Awards for Excellence 2005
BNP Paribas
The French bank has maintained an impressive breadth of business across the globe
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| Christophe Rousseau |
Few project finance banks have managed to maintain a consistent global presence in the past 12 months. US lenders remain, for the most part, uninterested in the product, and Japanese banks, although buoyed by active Japanese corporations and some sharp individuals, have been uninspired.
European lenders have been more impressive, particularly the Spanish banks, which have benefited from a strong domestic market, as well as the activities of Spanish sponsors overseas. In this respect, Cintra’s financing for the Chicago Skyway, a landmark purchase of a US infrastructure asset, is notable. The lead arrangers – Depfa Bank, Calyon, Santander and BBVA – will be looking to replicate the deal both in the US and for Cintra elsewhere.
But the Spanish banks, while probable future award-winners, are still too wedded to their core clients, and the most impressive lenders to public-private partnerships – Depfa and Dexia in particular – have little interest in energy assets. German banks, both public and private, have hunkered down, with Landesbank activity crimped by the imminent demise of state guarantees.
The most impressive players this year, and the only ones to maintain a meaningful global project finance presence, are the French institutions. Like their Spanish counterparts today, many of the French banks spread their operations west and east on the back of aggressive expansion at French corporates. The late 1990s witnessed the heyday of Vivendi, Suez, Electricité de France, Total and France Telecom, regular project finance users all.
But although these names have for the most part either pulled out, at times acrimoniously, or slowed their activity, French lenders have stayed behind, and in some cases flourished. SG is still working off some of its bad loans from the US power boom, although frenzied bidding for some of the projects that it took over means that it might get out of its exposure at above par.
The two best banks in project finance in the past year, however, have been Calyon and BNP Paribas, and this year BNP has a strong edge over its rival. Both have a strong franchise in the main project finance centres of New York, London and Hong Kong/Singapore, and both have been creative lenders and underwriters.
Calyon, led by Michel Anastassiades, has made several hires in its London-based project finance financial advisory team, including the remaining stars of Dresdner’s advisory group. It has also been an active underwriter of project finance bonds in the US, including several for power developer Tenasaka and an audacious $800 million refinancing of the Astoria power project.
But it is the breadth of BNP Paribas’ product mix, as much as its number one position in Dealogic Projectware’s 2004 league tables, that earns the firm house of the year. According to its global head of project finance, Christophe Rousseau: “We offer a broad and complete approach to our clients. We can provide them with advisory, lending and capital markets solutions.”
It has a rock-solid advisory franchise in Oman, and snagged mandated lead arranger titles for the Dolphin and Taweelah B financings in Abu Dhabi, and the record-breaking $8 billion Qatargas II deal. In Asia, it has been among the mandated lead arrangers for the refinancing of Loy Yang Power and Sydney Airport, and the financing of the Alinta Eagle acquisition. It has also in short order completed the first three wind farm financings in South Korea.
Renewable power, where project finance lenders are expending a great deal of energy, is a particular strength. BNP has closed the Walkaway wind financing in Australia, a loan for Canadian producer Boralex in France, and the IVPC4 portfolio in Italy. And it was a mandated lead arranger on the €225 million Astraeus deal – a portfolio of wind farms in the UK, Ireland and France. Such deals will convince the larger project finance houses that decent returns, and not simply green credentials, can be earned from renewable lending.
In the Americas, BNP is a top tier project bank, although it lacks the capital markets depth of the major investment banks. But in March it completed the $295 million Crockett Cogeneration bond issue for private-equity shop EIF Group – cited by Rousseau as a particular highlight – and has provided a revolving credit to back Goldman Sachs’s purchase of generator Cogentrix. It was also a lead arranger on the debt financing for the $3.4 billion Long Lake Oil Sands project in Canada.
BNP’s dominance of the Mexican transmission finance sector has not yet been surpassed, and it has so far maintained a lock on financings for ENAP, the Chilean state oil and gas company. In Brazil it has snagged a series of advisory mandates in the transmission sector.
One of the challenges for BNP Paribas in the coming year will be to transfer its capital markets capabilities in the field of project finance from mature markets such as the UK and US to continental European, Middle-Eastern and Latin American jurisdictions.
