ICELAND

Deal: Islandbanki A$300m three-year FRN

UBS and NAB were bookrunners.

This transaction is Islandsbanki’s debut Kangaroo issue launched from the bank’s Australian MTN programme, established in early 2005. The Australian market represents an important source of diversification away from Islandbanki’s European investor base. The transaction was upsized from A$200m, with a total of 15 accounts participating. Geographically, 10 of the 15 accounts in the book were Australian, while bank buyers outweighed fund managers and insurers.

INDIA

Deal: Genpact $215m leveraged buy-out

Bank of America was left-side lead arranger and structurer, Goldman Sachs and Citigroup were joint lead arrangers.

The LBO of Gecis – an Indian business process outsourcing services company later renamed Genpact – by General Atlantic Partners and Oak Hill Capital Partners was the financial sponsors’ first venture in India, and provided Genpact with a platform to grow globally.

This deal takes the award in recognition of the complex deal structure, with operating assets in India, China, Mexico and Hungary, and because it was executed in the Asian capital markets rather than on the US equivalents. Managers also had to overcome obstacles such as the numerous regulatory environments of the operating companies, which made it difficult to present a true, consolidating structure. The deal was also the first pure-play business process outsourcing (BPO) financing in Asia, and the first pure LBO structure deal out of India.

INDONESIA

Deal: $200m collateralised equity leveraged loan for Encore International to acquire 51% of PT Medco Energi Internasional

Merrill Lynch was sole arranger and sole structuring agent.

The innovative structure and slick execution of this deal enabled Encore International to raise finance for the acquisition of Indonesian oil and gas company Medco within a tight time frame and to fight off competition from a strategic buyer.

Encore was the special purpose vehicle set up by the Panigoro family for the acquisition of a 51% stake in Medco.

The collateralised equity leveraged loan (CELL) structure featured a three-tranche facility: each tranche was backed by shares, giving investors a choice of leveraged returns, leveraged returns with call options or straight equity at a discount to market.

IRELAND

Deal: Allied Irish Banks Lower Tier 2 20NC15 £500m

RBS and UBS were lead managers.

With an order book totalling £1170m, the Allied Irish Banks Lower Tier 2 20NC15 transaction is the winner for Ireland. Orders were placed by 89 investors across Europe, predominantly from the UK, with smaller participations from eight other European countries. The £500m deal was priced at the tight end of guidance of gilts + 56bp, and it traded at gilts + 56/54 on the break.

ITALY

Deal: €6.3bn acquisition of 87.3% of Banca Antonveneta by ABN AMRO and ABN AMRO’s €2.5bn equity issue to part finance the acquisition

Lehman Brothers advised ABN AMRO, and were joint bookrunners for the equity offering with JPMorgan and ABN AMRO Rothschild. ABN AMRO was also advised by Rothschild and by its advisory team, ABN AMRO Corporate Finance. Antonveneta was advised by Goldman Sachs, Morgan Stanley, Mediobanca, Dresdner Kleinwort Wasserstein and Lazard.

One of the most talked about deals of the past 12 months, the Antonveneta takeover by Dutch bank ABN AMRO would deserve an award just for the acquirer’s perseverance.

Apart from the events that surrounded the takeover, this deal represented the first unsolicited European cross-border cash tender offer and one of the largest cross-border transactions in the European financial services sector of the past year. The transaction also has a pivotal role in the long-awaited consolidation of the Italian banking system.

The acquisition was pre-financed by a €2.5bn equity offering, the second largest FIG equity transaction in the past year and the largest Dutch secondary equity offering since 2004. The deal was the largest FIG equity offering in the Benelux region since 2002.

JAPAN

Deal: Merger of Mitsubishi Tokyo Financial Group and UFJ Holdings

Nomura and Morgan Stanley were principal advisers to MTFG; Lazard and Mitsubishi, MTFG’s subsidiary, also provided financial advice. Merrill Lynch and JPMorgan advised UFJ.

In building this Japanese banking colossus, the deal represents the biggest banking M&A transaction of 2005 and created the largest bank in the world. It is also Japan’s largest bank rescue, led not by the government but driven by a competitor’s strategy.

This was the first contested merger in Japan, and the combination of the ¥700bn capital injection by MTFG and the poison pill contained in the preferred shares in JFJ Bank made it very difficult for SMFG to continue with its hostile offer.

The deal opened the gate for Japanese companies to make strategic proposals – even if they are hostile.

KUWAIT

Deal: $3.4bn acquisition of Celtel by MTC

UBS advised MTC while Citigroup, Goldman Sachs and Rothschild advised Celtel. Barclays Capital was bookrunner and mandated lead arranger for the acquisition financing with NBK, UBS and CSFB (now Credit Suisse); the rights issue was arranged by NBK.

In an M&A deal, it is usually the target company’s country that determines in what category a deal can compete. In this case, given that Celtel is registered in the Netherlands but has operations across 13 countries in sub-Saharan Africa, the deal’s inclusion is based on the bidder’s nationality.

The transaction represented a perfect fit for Celtel, which is leading mobile operations in Sub-Saharan Africa, as Kuwaiti mobile operator MTC’s expansion plans in emerging market territories provide the acquirer with the largest presence in the Middle East and Africa. The transaction used a dual-track M&A sell-side and IPO process to optimise the outcome for Celtel shareholders.

A one-year bridge term loan was arranged to finance the acquisition and more than $2.7bn was raised, of which 40% came from Middle Eastern banks. Furthermore, NBK arranged a $2.3bn rights issue for MTC.

LUXEMBOURG

Deal: €1.63bn senior secured loan facility for LBO of SBS Broadcasting by Permira and KKR

Barclays Capital was bookrunner and mandated lead arranger; Lehman Brothers and RBS were also lead arrangers.

