The following award winners and their clients will be honoured at our 10th annual awards dinner in Sydney on Tuesday, February 5, 2013 at the recently renovated Park Hyatt. For more information on this event, please contact Vicki Shaw at [email protected] or +61 2 9437 3070.
BEST LOCAL COMMERCIAL BANK
ANZ remains a dynamo in the world of corporate banking, and several years into its supra-regional strategy, is showing its competitors how a global presence can really support business flows. In 2012 ANZ topped the loan syndication league tables, acting as sole-lead on 10 transactions and underwriting in excess of A$3 billion (ANZ portion) in Australia. Its best work is done in building the profiles of local borrowers with investors in Asia, Europe and the US. The bank says it has arranged over 25 non-deal roadshows in Asia for Australian clients over the past 18 months. ANZ is also committed to investing in technology and in 2012 launched seven value-add payments and cash management solutions to the local market, including updates on mobile banking apps for corporate customers.
BEST FOREIGN COMMERCIAL BANK
Citi’s lead on its commercial banking rivals is widening and this is the 10th year in a row that it has won the Best Foreign Commercial Bank award. Citi delivered a very strong performance in 2012, despite challenging domestic and international markets, and proved that it is ready to stand by its customers with the best products and services. In industry surveys, the bank ranks first with large local companies for transaction banking and foreign exchange services and is noted for its senior management support and creative solutions. This year Citi has helped a number of large Australian companies build out their global operations with card services, supplier finance solutions, export credit agency finance and widely distributed loan syndications.
BEST INVESTMENT BANK
In the decade since FinanceAsia first published its Australia/New Zealand Achievement Awards, UBS has won the Best Investment Bank category every year for 10 years. The bank’s performance in 2012 was consistent, with UBS featuring at the top, or near the top, of various league tables. Its strongest franchise is equities and, during the review period, UBS raised more equity capital for clients than any other bank. In the debt markets it was involved in BHP’s $5.25 billion multi-tranche bond in Europe and Fortescue’s US dollar fundraising. And in M&A, UBS had an advisory role on the biggest deals of the year including Yancoal/Gloucester Coal, Aston/Whitehaven and Foxtel/Austar. While UBS retains its grip on this award, its rivals are quickly gaining ground. 2013 will be an interesting year for the bank.
BEST INVESTMENT BANK — NEW ZEALAND
As a bookrunner and adviser on three of the most important deals in New Zealand’s capital markets in 2012, UBS outshone its competitors as the top investment bank in the country. The firm was a joint lead manager on the much-anticipated dual listing of Fonterra Shareholders’ Fund, which raised NZ$525 million for the dairy co-op. The other two deals were in the M&A market with UBS taking an advisory role on Haier’s acquisition of Fisher & Paykel Appliances (worth $991 million) and Vodafone’s acquisition of TelstraClear (NZ$840 million). It is also worth noting the bank’s joint lead manager role in the NZ government’s successful return to the inflation-linked bond market, executing a NZ$2.5 billion 13-year deal in October. All in all, a great year for UBS in New Zealand.
ISSUER OF THE YEAR
Leighton executed two transactions in November 2012 that proved its mettle as a savvy issuer. The first was a A$1.4 billion three-year syndicated performance bond facility through sole co-ordinating arranger and bookrunner ANZ. The three-year facility streamlined the company’s previous bonding facilities under a single platform, and allowed it to reach a whole new universe of lenders based in Australia and the Asia-Pacific. ANZ fronted a tranche worth A$950 million, giving lower-rated investors a chance to participate. The second deal was a debut US dollar 144a/Reg-S issue arranged by HSBC and J.P. Morgan. The bookrunners ran an international roadshow but settled on an Asia-led strategy, eventually placing over 60% of the bonds with Asian accounts. The book was 10x oversubscribed and priced 30bp inside initial price talk. Heavy private bank participation has seen the bonds tighten significantly in secondary.
