Awards for Excellence 2005
CSFB
The investment bank has been extremely successful in the breadth and depth of deals it brings to the market
 |
| Paul Tregidgo |
Emerging markets have moved from the periphery to centre stage. The hunt for yield among investors has boosted the asset class’s attraction, with an increasing number of crossover funds now in place.
Credit Suisse First Boston has a range and depth of emerging-market business that is second to none. A top-five player for business conducted during 2005, it lays claim to a range of trades unmatched by others, and is particularly active in local as well as international markets.
“The past 12 months have been a banner year for us,” says Paul Tregidgo, global head of capital markets at CSFB. “Our franchise is built on a bedrock of sharp executions for the landmark issues from the issuers, be it in Latin America with the UMS, be it in Russia with companies like Gazprom, be it in Korea with Kexim. We pride ourselves on doing the big benchmark transactions where we have to be razor sharp.”
Tregidgo portrays CSFB’s emerging-market business as one of very strong plain vanilla execution. It builds on that with specific financing needs driven by the characteristics of the issuer or investor base.
The sovereign sector has traditionally driven flows in emerging markets, but at last corporates and financials are adding to volumes.
The breadth of CSFB’s business is also impressive. “We are not a euro-only house, and not a dollar-only house. We have a strong franchise in Latin America and Europe and an incredibly strong franchise in Asia,” says Chris Tuffey, head of emerging-market debt syndicate for CSFB in Europe. “We’re doing sovereign business and we are doing financials, such as bank subordinated deals, as well as corporates.”
Latin American debt capital markets is perhaps CSFB’s strongest region, where it vies for leadership with Citigroup on the back of $4.85 billion of underwriting through 13 transactions. Michael Shoen, head of origination for Latin America, points to the number of first-of-type transactions the bank has conducted. “For Televisa we brought the first deal in the local Mexican market. We combined that with a tender offer for some dollar bonds and also brought a new dollar issue,” he says.
This first-ever comprehensive cross-border liability management deal from a Mexican issuer was followed by Telmex, the first deal to price inside the sovereign yield curve from a corporate without a structural enhancement. A sole lead $1 billion 30-year for América Móvil followed, which came a whopping 12 basis points inside the sovereign.
Shoen also points to the development of the domestic and international asset-backed markets in Latin America. It has a 34% market share of the Latin American corporate league table.
Its franchise is not confined to Latin American corporates, however. CSFB was involved in every (non-sukuk) new sovereign issue from non-Japan Asia in the 12 months from May 2004. This included the first ever subordinated debt transaction from a Korean policy bank, Industrial Bank of Korea.
CSFB has stepped in to help clients in sticky markets, underwriting a loan for KPC from Indonesia, when a bond issue for $300 million was infeasible because of unfavourable market conditions. This was sold to hedge funds and upsized to $365 million – essentially a bond in loan format.
“It shows we are willing to commit capital, take risk and are also willing to come up with groundbreaking solutions,” says Pratt.
From the EMEA region, CSFB has again delivered a spread of business, both from issuer type and geography, including a number of sovereigns deals and innovation in the corporate sector.
“Magyar Telecom was the first high-yield deal to come out of the new central European EU members, just ahead of the accession of the 10 countries. This was sold solely as a high-yield instrument, it wasn’t sold to the emerging-market investor base. The key was shipping the knowledge and know-how from the high-yield market, and we are able to spot trends in the market, investor interest and structure and get trades done that facilitate that,” says Tuffey.
Rosbank became the first ever bank from Russia to issue a future-flow hard-currency deal backed by credit card voucher receivables.
The future-flow credit card business has long been the mainstay of the Latin American asset-backed securities market, but CSFB has been instrumental in creating local market securitization backed by real estate. Su Casita/GMAC mortgage-backed securities is part of the first traditional MBS securitization programme in Mexico.
