Australia
The Deal:The Carlyle Group and National Hire’s A$2.8bn acquisition of Coates Hire
ABN AMRO, Goldman Sachs JBWere and Deutsche Bank advised the buyers while Macquarie advised Coates Hire; ABN AMRO led the A$2.3bn debt facility along with ANZ Banking Group, Calyon, Mizuho, Sumitomo, Westpac and Goldman Sachs JBWere.
This is the largest Australian public-to-private deal to date and the first announced private equity transaction in the local market after the subprime crisis. This complex transaction, involving two public companies, includes a ‘leveraged dropdown’ structure where National Hire remained listed. Full credit has to go to the acquiring consortium which had to overcome Coates Hire’s boardroom reluctance to sell and shaky market conditions.
Austria
The Deal:Strabag’s €1.35bn IPO
Goldman Sachs, Deutsche Bank and Raiffeisen Centrobank were joint bookrunners.Strabag’s initial public offering (IPO) came amid volatile market conditions, but effective communication of the positive story around the sixth largest construction company in Europe ensured that the deal priced close to the top of the price range. The deal, the largest IPO in the history of the Vienna Stock Exchange, was 10 times oversubscribed, attracting demand of more than €13bn with a record number of more than 100,000 Austrian retail investors. Strabag traded up 6.1% on the first day of trading against weak European markets and the Greenshoe was fully exercised within two weeks.
Bahrain
The Deal: Arcapita Bank’s $1.1bn syndicated Murabahah Facility
Barclays Capital, Standard Chartered Bank and WestLB acted as underwriters, bookrunners and mandated lead arrangers; DBS Bank, European Islamic Inv Bank and Standard Bank were mandated lead arrangers.
This was the largest ever Islamic financing for a financial institution and also the largest syndicated Islamic deal for a Bahraini borrower. The deal for Arcapita Bank was twice oversubscribed with a broad syndicate of 50 conventional and Islamic banks from Europe, the Middle East, Asia and the US. The five-year facility for refinancing and general corporate purposes was financed at a margin of Libor plus 85 basis points, a significant discount to Arcapita’s previous loan in 2005 at Libor plus 175bps and, at $1.1bn, significantly larger than the previous $210m facility. The Islamic structure did not deter international banks, with 76% coming from non-Middle Eastern banks.
Bangladesh
The Deal:Santos’s $50m acquisition of Cairn Energy Bangladesh
Jefferies was sole financial adviser to Cairn Energy; Santos had no external banking advice.Despite ongoing political and energy policy uncertainty, the deal was successfully completed and represented a sound proposition for both buyer and seller. It was a significant new step in Santos’ Asian growth strategy, while allowing Cairn Energy to disinvest from a non-core area for the company. As part of the transaction, Cairn Energy will disinvest a 37.5% interest in the Sangu Development Area and other interests in exploration portfolios.
Belgium
The Deal:Nyrstar €2bn IPO, including Greenshoe
Deutsche Bank, Goldman Sachs and UBS were joint global co-ordinators and joint bookrunners; Fortis and KBC were also bookrunners.
Nyrstar’s IPO marked the conclusion of a process begun by the two founding shareholders, Unicore and Zinifex, in 2006. The deal was executed in the midst of adverse market conditions, with European and US equity markets dropping 2% to 3% during the two-week bookbuilding process. It had to overcome other challenges – not least that it operated in the specialised zinc smelting industry, which had not been widely followed by European investors. The deal, which created one of the top 20 companies in Belgium by market capitalisation and the world’s largest zinc metal producers, was the largest IPO in western Europe in 2007, the largest on Euronext since 2005 and the largest ever in the European metals and mining sector.
Botswana
The Deal:National Development Bank’s BWP100m 11.25% Notes due 2017
Stanbic Bank Botswana was sole bookrunner and lead arranger.The deal paid a coupon of 11.25% and was oversubscribed by 2.5 times. NDB said it would use the proceeds to refinance its short-term debt and fund its strategy for the next five years. The deal provides investors with an opportunity to get exposure to longer-term assets in the region, where there is a shortage of 10-year-plus deals. Because of this, the deal found strong support among local investors. It was completed against a background of potential NDB privatisation. If the government had privatised the bank, the credit would have changed from government guaranteed to an unknown credit quality.
Brazil
The Deal:IFC’s R$200m 11.96% Amazonia bond due 2011
Banco Itaú BBA and Banco ABN AMRO were joint lead managers and bookrunners.In the first seven months of 2007 alone there were 48 IPOs worth R$70bn ($29.5bn) in Brazil, and crowning that illustrious pile was Bovespa’s own record-breaking R$5.8bn float. But it is the IFC bond which clinches The Banker’s deal of the year. With its inaugural issue by a foreign entity in Brazil, the IFC opened a brand new market in Amazonia bonds. It is the first global AAA credit rating made available for domestic investors, and there were challenges to overcome in pricing a fixed-rate note for a AAA credit in a non-investment grade country. Nonetheless, it achieved the tightest premium ever paid by a non-sovereign entity at 9bps over Treasury.