BEST EQUITY HOUSE
UBS is the leading equity capital markets house in Australia. In the awards period, UBS arranged over 25 individual transactions for clients, raising more than A$2.8 billion in capital. Its deal sheet included block trades for Transurban (A$631 million), SP AusNet (A$434 million) and QR National (A$500 million); and accelerated entitlement offers for Brambles (A$448 million), Echo Entertainment (A$454 million) and Seven West Media (A$440 million). Importantly, UBS was involved in the IPO of Fonterra Shareholders’ Fund on the NZX and ASX, of which around 25% of the shares were sold to the Australian market.
BEST M&A HOUSE
Large deals can bolster league table rankings in M&A and Goldman Sachs had a role on some of the largest deals in 2012 including Austar’s $1.9 billion sale to Foxtel, Whitehaven Coal’s $2.7 billion merger with Aston, and Yancoal’s $2.5 billion purchase of Gloucester Coal. Our judges also liked its participation in the sale of Spotless to private equity firm PEP. Goldman remains an adroit defence adviser on large and hostile transactions, but this year it also completed more buy-side deals by number and value than any other firm in the market, according to its figures. Its current role on the sale and recapitalisation of Nine Entertainment will be one to watch for 2013.
BEST LOCAL BOND HOUSE
Coming in second on Dealogic’s table of A$ bookrunners, ANZ wins this award for its role in some of the most talked-about deals in the market. ANZ played in nearly 75% of all A$ corporate bond deals during the year, taking a sole or joint lead manager role on 28 domestic corporate bonds across a range of sectors, tenors and structures. Our judges particularly liked its involvement in BP’s A$500 million five-year debut Kangaroo and BHP Billiton’s winning A$1 billion MTN. These transactions not only broke new ground for the issuers, but demonstrated ANZ’s ability to support clients with underwriting and execution certainty.
BEST INTERNATIONAL BOND HOUSE
It’s hard to beat J.P. Morgan’s track record in international bonds. The bank matches its superior strength in the US dollar markets with a solid performance in euro and sterling transactions too. In 2012 it played a leading role in bond deals for Sydney Airport, Leighton Finance, Origin Energy and Foxtel, as well as fundraisings for all four major domestic banks. J.P. Morgan anchors its deals with a potent mix of underwriting certainty and solid demand from institutional buyers. Notably, Citi put in a good show for 2012, arranging more than 45 deals worth nearly $9.5 billion in the review period.
BEST DEBT FINANCE HOUSE
Westpac ran neck-and-neck with ANZ for this award, and won at the last post with its December issue of auto asset-backed securities for St George Finance. Westpac is clearly a frontrunner in structured and asset finance, and in 2012 the bank says it provided over A$15 billion worth of structured finance and securitisation facilities via its balance sheet and its conduit, Waratah. Westpac was sole lead manager on the WST 2012-1 issue, the largest RMBS transaction in the Australian domestic market for the year. The bank is also strong in the areas of project, leveraged and trade finance, playing a role in the financing of APLNG, the LBO package for PEP’s takeover of Spotless, and the refinancing of Coates Hire’s A$1.9 billion LBO deal.
BEST TRANSACTION SOLUTIONS HOUSE
Commonwealth Bank of Australia
CBA knows what we mean when we ask for concrete case studies to show how they are fostering innovation in transaction banking to make their lives of its corporate clients easier. This year our judges liked the work done in revolutionising the merchant terminal by enabling businesses to download apps, or even create and upload apps, to simplify the way they receive payments. Known as Pi, the platform allows application developers to create payment apps that meet specific business requirements and distribute them to merchants through an “AppBank”. CBA has also made strides in speeding up customers’ cashflow by providing real-time transaction processing (rather than batch processing) and everyday settlement (including on weekends).
BEST BROKERAGE HOUSE
In a surprise turn of events, Citi has toppled its long-term rival UBS to become the dominant trading house in Australia, noted for its best execution and distribution capabilities. Broking is a volume game and in 2012 Citi was the leading trader of equities on the ASX according to Iress. Figures for the past four years show a consistent rise in Citi’s share of the market while other firms have waxed and waned in their performance. In the areas of transition management and warrants trading, Citi is also the leading provider. The challenge now is to climb to the top of the equity research polls.
