Bank of America/Merrill Lynch tops Dealogics league table for Asia-Pacific G3 currency debt with accreditation on five deals for a total value of $2.278 billion. The bank is lucky in two respects: first that the Dealogic ranking includes Australia, where three of the US firms deals originated and, second, that the system of awarding equal apportionment to all bookrunners on a given deal favours firms that worked on deals with fewer bookrunners. With issuers in the first few months of this year not keen on gambling on a single house, key deals are being widely mandated, with two $2 billion Korean bank deals having five bookrunners (see story on page 48). Bank of America/Merrill Lynch worked alongside JPMorgan and Barclays Capital on a deal of $2.5 billion for Macquarie Bank, meaning that just the three of them shared league table credit for the years largest Asia-Pacific deal so far.
Quibbling over league table credit aside, the news will be heartening for management at the US bank, and the league table as a whole makes interesting reading for those considering what changes there will be in the pecking order of Asia-Pacific debt banks in the light of changes in the investment banking industry as a whole over the past few months. Deutsche Bank and HSBC, two of the regions traditional debt powerhouses and less affected than others by the crisis, are still performing well and were the only two banks mandated on all three of the key deals outside Australia: the bonds for the Republic of the Philippines and for the two Korean financial institutions, KDB and Kexim.
"The key at the moment is your recent track record," says an official from one of the banks in the top five of Dealogics league table, "because clients want to know what youve done during the crisis, not what happened before Lehman went down."
That banker and others asked agree that this might lead to the regions top debt houses, universally agreed to be Deutsche Bank, Citi, HSBC and Merrill Lynch (with the fifth slot much-debated), pulling away from the competition as a cycle of positive reinforcement takes place, with issuers turning to.
"The key at the moment is your recent track record,
A comparison of this years league table for January with last years shows another striking change: in January 2009, $14.3 billion of credit was apportioned from just 12 deals by the 20th of the month; in 2008, by comparison the entire month accounted for $8.9 billion from a total of 59 deals. The difficult market environment this year means that only sovereign entities and top-rated corporates can come to market, resulting in fewer but much bigger deals than has been usual in recent years. That will also make the competitive landscape tougher: there are fewer deals available with which to establish a recent track record, and missing out on a given deal will hurt more when most of them are hitting the $2 billion mark and paying out higher fees. Of course, these league tables show only G3 currency bonds for which read US dollars, given the current reluctance to issue in euro or yen and, given the high volume of local-currency deals expected this year, there will be room for banks versed in Asias local markets to make some headway in them.
One notable absence from this years January G3 Asia-Pacific league table is Nomura, which managed third place in January 2008 but now with the digestion of Lehman Brothers Asia-Pacific investment banking business under way finds itself unable to crack the top 10. It is early days yet, of course, and Lehman was never a top bookrunner of international bond deals in Asia. However, management in Tokyo might well be concerned that the money it has spent on retaining staff from the US bank has not yielded a mandate on one of the big deals launched during a bumper January for debt in the region.