By Michael Shari
Despite the fact that Citigroup’s overall market share was flat last year, it was the lead bookrunner of the largest equity capital market deal in the consumer sector by far. Citi raised $2 billion for Chow Tai Fook Jewellery in an initial public offering in Hong Kong on December 9 despite the fact that Europe’s debt crisis had virtually closed down the island’s IPO market in the second half of the year.
Keefe, Bruyette & Woods
In an extraordinary year, Keefe, Bruyette & Woods maintained its market share as the most widely recognized specialist in underwriting equity and debt issues by banks. It ran IPOs for two banks last year, raising $857.3 million as a co-bookrunner for Banca Civica of Spain in July despite investors’ rampant fears of Spanish banks, and raising $900.5 million as co-manager of US group BankUnited’s IPO.
Last year Piper Jaffray underwrote or advised no less than 35 public equity, debt and M&A deals for its clients in the healthcare industry, which has been the Minneapolis, Minnesota–based bank’s biggest business for the past two decades. In November alone the bank raised $52.3 million in a follow-on equity offering for Pacira Pharmaceuticals and another $32.2 million in an IPO for Lifetech Scientific. Piper has benefited from client loyalty, driven partly by the fact that many of its investment bankers have been with the firm for over a decade, says Bob DeSutter, Piper’s global head of healthcare.
Scotiabank sees opportunity in crises. This Canadian bank is becoming increasingly aggressive as a mandated lead arranger for infrastructure projects at a time when many project banks are shrinking their business. Scotia raised $31.8 billion in high-yield bonds last year, claiming a 14.3% global market share. In one of its more complicated deals, Scotia served as adviser to an equity consortium on Halton Healthcare of Canada, as well as underwriter of an investment-grade $543 million bond and lender of a $474 million loan for the project. ”We were more active last year, and we anticipate being more active this year than we have been in previous years,” says Bert Clark, head of US and Canada global infrastructure finance at Scotia.
Midsize bank Jefferies Group has long been strong in industrials, technology and healthcare. On February 22 this year, Jefferies acted as a joint bookrunner in a follow-on offering in the US and Canada that raised $238 million for Westport Innovations, which makes patented natural gas engines. The New York bank is also moving fast to seize opportunities in debt-ravaged Europe, where it announced on February 1 this year that it had agreed to acquire British corporate broker Hoare Govett from The Royal Bank of Scotland Group.
J.P. Morgan continues to dominate media and entertainment by leveraging one of the strongest balance sheets of any global bank across the numerous industries where it raises capital for clients. Shortly before the stock market plummeted in the second half of last year, the bank served as one of two bookrunners for the $241 million IPO of Pandora Media, the popular Internet-based music service, in June.
METALS & MINING
BMO Capital Markets
Montreal’s BMO Capital Markets has long been regarded as the bank of choice for mining companies looking to raise money. But in a year when soaring commodities prices kept mining companies away from the capital markets, BMO still managed to persuade firms to issue debt and equity. In a complicated deal struck in November, Franco Nevada, a so-called royalty-streaming company that invests in gold and platinum mines in return for royalties, agreed to sell a syndicate of underwriters led by BMO 8 million common shares for C$340 million.
OIL & GAS
Goldman Sachs has long outpaced its rivals in raising capital for its clients in the global oil and gas business. On March 1 last year, Goldman was the lead bookrunner in a follow-on equity deal that raised $1.43 billion for EOG Resources. On June 15, Goldman was the sole adviser to Petrohawk Energy on its sale to BHP Billiton for $12.1 billion. The bank reported in December that it was backing the oil & gas sector for growth in 2012.
Morgan Stanley has long worn the crown as leader of the global power generation sector. On January 10 this year, when the Tennessee Valley Authority priced a $1 billion lease-purchase financing of its 880-megawatt John Sevier Combined Cycle Plant, Morgan Stanley served as lead-left bookrunner and sole structuring agent for $900 million in debt financing. The bank was also the sole private placement agent for $100 million in equity financing for the TVA project. Earlier, on April 28, 2011, Morgan Stanley acted as lead financial adviser to Constellation Energy in its $7.9 billion acquisition by Exelon in deal that is expected to close sometime this year.
Raymond James, a midsize investment bank in Florida, has been picking up assets while competitors were making severe cuts. Its latest addition is investment bank Morgan Keegan. It will “bring in additional equity and debt capital markets professionals,” says Brad Butcher, managing director of real estate investment banking at Raymond James. “Last year Raymond James raised more than $10 billion in equity and debt capital for our clients, most of which are small and medium-sized real estate companies.”
In M&A, Morgan Stanley advised more tech companies than any other investment bank last year, scoring a total deal value of $38.5 billion, which represented a 26.1% market share in the technology sector, according to the bank. In equity capital markets, it was bookrunner on no less than 16 IPOs of tech companies that raised $8.14 billion in 2011. The bank raised $700 million in an IPO for Groupon, the popular ecommerce coupon website, in November. Earlier it had raised $353 million in an IPO for LinkedIn, the social-networking site, in which it played lead-left bookrunner.
J.P. Morgan has built a solid brand in the telecom sector that has remained unshaken despite the mayhem of 2011. In M&A, the bank did not shy away from cross-border deals, acting as lead adviser to Kabel Baden-Wuerttemberg, the third-largest cable operator in Germany, on its acquisition by Liberty Global of the US in a $4.48 billion deal that closed on March 21. J.P. Morgan still had the upper hand at year-end, when investors were few and far between. The bank acted as lead bookrunner for a follow-on equity issue that raised $403 million for Clearwire on December 7.