Serving Petronas: How does a bank win a Petronas mandate?
There are few more highly prized clients than the Petronas group. Deutsche Bank and Morgan Stanley – both fresh from their roles on the record-breaking Agricultural Bank of China IPO, and galvanized by their appointment on the revived AIA flotation – have continued a stellar year by being mandated as joint global coordinators alongside CIMB on the Petronas Petrochemical flotation. On MMHE, the joint leads will be JPMorgan, Credit Suisse and Maybank.
How does a bank win a Petronas mandate? Neither Morgan nor Deutsche were obvious ECM choices in Malaysia, neither having handled a decent equity deal there since a rights issue by Axiata in April 2009. Neither made it on to the Maxis IPO, a deal that included some 14 banks.
Instead, it seems to be more about loyalty for other work. Morgan Stanley was a lead manager on the vast Petronas bond and sukuk issue that raised a combined $4.5 billion in August 2009, while Deutsche has an M&A relationship with the group.
Some banks grumble that Petronas does not always put out a request for proposal (RFP), although others consider this suggestion sour grapes. Nevertheless, it is rumoured that more banks might be added to the Petrochemical float; and with CIMB and Maybank already represented between the two listings, it would be something of a surprise if RHB did not get a role.