2003 Innovation and Achievement
Award Ceremony
The Awards
60 leading MTN issuers and dealers attended the
our awards reception at the Institute of Directors
in London at the end of December.
The Review
The reception coincided with the publication of
the Innovation and Achievement Review, an
authoritative survey of issuer and dealer
performance during 2003.
Innovation and Achievement Awards 2003
Achievement – Equity Linked MTNs
Rocket-fuelled performance
Click here to open full review
As well as establishing itself as a leading
light in the development of the inflationlinked MTN market, BNP Paribas showed
clear leadership of the equity-linked sector
in 2003. It established a commanding lead
over rival houses with nearly EUR2bn of
sales for third-party borrowers, a market
share of almost 20%. It sold the year’s
largest deals in a number of equity-linked
structures and continued to exploit its
Ariane coupon concept, an innovation much
replicated elsewhere.
Full story
BNPP’s Frair Appleby-Walker
receives its award from Julian Lewis,
Managing Editor, mtn-intelligence
Tombstone
‘Recognising landmarks
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Innovation and Achievement Awards 2003
MTN Achievement
Click here to open full review
Biggest gets bigger
This year Citigroup managed to
extend its already commanding lead
in key markets. By mid-December
the firm stood poised to add Euros
to its established number one
positions in US dollars and yen. A
unique approach to organising and
managing its MTN business and
unmatched global reach explain its
further progress in 2003.
Full story
Citibank Head of MTNs Chris Cox, accepts
award from mtn-i Founder and CEO Mike Tims
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‘Recognising landmarks
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Innovation and Achievement Awards 2003
Equity-Linked MTN Innovation
Ace in the hole
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Commerzbank’s 2003 Innovation &
Achievement Award reflects its creative
migration of the targeted redemption
rate structure into the equity-linked
sector. Its Aggregate Coupon Equity
(ACE) note, which merged key elements
from the structure with those from
traditional best/worst equity basket
structures, formed the centrepiece of
another highly active year for the firm in
equity and fund-linked MTNs.
Full story
‘Recognising landmarks
of MTN
creativity and diversity’
Commerzmerk’s MTN team, Marko Milos and
Amaury Gosse, collect their award from mtnintelligence managing editor, Julian Lewis
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Innovation and Achievement Awards 2003
MTN Product Innovation
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Staying on target
Deutsche Bank’s 2003 Innovation
& Achievement Award reflects a
host of MTN product innovations
this year. These include the first
note in one of the year’s key new
structures, targeted redemption, as
well as a unique currency forwardlinked product, some of the first
equity default swap and ladder
inverse FRN structures and a host
of credit-linked hybrid notes.
Chris Jones, Deutsche Bank Head of MTNs receives
award from mtn-i Founder and CEO Mike Tims.
Full story
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Innovation and Achievement Awards 2003
Internet Innovation: e-debt suite
Competitive edge benefits borrowers
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Web platforms for MTNs and functionality allowing
issuers to post levels for private placement execution
are not new. But Dresdner Kleinwort
Wasserstein’s latest enhancements to its e-debt
suite of products make non-syndicated MTNs part of
an integrated system that supports all stages of the
fundraising process with new types of information,
analytic tools and execution transparency. Crucially,
the firm’s system not only creates a competitive edge
for its own business, but benefits borrowers too.
Full story
‘Recognising landmarks
of MTN
creativity and diversity’
Dresdner KW’s Head of e-debt, Axel Thill
collects award from mtn-intelligence
Managing Editor Julian Lewis and mtn-i
Founder and CEO, Mike Tims.
Tombstone
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Innovation and Achievement Awards 2003
Product Leadership: Inflation Linked MTNs
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Fuelling the Inflation-linked Lift-off
The European Investment Bank (EIB)’s 2003
Innovation & Achievement Award reflects its
leadership role in the creation of a major new
structured MTN market this year. Its EUR1bn of
Eurozone HICP-linked notes in Q1 was the driving
force behind one of 2003’s best-selling structures. The
supranational also broke new ground in the sterling
inflation-linked sector. Next: a long-awaited public
Eurozone HICP bond and new inflation structures.
Tombstone
Full story
‘Recognising landmarks
of MTN
creativity and diversity’
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Innovation and Achievement Awards 2003
MTN Product Innovation
Across the asset spectrum
Click here to open full review
Goldman Sachs’ 2003 Innovation &
Achievement Award reflects its product
innovations across a broad spectrum of
asset classes. It broke new ground with
rate, credit, equity, inflation and
commodity structures, as well as multiasset class hybrids. The firm also served up
some of the first variations on classical rate
structures, a key theme of 2003, as well as
continuing to refine some of its own
interest rate plays.