BEST FINANCIAL LAW FIRM
Herbert Smith Freehills
One way to gauge a top law firm is to count the number of winning deals it has advised on. Newly rebranded Herbert Smith Freehills had a stellar year in 2012 with its deal sheet covering some of the most innovative, complex, time-sensitive and strategic transactions. In the equity markets it advised on the IPO of SCA Property Group, and entitlement offers for Ten Network, AGL Energy, Brambles and SP AusNet. In M&A, the firm advised Austar on its A$1.9 billion takeover by Foxtel, and Aston Resources on its current A$5.1 billion merger with Whitehaven Coal. And over in the debt markets, its deal sheet includes Paladin’s convertible bond offer and BHP Billiton’s A$1 billion MTN.
SCA Property Group, A$472 million
Citi won the sole lead manager role on the largest Australian IPO in two years thanks to its strong ongoing relationship with Woolworths. The transfer of A$1.4 billion worth of property assets from Woolworths’ balance sheet to a standalone ASX-listed Reit wasn’t as straightforward as it seemed. Citi had to convince committed Reit buyers that the transition of ownership from Woolworths' shareholders would be orderly and that register stability would be achieved. The campaign worked and the stock has traded well on reasonable liquidity. Citi ran an accelerated broker firm process, resulting in A$200 million of stock being sold to retail investors.
BEST SECONDARY OFFERING
Queensland government’s sell-down in QR National, A$1.5 billion
Ever since QR National listed on the ASX in November 2010, the market has known that a further placement of shares would follow. So as the expiry date for the lockup approached, the company’s management was showered in proposals by various banks on how to get the deal done. In the end, UBS won the contest, and on a sole basis — presenting a pitch that priced the block trade at a premium to the market when everyone was assuming it would come at a discount. The sell-down comprised a A$1 billion selective buy-back by QR National and a A$500 million placement of shares. The share price increased by 5.2% on announcement.
BEST EQUITY-LINKED DEAL
Suncorp convertible preference shares, A$560 million
ANZ, National Australia Bank, RBS Morgans, UBS, Westpac
With Basel III implementation just around the corner, Suncorp became the first Australian insurer to issue compliant convertible preference shares in October. The tier-1 securities met the terms of APRA’s new draft prudential standards, and further enhanced the quality and mix of the company’s regulatory capital. Suncorp set out to raise A$350 million but was able to upsize to A$560 million, despite a pipeline of tier-1 deals in the market. In the end, Australian retail investors dominated the order book and the deal priced at the tight end of the indicative margin range. The transaction qualified for equity credit from Standard & Poor’s, Moody’s and Fitch.
BEST M&A DEAL
Foxtel’s A$1.9 billion acquisition of Austar
Advisers to Foxtel: Aquasia, UBS
Advisers to Austar: Goldman Sachs
Advisers to Telstra: Credit Suisse
One of the principals involved in Foxtel’s acquisition of subscription TV provider Austar said the negotiation process was like getting two elephants to mate. The deal involved some of the biggest and brashest names in global media and had already failed twice in the previous decade. This time the parties were able to reach a consensus on valuation and the all-cash deal achieved significant value for Austar shareholders. But only after some diplomatic handiwork performed by the advisers, and a few tense months of discussions with Australia’s competition watchdog. In the end, there was a sigh of relief and a round of applause.
BEST LOCAL BOND DEAL (JOINT)
BHP Billiton five-year MTN, A$1 billion
ANZ, Commonwealth Bank of Australia
Until October this year, everyone was talking about BP’s Kangaroo as a knockout deal. Then mining company BHP Billiton launched and priced a A$1 billion MTN in the domestic market and stole the limelight. This was BHP’s first domestic transaction since 2001, and represented the largest corporate single-tranche Australian dollar bond ever issued. The deal priced inside domestic bank funding, at an aggressive margin of swap+90bp, and attracted a strong mix of onshore and offshore investors. As much as 20% of the bonds were sold to Asian accounts.
