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The Covered Bond Report Awards for Excellence 2013
The Covered Bond Report Awards for Excellence 2013
The Covered Bond Report Awards for Excellence 2013
The Covered Bond Report Awards for Excellence 2013
The Covered Bond Report Awards for Excellence 2013
The Covered Bond Report Awards for Excellence 2013
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The Covered Bond Report Awards for Excellence 2013

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Please find herein the winners of our inaugural Awards for Excellence. Congratulations to all our winners!

Please find herein the winners of our inaugural Awards for Excellence. Congratulations to all our winners!

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  • 1. www.coveredbondreport.com Mar-Apr 2013The CoveredBond ReportOur inauguralAwards for ExcellenceAnd thewinner is...For further information please contact:Neil Day, Managing Editor, The Covered Bond Reportnday@coveredbondreport.com+44 20 7428 9575
  • 2. awards 2013Mar/Apr 2013 The Covered Bond Report 1When we conceived our inau-gural Awards for Excellence,we did so with a desire tocelebrate the best of the covered bondmarket. After much deliberation, we havechosen 11 winners.Notable among these are institutionsthat have been at the sharp end of thecrisis, either directly or indirectly. As onehead of covered bonds put it: “We think adeal from a peripheral country deservesthe award for best deal since it’s the bestevidence of the beauty of the coveredbond instrument. Moreover, access of pe-ripheral issuers was the story of the past12 months.”However, we would have to disagreewith his follow-up: “When core issuerslaunch tighter or bigger deals,” he added,“it’s a bit like when the 100m record isimproved by 0.01s.”Try telling that to US athletics legendCarl Lewis. Indeed if we are seeking thosewho are pushing the boundaries of thecovered bond market, we must look atthose who are willing to go outside theircomfort zone and reach for new levels.Meanwhile, although no-one in theirright mind would have wished for thecrisis that has afflicted the globe for morethan five years now, the difficulties thathave been faced have inspired innova-tions and initiatives that would otherwisenot have come about, and two of theseare among our winners.Before you turn over and find out justwho we have chosen (on the small chanceyou haven’t already done so), a few wordson how we arrived at our selection.Most importantly, however much in-put we may have received from outside— and we did our best to hear the mar-ket’s views — the final decision was ulti-mately ours alone.We gave ourselves the maximum flex-ibility in the process with a view to lettingthose institutions and deals deserving ofrecognition drive our categories ratherthan vice versa. The main concrete crite-rion was the period under consideration:April 2012 to March 2013.Our ultimate selection is weightedtowards issuers, which we feel is validconsidering their number relative to theranks of lead managers, law firms andregulators. It is also difficult to separateout individual deals from issuers’ overallstrategies, which explains why more issu-ers than deals are recognised.We have confined our awards to thoseareas where we are confident our processand ability to survey the market withinour given time frame have allowed usto reach a justified and justifiable result.This explains, for example, the lack of aresearch award, which we feel requires adifferent process.We have in some categories alongsidethe winners designated as “highly com-mended” certain institutions or dealsthat either might have triumphed hadthey not faced competition from ourchosen winners, or had a sufficientlystrong case that we felt they deserved tobe recognised.While we are confident that the win-ners are deserving recipients of ourawards, we are the first to admit that theremay well be others we have missed as a re-sult of the depth and breadth of the mar-ket. Hopefully next year we will be able touncover a broader range of winners.In the meantime, we hope you willshare in celebrating this year’s winners.Welcome to The Covered Bond Report’s inaugural Awards for Excellence.In the following pages we highlight those institutions and deals that havedemonstrated the best of the covered bond market in the past yearand taken it to new heights.The CoveredBond ReportAwards for Excellence  