Full story
Goldman Sachs Alexis Reynard and Ed Tunstall
receive their award from mtn-i Managing editor
Julian Lewis.
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Innovation and Achievement Awards 2003
Structured MTN Distribution
& Innovation
Active everywhere
Click here to open full review
USD7.6bn raised for third-party issuers
via 425 structured MTNs in as many as
38 different formats this year reveals
both the efficiency of JP Morgan’s
distribution of complex debt and its
capacity to innovate in a variety of
markets. The firm was active in almost
every one of 2003’s important
products, from range notes and
targeted redemption to emerging
currencies via inflation, commodity and
currency plays and more.
Full story
JP Morgan’s Lily Horvil, Fiona Doddrell and Fergus
Edwards receive their award from mtn-i Founder
and CEO, Mike Tims.
Tombstone
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Innovation and Achievement Awards 2003
Product Innovation
Italian Inflation-linked MTNs
Click here to open full review
Linkers for locals
The first dealer to sell Italian inflationlinked notes and the only one to sell a
TIPS-style product linked to the domestic
index, Lehman Brothers achieved a
dominant position in the structure this
year with over EUR700m of sales. Its
efforts to meet Italian appetite for linkers
with a local product even drove the
development of a swaps market and gave
the firm a stand-out product in a year
when it reorganised its MTN business
under the continuously-offered products
umbrella and more than doubled its total
structured MTN sales.
Julian Lewis, mtn-intelligence Managing Editor,
with Lehman’s Christoph Mallinckrodt and Giso
Van Loon
Full story
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Innovation and Achievement Awards 2003
Structured MTN Distribution
Strategy
Unique underwriter
Click here to open full review
Morgan Stanley’s unique approach to
structured note distribution put the firm at
the forefront of interest-rate derivative and
inflation-linked MTN sales in 2003. Its
willingness to underwrite structured deals
allowed it to focus on creating large liquid
transactions, in marked contrast to the
small-ticket investor-by-investor approach
seen elsewhere. With more than 30
USD100m or larger structured MTNs during
the year, the firm leveraged its global
presence to create a substantial pool of
secondary liquidity for its structured clients.
Full story
Tombstone
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of MTN
creativity and diversity’
www.mtn-i.com
Innovation and Achievement Awards 2003
Japanese MTN Distribution
& Innovation
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Forging new landmarks
Nomura forged new landmarks in
liquidity for structured yen and vanilla
Australian dollar deals in 2003,
leveraging both its institutional and retail
distribution in Japan. Notching up the
two largest power reverse dual currency
(PRDC) notes ever with its EIB-issued
Samurais, and the two largest AUD MTNs
with Uridashi notes issued by KfW and
Westpac, the firm created new levels of
visibility for these issuers with Japanese
investors and boosted the momentum of
the PRDC and AUD products.
Full story
Nomura Head of MTNs Gayle Turner collects its
award from mtn-i Managing Editor Julian Lewis.
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Innovation and Achievement Awards 2003
Structured MTN Distribution
Channel
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Meeting linker appetite with local product
UniCredit Banca Mobiliare’s consistent and imaginative
servicing of its domestic branch network on behalf of
international borrowers made it the market’s most active seller
of inflation-linked MTNs this year and a top performer in
number of other structured product categories. The firm
provided a string of single-A names with unique access both to
structured MTN funding and Italian retail investors.
Full story
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Innovation and Achievement Awards 2003
The Borrower Award
Click here to open full review
MTN Transaction Management
& Execution
Banque General du Luxembourg’s
Yvon Antoni presents the Borrower
Award to CL Head of MTNs, Fabrice
Pasquier.
Tombstone
While structuring and selling deals grabs
most of the headlines, leading issuers also
highlight the importance
of professional transaction management
and execution and deal after-care. This
dimension of funding operations rarely gets
attention, but can have a critical impact on
performance. Reporting a wide variety of
service from their dealers, issuers highlight
Credit Lyonnais as a leader in this area
more often than any other firm.
Full story
‘Recognising landmarks
of MTN
creativity and diversity’
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MTN issuer achievement awards
Click here to open full review
www.mtn-i.com
Innovation and Achievement Awards 2003
MTN Issuer Achievement
Click here to open full review
Banque General du Luxembourg’s
Head of MTNs, Yvon Antoni receives
award from mtn-intelligence
Managing Editor, Julian Lewis.
