One of the most remarkable results of the credit crunch has been the removal of the formerly ubiquitous league table trade.


Alex Chambers
Published on:

It is now very difficult to purchase market share via this method. How important is a firm’s market share to winning business now compared to a year ago?

Jim Esposito, head of syndicate and debt financing at Goldman Sachs
Market share remains a consideration, but sound advice and execution are currently the most important variables in the decision tree.

Jean-François Mazaud, deputy head of capital raising and financing at SG
This remains important for two main reasons: issuers want to mitigate their execution risk as much as possible and naturally prefer to work with banks that are in the flows. Liquidity being scarce, having access to a large investor base enables banks to detect pockets of demand and build reverse inquiries on a systematic basis for the benefit of issuers who can build their refinancing policy on a more opportunistic basis. This implies, of course, consistency in the resources allotted to the business, be it origination, syndication, sales, trading or credit research.

Siddharth Prasad, head of EMEA FIG capital markets and financing at Merrill Lynch
Market share has always been high on Merrill Lynch’s agenda; this has not changed. The firm intends to remain a leading participant in debt capital markets. Merrill Lynch’s footprint as a truly global leader across markets/products and our ability to provide advice/superior distribution capabilities means in times of dislocation we are naturally winning market share.

Chris Tuffey, head of EEMEA debt capital markets at Credit Suisse 
It is not about market share, it is about market intelligence. You can only really get that from executing deals. Buying deals doesn’t get you the intelligence; knowing what investors want and being in the flow of that is what wins you more business. Market share is not the highest topic of conversation with borrowers recently, investor feedback is.

Eamonn Price, former head of FIG capital markets at Lehman Brothers
For unsophisticated issuers in a strained market – some revert to the league table approach. But I think they pretty quickly realize that is not appropriate.

For the issuer to get best access to the capital market they have to choose the right individuals. You really need experienced DCM professionals to guide you through these markets. Some issuers do make that mistake. Issuers are meant to work with people they know well, now so more than ever.

Miles Millard, European head of debt capital markets, Deutsche Bank
Well-executed transactions in the difficult, volatile market of today require, more then ever, real-time market data from both investors and issuers. Deutsche Bank’s high market share underscores that it is constantly on the pulse of the market.

Martin Egan, head of primary and global head of debt capital markets at BNP Paribas
Market share has been a subject of much discussion in the past and is still highly relevant. With such market volatility, intelligence gained from each deal executed is more powerful than ever. Overall volumes count but the nuances of each individual deal – including marketing strategy, how to define price guidance, who are the key investors – have most relevance. If you are printing deals, you have knowledge; if you are not printing deals, then you are completely out of the loop.

Roberto Isolani, joint head of global capital markets at UBS
Market share in league tables is now less relevant, but track record of executing similar deals is key. Only those that have printed real deals are credible. Unless a syndicate desk is seeing real order books, it is impossible to know where the market is – secondary markets are still broken. This means clients have seen a large dispersion of spread indications from investment banks. Real colour from real deals is a critical factor to winning the business, as secondary market information (spreads and flows) are so volatile and vary so much from bank to bank that they are much less relevant.

Issuers now need to be convinced of banks’ ability to place paper and support the deal in the after-market. (With the losses that banks have suffered, issuers are wary of banks that are weakened).

We are having an incredible 2008, up more than 50% in fee terms versus last year in DCM, itself a record year. A sign that we are gaining from market turmoil is due clearly to our dominance in the FIG sector but also due to our first-class execution and secondary market capabilities.

Stephen Jones, head of European financing solutions group at Barclays Capital
Market share is increasingly important. Clients want to deal with firms that they know are in the flow.

The concentration of business among a few banks is becoming more pronounced. The importance of execution means that banks that can demonstrate ongoing market share are more likely to be trusted to guide clients through potentially difficult markets.

That said, market share is not being gained by sacrificing profitability. The league table trades have by and large diminished, with issuers prepared to pay underwriting fees in return for advice and execution certainty.