Bulgaria
The Deal:AIG Investment’s €1.42bn acquisition of Bulgarian Telecommunications
UBS was lead financial advisor to AIG, with Raiffeisenbank Bulgaria acting as the local adviser. Lehman Brothers advised Bulgarian Telecommunications.
NEF Telecom Bulgaria, a private equity vehicle set up by AIG, bought a 90% stake of BTC, the monopoly landline operator and owner of Bulgaria’s third-largest mobile operator, Vivatel, in a deal that closed in August 2007. This is the largest deal ever undertaken in Bulgaria, and also the largest private equity buyout in the CEE region last year. AIG followed on with a tender for the remaining 10% stake listed on the Bulgaria Stock Exchange, which was also the largest transaction ever undertaken on the exchange. Raiffeisenbank’s Bulgarian brokerage arm handled the tender offer. The sale allowed the Viva consortium, led by Icelandic fund Novator, to exit its investment just two years after buying into BTC at privatisation in 2005.
Canada
The Deal:Royal Bank of Canada’s €2bn 4.5% covered bond due 2012
RBC Capital Markets, Barclays Capital, BNP Paribas and Commerzbank were joint bookrunners.
Last year Canada saw some blockbuster deals, not least Rio Tinto’s $38.1bn acquisition of Alcan. The Banker’s deal of the year award for Canada, however, goes to RBC’s inaugural Canadian covered bond. In a difficult, post-crisis market, RBC’s debut offering received a positive reception. Amid the gloom of US subprime news, RBC was able to successfully communicate the difference between the Canadian and US mortgage markets. The transaction was more than 50% oversubscribed only 75 minutes after the books were opened, attracting interest from more than 90 investors worldwide. More than 50% of investors were non-risk weighting sensitive – such as central banks, fund managers, insurance and pension companies.
Chile
The Deal:Esval’s UF2.3m amortisable bond due 2028
Santander Investment was advisor and underwriter.Chilean water utility Esval’s UF2.3m amortisable bond – the first local bond to incorporate a callable option with a Make Whole provision – is The Banker’s deal of the year for Chile. Although the structure is common in more developed financial markets, the Make Whole provision had to be adapted to the characteristics of the Chilean market. Santander Investment created a mechanism to determine the applicable benchmark for a bond that was a 21-year redeemable, linking its duration to the time of the redemption. Not only was the auction oversubscribed, but the bond was placed at the same price as a non-callable bond. The Ontario Teachers’ Pension Plan Board’s later acquisition of Esval also deserves a mention.
China
The Deal:Fujian Refining & Petrochemical Rmb30bn project financing
HSBC and China Construction Bank were financial advisers; China Construction Bank, ICBC, Agricultural Bank of China, Bank of China and China Development Bank were lead arrangers.
This landmark transaction is the first and largest fully integrated refining and petrochemical complex in China. It was led by China Petroleum and Chemical Corporation, Exxon Mobil and Saudi Aramco. The deal is Asia’s largest project finance transaction, with an equivalent value of $4bn, and presents several innovative aspects for the local market in terms of sponsors’ financial support and liability, offtake structure and risk profiles. In addition, the project includes a refinery where the prices of fuel are currently regulated, which challenged the lenders’ ability to assume price risk with no sponsors’ support in the operating phase. The transaction is the first project financing completed in the Chinese regulated petroleum pricing regime. The deal was 10 times oversubscribed with strong interest from both international and local banks. Its pricing represents a new benchmark and is lower than similar deals in Asia and the Middle East.
Colombia
The Deal:Republic of Colombia’s $1bn-equivalent buy-back and bond exchange
Deutsche Bank and Citigroup were dealer managers.In June last year, the Republic of Colombia carried out a landmark liability management exercise by issuing a $1bn-equivalent 20-year peso-denominated global TES benchmark in conjunction with a public tender offer for outstanding shorter-dated bonds. The milestone deal achieved all of the Republic’s key debt management objectives, including the establishment of a new TES benchmark with the largest and longest ever bond in local currency. It benefited the Republic’s yield curve development and was executed at a competitive level. The new 20-year TES attracted about 100 different investors, many of whom were first-time buyers of Colombia credit, and it improved the Republic’s currency composition by replacing a large component of shorter-dated US dollar debt for long-dated local currency debt.