  • 3. 2 The Covered Bond Report Mar/Apr 2013awards 2013issuerCommerzbankAward for Excellence:Innovation  If there were an award for “Most differ-ent reasons why this deserves to win”,then the SME-backed structured issueCommerzbank launched in Februarywould win hands down. But, then again,some market participants would arguethat the deal doesn’t even deserve to beconsidered for a covered bond award.Love it or hate it, it is hard to deny thatCommerzbank’s Eu500m five year wasgroundbreaking and it wins the Awardfor Excellence in innovation.With apologies to Turkish issuers, theGerman bank’s inclusion of SME loans ina covered bond programme broke one ofthe market’s taboos — breaking out fromtraditional public sector and mortgage col-lateral. And it did so on a structured basisin the home of the Pfandbrief.A full pass-through structure beyondthe expected maturity date and otherstructural innovations make the deal al-most overqualified for even this award.Commerzbank’s deal also makes cov-ered bonds relevant to the latest planbeing pushed to save the euro-zone realeconomy: somebody do something aboutSMEs! While the ECB has called for gov-ernments, EU institutions and the ABSindustry to come up with a solution tothis real economy problem, only the cov-ered bond market has delivered a poten-tial breakthrough — small wonder thatthe deal won covered bond treatmentfrom the central bank.The debate over the deal’s status willrun and run, making Commerzbank’sissue possibly the most influential inno-vation in the covered bond market sinceHBOS launched the first structured cov-ered bond a decade ago, in 2003. Highly commended:Global Bank (Panama)issuerBank of Ireland Mortgage BankAward for Excellence:Overall deal  It is not often that individual coveredbond issues are highlighted by govern-ments as milestones. But then not everycovered bond issue is as notable as aEu1bn three year deal issued by Bank ofIreland Mortgage Bank in November.“This issuance is further evidence ofthe strengthening and normalisation ofour banking system,” said Ireland’s fi-nance minister, Michael Noonan. “It is aclear show of confidence in the restruc-turing of the sector and its viability intothe future by international investors.”While the transaction clearly benefit-ed from Ireland’s profile as a poster boyfor the EU’s recovery cheerleaders, Bankof Ireland deserves credit for taking ad-vantage of the opportunities presented itand for the way it has done so.The November deal was the first non-government guaranteed deal for an Irishfinancial institution since September 2009— when Bank of Ireland had launched itslast benchmark covered bond. The Irishbank followed up the watershed deal witha Eu500m five year in March in the wakeof the first Irish government benchmarksince the 2010 bail-out.Bankers pay tribute to the way inwhich Bank of Ireland has maintaineda dialogue with potential investors evenwhen the market was closed. The CBRwitnessed this first hand at an LBBWcovered bond conference in February2012 when head of wholesale fundingDarach O’Leary engaged with investorsdespite laughing off our suggestion thatwe might see an Irish covered bond be-fore the year was out.“Darach is one of the best funding of-ficials out there, if not the best,” says onesyndicate official. “He pushes banks, butin the right way.” Highly commended:UniCreditEu750m 4% 2018
  • 4. Mar/Apr 2013 The Covered Bond Report 3awards 2013issuerSveriges RiksbankissuerRoyal Bank of CanadaAward for Excellence:Deal: Dollars  Afull-blown US market with domes-tic issuers and investors is perhapsthe Holy Grail of the covered bond mar-ket. Although that remains a fantasy,the asset class took a big step forward inNorth America in September when RoyalBank of Canada launched the first fullySEC registered covered bond.The $2.5bn five year issue attractedsome $5.25bn of orders from more than180 investors, and was hailed as a break-through, promising a broader US investorbase for the asset class for index and otherreasons while offering the issuer savings.“The deal went phenomenally well,”said a syndicate banker away from theleads, “and was right in line with expec-tations and where we had pinpointed theopportunities for them.”Much of the deal’s success was downto work done before execution, with theissuer and Securities & Exchange Com-mission getting themselves comfortableon the regulatory side.The deal also caught the attention ofthose in Washington whose support isnecessary for the US dream to becomea reality, with Democrat Senator KayHagan citing it in a call for the swift pas-sage of legislation. Highly commended:CM-CIC$1bn 1.5% 2017Award for Excellence:Regulation  When it comes to opinions on finan-cial authorities from market par-ticipants, negativity typically abounds. Itis therefore refreshing to hear one suchinstitution talked about consistently in apositive way, namely Sweden’s Riksbank.Issuers applaud the way in which theFinancial Stability Department, led byMattias Persson (pictured), handles itsresponsibilities and takes a pro-active ap-proach.