Best global infrastructure house:
Crédit Agricole CIB
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Also shortlisted: |
Today, more than ever, excellence in infrastructure means being able to demonstrate capabilities across bonds and advisory, in addition to lending. It is a mix that HSBC and Société Générale have previously demonstrated effectively – they have both won this award in recent years and were shortlisted again this year. However, the increasing strength and diversity across products at Crédit Agricole CIB was even more impressive this year.
Lending remains at the core of Crédit Agricole’s infrastructure franchise. This year it arranged and hedged loans such as a £2.2 billion financing for a new train fleet in the UK, and the €92 million financing for the Canal de Navarra water project. The latter was the first Spanish public-private partnership since the eurozone crisis.
But the bank’s increasing prowess outside lending was evident in the first German project bond with credit enhancement from the European Investment Bank, a €750 million privately placed deal with tenors of up to 29 years for the A7 highway.
Its advisory mandates also encompassed a UK energy-for-waste public-private partnership built by Mercia Waste Management, and a €950 million bond and loan refinancing for Redexis, the Spanish gas distribution company.
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Developing distribution relationships with investors has helped us keep the long end of our balance sheet open
Jamie Mabilat, |
To get another taste of its strength in bonds, think of the refinancing for the Netherlands’ energy-from-waste company AVR, acquired in 2013 by Hong Kong Cheung Kong conglomerate, which included a €300 million private placement of secured notes. It also placed an inaugural bond for Infra Foch, owner of car parks operator Vinci Park, in €500 million six-year and €750 million 10-year tranches.
The team is quick to recognise that increasing success in bonds and advisory reflects wider group changes after 2012. Jamie Mabilat, global head of infrastructure, says infrastructure has been at the forefront of a new originate-to-distribute strategy. He points to substantial investment in the DCM team, establishing a dedicated private-placement team and building up the ratings advisory franchise. He says last year saw the fruit of all this.
“Developing distribution relationships with investors has helped us keep the long end of our balance sheet open,” he says.
Contrary to some perceptions, the business is by no means retreating to Europe. It was at the forefront of key deals in the US, Australia (generally seen as the most important infrastructure market for international banks in Asia Pacific) and it is also building up in Latin America, where Mabilat says the bank has hired more bankers, and is launching a new advisory team.
The bank arranged a $280 million 13-year financing for the expansion of the Matarani port in southern Peru, supported by agreements with large mining exporters. In Brazil, it has advised and helped arrange local-currency funding for the Belo Horizonte ring road and a new metro line in São Paulo, alongside work in Chile, Mexico and Colombia, where it now has an on-the-ground infrastructure presence to serve Colombian PPPs.
In Australia, it led a €600 million senior-secured bond for Transurban, in addition to loan and hedging deals for the toll-road operator. It also raised funding for Sydney Airport, including a €600 million 10-year bond. And in the US, it was mandated lead arranger and hedge provider on a $2.3 billion financing to rebuild and extend a section of the Interstate 4 highway.
Impact
Matthew Norman, who heads the EMEA infrastructure team, says a decision to cut businesses such as equity derivatives and commodities trading from 2012, only reinforced Crédit Agricole’s commitment to infrastructure. He agrees that the last year has witnessed the impact of those changes.
“The bank made difficult decisions to cut certain areas,” he says. “It focused its resources around fewer clients from a global perspective, but more clients from a sector perspective. In the past two years we’ve had even more financial resources to focus on a larger number of [infrastructure] clients. The bank has really got behind us.”
Yet Norman says the bank’s increasing success in infrastructure bonds and advisory is also due to the wider focus over the last three years on building distribution capabilities – as well as a shift in January 2014 to a coverage model more organised around sectors than geography, including increased coverage of funds such as Goldman Sachs Infrastructure Partners, or the Canadian public pension funds.
“There’s been a change in mindset,” says Norman. “Before the bank was very much driven by financing. Now there’s a broader spectrum.”
