Awards for Excellence 2020
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After years of pullback from emerging markets by big Western banks, only two players can now claim to offer truly comprehensive investment banking coverage in CEE.
Citi has the larger physical network and an increasingly successful M&A franchise, but the standout performer across the product spectrum in the awards period and CEE’s best investment bank is JPMorgan.
In a year that saw a pickup in capital markets deal flow in the region, particularly on the Eurobond side, JPMorgan easily outpaced its global and European rivals by both number and volume of transactions. According to Dealogic, the US bank led more than half of all international bond sales in CEE in the 12 months to March, notching a total allocated volume of $11.6 billion.
These covered the full spectrum of sovereign, corporate, financial, high-grade and high-yield issuers, as well as green bonds for Czech property firm CPI and Russian Railways – a first from the jurisdiction – and a clutch of subordinated notes for banks in Russia, Czech Republic and even Georgia.
Milena Grayde, head of investment banking for southeast Europe and Ukraine, notes that JPMorgan’s leading market position gives the bank an additional competitive edge.
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Milena Grayde |
“When we are doing 50% of transactions, we know exactly which investors are buying and which aren’t,” she adds. “That offers a unique advantage for our clients because we have our finger on the pulse of the market.”
Perhaps the most impressive aspect of JPMorgan’s DCM franchise, however, is its comprehensive regional reach. Despite a relatively limited physical footprint, the bank notched deals in every sub-region from the Baltics to the Caucasus in the awards period, including many in smaller markets largely overlooked by international banks.
Grayde says pan-regional coverage is essential for banks that want to be relevant to clients globally and in a European context.
“CEE is still one of the fastest-growing parts of Europe and an engine of growth for many Western European corporates,” she says. “It is also a land of entrepreneurship, where we see local entrepreneurs developing Western European and global ambitions.
“If you want to provide a truly holistic global service, you have to be present in these markets, but only a global bank like JPMorgan can justify offering services in every single market.”
This regional reach is also evident in ECM. Despite relatively light overall flows, JPMorgan again topped the league tables in the awards period with 12 deals worth $1.3 billion, well ahead of closest rival Goldman Sachs’s $1.1 billion.
Notable mandates included a chunky offering of global depositary receipts in London for Kazakhstan’s Halyk Bank, a rare $1.25 billion convertible bond for Russian tech firm Yandex and block trades for Romanian, Turkish and Hungarian clients.
Acquisitions
Another key factor in JPMorgan’s success in CEE is its continued willingness to put its balance sheet to work in the region, particularly in an acquisition context.
“We have one of the biggest balance sheets on Wall Street and our clients know that when they are about to do that big transformational M&A transaction, we will be there to help them and then take that out in the capital markets,” says Grayde.
She points to the acquisition of Bulgarian telco Vivacom by Balkan media conglomerate United Group, where JPMorgan acted as buy-side adviser, financed the acquisition and then helped refinance €1.8 billion of United Group’s existing debt.
The firm also provided advisory services and balance-sheet support for the acquisition by Azerbaijan’s Neqsol of Vodafone Ukraine from Mobile Telesystems of Russia, extending a $464 million loan to finance the purchase and then leading a $500 million issue for the Ukrainian entity to refinance the bridge loan.
Other standout buy-side advisory mandates during the awards period included the $2.3 billion acquisition of Central European Media Enterprises from AT&T by the Czech Republic’s PPF Group and Heimstaden of Sweden’s purchase of a €1.3 billion Czech residential property portfolio.
JPMorgan also advised Lenta on the Russian retailer’s acquisition by Severgroup and played a leading role in the transfer of UniCredit’s stake in Yapi Kredi to Koc Holding.
