from $15 million to $900 million. Other issuers that can claim to have had an excellent start to their CP programmes include Conoco. Despite being an A2/P2 borrower it is in the market every day and has been able to tighten its spreads by five basis points since signing in July 2000. And Oesterreichische Kontrollbank has outstandings of $2.2 billion and regularly posts levels in a variety of currencies across the curve. But Rentenbank wins the Best New Borrower award because of the impact it has had on the Euro-CP investor base in a short period of time. In the words of one dealer: "Rentenbank is on top of the market all the time and has no fear of swaps. It is consistent, flexible and we have great feedback from them too." Most Enterprising Euro-CP House - Goldman Sachs Most enterprising means most willing to develop new ideas, to test new products and to commit to the development of the market as a whole. And Goldman Sachs (Goldman) shone in this respect. It tops the arranger and dealer league tables for global shelves and arranged Royal Bank of Scotland's £

Romanian electricity generator Termoelectrica has launched a Eu125m three year debut Eurobond via Deutsche Bank and JP Morgan, despite a difficult background of market edginess over recent events in Argentina and disappointment over the US rate cut. Pricing is 99.757, which yields 11.35% on the 11.25% coupon, giving a spread of 711bp over the Bobl.

Equity capital markets bankers across Europe are awaiting an announcement from the Polish government naming the winners of the mandate for the sale of 30% of Telekomunikacja Polska (TPSA). The finance minister is expected to give his decision by the end of March on a deal tipped to raise over $1bn. A staggering 11 top tier banks bid for a role on the syndicate. The issue is expected to be the largest equity issue from central Europe this year. "The competition is pretty intense," said one participant. There was a notable absence of analysts in London available for comment this week as they made their way to Poland.

Fears of a full scale US recession took hold this week as the smaller than expected Federal Reserve rate cut sparked panic selling in stock markets worldwide, sending them plummeting as investors sought safe havens. Early in the week, the market was focused on Tuesday's FOMC meeting and there was little trading. Disappointment was in store for many investors, who had hoped for a 75bp rate cut in response to concerns about the US economy, numerous profit warnings and the fall in equities since the start of the year.

Banks are bidding on the financing mandate following Apax Partners' acquisition of Carcraft, the UK's largest second-hand car dealership. The company was put up for sale by its private equity owners for at least £200m. The company was bought by Noel and Darren McKee from their father Frank in 1998. The brothers' £50m buy-out was backed by Royal Bank Development Capital. The company has expanded since then and now has three used car supermarkets in Rochdale, Sheffield and Newport. The £197.5m of senior and mezzanine debt facilities for Eubisco is proceeding well in syndication and is expected to close oversubscribed in the next week. Mandated arrangers on the deal are Deutsche and CSFB.

Globals * Coca-Cola Co

* National Bank of Canada Rating: A1/A/A+

French steel group Usinor launched its debut euro issue on Wednesday, a Eu500m seven year offering via BNP Paribas, JP Morgan and Schroder Salomon Smith Barney. The lead managers reported good flows supported by a strong domestic bid, and demand from Spain and the Benelux. The deal was oversubscribed, offering investors diversification and a fair spread of 120bp over mid-swaps. "We were quite pleased with where we priced the offering," a Usinor spokesperson told EuroWeek. "The proceeds will be used to refinance existing debt that is maturing in the next two years."

UBS Warburg priced Vienna International Airport's Eu66m accelerated bookbuild at a slim discount on Tuesday night, after investors had been shaken by another dismal day for the US equity markets. The deal was nearly twice covered, although Tuesday's 4.8% fall on the Nasdaq composite index and 2.4% drop in the Dow Jones Industrial Average caused some investors in the US to set price sensitivity levels just below the final price. The stock was sold at Eu38.5, offering a discount of 1.2% to yesterday's (Thursday) closing price of Eu38.96.

Arrangers SEB Merchant Banking and Svenska Handelsbanken have underwritten a $1bn credit facility for Vin & Sprit. The facility will finance the company's investment in Jim Beam Brands, Future Brands and Maxxium in support of a new global distribution of Absolut Vodka. V&S and Jim Beam brands will each own 50% of the new company that will distribute Absolut and Jim Beam bourbon as well as other brands. The V&S becomes a fourth partner in Maxxium, a distribution business that will deliver Absolute outside the US. V&S will also take a 10% stake in Jim Beam, with an option to increase the share.