Deals of the year 1999: Trend-setting and ground-breaking
In 1999, the European single currency brought with it a flourishing new market in corporate bonds for a range of different quality issuers. The dollar bond market also thrived on a diet of jumbo global offerings. Syndicated loans integrated ever more closely with the capital markets to deliver huge amounts to acquisitive companies. Equity markets saw the first ever pan-European retail deal and the US markets were innovative as ever. Brian Caplen, Antony Currie, Peter Lee, David Shirreff and Marcus Walker profile the deals of 1999.
Car giant carves its yield curve
Deals: $2 billion 10-year Eurobond, $1.5 billion five-year Eurobond, $1 billion FRN
Date: August 161999
Bookrunners: Credit Suisse First Boston, Salomon Smith Barney
With its $4.5 billion three-tranche financing in August, DaimlerChrysler firmly put itself on the map as a newly merged entity. This was the second-biggest industrial company debt offering of all time.
And it was done at an awkward moment, bang in the middle of the holiday season when Argentina was looking decidedly shaky too. "DaimlerChrysler wanted to do it before the US Federal Reserve's open market committee [FOMC] meeting," says Andrew Brownfield, managing director at Credit Suisse First Boston, which was joint bookrunner with Salomon Smith Barney.
It was an "unprecedented marketing effort on the ground for that time of year", Brownfield adds.
DaimlerChrysler's aim was to set a benchmark yield curve at three different maturities: six months, with a $1 billion floating-rate note, priced over three-month Libor; and five and 10 years with fixed-rate tranches of $1.5 billion and $2 billion respectively. With three points on the yield curve established, and one hopes a liquid secondary market, DaimlerChrysler should be able to launch new financing deals in future at the most advantageous point of the curve.