Congo, DR
The Deal:Ruashi Mining SPRL $170m project finance facility
Standard Bank was financial adviser and mandated lead arranger for the financing.This is the first large-scale project financing of a mining venture in the Democratic Republic of Congo. As with all ‘firsts’, challenges were not scarce. Legal complexities and environmental and social issues, which included the relocation of about 2500 miners, all provided obstacles to the successful completion of the deal. The debt facility includes $125m senior project debt, covered by the Export Credit Insurance Corporation of South Africa, a $30m senior commercial debt and a $15m cost over-run facility. The project is divided in two phases for a total cost of $270m.
Cyprus
The Deal:Kombinat Aluminijuma Podgorica and CEAC Holdings’ $235m financing facility
Raiffeisen Zentralbank and BNP Paribas acted as co-ordinated mandated lead arrangers and bookrunners.This facility is significant for a corporate borrower in Montenegro with the integrated aluminium complex, the largest industrial company in the country, accounting for almost one-third of Montenegro’s GDP. The financing is fully guaranteed by EN+ Group, which is also the owner of CEAC Holding, a holding company registered in Cyprus and created by EN+ Group for acquisition purposes in CEE. CEAC acquired Kombinat Aluminijuma (KAP) from the Montenegro government in 2004. The facility consists of two amortising term loans of $56m and $105m for refinancing purposes and one revolving credit facility of $74m for general working capital purposes.
Czech Republic
The Deal:Creation of €5.1bn insurance joint venture between PPF and Generali
JPMorgan advised PPF, the owners of Ceska pojistovna; UniCredit was financial advisor and mandated lead arranger to Generali.The largest ever financial sector transaction in CEE (excluding Russia) brought together the €1.5bn CEE operations of Italian insurer Generali with €3.6bn Ceska pojistovna, the Prague-based insurance arm of financial group PPF. In addition to its own assets, Generali paid PPF €1.1bn to take a 51% stake in the joint venture. JPMorgan’s advice to PPF extended over a two-year decision-making process, during which the bank compared this proposal with a number of alternatives for PPF, including an IPO or sale to a strategic investor. The deal was concluded in April 2007, and is expected to realise cost savings of about €50m a year for the combined group. The joint venture has a presence in 12 countries in the region, ranging from the mature Czech market to CIS states with very low insurance penetration.
Denmark
The Deal:Danske Bank’s €3bn double tranche senior notes due 2012
BBVA, BNP Paribas, Danske and UniCredit were joint bookrunners; Santander, BayernLB, DZ Bank, Fortis and RZB were co-leads.Raising money for a respected company such as Danske Bank is a task many bookrunners would like to have. The deal, however, impressed for its size, which was the largest regional deal by the company and its largest senior issue to date. The deal aimed at attracting smaller investors, which helped the issuer diversify from traditional institutional bank buyers. The bookbuilding was closed quickly and was more than twice oversubscribed in almost six hours. The transaction includes a €2.25bn floating rate note, five basis points over the three-month Euribor, and a €750m 4.75% note.
Egypt
The Deal: Lafarge’s $13bn acquisition of Orascom Cement
Morgan Stanley advised Lafarge and acted as joint lead arranger and mandated lead arranger on the €7.2bn acquisition financing to support the acquisition. BNP Paribas and Calyon also advised Lafarge and were joint lead bookrunners on the financing package. Citigroup advised Orascom.
This industry-reshaping transaction was the largest ever cement transaction and the largest foreign direct investment in the Middle East and Africa. Lafarge acquired 100% of Orascom Cement for E8.8bn plus €1.4bn of assumed net debt from Orascom Construction Industries, 60% owned by the Sawiris family. The family was to re-invest most of the proceeds from Orascom Cement’s disposal in Lafarge and was to become an 11.4% shareholder. The acquisition gives Lafarge leading market positions in cement in the fast-growing, highly profitable Middle East and north Africa region. The E7.2bn acquisition (bridge) credit facility is structured as a multi-tranche term loan and revolving credit facility.
Ethiopia
The Deal:Ethiopian Airlines’ $60m pre-delivery payment facility
DVB Bank and ING Bank structured, arranged and underwrote a $60m pre-delivery payment facility for Ethiopian Airlines.The money raised from this deal will be used to buy five Boeing 787-8 aircraft as part of Ethiopian Airlines’ drive to provide additional lift for long-haul markets and the phasing out of the company’s older aircraft. The deal had a complex structure due to the jurisdictional challenges and the innovative asset class. The airline recently announced that it will begin daily long-haul flights between Addis Ababa and Frankfurt.
Finland
The Deal:Talvivaara Mining Company’s $320m debt facility
HVB, Nordea Bank, Société Générale and Standard Bank were mandated lead arrangers.There is no doubt that commodities were the flavour of 2007, and will increasingly be on investors’ radars for years to come. The financing of Talvivaara’s nickel project, in one of the largest known resources in Europe, is significant not only because it facilitated the production of a sought-after commodity. It also created the right debt levels necessary for the company’s listing on the London Stock Exchange at the end of May last year. The debt facility for the development and construction of Talvivaara’s $612m nickel project was closed in the same month, within a tight timeframe of about three months.
