Best bank – Banco Popular
Best debt house – Barclays Capital
Best equity house – Morgan Stanley
Best M&A house – Morgan Stanley
Best local partner – Invercaixa
Banco Popular is again best bank in Spain as the largest players – BBVA and SCH – continue with their restructuring plans in the wake of management changes last year. Popular continues to be the first choice with small and mid-cap companies and is building on the market share it acquired last year. In retail banking its strategy is based on cross-selling and it prides itself on providing an advisory service to customers, using a sophisticated relationship management system, rather than blindly selling products to them. Its cross-selling effort has been particularly effective in small and medium-size enterprises, which constitute a profitable sector of corporate Spain for Popular. It has arranged financing this year for among others property developer Bami, which raised e550 million, and SOS Cuetara, which borrowed e196 million.
Spain is an important market for Barclays. Look no further than its planned acquisition of Banco Zaragozano for the proof. But Barclays Capital has also been providing debt finance to Spanish institutions since opening offices there in 2000. Over the past year, its commitment has paid dividends, winning Barclays mandates from a number of major Spanish corporates. In February it raised e2 billion for Telefónica, including a e500 million 30-year tranche. It also led a 10-year bond deal for Iberdrola and is a dealer on its inaugural EuroCP programme. Barclays has been particularly active in cedulas hipotecarias, the fastest-growing covered bond market in Europe. Deals include a e3 billion transaction for BBVA and e2.5 billion for La Caixa. The bank has been instrumental in persuading issuers to run roadshows and go through the book-building process in order to get the lowest borrowing costs. Barclays is a big lender in Spain and key loan transactions include several for utility companies, including e1.75 billion for Union Fenosa and e2 billion for Hidroelectrica del Cantábrico, the largest syndicated loan for a Spanish borrower in 2002.
Best equity house in Spain was a close call this year between Goldman Sachs and Morgan Stanley. In the end, we chose the latter based on its superior commitment to the Spanish market in terms of trading volumes – according to Autex figures Morgan Stanley ranks among the top three banks – and its distribution capabilities. Thanks to its strong retail network in Spain, the US bank has the ability to outperform even domestic competition. This was an important factor in the success of the e259 million follow-on issue for retailer Inditex in July, for example. The stock was placed at a 2.8% discount to the previous day’s close and closed up 1.5% on the first day of trading, despite the Ibex falling another 2%. In March, Repsol, another repeat customer, used Morgan Stanley to place a block of shares worth e506 million.
Morgan Stanley also wins best M&A house in Spain. One of its major achievements was the successful defence of utility Iberdrola from a hostile and unexpected bid by Gas Natural. Morgan Stanley also worked with Iberdrola earlier in the year in its acquisition of wind farms for e1 billion from Gamesa and the demerger of Energias Hidroelectricas de Navarra. Despite the fact that Gas Natural, advised by Goldman Sachs, made an arguably ill-prepared bid, there were complex political issues involved and Iberdrola’s advisers worked non-stop for two months to ensure that the offer did not succeed. Morgan Stanley is working on the merger between Sogecable and Via Digital and ACESA’s merger with Aurea to create a e2.5 billion concessions company.
Best local partner in Spain is Invercaixa. Given its size, it has been involved in surprisingly large deals in the past, including the IPOs of Telefónica Móviles and Terra Lycos. Over the past year it has served as adviser to major Spanish companies such as Gas Natural and Enagas and worked with motorway operator Acesa on its acquisition of the remaining shares of car park operator Saba Aparcamientos.
