The following award winners and their clients will be honoured at our annual awards dinner on Tuesday, February 4, 2014 at the Park Hyatt on Sydney Harbour. For more information on this event, please contact Vicki Shaw at [email protected] or +61 2 9437 3070.
HOUSE AWARDS
BEST LOCAL COMMERCIAL BANK
ANZ
ANZ’s mission of achieving greater quality and predictability through more exposure to investment-grade and multinational customers is proving a boon for its corporate bankers. The Melbourne-based bank spent 2013 building on its share of the corporate banking market, leading to its trade, markets and cash management divisions reporting a huge jump in profit. ANZ continues to be the only domestic player with a clear Asia strategy which helps it to connect corporate customers with faster growing regional capital, trade and wealth flows.
BEST FOREIGN COMMERCIAL BANK
Citi
Citi added another 67 corporate client relationships to its name in Australia this year, making it the leading banker to more than 500 multinationals in the country. It continued to offer the best treasury and trade services, including launching an innovative “virtual card” solution for Tourism Australia, which allows it to settle invoices by generating a series of unique 16-digit codes that become payment reference numbers. Citi worked with other multinationals to provide global supplier financing, online investments and complex lockbox solutions. The US bank builds loyalty by combining its working capital and cash management expertise with its advisory and debt underwriting capabilities.
BEST INVESTMENT BANK
UBS
UBS’s unwavering commitment to offering the best in origination and execution gives it an unshakeable grip on this award. UBS played a role in five of our top Deal Awards for the year – helping to reopen the IPO markets with the listing of Virtus Health, advising NSW Ports Consortium on its successful bid for port leases, and working with the Commonwealth Government on its ground-breaking 30-year bond. The firm’s equity capital markets team cornered a 32% share of the market during the year, raising nearly $6 billion for clients, or double its nearest competitor. Across all securities UBS remains a consistent price-maker, providing secondary market liquidity in the A$ bond markets and clocking in as the number 2 trader on the stock exchange.
BEST INVESTMENT BANK — NEW ZEALAND
Deutsche Craigs
The newly fused investment banking team at DeutscheCraigs played an active role in most of New Zealand’s big deals in 2013. As sole adviser to NZ Treasury on its privatisation programme, the firm went on to work on IPOs for Meridian Energy and Mighty River Power this year. It also helped to raise NZ$840 million for Z Energy in another IPO and completed block trades for Air New Zealand and Sky TV – the latter on a sole underwriter and bookrunner basis. In the debt capital markets DeutscheCraigs was involved in two NZ$2 billion-plus bond deals for the national government, and important deals for Goodman Property Trust and Genesis Energy.
ISSUER OF THE YEAR
AOFM
The AOFM does more than raise money for the Commonwealth Government; it sets a pricing benchmark and ensures a certain base level of supply so that others have the flexibility and freedom to borrow. In 2013, the AOFM took this role seriously by issuing the largest and longest Australian dollar bond in history with its A$5.9 billion 20-year transaction in June, a bond that added four years to the nominal curve. Since 2010, the AOFM has extended the curve of its overall portfolio from an average of five years to just under nine years, and now there is talk of a 30-year bond. The AOFM has some challenges ahead. A A$64 billion programme next financial year will test its resolve as coverage ratios suffer under the weight of government and semi-government supply.
BEST EQUITY HOUSE
UBS
Executing more than 31 transactions across a broad range of structures and sectors, UBS wins our Best Equity House award for 2013. UBS completed IPOs for Veda and Virtus Health (see our Best IPO), but its best work was in block placements and rights issues, including large-scale deals for Aurizon (A$806 million), Transpacific (A$562 million) and ASX Ltd (A$554 million). Many of UBS’s deals are done on a sole basis – regardless of size or complexity – illustrating the strength of its distribution power and its willingness to take calculated risks. The bank’s equities research (it has 50 analysts covering over 250 stocks) and sales and trading teams are consistently recognised in industry surveys.
BEST M&A HOUSE
Macquarie Capital
Macquarie Capital was involved in the largest and most influential M&A transactions of the year, beating its nearest rival on the league tables by a fair margin. Our judges particularly liked its role as sole adviser to Nine Entertainment on its complex debt restructuring and sale of ACP Magazines to Bauer Media; and buyside adviser to the Future Fund in its acquisition of Australian Infrastructure Fund assets (see our Best M&A Deals). Towards the tail-end of the year Macquarie ran a competitive bidding process for client Talison Lithium and managed to extract maximum value for shareholders in the sale of the West Australian miner to Chengdu Tianqi and CIC of China.
