Deals of the Year 2023

The best deals in Europe over the past year are celebrated.

Bonds: Corporates

Roche’s jumbo senior bond 

Bookrunners: BNP Paribas, Credit Suisse, Deutsche Bank, UBS

With the largest Swiss franc-denominated bond issue since 2009, Swiss-based global pharmaceutical company Roche offered a real test for investor appetite for Swiss franc paper in its SFr3bn ($3.36bn) offering in February 2022. The market responded well, with the company able to price its first domestic currency offering for four years attractively. 

Roche’s recognition and high AA credit rating allowed it to issue initial price talks an hour after initially announcing the issue of a four-tranche senior bond issue. 

Books opened for a minimum of SFr1.9bn, closing at SFr3bn. A nine-month tranche of SFr1.25bn priced at –0.5% yield to maturity (YTM), or 15.75 basis points (bps) over Swiss average rate overnight (Saron) mid-swap, the reference rate. The SFr825m five-year tranche priced at 0.380% YTM, or Saron mid-swap +15bps; a SFr625m nine-year tranche at 0.685%, Saron +20bps; and SFr300m of 15-year paper at 0.885%, or Saron +25bps. 

The nine-month tranche, which expectedly saw the most demand, was entirely allocated to treasury accounts, with a mix of treasury accounts, banks, asset managers, insurers, and pension funds accounting for the other three tenors. 

This transaction successfully leveraged the newly established operational link between the SIX Digital Exchange (SDX) central securities depository and SIX SIS. Investors were complementary on the wider structure given the instrument would be dual-listed at SDX Trading and SIX Swiss Exchange to offer maximum liquidity and trading convenience. Over 100 parties including investors, other borrowers, regulators and governing bodies engaged in the process to gain an understanding of the transition to a digital market infrastructure in Switzerland.

Roche plans to use the proceeds for general corporate purposes, including funding the purchase of Roche shares from Novartis — a $20.7bn deal accounting for nearly a third of the former’s voting shares announced in 2021.

Bonds: Sovereigns, supras and agencies

EU’s 7bn dual-tranche tap 

Bookrunners: Barclays, Bank of America, Citi, Crédit Agricole, Deutsche Bank 

Launched at the end of 2020, NextGenerationEU is a €800bn-plus “temporary recovery instrument” to support the EU’s economic and social recovery from the Covid-19 pandemic. A mix of funds and loans, the programme entails investments in areas including broadband, energy efficiency, sustainable transport, and education.

In February 2023, the EU, represented by the European Commission (EC), issued a €7bn dual-tranche bond designed to support the NextGenerationEU recovery programme, as well as the EU’s €18bn Macro-Financial Assistance+ programme for Ukraine. 

Investors demonstrated strong interest in the EU bonds. The issue attracted total demand of €93bn, making it one of the most oversubscribed issues of the year to date. Just an hour after books opening, the €3bn seven-year tranche had drawn an order book of €33bn, while the €4bn 20-year tap saw demand of €37bn, achieving final book size of €42bn and €51bn, respectively.

The transaction took the EC to €20bn of its €80bn funding target for the first half of 2023. It was the second transaction under the EU’s Unified Funding Approach, which allows the instruments developed for NextGenerationEU to be used for other programmes, a move which is also expected to make EU securities more liquid and fungible. 

To further boost liquidity, the EC is drawing up a framework to provide investors with pricing quotes on EU securities, and is starting to construct a repo facility to support market participants in trading its bonds. This is expected to be implemented by early 2024.

Bank treasuries took 49.4% of the 2029 tranche and 35.1% of the 2042 offer, with fund managers, central banks and other official institutions strongly present. Demand was predominantly from Europe, including an active UK participation (11.5% of seven-year and 16.8% of 20-year tranches).


Porsche’s 9.1bn IPO 

Joint global co-ordinators: Bank of America, Citi, Goldman Sachs, JPMorgan 

Senior joint bookrunners: BNP Paribas, Deutsche Bank, Morgan Stanley

Joint bookrunners: Barclays, Santander, Société Générale, UniCredit

Co-lead managers: Commerzbank, Crédit Agricole, LBBW, Mizuho 

The biggest initial public offering (IPO) of the year globally was also the largest in Europe for more than a decade – and one of its biggest this century – and the largest in Germany since the 1996 listing of Deutsche Telekom. It came from iconic German luxury carmaker Porsche, previously fully-owned by troubled Volkswagen (VW). 