Active across the range
A borrower that uses the MTN market exclusively for structured funding, BGL is one of
the best recognised structured issuers. Its 2003 output ranges across all asset classes,
with only 75% from rate structures and as much as 20% from equity-linked deals even
in a relatively quiet year for the sector.
Range accruals, where BGL is a top 10 issuer, are the bank’s largest product with more
than one-third of its identified volume. Its key transactions include two quanto
structures in EUR on USD Libor (EUR70.49m and EUR43.17m, both via JP Morgan).
Inverse FRNs in many variations have been BGL’s other key product, providing it with
more than USD500m-equivalent of funding. Besides 21 trigger callable leveraged
inverse FRNs – the standard targeted redemption format, for which it ranks sixth by
volume among third-party issuers – the bank printed 15 standard leveraged structures,
11 step-ups and four cumulative inverse FRNs, an emerging product where BGL’s deals
represent 60% of identified volume.
It also issued one of the year’s very few quanto de-leveraging inverse FRNs (on CHF
Libor in USD) and a step-up inverse FRN/range accrual hybrid.
Tombstone
‘Recognising landmarks
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Innovation and Achievement Awards 2003
MTN Issuer Achievement
Click here to open full review
CDC Ixis Funding executive,
Bertrand Verlhac collects award from
mtn-i Founder and CEO Mike Tims.
Flying without guarantee
CDC Ixis sold around USD5bn-equivalent of structured notes in 2003, shrugging off the effect
of the phased loss of its French state guarantee from the beginning of the year to become
one of the most flexible and active dollar rate structure issuers.
‘Recognising landmarks
of MTN
creativity and diversity’
Long-dated structured yen transactions made up around 20% of CDC’s structured funding
volumes last year (around USD1.5bn-equivalent). However, the guarantee withdrawal similar to that affecting the German Landesbanks - shut off a substantial portion of that
market.
CDC responded with a concerted marketing effort in Japan, while exploiting the boom in
range accruals and other USD interest rate-linked products - typically with a maximum 10year term. The Japanese currency accounted for 10% of the issuer’s MTN sales this year, with
a JPY30bn 1-year Nikkei-linked note and a slew of smaller reverse convertibles contributing
significantly.
CDC emphasises flexibility, with a minimum transaction size of USD2m to USD3m, and is a
substantial player in NC3M structures. This year it has also added fund and credit-linked
structures to its approved list.
Deal highlights this year include a USD200m 20-year NC3M range accrual/leveraged inverse
FRN combination via Goldman Sachs in April. The deal has not yet been called.
Tombstone
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Innovation and Achievement Awards 2003
MTN Issuer Achievement
Click here to open full review
CBA’s Jacques Lumb collects award
from mtn-intelligence Managing
Editor, Julian Lewis
Responsive around the clock
Becoming available to deal in London time, as well as from headquarters
in Sydney, evidently helped CBA become more accessible and responsive
– it now aims to respond to reverse enquiries in less than 20 minutes. As
a consequence, it proved one of the leading issuers of commoditised
structures in 2003. The bank was one of the leaders in the year’s
targeted redemption boom, selling 30 notes in the structure and raising
over USD430m - more than any other third-party issuer. It also printed
over 120 range accruals throughout the year for USD1.6bn-equivalent.
This year CBA’s identified structured note volumes more than doubled to
over USD3.6bn-equivalent from under USD1.5bn in 2002. Besides flow
products, it also issued less common structures. These included a series
of currency-linked MTNs, such as a triple FX dual range note, as well as
an ultra-rare equity-linked deal in Australian dollars.
CBA mostly sourced its vanilla funding (relatively stable at USD1.8bn) in
Hong Kong dollars and from Uridashi notes in its domestic currency,
rather than more expensive public bonds.
Tombstone
‘Recognising landmarks
of MTN
creativity and diversity’
www.mtn-i.com
Innovation and Achievement Awards 2003
MTN Issuer Achievement
Eksportfinans Head of Funding and
Investor Relations, Soren Elbech
collects its award from mtn-i
Founder and CEO, Mike Tims
Click here to open full review
Increased output at lower cost
‘Recognising landmarks
of MTN
creativity and diversity’
This year Eksportfinans met the challenge of adding a further 40% to a borrowing
programme that had already doubled in 2002. To raise the USD4bn it needed without seeing
its borrowing costs deteriorate, the Norwegian agency refined the new funding strategy it
adopted last year.
MTNs play a key role in this, alongside carefully prepared and extensively marketed strategic
benchmark bonds. This year Eksportfinans issued twice as many structured MTNs as in
2002. Far from worsening, its average cost of funds has improved significantly as a result,
according to the agency.
