ARGENTINA

Deal: Republic of Argentina restructuring

Merrill Lynch, Barclays Capital and UBS were financial advisers to the republic of Argentina restructuring deal and international joint lead managers on the exchange offer in connection with Argentina’s defaulted public debt.

High budget deficits, decreasing capital inflows and high indebtedness were among that factors that led Argentina to its recent crisis and obliged the country to restructure its debt. Argentina had unique characteristics compared with other countries, which made the deal particularly complex. The size of the deal was also impressive, with the restructuring of approximately $102.5bn of external debt, creating the largest ever debt restructuring.

The transaction was unprecedented in terms of logistics and mechanics. Co-ordination with all major clearing houses was achieved, allowing a direct interface between the clearing systems and the exchange agent. Co-ordination and compliance with multiple stock exchanges (Buenos Aires, Frankfurt, Luxembourg and Milan) and with regulatory agencies (such as the US Securities and Exchange Commission, Germany’s BaFin, Italy’s Consob, Japan’s Ministry of Finance and the UK’s Financial Services Authority) were also successfully managed.

AUSTRALIA

Deal: Metcash Trading A$1,058m acquisition of Foodland Australia, capital reorganisation, A$270m equity placement and spin-off of Foodland New Zealand

Deutsche Bank provided financial advice and financing solutions to Metcash and acted as sole lead manager, bookrunner and underwriter. ABN AMRO advised Foodland, while UBS advised Woolworths, which acquired Foodland New Zealand.

The complex capital reorganisation and a bid offer for Foodland Group rescued Australian food distributor Metcash Trading from a vulnerable position after its South African parent, Metoz Holdings, sold all other assets, leaving Metcash as a possible takeover target.

The Foodland acquisition and capital restructuring facilitated the transformation of Metcash from a South African-owned, east-coast focused wholesaler to an Australian-owned business with a national reach. This landmark transaction increased Metcash’s business scale and wholesale network, resulting in significant buying power along with supply chain and logistics benefits.

The deal also included a A$270m equity placing to finance the takeover.

AUSTRIA

Deal: €500m pre-IPO exchangeable bond due 2008 HSBC acted as sole bookrunner and lead manager for the bond.

Kaernter Landesholding (KLHd), the asset holding company of the Austrian Province of Carinthia, decided to sell part of its holding in Hypo Alpo-Adria Bank International (HBInt) through an initial public offering (IPO). To take advantage of the future sale, KLHd raised zero coupon bonds, which would be redeemed using the proceeds of the IPO.

The deal’s structure was designed to match the issuer’s goals: to raise zero coupon funding that can be repaid through later monetisation of the HBInt stake; to cut execution risk for the IPO while maximising returns; to build the profile of HBInt with equity investors ahead of the IPO; and to ensure a good distribution of the bond at a competitive funding rate against the background of a weak equity-linked market.

BAHRAIN

Deal: Sharia-compliant equity-linked product for Khaleej Finance and Investment Company

Deutsche Bank designed a Sharia-compliant structure comprising a guaranteed minimum return and geared participation in the returns of an equity basket.

Through this structure, the client was able to take a bullish view on a diversified basket of 20 Sharia-compliant global stocks to ensure a minimum guaranteed return of 8% at maturity and adhere to a Sharia-compliant form.

The product is a creative use of traditional Sharia contracts and was tailor-made for the client.

BELGIUM

Deal: €390m sale of 51% stake in SPE to Gaz de France and Centrica, and the simultaneous acquisition of Luminus and ALG Negoce by SPE for €207m and €2m, respectively

ABN AMRO was financial adviser to SPE, the second largest electricity generator in Belgium, Goldman Sachs and Merrill Lynch respectively advised French gas supplier Gaz de France and Centrica, owner of British Gas and other energy supply companies. Merrill Lynch was also global co-ordinator for the deal with Calyon, Lazard-Ixis and Société Générale.

The deal was one of the most complicated M&A transactions in the European energy sector last year, involving negotiations with five partners in three languages, and all transactions had to close simultaneously. Essentially, a special purpose vehicle owned by Gaz de France and Centrica bought a controlling 51% stake in SPE, which had acquired Belgian electricity and gas supply joint venture Luminus, which is partly owned by Centrica. SPE also acquire ALG Negoce, a gas supply joint venture in the Liege province, partly owned by ALG and Gaz de France. The transaction provided SPE’s shareholders with strong strategic partnerships, strengthened Gaz de France and improved Centrica’s position in Europe.

BRAZIL

Deal: Brazil’s global real bond

Goldman Sachs and JPMorgan were joint bookrunners for this R$3.4bn 10-year global bond, while Banco Itau was co-manager.