BEST LOCAL BOND HOUSE
ANZ
ANZ’s involvement in key transactions for issuers such as Aurizon, SP AusNet, Anglo American and the Commonwealth Government (see our Best Local Bond Deal) put it at the top of local bond league tables. According to Dealogic’s All Australia DCM bookrunner rankings, ANZ arranged more than A$20 billion in bonds for more than 75 issuers during the review period, maintaining a market share of about 12%. It acted as lead manager on the largest ever Kangaroo covered bond for Royal Bank of Canada (A$1.25 billion) and an inaugural deal for the National Bank of Abu Dhabi (A$300 million). ANZ’s innovative and collaborative approach to bond origination helps clients to achieve tight pricing and diversify their investor bases.
BEST INTERNATIONAL BOND HOUSE
Citi
While their work on BHP Billiton’s mega $5 billion multi-tranche bond put JP Morgan on top of the league tables, we commend Citi’s ability to provide its clients with access to multiple products across markets and currencies. In March Citi arranged a $500 million US private placement for biopharmaceutical company CSL; in September it was joint lead manager on Melbourne Airport’s €550m inaugural 10-year euro-denominated bond (see our Best International Bond Deal); and then later that month it helped the Commonwealth Bank to issue a 3- and 5-year $3 billion transaction in the US public markets. Citi consistently identifies the correct transaction choices for its clients.
BEST DEBT FINANCE HOUSE
Westpac
The top underwriter of asset-backed securities in Australia and a powerful debt arranger, Westpac wins this award for the second year running as it continues to provide over A$15 billion of structured finance and securitisation facilities to clients. In 2013 the bank pushed the envelope with investors, convincing them to back some highly innovative, long-dated instruments such as A$304 million worth of 12-year notes backed by lease payments made on 15 Bunnings properties (see our Best Debt Finance Deal), and the largest ever social benefit bond in Australia in the form of a A$10 million 5-year bond for the Benevolent Society’s Family Preservation Service.
BEST FINANCIAL LAW FIRM
Herbert Smith Freehills
Herbert Smith Feehills wins this award for another year in recognition of its strength across all transactions from M&A and equity raisings to private equity buyouts and project finance. Some of the firm’s more crafty deals for 2013 included the Australian Infrastructure Fund’s sale to the Future Fund requiring the navigation of pre-emptive rights conditions and the completion of various individual asset sales in accordance with co-investment agreements (see our Best M&A Deals); and a fully underwritten A$553 million entitlement offer for ASX Limited where all regulatory relief (including ASX Listing Rule waivers) was obtained from, and all announcements were lodged with, the Australian securities watchdog Asic acting in place of ASX in its role as market operator.
DEAL AWARDS
BEST IPO
Virtus Health, A$339 million
Morgan Stanley, UBS
After years in the doldrums, the successful listing of Virtus Health in June heralded the reopening of Australia’s primary equity markets and the return of financial-sponsor exits. A medical company specialising in IVF reproduction, Virtus executed the sale of A$127 million worth of new shares and A$212 million of existing shares held by a mix of fertility doctors, company employees and Quadrant Private Equity. After a five-city roadshow that took in Singapore and Hong Kong, lead managers Morgan Stanley and UBS increased the size of the deal allowing Quadrant to fully exit. The stock traded up on debut and rose consistently after that, returning 55% to investors by the end of the year.
BEST SECONDARY OFFERING
Australand block trade, A$426 million
Citi
CapitaLand’s sale of a 20% block in Australand shares is our Best Secondary Offering for 2013. Citi proved its mettle as an executor of difficult deals, underwriting a stock that was liquidity constrained and deftly managing some complex foreign ownership issues. The offer represented about six months of trading volume but still priced at a super tight 1.7% discount to spot. Australand’s free-float increased by approximately 50%, making it more attractive to institutional buyers. Since the transaction, the property company’s shares have outperformed the index, despite generally volatile conditions and the likelihood that CapitaLand might sell more stock in the future.
BEST EQUITY-LINKED DEAL
Suncorp subordinated note issue, A$770 million
ANZ, National Australia Bank, Morgans, UBS, Westpac
Suncorp beat other financial institutions to market with an innovative Basel III-compliant tier-2 subordinated note issue in April. The deal qualifies as equity-linked because of its “non-viability” conversion trigger, but more importantly our judges liked it for its size and for being the first compliant issue by an APRA-regulated borrower since Basel III regulations were implemented. Issuers Westpac and AMP quickly followed with similar deals. Suncorp’s transaction included a reinvestment offer giving existing convertible preference-share holders the chance to roll their securities into the new notes. Strong demand, particularly from retail investors, allowed the lead managers to upsize the deal from an initial target of A$500 million.