The chart-topping €9.1bn offering came in a difficult environment, with some of the lowest equity capital market volumes and aggregate deal values for a decade, and Germany’s DAX down 24% from the start of the year. 

Several other landmark IPOs were called off, but VW persisted – and was paid off with an issue that was multiple times oversubscribed and priced at the top of the €76.50–82.50 price range, implying €75.2bn market capitalisation. The transaction was boosted by Porsche’s cornerstone strategy, which secured €3.6bn – around 40% of the total – at launch from the Qatar Investment Authority (with €1.875bn), Abu Dhabi’s ADQ, Norges Bank and T Rowe. This supported broader investor confidence and appetite. 

Long-only funds secured 42% of allocations, hedge funds 11% and retail investors 8%, following VW’s decision to run a single-tranche transaction for institutional and retail investors. The deal also ensured that the Porsche and Piëch families, the original owners of Porsche and controlling shareholders of VW, returned to direct ownership of Porsche, securing a blocking 25% plus one share through their holding company.

The deal gives Porsche greater financial and operational flexibility from Volkswagen, as well a supporting its development of battery electric vehicles (BEVs); the company has the target of more than 80% of new Porsches being BEVs by 2030. Like all long-established automakers, VW is facing the challenge of a green transformation, and meeting regulatory and customer demand on a competitive marketplace.

Financial institutions group financing

BMPS’s 2.5bn capital raise 

Bookrunners: Bank of America, Citi, Credit Suisse, Mediobanca, Santander, Barclays Bank Ireland, Société Générale, Stifel Europe Bank 

The world’s oldest bank still in operation, Banca Monte dei Paschi di Siena (BMPS) is one of the largest domestic banks in Italy, with activities including traditional retail banking and commercial banking with a particular focus on small and medium-sized enterprises. 

The bank’s recent history has been troubled, with billions of losses driven by 2006–09 derivatives trades and its holdings of Italian government bonds. Former executives were jailed in 2014 for misleading regulators, and in 2017 the bank was subject to a €5.4bn state bailout, with the government taking a 68% stake in return.

In October 2022, BMPS completed a €2.5bn capital raise that will reinforce its restructuring and may pave the way for privatisation. The funds raised are intended to support the group’s 2022–26 strategic plan, which is founded on achieving business sustainability, building a solid and resilient balance sheet, and tackling legacy issues. 

The capital increase should also help BMPS achieve better profitability through cost-base streamlining and workforce optimisation, and achieve a fully loaded common equity Tier 1 ratio of 14.2% by 2024, well above the 8.8% determined by its Supervisory Review and Evaluation Process.

The rights issue was fully pre-underwritten at its announcement, giving BMPS full certainty of funding. The Ministry of Economy and Finance committed €1.6m, and a first allocation of €475m of new shares was made to several strategic institutional debt and equity investors, including €200m from Axa and €25m from Anima Holding.

The eventual take-up was 96.3%, despite a difficult macroeconomic environment in which European bank stocks slid between announcement and the start of the subscription period. The transaction was the largest equity capital markets deal in Italy in 2022, and the largest Italian rights issue over the preceding five years.

Infrastructure and project finance

DigitalBridge and Brookfield’s majority stake in GD Towers 

Financial advisers to Digital Bridge: Barclays, Evercore 

Financial adviser to Deutsche Telekom: Goldman Sachs 

Bookrunners on 6.85bn acquisition financing: BNP Paribas, Crédit Agricole, Intesa Sanpaolo, MUFG, Natixis, Santander, UniCredit 

With Russia’s full-fledged invasion of Ukraine in late February 2022, deal-makers faced an array of challenges. Large European banks and financing institutions with substantial underwriting books faced the possibility of hundreds of millions in losses, as well as the potential infrastructure and security risk of the war spreading.

The lenders supporting DigitalBridge Group’s €10bn acquisition of a 51% stake in Deutsche Telekom’s GD Towers, for which negotiations started at the outset of the war, found that institutions were only willing to commit 10–15% of the underwrite value each, whereas usually two or three could be found to commit 33–50% in a transaction this size. This required assembling a larger consortium of underwriters, while traditionally strong capital providers shied away.

Evercore, as strategic debt adviser, thus employed a more extensive debt financing strategy, identifying a broader pool of debt providers and assembling a group of seven: BNP Paribas, Intesa, Crédit Agricole, Natixis, Santander, MUFG and UniCredit. All had different approaches to the syndication process, necessitating a careful balance between them while moving as quickly as possible to protect against the risk of losses. 

