BOND ORIGINATION
The euroland playground is getting shaken up. A group of small but reputable European banks are getting together in an attempt to wrest back at least part of their former market share from the global banks who now dominate the market for bond underwriting.
The advent of the euro and the popularity of jumbo issues left these institutions unable to underwrite the major transactions and pushed them into the junior role of distributing to the European retail market. The loss of influence, not to mention compensation, rankles - particularly as they believe the local, second-tier investor base is an important part of the market.
So a group of 16 smaller continental banks has formed Euroclub to lead-manage bond issues in Euroland on their own.
The banks, which include Crédit Commercial de France, Banca Comerciale Italiana, Bank Austria Creditanstalt, Banque Générale du Luxembourg and GZB Bank, have created an informal syndicate which aims to underwrite corporate bonds of between e500 million ($555 million) and e1 billion. The idea was the brainchild of Norbert Friedrich, director responsible for capital markets, money markets and foreign exchange at GZB Bank in Germany.