Best Bank for Structuring and ALM - Barclays
Repeating success year-in, year-out is a difficult business. Even Michael Jordan’s trail-blazing Chicago Bulls team had a couple of off years in the middle of their 1990s winning streak. It’s quite some achievement, then, that Barclays has now won the GlobalCapital Best Bank for Structuring and ALM award six times in a row.
A big part of the bank’s success is down to what Elena Bortolotti, global head of covered bonds at Barclays, calls a 360-degree approach — in which structuring is one element of an integrated team effort.
“The award is a structuring award, but I see it more as an award for the whole covered bond franchise,” she says. “I don’t think we would have won if we didn’t have the partnership we have with FIG debt capital markets, syndicate, distribution and trading.
“We don’t work in silos or compartments; we work together.”
The proximity of the structuring team to the DCM operation — whether in the office or, in recent months, via remote communications — reflects the importance that the bank puts on the covered bond product.
“Embedding it within the fabric of the services we offer clients consistently over many years has been crucial,” says Mark Geller, head of FIG debt capital markets, EMEA at Barclays.
“Issuers look at the Barclays franchise and they see a skilled and experienced platform for this product. It encompasses everything from developing the programme through to our advice around market execution and then to delivery.”
A key factor in the covered bond team’s success is that it has a global mandate — no matter where, if a client wants to do something that is called a covered bond, Bortolotti’s team will be available to work on it. In total, the bank has structured 67 covered bond programmes, across 21 jurisdictions on four continents, something few other rivals can match.
“We have focused a lot on bringing new jurisdictions to the market and bringing issuers to the market for the first time,” says Bortolotti.
“This is not something all banks want to do — because when you are setting up a programme in a jurisdiction for the first time there are no precedents, which entails a lot of work and time.”
The pay-off for this is vast experience across many geographies of dealing with all aspects of arrangership. “It puts us in a position to be able to advise issuers in their dialogue with key stakeholders, such as ratings agencies, regulators and law firms, and ensures we are aware of the key nuances around the structuring of these programmes as well as making them future‑proof,” says Geller. “That is very valuable to clients.”
The dialogue is also crucial on the investor side. “Because we focus on first-time issuers or new jurisdictions, we are involved in explaining the structural features and legal frameworks to investors to get them confident that the programme works and they have the security they are looking for,” says Bortolotti.
The strengths of the set-up at Barclays have been highlighted during the Covid crisis, when the collaborative effort between structuring, DCM, trading and distribution has continued to deliver for clients.
In particular, Barclays reacted quickly to assess the introduction of Covid-related mortgage payment moratoriums on covered bond asset coverage tests, and in some cases advised on programme amendments. It has also been heavily involved with discussions around the EU harmonised framework for covered bonds.
“For us on the structuring side it’s always important to stay abreast of any changes in the market, whether that is regulation or events like Covid that could have knock-on effects on the programmes,” Bortolotti says. “We are there to advise our clients on what they need to do.”
For the future, Bortolotti sees a continued evolution of the covered bond product, with opportunities in new countries and regions, as well as the development of the European Secured Note. “I don’t think we have reached peak jurisdiction yet,” she says. “Japan is looking to implement a framework to provide guidelines to its banks, we continue having discussions with some emerging markets as well, and while this year Estonia came to market we are yet to see a pan-Baltic issuance. There is plenty of room for further growth of the product and the ESN will certainly be an interesting space to watch.”