This landmark deal has changed the dynamics of Brazilian debt. It provides investors with long-dated Brazilian currency and interest rate exposure in offshore markets and avoids taxes and other frictional costs imposed on investors looking to move onshore and offshore. Brazil did not have a 10-year fixed-rate bond in its domestic market before this groundbreaking deal, and shorter-dated fixed-rate bonds have not been liquid in the onshore market. The bond was also based on standard international bond market conversions rather than local bond/swap conversions.

CANADA

Deal: Merger of Inco and Falconbridge

CIBC was financial advisor to Falconbridge, RBC Capital Markets, Morgan Stanley and Goldman Sachs advised Inco.

This unique transaction – the largest domestic M&A transaction ever when defined by the value of the target – creates a global base metals powerhouse and brings together two historic rivals. The new company will be the world’s largest nickel producer and holds the largest nickel reserves in the world. It also ranks in the top 10 largest producers of zinc and copper globally. The deal combines the companies’ independent surface infrastructure and processing facilities.

CHILE

Deal: Energia ConCon – construction term loan

Citigroup was financial adviser to ENAP, main shareholder in Energia ConCon (Enercon), joint lead arranger with BNP Paribas and Calyon and syndication agent and collateral agent. Other arrangers were ABN AMRO and BBVA.

The $410m, 15-year term loan was the longest tenure project-financing deal in the bank market in Chile. The loan was launched to finance the construction of a delayed coker unit in ENAP Refinerias’ Aconcagua Refinery in central Chile, and achieved the 95% leverage target. Despite the lengthy tenor, the transaction achieved advantageous pricing for the client, at 80bp over Libor, starting from 50bp over Libor. Furthermore, the deal received an excellent reception in the syndicated loan market: commitments for $365m enabled each of the lead arrangers’ hold to be less than 10% of the amount of the transaction. The transaction was closed in less than three months.

CHINA

Deal: China Construction Bank RMB3bn residential mortgage-backed securities

Standard Chartered provided financial advice to China Construction Bank, which acted as originator and arranger.

This was a first in China. One of two pilot transactions approved by the Chinese government, the deal set a benchmark for all future securitisations. The transaction was also the first to apply international asset-backed securities standards. Standard Chartered, as adviser, is the only foreign bank to play such a role in China to date. This deal blazes a trail in terms of overcoming the structuring, legal, accounting and tax obstacles that are encountered when launching a new asset class in a new jurisdiction.

CZECH REPUBLIC

Deal: Privatisation of Cesky Telecom

CSFB (now Credit Suisse) acted as financial adviser to the National Property Fund (NPF) of the Czech Republic on the disposal of its 51.1% stake in Cesky Telecom.

The NPF sold its holding in Cesky Telecom to Spanish telecom group Telefonica for €2.8bn, the largest telecoms M&A transaction in central and eastern Europe since 2000, and the second largest privatisation in the Czech Republic. This first acquisition of a European incumbent operator by Telefonica came after a failed privatisation attempt by NPF in 2002 and against the background of a challenging political environment.

DENMARK

Deal: €375m restructuring of inflation-linked debt for Storebaelt

ABN AMRO was financial adviser for the deal.

This deal involves the clever restructuring of inflation-linked debt for Storebaelt, a government-owned entity that operates, among others, one of the suspension bridges that links east and west Denmark. It is the only deal of its kind in which a client pays according to Danish inflation, while receiving French inflation to replace outstanding OAT bonds (which mature in 2014).

The bridge project is financed through government loans and the outstanding debt of about €5bn will be repaid through toll fees, which are regulated according to Danish inflation rates. The rebirth of the Danish consumer price index-linked market encouraged Storebaelt to switch back from debt linked to French inflation (to which the company moved after changes in the Danish tax law) to debt linked to Danish inflation. ABN AMRO’s tailor-made swap structure fulfilled all Storebaelt’s accounting requirements in an innovative cross-border inflation transaction and one of the largest inflation-linked asset liability management (ALM) restructurings in Europe in 2005.

EGYPT

Deal: $380m acquisition of 91% of Misr International Bank (MIB) by National Société Générale Bank (NSGB)

EFG-Hermes was sole financial adviser to Société Générale, which acted on the acquisition through its Egyptian operation, NSGB.

This deal represents the first large-scale banking sector privatisation by the Egyptian government and it is hoped that it will be the cornerstone of Egypt’s banking reform.

Société Générale’s acquisition of the second largest private bank in Egypt makes NSGB the country’s largest private commercial bank, and almost triples Société Générale’s asset and deposit base in Egypt.

FINLAND

Deal: Sampo Housing Loan Bank E1bn covered bond due 2010

Dresdner Kleinwort Wasserstein (DrKW), JPMorgan, Barclays Bank and Sampo were lead managers. Goldman Sachs, Calyon, ABN AMRO, IXIS and HVB were co-managers.