BP five-year debut Kangaroo, A$500 million
This was a debut deal for BP in the Kangaroo bond market and is more than worthy of an award. The global energy company wanted to diversify away from US dollar funding and, in August, set its sights on raising A$500 million from Australian institutional investors. Within 24 hours the deal had generated a book of A$575 million mostly from asset managers and insurance funds, and priced flat to BP’s US dollar secondary curve, showing the strength of the deal. In secondary trading, the bonds have tightened, showing continued investor demand for the BP name and the bonds themselves.
BEST INTERNATIONAL BOND DEAL
Sydney Airport 10.5-year Yankee, $825 million
Bank of America Merrill Lynch, BNP, J.P. Morgan, Royal Bank of Scotland
Sydney Airport’s careful decision to tap the Yankee market for the second time since 2010 was a shrewd move. Investors had been following the company’s story and were pleased to be given an update, so when the deal launched, Sydney Airport was able to upsize the transaction from $500 million to $600 million and price at the tight end of guidance. A series of reverse enquiries led to another tap of the bonds just 10 days later, raising $225 million. In secondary trade, the bonds have performed satisfactorily — trading wider than some, but in line with broader markets.
BEST DEBT FINANCE DEAL
St George Finance Crusade 2012-1 auto ABS, A$1.2 billion
A late entry in this category, Westpac priced this sole-led deal in the first week of December and quickly gained the top spot in the 10 largest structured finance deals for the year, according to Dealogic. The deal was upsized from A$750 million to A$1.2 billion, making it the largest domestic asset-backed transaction since 2008. But it was also the first time that St George Finance had issued in the ABS market in four years. Moreover, the transaction inverted traditional relative pricing in the Australian markets, pricing inside an RMBS tranche of an equivalent tenor. The innovative structure included a 12-month asset substitution period, meeting issuer and investor requirements.
BEST PROJECT FINANCE DEAL
Australia Pacific LNG, $8.5 billion
ANZ, Bank of China, BBVA, BOSI, BTMU, Commonwealth Bank of Australia, DBS, DNB, EDC, HSBC, Mizuho, National Australia Bank, Societe Generale, SMBC, Westpac
This was the first large-scale coal-seam-gas-based LNG project financing in the world and brought together no fewer than 15 lead arrangers and two export-import banks. The financing was raised for the construction of two gas liquefaction trains to convert coal seam gas to liquefied natural gas in Queensland. For many of the banks on the deal, it was the first time they had assessed CSG risks. The project is underpinned by offtake agreements with Chinese buyers and involved a $2.9 billion bank tranche and a further $5.6 billion provided by China-EXIM and US-EXIM. The tenor on the bank tranche is 16 years — an exceptionally long facility tenor for the Australian market.
MOST INNOVATIVE DEAL
Commonwealth Bank of Australia dual senior unsecured/covered bond, $4 billion
Citi, Commonwealth Bank of Australia, Goldman Sachs, J.P. Morgan, Morgan Stanley
At a time when bank treasuries are looking for new sources of funding, Commonwealth Bank’s innovative dual-tranche senior unsecured three-year bond coupled with a five-year covered bond was a standout. The deal generated an order book of over $8.2 billion from investors in Asia, Europe and the US, and ultimately allowed CBA to raise a whopping $4 billion. Both tranches were inaugural deals and yet they priced at the tight end of guidance with negligible new issue concessions. The deal is testament to CBA’s strong global name and its ability to move quickly when market conditions are right.
BEST NEW ZEALAND DEAL
Fonterra Shareholders’ Fund initial public offering, NZ$525 million
Craigs Investment Partners/Deutsche, Goldman Sachs, UBS (Local distribution: First NZ Capital, Forsyth Barr, Macquarie)
The public offering of New Zealand’s dairy co-operative was a long time coming, and was finally achieved this year with the dual listing of units in Fonterra Shareholders’ Fund on both the New Zealand and Australian stock exchanges. While the deal could have been priced tighter (the shares gained 25% on day one), its large size and the innovative “Trading Among Farmers” structure makes it a worthy winner. The bookrunners undertook a comprehensive investor education programme and were able to focus attention on the company’s medium-term growth potential. The participation of retail investors was key, and the use of a broker firm offer ensured that New Zealand residents had a bite of the cherry.