Primary debt poll 2010: The time has come for debt capital markets bankers

The time has come for debt capital markets bankers Funding back in the balance 2010 primary debt poll results

Primary debt poll methodology

Deutsche Bank’s global head of debt capital markets, Miles Millard, succinctly weighs up the importance of his speciality. “The last couple of years has shown us just how increasingly important the debt capital market has become as a source of capital for all types of borrowers, in all regions of the world,” he says. “It is an absolute key pillar to our global markets franchise.” By contrast, just a few short years ago, in those sunny pre-crisis years, derivatives bankers were the stars of the show, rising through the management ranks the fastest, the geniuses of financial product innovation and the generators of turbo-charged returns.

Regulation is about to clip their wings. And, as the financial markets come to grips with the real level of global indebtedness, from a sovereign, bank, and corporate perspective, the public debt markets are becoming more and more the key transmission mechanism that can disperse and manage those liabilities. For DCM bankers, this is their time.

According to Richard Boath at Barclays Capital, who runs the European DCM business of the winner of Euromoney’s 2010 primary debt poll (results of which can be found here), the ideal DCM banker these days is very much an all-rounder. “He’s probably the banker with the most regular client dialogue, the key relationship, who has a strong understanding about capital structures, balance sheets, accounting, and is derivatives fluent. They also need to be the type of person that can talk to a BBB or BB-rated company, and take them through three or four different funding alternatives, that can get them the money at the right place on the balance sheet, and at the best cost.” Liquidity is something borrowers of any persuasion no longer take for granted. A DCM banker must unlock that liquidity, wherever that may be. The global debt markets have become much more fluid. Euromoney takes a quick look at those who will be the key players in this process.

Richard Boath, co-head of global finance, EMEA, Barclays Capital There is one key date that defines Barclays’ ascent to the top of the Euromoney primary debt poll for a second year as far as Richard Boath is concerned. That’s the acquisition of Lehman Brothers in 2008. It has transformed Barclays into a truly global debt capital markets player, making the world’s biggest capital market, the US, a genuine home market for it. “It has changed the conversation we have with our clients,” Boath says. For the past 10 years Boath has helped transform Barclays from a predominantly sterling debt capital markets business to a top-two Eurobond house. That was further strengthened when Barclays rolled out the Lehman DCM platform, Global Finance, which had been created by Larry Wieseneck, who is now Boath’s boss. That incorporates the whole suite of financing products, from equity and debt capital markets, to leveraged finance, risk solutions, loans, and derivatives all under the same roof. It’s a very powerful proposition, says Boath. As this year’s poll results show, Barclays scores highly across most categories. Perhaps most interestingly, it fails to feature in the top five positions by US borrowers, which are still dominated by US-based banks.

Spencer Lake, global head of debt capital markets and acquisition finance, HSBC By his own admission, Spencer Lake didn’t fully realize the potential of HSBC’s global footprint when he took up his role as global head of DCM in 2007, after 17 years at Merrill Lynch. Now, with DCM specialists in 33 countries worldwide, he certainly does. HSBC was this year’s biggest mover in the poll, improving its overall position by two places to second, while maintaining its top position in terms of coverage, and liability management, which Lake says has been a key focus for HSBC in recent years. But there is more to do he says, such as further building on its yen-denominated DCM business where it remains the only non-Japanese bank to appear in the top five positions in the poll.

Martin Egan, global head of primary markets and origination, BNP Paribas Under Martin Egan’s stewardship BNP Paribas has established itself as a top-tier DCM franchise in Europe, boosted in part by its stronger AA-rating, which has given it an edge in garnering market share. Last month Egan had his duties expanded to include global origination, encompassing responsibility for debt syndicate, securitization and capital markets origination activities. BNP’s continued presence is reflected in the poll.

It rose three places in the debt coverage category, while also scoring highly in the deal-related and non-deal-related investor relations categories. Egan says BNP’s approach is currency agnostic, where the focus is on what market makes sense to tap at any particular time, given the way the sovereign debt crisis is unfolding.

Miles Millard, global head of debt capital markets, Deutsche Bank There is one clear theme on Miles Millard’s mind when he talks to Euromoney: how the world’s banks will be able to efficiently fund themselves, against a backdrop of sovereign contagion and new tougher capital rules.

As a result, the 11-year Deutsche veteran is busy building out the bank’s financial services platform. There has been a recent hiring spree, including Vinod Vasan, as European head of FIG DCM; Andrew Reid, as head of corporate pension origination; Mauricio Noe, as head of covered and senior bond origination for financial institutions in Europe; and Clare Hennings, as head of DCM insurance structured solutions. There has also been a string of other regional hires. “We have continued to invest and increase our coverage so we can support that sort of growth” in financial institution issuance, says Millard.