Awards for Excellence 2018
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A stellar capital markets franchise, deepening advisory capability and extensive on-the-ground presence proved a winning combination for Citi in CEE investment banking.
In debt capital markets, a revival of activity across the region played to Citi’s strengths. As Eurobond issuance surged by a third to $91.1 billion, the highest level since 2013/14, the US firm regained the top spot among international banks in Dealogic’s rankings thanks to its impressive breadth of coverage.
In addition to maintaining a stranglehold on the Turkish Eurobond market and securing a sizeable chunk of strong flows from Russia, Citi won mandates on sovereign deals from every corner of the region – including Belarus’s dollar market return and Tajikistan’s debut international issue – as well as a clutch of corporate and financial institution transactions.
In the primary equity markets, a plethora of accelerated bookbuilds for Russian clients helped Goldman Sachs nudge Citi down to second place in the overall rankings. Citi’s record in IPOs, however, was unmatched.
Of the 14 deals the firm acted on in the awards period, eight were new listings spanning four jurisdictions. These included Romanian telco Digi’s $208 million IPO, the largest ever of a private company on the Bucharest Stock Exchange and a rare Hungarian listing by trucking company Waberer’s, as well as three landmark deals from Turkey.
The $206 million IPO of Global Ports in May 2017, the first ever direct listing of a Turkish company in London, was followed six weeks later by the $193 million debut of Turkish Domino’s Pizza franchisee DP Eurasia on the London Stock Exchange.
Then in February, Citi, as sole senior global coordinator, managed to engineer a successful $352 million Istanbul IPO for Turkish utility Enerjisa Enerji despite a backdrop of currency depreciation and rising concerns about emerging market assets.
The headline IPO from Russia was December’s ill-fated $1.5 billion London listing of Oleg Deripaska’s En+, on which Citi was joint global coordinator. The bank also acted on the Moscow debuts of shoe retailer Obuv Rossii and GlobalTruck, which were sized at $103 million and $60.1 million respectively.
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| Irackly Mtibelishvily |
Irackly Mtibelishvily, chairman of Ceemea corporate and investment banking at Citi, says the firm’s readiness to act on relatively small transactions marked a recognition of the shifting market dynamics in Russia and the wider region.
“We wanted to establish our credentials in smaller deals because we see a lot of pipeline coming out of this sub-segment, where companies are not big enough to access meaningful debt markets but are growing fast and are profitable enough to be interesting for equity buyers,” he says. “Our participation in the Obuv Rossii and GlobalTruck deals has generated a meaningful amount of new business.”
This willingness to look further down the size spectrum than bulge-bracket rivals is also increasingly a feature of Citi’s advisory franchise in CEE and looks farsighted in view of the recent dramatic decline in big-ticket deals from the region. Theo Giatrakos, head of investment banking for central and southeastern Europe, cites as an example the €185 million sale of Bulgaria’s Nova TV to Czech investment firm PPF in February, on which Citi acted as sole sell-side adviser to Sweden’s Modern Times Group.
“It’s incredibly relevant to be able to do these deals because they are what will be driving activity in the region for years to come,” he says.
He notes that Citi’s ability to look beyond the headline transactions is due to its combination of a strong regional investment banking team of 24 bankers in London and an on-the-ground presence in 10 markets, including the four Visegrad countries, Romania, Bulgaria, Kazakhstan and Ukraine.
Citi’s investment bankers in Russia and Turkey are also backed by commercial banking operations, allowing the firm to deploy local capital for acquisition finance as well as its offshore balance sheet.
This broad coverage also enabled Citi to land mandates on a clutch of higher-profile deals during the awards period. These included advising Bank of Georgia on the $1.5 billion demerger of its investment business from the core bank, helping Telia complete a $1.4 billion exit from Megafon and acting as sole financial adviser to Sberbank on the creation of a joint e-commerce venture with Yandex.