“They have a consistent dialogue withthe banks regarding different issues andthe risk of something coming in out ofthe blue is therefore very small,” saysone funding official. “But it’s not like thebanks are dictating policy as they usuallyhave a firm view.”The Riksbank has also engaged withthe wider market on a variety of issues,whether that be in support of its localbanks or to promote the debate aboutasset encumbrance — a topic where itsjoint stance with the Swedish FSA hasbeen complimented. nAward for Excellence:Issuer: Euros  Some market participants put for-ward Intesa Sanpaolo’s Eu1bn 12year OBG from January for a dealaward. Others suggested its public intomortgage exchange last summer shouldbe recognised. And one banker simplydescribed them as “a great issuer”.Whichever way you look at it, thatsounds like a winner.However, the issuer faced stiff localcompetition, with Italian peer UniCreditalso coming in for acclaim.Among factors tilting our decisionin Intesa’s favour was the exchange ofpublic sector into higher rated mortgagebacked OBGs, on a par for par basis andwith the same terms, that it completedin July 2012.“That one definitely wins on my ‘Iwish I’d thought of that’ criteria,” saidone covered bond banker.Among a trio of euro benchmarksexecuted from September to January,Intesa Sanpaolo’s 12 year in January wasthe longest dated OBG in two years, theonly 12 year euro benchmark outsideFrance in our qualifying period, and itslongest OBG.The Eu1bn no-grow transaction gar-nered Eu3.5bn of demand from over 150accounts, with 89% placed outside Italy,and achieved pricing inside its curveand more than 100bp through BTPs.A lead syndicate official said that In-tesa was for the third time in six monthsconfirming its high standing in themarket with the 12 year deal, as well asfurther distancing itself from peripheralnames, and “being able to enter in theelite club of issuers with the privilege togo beyond the 10 year tenor”. Highly commended:BelfiusissuerIntesaSanpaolo
  • 5. 4 The Covered Bond Report Mar/Apr 2013awards 2013issuerCommonwealth Bank of AustraliaAward for Excellence:Overall issuer  CBA has been at the forefront of cov-ered bond issuance despite being arelative newcomer. And, unlike some ofits large peers at home and abroad, it has atrack record that is hard to fault — despitean ambitious issuance programme.Alongside deals in niche currencies— and its home Australian dollar marketlast year — the bank has not shied awayfrom leading the way in euros, sterlingand US dollars this past year.In April 2012 CBA launched aEu1.5bn 10 year deal into a challengingmarket, which was seen as a brave movebut attracted Eu4.5bn of demand. It fol-lowed this up with a £750m 14 year is-sue that was the first long dated sterlingbenchmark from a foreign issuer sincebefore the crisis and remains the larg-est, and achieved the tightest new issuespread seen in the currency. The bankthen opened the US dollar market forcovered bond issuance in January with asuccessful $2bn five year deal.“Their issuance was very balanced overthe course of the year and they very nicelyaccessed different parts of the curve to se-cure best execution in each market whileensuring outstanding ongoing investordiversification,” says one banker.Another banker describes CBA’sfunding team — led by Simon Maidment,head of group funding and execution —as “probably the most switched on of theAustralians, if not all issuers”. n Highly commended:Münchener Hyp,StadshypotekAward for Excellence:Investor relations  It may seem strange that a bank that only issued one in-ternational benchmark in the period under consideration(April 2012 to March 2013) and no euro benchmarks at allwins an Award for Excellence, but Swedbank has neverthelesswon over market participants and was cited for its investorrelations work.Bankers note how the Swedish issuer’s spreads have im-proved to be on a par with the tightest of its peers.