The power reverse dual currency (PRDC) note remains Eksportfinans’ key instrument. Its
activity includes capped, digital, trigger callable and even twin currency (see Timeline
above) variations. While increasing its identified PRDC volume by 50% this year to some
JPY96bn, the agency managed to reduce the product’s share of its total structured sales
below 40% - down from almost 60% in 2002.
Eksportfinans also reports selling a total of USD1bn in various USD callable structures this
year, particularly into Asia. Its other key transactions include the first targeted redemption
note from a third-party issuer (a USD12.2m 7-year via Deutsche Bank) and a broad range of
credit and fund-linked structures.
Tombstone
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Innovation and Achievement Awards 2003
MTN Issuer Achievement
Click here to open full review
Structured Yen machine breaks USD2bn barrier
The MTN market’s biggest issuer, and one with a particularly diverse array
of products, KfW is as likely to print yet another power reverse dual
currency (PRDC) note as to sell its next benchmark bond. The German
agency’s near-USD20bn of non-syndicated MTNs over the year includes
some USD7.3bn-equivalent of structured notes.
PRDCs, for which it is by far the leading issuer by volume with a 23%
market share, are a key product for KfW. By May its yen machine had
cranked out over 100 issues, in July it broke the USD2bn-equivalent
barrier and it ends the year having sold well over 300 tickets in the
structure.
The biggest-ever Australian dollar Uridashi issue (AUD1.665bn via
Nomura – see Innovation & Achievement Award above) added to its
penetration of the Japanese market this year.
KfW was also prominent in other sectors, selling over USD4.1bn of
interest rate-linked products and USD400m of inflation structures.
Moreover, the agency has announced its participation on Deutsche Bank’s
Continuously Offered Investor Notes (COINS) platform, which will make
its debt directly accessible to retail investors across Europe for the first
time.
Tombstone
‘Recognising landmarks
of MTN
creativity and diversity’
www.mtn-i.com
Innovation and Achievement Awards 2003
MTN Issuer Achievement
Default issuer for key structures
Click here to open full review
Lloyds TSB transformed itself in 2003 into the default issuer for high-volume
commoditised rate structures. With USD5.6bn of identified interest rate-linked
volume, it ended the year ranking behind only Rabobank and the special case
of US agency Freddie Mac, according to mtn-i data – a significant rise from its
sixth position in this area in 2002.
This new prominence has been founded on Lloyds TSB’s domination of the
range accrual product, which has provided two-thirds of its total MTN funding.
The UK financial services group printed USD3.6bn of new issues in the
structure during the year, USD1bn more than nearest rival Rabobank. This
gave it 21% of identified volume, while its 303 deals compare to the 126
printed by the next most active name on this measure (RBS).
‘Recognising landmarks
of MTN
creativity and diversity’
Besides around USD250m each in CMS and step-up callable structures, Lloyds
TSB was especially active in inverse FRNs. Its USD1bn of such deals included
as many as 56 trigger callable leveraged inverse FRNs, the standard targeted
redemption format. The issuer’s enthusiastic adoption of Q3’s hottest structure
gave it almost twice as many deals as any other third-party issuer and a 14%
market share.
Tombstone
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Innovation and Achievement Awards 2003
MTN Issuer Achievement
NIB Capital’s Luc Veenstra
collects its award from mtn-i
founder and CEO, Mike Tims
Click here to open full review
Exotic issuer of choice
NIB Capital is an MTN issuer of choice for non-standard structures and,
especially, alternative asset classes. Besides selling half as many equitylinked MTNs again as any other borrower this year, scooping up no less than
USD1bn-equivalent from the sector, the Den Haag-based institution has put
its name to more credit-linked MTNs than any other third-party borrower. It
also dominates commodity-linked flows with more than 50% of identified
third-party volume, according to mtn-i data.
‘Recognising landmarks
of MTN
creativity and diversity’
In addition, NIB Cap has issued a broad variety of rate, currency and bond
plays over the year, as well as a credit/rate hybrid. Much of this output has
emerged in uncommon or even unique structures, such as an amortising
dual-coupon note (JPY400m 10-year via Deutsche Bank).
In raising some USD1.9bn-equivalent overall from structured MTNs in 2003,
the bank has offered the striking total of 34 different identified structures.
That is significantly more than most borrowers that rank alongside it in the
lower reaches of the year’s top 20 structured MTN issuers by volume.
Tombstone
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Innovation and Achievement Awards 2003
MTN Issuer Achievement
Click here to open full review
Sabbatical pays dividends
RBS took the highly unusual step of withdrawing from the MTN market
during the middle of the year, in order to review its transaction
processing, back-office and risk management systems. Despite the
pause, it raised a total of around GBP4bn of MTN funding from 550
notes in 2003, almost entirely in structured/arbitrage funding.