The deal closed at €10.7bn, valuing GD Towers at €17.5bn, with DigitalBridge forming a 50/50 joint venture with Brookfield. The deal was financed by a €6.85bn debt package with a dual operating company/holding company structure top optimise liquidity and the competitiveness of the financing terms. 

The valuation reflects the strength of the target. GD is the largest independent tower company in Germany, operating nearly 40% of towers, and has favourable 30-year master lease agreements with Deutsche Telekom which give long-term cashflow visibility and account for around 80% of recurring revenues. 

This is one of Europe’s largest digital infrastructure deals of 2022 and is expected to help build Europe’s next-generation digital infrastructure champion.

Islamic finance 

Turkey’s $2.5bn three-year sukuk 

Bookrunners: Citi, Dubai Islamic Bank, Emirates NBD, HSBC 

Until recent years, Turkey’s Islamic finance sector lagged behind that of global leaders such as Malaysia and Bahrain. The country’s secular constitution and traditions, regulation and a lack of clear legal structures for some sharia-compliant products limited its development. However, changing politics, the growth of global Islamic finance and the country’s ambitions to become an international financial centre have catalysed the once-fledgling industry. 

In 2022, Turkey’s government met half of its $11bn external financing needs from sukuks, with a $3bn five-year issue in February, and a $2.5bn three-year note in October. In a difficult year, sukuks proved an excellent instrument for Turkey to secure market access, and raise large sums at relatively attractive pricing terms.

The latter deal came after a six-month hiatus from the market by the sovereign, with high international volatility and domestic concerns over inflation, as well as the devaluation of the Turkish lira, having an impact. 

The issue capitalised on a window of stability, with HSBC leading structuring and ensuring that Turkey had access to important, liquid international sukuk investors, particularly the UAE, which has tough regulatory requirements.

The orderbook exceeded $6.5bn at launch, with strong demand allowing the republic to set a final yield at 9.75%, 25 basis points (bps) below initial price talks. The deal priced around 30bps through Turkey’s US dollar conventional bond curve. 

Demand was particularly strong from the Muslim world, with the Middle East accounting for 57% of allocations and Turkey itself taking 21%. There was also notable support from international investors in the Americas, Europe and the UK. In terms of investor type, banks took 73% of allocations, with fund managers the second biggest cohort (20%).

High-yield and leveraged finance

Edizione and Blackstone’s buyout of Atlantia 

Financial advisers to Edizione and Blackstone: Bank of America, Citi, Goldman Sachs, JPMorgan, Lazard, Mediobanca, UBS, UniCredit 

The largest leveraged buyout in European history, as well as the largest infrastructure deal by enterprise value, Edizione and Blackstone Infrastructure Partners’ (BIP’s) €46bn voluntary tender offer on Atlantia, an Italian highway operator, was a landmark transaction in global private equity. 

Edizione, a holding company fully owned by the Benetton family, and BIP, part of the world’s largest alternative asset management firm, tabled an offer of €12.7bn based on the offer price of €23 per share for 552,442,990 shares, representing a 66.9% stake in Atlantia. The transaction implies an equity value of €19bn and an enterprise value of €46bn. 

The offer was announced on April 14, 2022, and launched through Schema Alfa, a newly created vehicle (BidCo), with Edizione rolling-over its 33.1% stake in Atlantia into BidCo in exchange of a majority stake in the company and BIP providing new equity contribution.

After the customary regulatory approvals were obtained, the offer period started on October 10 and ended on November 25 (including reopening of the terms), with BidCo owning over 95% of Atlantia’s share capital. Atlantia was delisted from the Italian Stock Exchange in December 2022.

Edizione and BIP have announced their intention to support Atlantia’s long-term investment strategy, providing resources for the company to capitalise on opportunities in its sector, consolidating its position as an infrastructure industry leader. 

Atlantia operates toll road concessions in 11 countries and provides tolling services in 24 countries worldwide, while managing five airports in Europe which served 64 million passengers per year before the pandemic. It also has a growing presence in mobility services through Telepass, a digital tolling business expanding into multi-service digital payments, and Yunex Traffic, an intelligent transport systems and smart mobility company acquired from Siemens in January 2022.