With an unrated issuer, investor perception of a volatile economy, a risk of illiquidity, no previous jumbo covered bonds from the country and a parent company that was an infrequent user of the capital markets, this deal presented DrKW with many obstacles.

Ultimately, investors were fighting to gain access to the first Finnish Jumbo as Sampo’s debut stormed the market. The oversubscribed book closed in record time.

FRANCE

Deal: Casino €600m CMS Perp NC5

UBS was sole structuring arranger and joint bookrunner alongside BNP Paribas; Deutsche Bank and HSBC were senior co-lead managers.

With this unusual deal, French supermarket group Casino issued a constant maturity swap (CMS)-linked perpetual, non-call five note with no step up that generates 100% equity accounting treatment under International Financial Reporting Standards (IFRS) and a healthy equity treatment from rating agencies.

The transaction – the first corporate CMS hybrid – created a new asset class for both issuers and investors, and was the first ever non-investment grade retail-targeted CMS issue.

The deal set a standard for a new generation of hybrid products and sold a previous untested structure to a wide investor base of mainstream fixed-income investors.

GERMANY

Deal: €15.4 merger between UniCredit and HVB merger

Merrill Lynch and Goldman Sachs advised UniCredit; Citigroup and JPMorgan and Deutsche Bank advised HVB; Lehman Brothers advised HVB Group supervisory board.

The merger between Italian UniCredit and German HypoVereinsbank (HVB) has created a truly pan-European bank with a market cap of €55bn.

The complex transaction – the largest European cross-border financial institutions groups (FIG) deal ever involving three different offers in three different countries – produced a group with four ‘home’ markets with access to more than 28 million customers in 19 countries via more than 7000 branches.

In particular, this significant deal established the largest banking group in central and eastern Europe because of the integration of UniCredit’s presence in the market with the network of HVB-owned Bank Austria Creditanstalt across 16 countries. It also cemented the new entity as a major player in the wealthiest markets in Europe: Bavaria, northern Italy and Austria.

GREECE

Deal: €1.6bn sale of TIM Hellas to Apax Partners and Texas Pacific Group and acquisition financing deal

JPMorgan, Deutsche Bank and Citigroup were financial advisers to Apax Partners and Texas Pacific Group, Lehman Brothers and Merrill Lynch advised Telecom Italia Mobile, the vendor of Greek mobile operator TIM Hellas. JPMorgan and Lehman were also joint lead managers for the acquisition financing. JPMorgan, Deutsche Bank, Lehman and Merrill Lynch were bookrunners.

The TIM Hellas acquisition was the first all-bond leveraged buy-out (LBO) financing of a European company. The bond issued for Apax Partners and Texas Pacific Group also represented the largest floating rate note (FRN) issuance in the global high yield market and the second largest ever all-euro bond issuance. The three-layer capital structure enabled sponsors to minimise equity contribution and maximise returns.

Structured as a dual-tranche dollar and euro issuance to tap US market liquidity, the bond generated such strong demand in Europe that it was changed to an all-euro transaction.

HONG KONG

Deal: HK$335m IPO of Tradelink Electronic Commerce

DBS acted as sole bookrunner, sole global co-ordinator and sole lead manager.

Tradelink Electronic Commerce’s IPO was a success story against a difficult backdrop. In 2003, the Hong Kong government had unsuccessfully attempted to sell down its stake in Tradelink. The company’s profits had declined during the track record period and its IPO was launched at the same time as the bigger China Construction Bank’s (CCB’s) $8bn IPO, which was expected to soak up institutional and retail liquidity. In the face of CCB competition, other issuers postponed their IPOs but DBS believed that a delay would mean taking Tradelink to market amid many other small issues.

DBS had to sell the story to investors, explaining the background to shrinking revenues and the benefits of a smaller company. The deal was successfully priced close to the top end of the range and was 23 times oversubscribed. The shares performed well in the aftermarket – up 7.2% on the first day of trading despite weak market sentiment; by December 2005, performance was up 20%.

HUNGARY

Deal: The Ministry of Economy and Transport and Nemzeti Autopalya Rt €460m syndicated credit facility for the M6 motorway PPP project

ING was sole financial adviser to the Hungarian Government National Motorway Co on the implementation of the M6 motorway concession under a public-private partnership (PPP) structure. Bayerische Landesbank, Commerzbank, KBC and KfW were lead arrangers.

The M6 project is the second major PPP implemented in Hungary and one of the largest of its kind in central Europe. It was structured as a 22-year “availability payment” concession developed by ING.

The €480m concession contract was awarded in 10 and a half months, a record for any international procurement of any major PPP project.

The consortium (Bilfinger Berger BOT, Porr Infrastruktur and Swietelsky International) raised about €410m in long-term senior debt finance together with its own equity investment of €48m.

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