Private equity firms Permira and KKR were seeking funds for the $2bn acquisition of SBS Media, the second largest pan-European broadcaster. The target had minority shareholders in its Dutch subsidiary whose position was unknown; they could put their shares to the acquirer or call the shares held by SBS. The acquirer required facilities to finance the transaction and to enable further acquisitions. The high enterprise valuation led to one of the highest transaction leverage levels in 2005.

The deal was structured to provide suitable financing in the event of any decision by SBS’s minority shareholders. Additional debt was committed for the put option and an allowance incorporated for debt repayment with a fee rebate in the event the call was exercised. In addition, the arrangers provided an equity bridge to avoid the sponsor drawing and repaying the private equity funds while there was still uncertainty.

MALAYSIA

Deal: Maybank RM1bn Islamic subordinated bonds

Aseambankers Malaysia Berhad was sole arranger and principal adviser.

This landmark transaction was the largest ringgit subordinated bond and the first to be structured under Islamic financing principles raised by a Malaysian financial institution. It helped to develop the breadth and depth of the domestic and international Islamic capital market with the introduction of a new asset class, and created a reference point for future issuance.

The 10-year, non-callable five bond was based on the Islamic principle of bai-bithaman ajil to attract a broader investor base and qualifies as Tier 2 capital for the purposes of Malaysian capital adequacy regulation.

MEXICO

Deal: United Mexican States $2.5bn debt exchange warrants

CSFB (now Credit Suisse) and JPMorgan were joint bookrunners.

The deal was the first standalone cross-currency exchange warrant offering from a sovereign issuer. It gave Mexico a frictionless mechanism to meet two of its key debt management objectives: to reduce the percentage of its foreign currency debt and to promote the local debt market by increasing supply only under favourable market conditions and through a predictable, transparent and market-triggered mechanism.

The warrants enable investors to take a directional view on Mexico’s yield convergence that effectively bridges the presidential elections. They were issued in three series and in total entitle holders to exchange $2.5bn market value of Mexico’s US dollar-denominated global bonds for Mexico’s fixed-rate peso government bonds the following year. Investors can submit the warrants together with any of 14 Mexican US dollar bonds in return for one of the three corresponding local currency bonds maturing in 2011, 2014 and 2024. The structure gives investors flexibility while enabling Mexico to retire inefficient or illiquid debt.

The deal was upsized to meet exceptional demand – the book was more than seven times oversubscribed.

NETHERLANDS

Deal: Stichting Memphis 2005-I

Lehman Brothers and ING were joint lead managers, joint lead arrangers and joint bookrunners.

This was the first economic capital-driven RMBS deal in the Netherlands and it offered the flexibility to achieve regulatory capital relief in the future. It was the first Dutch mortgage transaction selling single B-rated risk and, at the time of issuance, this €3bn transaction was also the largest mortgage reference pool securitised in the Netherlands.

Stichting Memphis 2005-I is the special purpose vehicle established for ING subsidiary Postbank, which retained the AAA and AA notes. The deal opened the way for another major bank to launch an even larger deal referencing from this structure.

The transaction was significantly oversubscribed, particularly in the A and BBB rated notes, which were sold within 24 hours.

NEW ZEALAND

Deal: NZ$500m equity bridge in lead up to NZ$589m IPO and NZ$866m acquisition of NGC by Vector

ABN AMRO advised Vector on the acquisition, was sole underwriter and provider of the pre-IPO equity securities, joint financial advisor with GSJBW to Vector in relation to its offer for the remaining shares. ABN AMRO Rothschild was lead manager in Vector’s IPO.

This was the first successful parallel scrip takeover offer and IPO in New Zealand and the largest IPO in New Zealand since 1999.

The acquisition of New Zealand gas supplier NGC transformed Vector into the country’s largest diversified energy infrastructure company. Funding constraints were overcome through a NZ$500m equity bridge – the pre-IPO equity securities (PIPEs) – of which NZ$354m was drawn down. The speedy provision of PIPEs gave Vector the flexibility to acquire the remaining 32.95% of NGC after the initial acquisition. The equity bridge was also deeply subordinated, achieving significantly higher equity credit than a conventional debt instrument. The parallel IPO and NZ$494m scrip takeover offer for NGC minorities were a first for New Zealand.

NORWAY

Deal: Kommunalbanken $1bn 4.5% five-year issue

Citigroup, Deutsche Bank and Nomura were joint lead managers and bookrunners. Daiwa, Mitsubishi, Morgan Stanley, JPMorgan, Mizuho and RBC were co-lead managers.

The transaction marks a milestone in government-owned Kommunalbanken Norway’s funding operations as another step towards its goal to be the closest alternative to the Kingdom of Norway in international markets. Conversely, the US dollar transaction offered investors a great opportunity to gain exposure to Norwegian public debt.

Favourable timing and a lack of competing supply at the time of launch generated a positive response from the market, which in a few hours translated into a heavily oversubscribed book from a broad spectrum of investors and increased price guidance.

OMAN

Deal: RO288m part-privatisation through IPO of Omantel

Bank Muscat was lead manager.

Telecom operator Omantel’s IPO was by far the largest IPO in Omani capital market history, generating exceptional interest from investors and attracting participation by 10% of the eligible population. It was a key element of the government’s privatisation programme and intended as a template for future transactions.

One of the government’s major aims was to attract smaller investors and ensure their participation in the IPO. To do this, it introduced innovative elements: it was the first time in Oman that, prior to an IPO, existing shares were split into 10 shares by reducing the nominal value of each share, enabling the government to offer shares at a price that smaller investors could afford; Omani companies and funds and non-Omani investors were not allowed to participate in the IPO but were permitted to buy shares in the secondary market to encourage a liquid secondary market.

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