The world’s best bank for corporates 2022: BNP Paribas
From energy transition to Libor transition, the French bank is the go-to firm for many corporate clients in a time of flux. This is the result of longstanding relationships and new investment in core sectors of the franchise.
At a time of complex economic and geopolitical change – and when US banks have been stronger than ever versus their European rivals – BNP Paribas is a rare example of a European corporate bank not just holding its own but growing both at home and abroad.
It stands out this year for its work on helping corporate clients adapt to change – whether it is the shift away from fossil fuels, more digitalization, interest-rate flux or the transition from Libor to risk-free rates.
The firm has long been a global leader in sustainable finance. The $5 billion equivalent sustainability-linked deal for Teva last November, in dollars and euros, illustrates the development of this market and BNPP’s place in it. BNPP was sustainability structurer and active bookrunner on the transaction.
Its sustainability work is not just about bonds, however. In advisory, it was exclusive financial adviser to electric vehicle-charging network Ionity on a €700 million equity fundraising from BlackRock. In trade finance, it provided the Spanish arm of Engie with a €20 million guaranteed facility for green energy projects. And it was also instrumental in a €204 million facility for the full conversation from coal to biomass of the Albioma Bois-Rouge power plants on Réunion.
But it is not all about sustainability. BNPP's transaction banking business is at the leading edge of digital innovation, not just in terms of internal processes and partnerships with fintechs but also in helping clients transform their own businesses. In France, for example, it provided an instant account-to-account payment solution for higher-spending customers of Kingfisher Group’s Castorama and Brico Dépôt based on its Instanea initiative.
Corporates continue their adjustment to life after Libor and BNPP has worked with clients on moving towards new replacement benchmarks. One important deal this year was a landmark corporate interest-rate swap for BMW Group. The bank syndicated $1.25 billion of swaps referencing the US secured overnight financing rate, hedging bonds issued by BMW US Capital.
Debt capital markets is an area where BNPP has long enjoyed dominance in Europe. With rates rising towards the end of the awards period, the bank brought a slew of long-dated issuance to the market, including a €1.8 billion deal via 30- and 40-year notes for Lilly; a €500 million 20-year deal for Vonovia, rated A3 by Moody's and BBB+ by S&P; and a £300 million 30-year deal for Clarion Housing Group.
BNPP’s dominance in DCM this year was also evident in unsecured issuance in the real estate sector and the hybrid capital market. It was active bookrunner on a series of hybrid transactions for Heimstaden and on Castellum’s return to the public market with a €1 billion deal in August. It was also joint structuring adviser and joint global coordinator on a €2 billion deal in May as part of Enel’s €5 billion hybrid funding plan.
In loans, BNPP was bookrunner on marquee deals such as the $6 billion refinancing for VAR Energi and the $8 billion liquidity line for TotalEnergies. It was also central to event-driven financing, including the €18 billion spin-off financing for Daimler Truck and a €4.7 billion spin-off financing for Solvay.
Beyond these sectors, the bank’s corporate franchise has made the greatest progress this year in equities, notably with the completion of its acquisition of Exane in July 2021. It also completed the integration of its 2019 acquisition of Deutsche Bank’s largely US-based electronic equities and prime brokerage businesses.
Between the beginning of April 2021 and end of March 2022, BNPP carried out a total of 77 transactions in the equity capital markets, raising €52 billion, which included 27 IPOs, 30 accelerated bookbuilds and 11 rights issues.
The firm continues to benefit from having stepped up for corporate clients when Covid first hit – epitomized by its position as sole bookrunner in the $10 billion syndicated facility for BP when the oil price slumped in the early days of the pandemic.
Corporate clients have very long memories and they remember the difference we made for them in early 2020
“Corporate clients have very long memories and they remember the difference we made for them in early 2020,” says Renaud-Franck Falce, head of Europe, Middle East and Africa capital markets at BNPP.
This may pay off in M&A advisory in the future, where the bank has registered double-digit growth in revenues since 2019. It acted as financial adviser and listing agent on Daimler’s €29 billion spin-off of Daimler Truck and Vivendi’s €27 billion spin-off of Universal Music Group. It advised Veolia on its €20 billion acquisition of Suez and MásMovil Ibercom on its €20 billion joint venture with Orange.
Its work for Clayton, Dubilier & Rice on its £10 billion acquisition of WM Morrison Supermarkets combined advisory, leveraged finance and real estate brokerage.
It would be wrong to assume the group’s sale of Bank of the West in late 2021 means a geographic retrenchment in corporate banking, according to Falce. BNPP still counts some 4,000 employees in New York across banking, global markets and securities services.
“We continue to strengthen our corporate and institutional banking activities in the Americas,” says Falce. “It’s a key pillar for BNPP. The direction of travel is to expand and build that platform further."