Iberdrola’s inaugural syndicated water footprint credit line 

Mandated lead arrangers and bookrunners: Barclays, BBVA, BNP Paribas, BofA Securities, Citi, Crédit Mutuel-CIC, Crédit Agricole CIB, DBS, Deutsche Bank, HSBC, JPMorgan, Mizuho, Natixis, NatWest Markets, RBC Capital Markets, Santander, UniCredit, Wells Fargo

Mandated lead arrangers: Credit Suisse, Goldman Sachs, Morgan Stanley, Rabobank, Standard Chartered Bank, UBS 

Sustainability-linked loans have taken off in recent years, as companies have become increasingly aware of the need to meet the environmental, social and governance targets demanded by regulators, investors and consumers. Most focus on greening and reducing energy use, social targets or both. 

Renewables giant Iberdrola broke new ground in July 2022 with the signing of the world’s first syndicated water footprint credit line. The core characteristics of the product, developed by BBVA, is the reduction of the water footprint as it set targets on the improvement of how corporates manage water in all its inceptions, such as Scope 1, 2 and 3 emissions, as well as with carbon dioxide metrics.

The new format will see Iberdrola’s credit margin decrease if it improves on water-based key performance indicators (KPIs) and increase if its performance deteriorates. 

The €2.5bn loan, which brought together 24 international financial institutions led by BBVA, is based on two KPIs. First, water consumption in energy generation — measured by the amount of water drawn within the company’s boundaries and not discharged back into the environment — should be down 50% by 2030. Second, the company’s ‘water score’ from CDP, a charity that operates a global disclosure system for environmental impact. The CDP score considers awareness, management, and disclosure of water risks, as well as best practice.

The financing enhances Iberdrola’s plan to make significant contribution to the UN Sustainable Development Goals (SDGs) 6 (clean water and sanitation) and 12 (responsible production and consumption). Until now, the company’s facilities have been focused on contributing to the SDGs 7 and 13 (clean and accessible energy and the fight against climate change, respectively).

Following the transaction, more than 90% of Iberdrola’s credit lines — worth €41bn — are sustainable. 


Ørsted sells 50% stake in Hornsea 2 OWF 

Financial adviser to Ørsted:  Crédit Agricole 

Financial adviser to Axa IM Alts and Crédit Agricole Assurances: Nomura

The world’s largest offshore wind farm (OWF), Hornsea 2 is located in the North Sea, off the coast of north-east England. The site has 165 8.4 megawatt (MW) turbines, giving it a capacity of 1.3 gigawatts (GW), and started full commercial operations in the third quarter of 2022. It is a flagship project for the UK government’s ambition of having 50GW of offshore wind by 2030.

In March 2022, Axa Investment Managers (Axa IM) and Crédit Agricole Assurances (CAA) signed a deal jointly to acquire a 50% stake in the project for £3bn, with financial close achieved in September 2022. 

Crédit Agricole Corporate and Investment Bank (CACIB) ran both the debt and the equity processes for Ørsted through its integrated mergers and acquisitions (M&A)/structured finance platform. CACIB oversaw a competitive M&A process ending in the selection of Axa IM and CAA as new long-term partners for the Danish utility company. 

On the debt side, CACIB arranged a multi-billion-pound stabled financing package for the new investors from a 30-bank club — the largest lending group ever for an OWF project — and including a covered tranche guaranteed by EKF, Denmark’s export credit agency. The process required the co-ordination of numerous levered and unlevered potential bidders, and was designed to meet the requirements of various stakeholders, as well as a change in project commercial operation date. 

The transaction reached financial close and interest rate swaps were priced at the most volatile period for UK gilts in history, following the UK government’s controversial September 2022 ‘mini-Budget’, as well as volatile commodity prices as a result of the Ukrainian war and a high inflationary environment creating uncertainty in investor returns requirements.

An outstanding outcome was achieved on this ground-breaking transaction for Ørsted, which met its key objectives of establishing a new long-term partnership at an attractive valuation.


Successful restructure of Nordic Aviation’s $6.4bn debt 

Financial adviser to the private placement noteholders: Houlihan Lokey

Financial adviser to Nordic Aviation Capital: Rothschild & Co 

Ireland-based Nordic Aviation Capital (NAC) is the world’s largest regional aircraft lessor, and sixth-largest commercial aircraft lessor, leasing aircraft with fewer than 130 seats. Its clients include some of the world’s largest airlines, as well as smaller low-cost airlines, predominantly in Europe. Before its restructuring, the company owned and manged 475 aircraft: 285 turboprops and 190 regional jets.

Due to the Covid-19 pandemic’s impact on the aviation industry, NAC had capital and operational challenges, including decreases in lease-related cash collection and asset impairments as aircraft values plummeted. The company found itself overleveraged and facing challenging debt service payments. In July 2020, it agreed an Irish scheme of arrangement to defer some payments and waive some financial covenants, requiring it to make cash-sweep payments towards outstanding debt from May 2021.

