Australia Investment Banking Focus
Year-to-Date Overview
June 14, 2010
Key Points
Australian ECM Volume ($bn)
Half-Year Comparison
$bn
40
ECM issuance potentially at lowest half year level in seven years
Follow ing three consecutive half year periods of increasing Australian ECM issuance that culminated in
record breaking volume in 2H 2009 ($35.4bn) - volume so far in 1H 2010 has pulled back sharply to
stand at only $7.8bn and is potentially the low est half-year volume seen from the nation in seven
years ($7.3bn in 2003).
Follow -on issuance has slumped by 71% year-on-year on the back of few er GPAs and overnight
offerings. Guaranteed preferential allocations (GPAs) have raised only $436m so far this year compared to half-yearly volumes in excess of $3bn in the last tw o years, and $11.0bn in 2009 YTD
alone. Overnight deals have raised a total of $2.1bn in 2010 YTD, a fraction of the $7.7bn worth of
deals seen in the same period last year.
The dearth of sizeable IPOs has continued into the second quarter, with companies raising only
$232m from 10 listings so far in 2Q 2010. Brings total IPO volume to $274m so far this year - w hich is
still w ell above the single listing in 1H 2009 that raised just $9m. The IPO backlog includes a possible
$1.1bn (A$1.3bn) IPO from Valemus and could be the nation's largest listing since Myer Holdings'
$1.9bn (A$2.1bn) issue in October 2009.
Structured bond volume at highest 1H level in two years
No.
560
35
490
30
420
25
350
20
280
15
210
10
140
5
70
0
0
1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H
2001
2002
2003
2004
2005
2006
Value ($bn)
2007
2008
2009 2010
No. Deals
Australia Structured DCM Volume
Half-Year Comparison
$bn
45
$m
1350
40
1200
Structured bond issuance of $7.5bn has already climbed to the highest 1H level seen since the
collapse of Lehman Brothers in 2007. The average deal size has increased to $573m, also the highest
1H average since 1H 2007 ($1.2bn).
35
1050
30
900
25
750
Structured bond volume from the nation in the month of May proved to be resilient - with three deals
raising $1.3bn - against a back drop of global turmoil that saw a pull back in capital markets issuance
w orldw ide.
20
600
15
450
10
300
Separately, kangaroo bonds ground to a halt in the month of May, on the heels of record issuance in
the first quarter. In spite of the stall in activity, volume of $18.3bn so far this year still remains at a
record YTD level.
5
150
0
0
1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H
2001
Inbound cross-border M&A at two year low
2002
2003
2004
2005
2006
Value ($bn)
A total of $15.2bn w orth of inbound transactions has been announced so far this year, the low est
YTD level for the nation since 2008, when $12.0bn w orth of deals from foreign investors was
announced.
The United States has been the biggest acquiror of Australian assets, accounting for 52% of total
inbound volume in 2010 YTD - up from an 11% share in 2009 YTD and driven by Peabody Energy
Corp's $3.5bn tilt at Macarthur Coal.
Chinese M&A investment in Australia has declined by 30% year-on-year to $2.1bn and represents
14% of M&A inflow so far this year. Bright Foods' $1.6bn bid for CSR's sugar and renew able energy
business, announced in January, remains the largest deal from China in 2010 YTD.
Core IB revenue remains at lowest level in six years
Core IB revenue of $469m in 2010 YTD is dow n 36% year-on-year and remains at the low est YTD
level seen in six years ($384m in 2004).
With ECM issuance remaining depressed so far into 2Q 2010, ECM fees in 2010 YTD amount to
$169m - potentially the lowest 1H level since 2003 ($85m). ECM accounts for a 36% share of the fee
pool in 2010 YTD, down from a 64% share in the same period last year.
2007
2008
2009 2010
Avg Size ($m)
Australian Inbound Cross-Border M&A Activity
Half-Year Comparison
$bn
40
%
88
35
77
30
66
25
55
20
44
15
33
10
22
5
11
0
0
1H
2H
2001
1H
2H
2002
1H
2H
2003
1H
2H
2004
1H
2H
2005
1H
2H
2006
Value ($bn)
1H
2H
2007
1H
2H
1H
2008
2H
1H
2009 2010
% from Asia
League Tables
Australia
Rank
1
2
3
4
5
6
7
8
9
10
All ECM Bookrunner Ranking - 2010 YTD
Bookrunner
Value ($m)
Bank of America Merrill Lynch
1,691
UBS
1,610
644
JPMorgan
Credit Suisse
621
Citi
490
RBS
456
Macquarie Group
378
Patersons Securities
231
Goldman Sachs
194
Southern Cross
108
Australia
Rank
1
2
3
4
5
6
7
8
9
10
Announced M&A Advisor Ranking (ex Fairness Opinions) - 2010 YTD
Advisor
Value ($m)
No.
%Share
17,032
Bank of America Merrill Lynch
6
32.2
Lazard
6
25.9
13,674
13,156
10
24.9
Rothschild
12
18.3
Macquarie Group
9,668
Greenhill & Co
8,926
2
16.9
Goldman Sachs
7,851
12
14.9
Citi
3
14.1
7,427
JPMorgan
5,961
8
11.3
UBS
4,554
6
8.6
RBS
3
8.5
4,490
No.
