Awards for Excellence 2014: Best global infrastructure house

Best global infrastructure house:

HSBC

Being all things to all institutions all over the world is not something that large global banks have been trumpeting in recent years, but when that is exactly what a bank is capable of it, is worth shouting about.

In global infrastructure and project finance, HSBC has good reason to shout. It is active in all the main markets and can connect them in a way most banks simply cannot, while its expertise and heft in financial advisory, structuring, lending, debt capital markets and hedging, comprehensively equips it with more capabilities than most.

But it is not just global breadth of coverage and skillset that counts. It is being able to bring that all together and consistently deliver solutions that tackle some of the most complex challenges for clients across industries and borders that really matters, and there HSBC’s global team excels.

In the past year, the bank has successfully executed more than 54 project finance advisory and arranging mandates worth over $50 billion across 22 countries, and broken new ground for its clients along the way.

Indeed, across regions, industries and infrastructure and project finance products, HSBC has not just innovated, it has led.

We’ve really tried hard to bring about a seamless  and holistic approach to tackling clients’ needs, across borders and products David Gardner

In July last year, for example, the bank was financial adviser, global coordinator and joint bookrunner on $1.7 billion of project bonds for the oil and gas subsidiary of Brazilian construction, energy and infrastructure conglomerate, Odebrecht.

The bond sale not only marked the largest issue of project bonds globally but it also had an innovative structure, including a retention mechanism to start trapping cash 46 months before the final maturity of the bonds to secure the payment of the last instalment.

HSBC was joint bookrunner and joint lead manager on Ruwais Power Co’s $825 million 2036 bonds, refinancing the Shuweihat 2 independent water and power project in Abu Dhabi.

This was the first time that a privately owned power and water project in the Middle East and North Africa region was refinanced via the bond markets, creating a blueprint for others.

HSBC acted as mandated lead arranger, hedge provider, and joint placement agent on AquaSure’s A$3.7 billion refinancing of its desalination plant in Victoria, Australia – the first refinancing of its kind for a large desalination plant in the southern hemisphere – and was at the heart of structuring and executing two of the largest and most complex projects this year: the InterCity Express Trains Phase 2 project in the UK and the Sohar Refinery project in Oman.

For David Gardner, managing director and global head of project and export finance at HSBC, the bank’s capabilities and successes in the past year, and beyond, reflect how the global team is set up.

“We took a view as a firm about four years ago that we wanted to overlay infrastructure with all the different components that are infrastructure – project finance, export finance, leverage acquisition, debt capital markets – and we’ve really tried hard to bring about a seamless and holistic approach to tackling clients’ needs, across borders and products.”

He adds that for clients all over the world: “We’re entrusted to do a lot.”

Prime example

HSBC’s deep relationship with Brazil’s Odebrecht is a prime example of this trust, and its unflinching commitment to support clients through their own evolution.

“It’s [Odebrecht] getting bigger and more complex by the day,” says Gardner, who adds that the project bond last July was transformational. “We saw a unique opportunity for them to take advantage of the liquidity in the market to take out the bank lines, recycle them, and through this generate ample capital to support their next phase of growth. It worked out just beautifully. That is a success story and not just the transaction itself but in really helping the company and taking it to the next level.”

Odebrecht has repeatedly mandated HSBC in advisory and financing its projects over the years, as have the Abu Dhabi Water & Electricity Authority and other high profile private and public institutions globally.

It has also worked with some of the largest institutional investors, such as Allianz Global Investors, which invested €127 million in the long-term debt financing backing the “Music City” being built on Seguin island in Boulogne-Billancourt, Paris. HSBC was one of the core financing banks.

And if European institutional investors and sponsors cannot find anything compelling in Europe, HSBC can provide valuable support with that too.

“Our European clients are increasingly seeking growth in emerging markets and international markets,” says Virginie Grand, head of project finance, Europe, HSBC. “That trend is now very clear and with our integrated structure we can and are working on an increasing number of transaction for European clients – in Spain, France and Germany – who are bidding for public-private partnerships and project finance in Latin America, in North America, Australia, New Zealand and Asia-Pacific.”