“We are funding deeply sub-Libor on a portfolio basis, so why should
we pay up for vanilla debt?” an RBS funding executive comments.
From range accruals and targeted redemption to inverse FRNs and
PRDCs, the bank featured in all of the high-volume sectors of 2003,
averaging more than two trades per day. It also sold some of the year’s
more notable inflation, equity and fund-linked deals. These included
TIPS-style US inflation (via UBS), all-items Eurozone inflation (via its
own investment bank dealer, RBS) and ratchet equity baskets (via
Commerzbank), as well as structures in Polish zloty (via Goldman
Sachs) and Norwegian kroner (also via RBS).
Tombstone
‘Recognising landmarks
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creativity and diversity’
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Innovation and Achievement Awards 2003
MTN Issuer Achievement
Sylvia Ashley, Rabobank Head of
Investor Relations and Nadine Alsina
collect award from mtn-intelligence
Managing Editor, Julian Lewis
Partnership approach yields USD8bn in structured sales
Click here to open full review
An approach which involves seeing itself as “dealers’ partner, rather than a client”
has delivered Rabobank over USD18bn-equivalent of MTN funding in 2003. This
total includes over USD8bn in structured notes sales - more than any other
international issuer.
Though Rabo operates a USD10m minimum for transactions and has stayed away
from issues callable after three months, it managed to print over 400 tickets during
the year. The Dutch co-operative bank has also taken a flexible approach to keeping
mandates open.
‘Recognising landmarks
of MTN
creativity and diversity’
Its landmark structured MTNs this year include jumbo fund and equity-linked deals
via Robecco (EUR275m) and BNP Paribas (EUR169m and EUR122m), respectively.
Others were the biggest targeted redemption note yet (USD110m via JP Morgan)
and an Italian retail-targeted sticky FRN (EUR100m via Morgan Stanley and Banca
Akros).
Rabo’s funding stands out as global in scope. This year it has printed MTNs in 13
different currencies – AUD, CAD, CHF, EUR, GBP, HKD, HUF, JPY, NOK, NZD, SGD,
USD and ZAR.
Dealers continue to applaud the bank’s transparency and consistency. Unlike issuers
with smaller balance sheets and wider funding levels, it manages to stay in the
market at stable levels in all conditions.
Tombstone
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Innovation and Achievement Awards 2003
MTN Issuer Achievement
SNS Bank’s Roger Schumann
collects award from mtn-intelligence
Managing Editor, Julian Lewis
Click here to open full review
Single A succeeds in structures
SNS Bank stands out as the year’s most successful single A-rated issuer in structured MTN
markets. Lacking the stronger credit of compatriots NIB Cap and Rabo (see MTN Issuer
Achievement Awards for both above), the bank has had to look to less conventional
channels for its USD1.6bn of structured financing – especially as it falls below the double A
minimum requirement of many private banks and other buyers.
SNS’s main response has been to draw strongly on the Italian retail appetite for higheryielding lightly structured products that UniCredit Banca Mobiliare has refined so visibly this
year (see Innovation & Achievement Award above). In two Eurozone inflation issues and a
EUR/USD digital via UBM, it raised as much as EUR850m.
‘Recognising landmarks
of MTN
creativity and diversity’
Even so, the UBM jumbos account for only just over half (56%) of SNS’s total identified
structured MTN volume. The bank also managed to raise a further USD600m-equivalent
from a broad variety of rate, equity and fund-linked structures.
These include a EUR141m annually putable FRN and a EUR100m Eurostoxx 50 play. Other
highlights were 10 CMS-linked notes in EUR and Polish zloty, a range callable in Czech
koruna and the year’s first targeted redemption note for a single A third-party issuer.
Tombstone
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Reviews
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Q4 and 2003 Review
2004 Outlook
Q1 Review 2004
Q2 Review 2004
Q3 Review 2004
Innovation & Achievement Review 2004
Q4 Review 2004
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Case Notes and Special Reports*
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Jul 2004
Oct 2004
Dec 2004
Jan 2004
Jan 2004
Feb 2004
Apr 2004
July 2004
Oct 2004
Dec 2004
Jan 2004
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Targeted Redemption Case Note
Single-A Credits
Nordic Frequent Borrowers
Masters of Retail
Q1
Q1
Q2
Q2
2004
2004
2004
2004
*Further case notes and special reports will be scheduled during the year
Q1
Q1
Q2
Q2
2004
2004
2004
2004