“It has gone from the doghouse a couple of years’ back tobeing the best positioned among the Nordic majors,” says one.Its outperformance in the covered bond market has beenhelped by better than expected results and positive ratingsnews, while as an issuer it has been active in raising senior un-secured and subordinated debt. Swedbank rounded off the yearunder consideration with a return to the covered bond market,selling a $1bn five year in March. Highly commended: CFFLdealSwedbankAward for Excellence:Legal advisory  One respondent to our call for nominations simply putdown in the legal advisory field: “No brainer.” It wouldhave been a disservice to firms such as Clifford Chance, Linklat-ers and Morrison Foerster if we hadn’t checked that this marketparticipant had Allen & Overy in mind, but given the strengthof feeling in support of A&O it was no surprise when our sus-picion was confirmed.The firm has been at the forefront of developments in thecovered bond market for at least a decade and remains there.Among partners mentioned by their supporters are AngelaClist, Sally Onions and Lawton Camp.“The breadth and depth of their advice encompasses a num-ber of different partners,” says one structuring specialist. “Wehave worked with them extensively across all the major mar-kets, and they have the ability to cross-pollinate the advice theyprovide.”Among A&O’s contributions in the past year are involve-ment in the development of Belgium’s covered bond market andin RBC’s SEC registered covered bond. ndealAllen & Overy
  • 6. Mar/Apr 2013 The Covered Bond Report 5awards 2013issuerUniCreditissuerBarclaysAward for Excellence:Overall bank  Getting to the bottom of which banksreally stand out in the covered bondmarket is no easy task, with reciprocityallegedly clouding the picture and thesuccess of bulge bracket bond houseselsewhere making it hard to discern theirexpertise in the asset class.But one name stands out as the un-disputed leader: Barclays. In the UKbank’s case, it appears that the leaguetable does not lie.“They are still a real reference pointin this market,” says a rival DCM banker.A stalwart of the euro market, Bar-clays has now positioned itself at thefront of the US dollar market.Meanwhile, the bank remains activein bringing new jurisdictions on streamand developing new structures.“You can’t knock them for the workthey do to develop the market,” says acovered bond banker at one competitor.“I wish I had the resources to throw atthose obscure countries.”The bank is seen not only as strongoverall but among the leaders across thevariety of competences necessary for acovered bond franchise, including re-search, syndicate, structuring, tradingand origination. Highly commended:BNP ParibasAward for Excellence:Bank: Euros  Making sense of the relative meritsof banks within the euro bench-mark market is far from straightforwardgiven its competitive nature. And oncethe testy subject of reciprocity surfacesemotion often takes over from reason.However, a couple of deals this yearalready have shown that successful exe-cution cannot be taken for granted evenfor top credits.Each issuer has its own preferences,but a name that regularly crops up whenissuers are asked who they can trust tohelp avoid any such pitfalls is UniCredit.Rival syndicate bankers also pay trib-ute to the Munich-based operation, andthe bank has kept pace with its strongestcompetitors and led more euro bench-marks than any other over the period inquestion. Highly commended:Deutsche Bank,Crédit AgricoleAward for Excellence:Editor’s award  The euro-zone crisis has shown justhow difficult it is to get representa-tives of different countries to come to-gether and compromise for the commongood.In the covered bond market, thatunenviable task falls to the EuropeanCovered Bond Council. And history hasshown that the covered bond market canbe just as fractious as any EU heads ofgovernment meeting.Against such a challenging backdrop,the successful launch of the Covered BondLabel in January deserves to be recognisedas an achievement in itself.But above and beyond that, the ini-tiative fits perfectly into the spirit of ourAwards for Excellence in driving the mar-ket forward.The Label has gradually won aroundsceptics among issuers, investors andbankers, while getting the EuropeanCentral Bank onside has been a keyachievement.At the same time, the ECBC has beencommendably frank in its admission thatthe Label needs to be improved.The Label was nominated by a vari-ety of market participants in the field ofinnovation, while others proposed theECBC — under its parent, the EuropeanMortgage Federation — as a candidate inregulation.We have given the institution our Edi-tor’s Award, reflecting its unique contri-bution and status in the market.At the heart of the Label project hasbeen ECBC head Luca Bertalot, whosetireless efforts and passionate argumentshave won plaudits, while others pay trib-ute to the work of the body down fromchairman Paul O’Connor to its variousworking groups. nissuerEuropeanCovered BondCouncil

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