BEST M&A DEAL (Joint winners)
NSW Ports Consortium’s A$5.07 billion acquisition of Port Botany and Port Kembla
Adviser to NSW Ports Consortium: Lazard, UBS
Adviser to NSW Government: Morgan Stanley
The A$5.07 billion sale of two 99-year leases over the Port Botany and Port Kembla assets highlights the growing global influence of pension and sovereign wealth funds in the infrastructure sector. NSW Ports Consortium – comprised of Industry Funds Management, AustralianSuper, QSuper and the Abu Dhabi Investment Authority – emerged as the preferred buyer from three highly competitive bids. This is the largest ever privatisation undertaken by the New South Wales state government. Target advisers Morgan Stanley achieved a price of 2 times net book value on the sale, while acquirer advisers UBS were able to deliver critical insights that proved key to NSW Ports’ success.
Future Fund’s acquisition of Australian Infrastructure Fund assets
Adviser to Australian Infrastructure Fund: Credit Suisse
Adviser to Future Fund: Macquarie Capital
In a similar institutional vein, the A$2 billion sale of assets held by the Australian Infrastructure Fund (AIX) is joint winner of our Best M&A Deal this year. The Future Fund and existing shareholders purchased all assets held by the Hastings-managed listed infrastructure fund including domestic airports, international airports and a stake in a Sydney toll road concession. The transaction was unique in that it involved the sale of a portfolio of underlying interests rather than a straight takeover of the listed vehicle itself, requiring the advisers to navigate some tricky pre-emptive rights provisions. Proceeds were returned to AIX security holders, involving considerable structuring and execution expertise.
BEST LOCAL BOND DEAL
AOFM 20-year Treasury Bond, A$5.9 billion
ANZ, Citi, UBS
While we tend to favour corporate issuers for this award, the mega-A$5.9 billion bond for the Commonwealth of Australia’s debt management office was a standout transaction in 2013 and a worthy awardee. It represented the largest volume ever raised via the local dollar market and was successful in extending the Australian government’s curve by four years, setting a risk-free benchmark for other longer-dated deals. The final order book saw 59% of the bonds sold to offshore accounts, mainly to UK and Asian investors. Distribution was balanced between fund managers, central banks and bank trading accounts, and the bonds have performed well in the secondary market.
BEST INTERNATIONAL BOND DEAL
Melbourne Airport 10-year EMTN, €550 million
BNP Paribas, Citi, JP Morgan
Melbourne Airports’ euro notes tightened nicely in secondary trade, proving that the company’s first public offshore transaction is a winner. The €550 million 10-year deal was timed well to coincide with the European market’s recovery and the US Federal Reserve’s decision not to taper. BNP Paribas, Citi and JP Morgan generated €2.7 billion in orders within an hour of launch and quickly achieved an oversubscription rate of 6.9 times with pricing at the tight end of guidance. More than 75% of the bonds were placed with real asset management accounts and Melbourne Airport was able to add 145 new investors to its dance card.
BEST DEBT FINANCE DEAL and MOST INNOVATIVE DEAL
Wesfarmers’ Bunnings lease securitisation, A$304 million
CIMB, Goldman Sachs, Westpac
In August this year, Wesfarmers priced an innovative A$304 million bond linked to lease payments made by its hardware retailer Bunnings. The idea was to provide growth capital for expansion projects by removing 15 Bunnings properties off Wesfarmers’ balance sheet and shifting them into a special purpose vehicle. Joint lead managers CIMB, Goldman Sachs and Westpac attracted enough bids from domestic and offshore investors to price the deal intraday, with the book oversubscribed by more than 1.5 times. The deal priced at the tight end of guidance, and could act as a template for other companies wishing to recycle the value of their property portfolios.
BEST PROJECT FINANCE DEAL
NSW Ports Consortium, A$2 billion acquisition financing
ANZ, CIBC, Credit Agricole, DBS, ICBC, ING, KDB, National Australia Bank, SMBC, BTMU
The A$2 billion senior debt facility provided by this group of 10 banks was critical to the winning bid in the largest privatisation of the year (see our Best M&A Deal). Acting for the NSW Ports Consortium, the syndicate provided the debt funding component for the A$5.07 billion purchase of 99-year leases at Port Botany and Port Kembla. The deal was structured to eliminate some of the more costly elements of the debt package to make the bid competitive, resulting in a 43% oversubscription. It represented the biggest new-money transaction in the project finance loan market during 2013.
BEST NEW ZEALAND DEAL
Ebos Group’s acquisition of Symbion and equity raising, NZ$1.1 billion
Forsyth Barr, Fort Street Advisers, UBS
Ebos Group became one of New Zealand’s top performing stocks after its audacious NZ$1.1 billion acquisition of Australian pharmaceutical firm Symbion – a company twice its size. Ebos paid owners Zuellig NZ$367 million in cash and NZ$498 million in scrip, while taking on NZ$230 million of Symbion net debt. UBS and Forsyth Barr raised NZ$239 million in new equity capital to fund the deal, taking a company not widely held by institutions and dramatically strengthening its share register. The lead managers attracted large individual bid sizes, with the top three bids more than covering the book. The deal received considerable interest from Asian accounts.