In March 2021, NAC’s largest financial creditor group engaged investment bank Houlihan Lokey to address the company’s over-leveraged balance sheet and help recapitalise the business. Given the distinct restructuring needs, collateral pools and investment appetite of NAC’s creditors, this required a ‘multi-silo’ approach, offering different restructuring options. 

Creditors with $3.9bn of pre-restructuring debt claims took a debt-for-equity deal; another silo agreed a debt-for-debt transaction worth a total $500m; and debtors owed $1.9bn accepted an exit, terminating servicing arrangements and accepting collateral. Creditors in the first silo were able to participate in the issue of $537m in new money facilities, entailing a $337m rights offering, $170m debtor-in-possession financing and a $200m exit facility in the form of a revolving credit facility.

Overall, the restructuring reduced NAC’s total debt from $6.4bn to $2.2bn, and installed a more stable ownership structure with reorganised equity in the hands of a diverse collection of financial institutions. The deal also installed a new leadership team, including a new board of directors and strengthened risk management and commercial teams.


Boursorama’s 10bn securitisation 

Arranger: Société Générale 

Boursorama is France’s biggest online bank and an 100%-owned subsidiary of Société Générale (SocGen) Group. A credit institution under French law, it has three main activities: online banking, online brokerage, and operating an economic and business information portal.

In November 2022, Boursorama placed its first securitisation transaction, backed by a portfolio of French home loan receivables. The initial €2.7bn issue is part of a €10bn asset-backed debt issuance programme with a four-year revolving period, during which the bank may issue further class A notes to acquire further receivables. 

The first issue was split between €2.6bn of class A notes subscribed by SocGen and €135m of class B notes subscribed by Boursorama to provide credit enhancement to the first tranche. The structure has fixed rates, thus eliminating interest rate risk — particularly important at a time of economic volatility and with central banks raising rates. Further issues will not have to undergo any additional rating process, due to the uniformity of the home loan receivables and the eligibility criteria.

The first issuance securitised more than 4200 home loans, 95% of which are for owner-occupied homes, and 81% issued to full-time private sector employees. The securitised portfolio is 100% secured by guarantees from Crédit Logement. 

The deal is the first French residential mortgage-backed security securitising loans that are not fully drawn down, allowing Boursorama to securitise receivables with multiple disbursements through the initial drawing period, and optimising the use of collateral.

This issuance programme is an integral part of Boursorama and SocGen Group’s liquidity programme. Eligibility criteria have been designed to include loan receivables which are not eligible to other SocGen Group refinancing structures (including non-fully drawn loans), thus optimising the use of collateral.

Sustainable finance

France’s first green OATbond 

Bookrunners: Barclays, BNP Paribas, Crédit Agricole CIB, Natixis,  Société Générale

Co-manager: Citi 

France is the largest sovereign issuer in the environmental, social and governance (ESG) market, with €49.1bn of green bonds issued by late 2022. As an ESG debt capital market leader, and one of the world’s largest issuers of inflation-linked bonds, France was a natural issuer for the world’s first-ever green inflation-linked bond. 

The €4bn 15-year issue was closed in May 2022, as an OAT€i — an Obligation assimilable du Trésor (OAT; a French treasury bond) linked to the eurozone inflation rate. 

Feedback from investors preferred OAT€i to an OATi — a bond linked to French inflation — and the eurozone link means that the issue can now be used as a model by other debt management offices active in the €i space, including Italy, Germany and Spain, with the French treasury agency as a pioneer.

The rationale for the float was clear: investors are seeking both hedges against inflation and opportunities to make their portfolios greener. The war in Ukraine and the desire to lower Europe’s energy dependence on Russia has meanwhile accelerated momentum behind the energy transition while stoking inflation. The green OAT framework is already well-established; it covers four environmental goals following EU categorisation: climate change mitigation and adaptation, pollution, and biodiversity. 

Books on the issue closed at €27bn, indicating strong investor appetite for the structure, and allowing the treasury to price it with a 0.1% annual coupon and a spread of +12 basis points (bps) over the conventional OAT€i 2036, thus offering a real yield of –0.415%. Initial guidance had set a spread of 15bps over the conventional equivalent. Nearly 230 investors participated in the issue, with an estimated 50% of allocation going to green investors.

In terms of investor type, banks accounted for 29%, asset managers 28% and pension funds 15%.


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