France
The Deal:Veolia Environment’s £500m 6.215% bond due 2037
Barclays Capital, HSBC and Royal Bank of Scotland were joint bookrunners.Not only was this Veolia’s debut sterling deal, but it deserves plaudits for being the first corporate transaction in the sterling market since the summer’s credit crisis began, executed in a very volatile environment. Despite the tricky market timing, it priced at the tight end of spread guidance and generated a high quality order book that exceeded £2bn ($3.95bn) within a few hours. The order book covered a well-diversified investor base though final allocations were geared towards real money investors. It was one of the few corporate transactions of the past few months not to include a change of control clause.
Gabon
The Deal:The Gabonese Republic’s $1bn, 10-year inaugural international bond issue
Citigroup and JPMorgan were joint bookrunners.Following hot on the heels of the Republic of Ghana, the Gabonese Republic issued a $1bn, 10-year Eurobond, the second ever issued by a sub-Saharan African country. The deal paid a coupon of 8.2%. The notes were rated BB- by Fitch and Standard & Poor’s and the proceeds of the issue were used to part finance the country’s repayment of its Paris Club debt. The deal received huge demand from investors and raised a total of $2.5bn from US and European investors. Asset managers bought 75%, banks 10%, hedge funds 7% and insurance companies 5%. The deal, which took just three months to complete, was widely praised by bankers for the competitive pricing and broad investor base.
Highly commended
The Deal:BowLeven’s £28.5m Acquisition for FirstAfrica Oil
Jefferies advised BowLeven and Rothschild advised FirstAfrica Oil.Creatively structured, the acquisition allowed BowLeven, an oil and gas company, to create a second core area complementary to its existing interests in Cameroon. Prior to the acquisition, FirstAfrica Oil, which was listed on the AIM section of the London Stock Exchange, announced that it was undergoing financial difficulties and that it might be forced to interrupt tradings. Unusually, in the context of a public offer, BowLeven entered into a loan agreement with FirstAfrica during the public offer period.
Germany
The Deal:KfW’s Naira17bn 8.5% bond due 2011
Standard Bank was sole manager and sole bookrunner.A naira bond may not seem the obvious choice for a German deal of the year, but KfW Bankengruppe’s Nigerian currency bond scores on several levels. First and foremost, the issue demonstrated the ability of institutions to still raise funds cost effectively, yet to do so in innovative ways in domestic markets that assist in their overall development. On top of that, not only is it the longest tenor and the largest naira Eurobond by a foreign issuer, but the transaction opens the opportunity for further extension of the NGN curve offshore and creates the ability for domestic corporates to benchmark issues for offshore investors.
Ghana
The Deal:Republic of Ghana’s $750m, 10-year inaugural international bond issue
Citigroup and UBS acted as joint bookrunners.It paid a coupon of 8.5% and paid mid-swaps plus 325 basis points. The deal was the first sovereign Eurobond issued by a sub-Saharan African country and was oversubscribed by more than four times. It attracted orders from 158 investors worth in excess of $3bn, but had to be scaled back due to country restrictions. The huge demand meant bookrunners achieved pricing at the tight end of initial guidance. The deal was a landmark for the region and many bankers feel it could herald a spate of Eurobond issuance from African countries that have benefited from debt relief. The bonds went to a wide range of investors, with about 40% going to the US, 35% to the UK and the rest to Europe.
Greece
The Deal:Marfin Investment Group’s €5.19bn capital raising
Citigroup, Deutsche Bank and Merrill Lynch were joint bookrunners.Marfin Investment Group’s €5.19bn capital raising is the largest rights issue ever in Greece and the largest public capital raising for an investment company globally to date. The deal for the Greek private equity unit of Marfin Popular Bank demonstrates how much appetite there is for a manager with a good track record and an attractive proposition, despite the volatile environment. Marfin undoubtedly benefited from the support of Dubai Financial Group, which owns about 8% of the bank, but the fund’s success is a sign that credit market jitters will not deter investors if the story is a good one.
Guatemala
The Deal:Hidro Xacbal’s $171m fixed rate loan
RBTT Merchant Bank was lead arranger.Guatemala’s capital market is relatively small and Hidro Xacbal is the largest ever private power plant project to be financed in central America. It soon became clear that the company would need to tap both international investors and attract multilateral interest. Another challenge was to find international investors willing to fund a project with a 15-year payback, and willing to accept the risks associated with a merchant plant. The transaction was structured as a syndicated loan during construction – to facilitate the sometimes unpredictable draw-down process – with a conversion option post construction to bonds if the investor base demanded it.