6
11
3
3
1
14
8
36
6
8
%Share
21.8
20.8
8.3
8.0
6.3
5.9
4.9
3.0
2.5
1.4
Australia All DCM Bookrunner Ranking - 2010 Y TD
Rank
Bookrunner
Value
Westpac
1
2
Deutsche Bank
3
ANZ
4
Commonwealth Bank of Australia
5
JPMorgan
HSBC
6
UBS
7
Goldman Sachs
8
9
National Australia Bank
10
Macquarie Group
($m)
8,237
5,567
5,050
4,756
4,438
3,358
2,909
2,543
2,513
2,085
Australia Core IB Bank Revenue Ranking* - 2010 Y TD
Rank
Bank
Net Revenue ($m)
1
UBS
62
Goldman Sachs
2
43
3
42
Macquarie Group
4
Bank of America Merrill Lynch
37
JPMorgan
5
22
Credit Suisse
6
18
RBS
7
18
8
Citi
17
Intesa Sanpaolo
9
11
10
11
Westpac
No.
22
17
20
19
12
34
14
5
8
5
%Share
14.2
9.6
8.7
8.2
7.7
5.8
5.0
4.4
4.3
3.6
%Share
13.2
9.3
9.0
7.9
4.8
3.9
3.8
3.6
2.4
2.4
League Table Commentary
ECM
- Bank of Am erica Merrill Lynch leads the field in the ECM ranking by a narrow m argin, on the back of QBE's $850m equity-linked transaction and Lend Lease's $752m FO, am ong others. The US
bank ranked in ninth place in 2009 YTD.
DCM
- Westpac holds onto first place from the 1Q 2010 and has im proved from a third place ranking in 2009 YTD. The dom estic house has been involved in three out of the top five deals in 2010 YTD.
- ANZ leaps to third place from the 22nd rung in 2009 YTD, following involvem ent in Queensland Treasury Corp's $3.7bn and $2.8bn trades.
M&A
- Bank of Am erica Merrill Lynch also clinches first place in the advisory ranking, on the back of the two largest deals so far this year - Lihir Gold/Newcrest Mining ($8.7bn) and Queensland Rail
(coal track network)/Mining consortium ($4.0bn). The US bank didn't feature in the league table during the sam e period last year.
- Citi is also m aking strides in the advisory ranking - jum ping to the seventh spot from 19th place in 2009 YTD. The US house was also involved in the $4.0bn bid for Queensland Rail's coal track
network, in addition to Royal Dutch Shell and PetroChina's $3.4bn tilt at Arrow Energy.
Core IB Revenue
- UBS m aintains clim bs up a notch to the top of the revenue ranking to hold a 13.2% share of fees, down from 14.0% in 2009 YTD.
- Goldm an Sachs claws up to second place with a 9.3% share of wallet, up from the seventh rung and a 5.3% share in 2009 YTD.
Copyright © 2010 Dealogic Holdings Plc
Page 1 of 2
ECM Deals
Top 5 Australia ECM Transactions - 2010 YTD
Priced
Issuer
4 Feb 2010
Woodside Petroleum
Issuer
Nation
Australia
FO
29 Apr 2010
QBE Funding Trust V
Australia
CONV
850
Bank of America Merrill Lynch
30 Mar 2010
Lend Lease Corp
Australia
FO
752
RBS
Bank of America Merrill Lynch
17 May 2010
Transurban Group
Australia
FO
629
JPMorgan
10 Jun 2010
Transurban Group
Australia
FO
449
UBS
Deal Type
Value ($m)
Bookrunner
2,232
Citi
Credit Suisse
UBS
DCM Deals
Top 5 Australia DCM Transactions - 2010 YTD
Priced
Issuer
22 Jan 2010
Queensland Treasury Corp - QTC
Issuer
Nation
Australia
Non-US Agency
3,695
Deutsche Bank
ANZ
Westpac
6 Jan 2010
Australia & New Zealand Banking Group - ANZ
Australia
Corporate Bond-Investment-Grade
3,000
JPMorgan
Goldman Sachs
21 Apr 2010
Queensland Treasury Corp - QTC
Australia
Non-US Agency
2,772
JPMorgan
UBS
ANZ
23 Feb 2010
Queensland Treasury Corp - QTC
Australia
Non-US Agency
2,250
Deutsche Bank
Commonw ealth Bank of Australia
Westpac
8 Apr 2010
Westpac Banking Corp
Australia
Corporate Bond-Investment-Grade
1,944
Westpac
Deal Type
Value ($m)
Bookrunner
M&A Deals
Top 5 Australia Announced M&A Transactions (Target/Acquiror) - 2010 YTD
Target
Announced
Target
Acquiror
Nation
1 Apr 2010
Australia
Lihir Gold
Newcrest Mining
Acquiror
Nation
Australia
26 May 2010
Queensland Rail (Coal track
netw ork )
Australia
Queensland Coal Industry Rail Group
Rio Tinto
Xstrata Coal
BHP Billiton
Peabody Energy Corp
Queensland Coal Mine Management
Felix Resources
New Hope Corp
Aquila Resources
Anglo American
Ensham Resources
Macarthur Coal
Wesfarmers
Vale
Australia
Rothschild
RBS
Bank of America Merrill
Lynch
Citi
3,953
31 Mar 2010
Macarthur Coal (Bid No 1)
Australia
Peabody Energy Corp
United
States
JPMorgan
Rothschild
3,507
9 Apr 2010
Macarthur Coal (Bid No 2)
Australia
New Hope Corp
Australia
JPMorgan
Pitt Capital Partners
3,382
8 Mar 2010
Arrow Energy (Australia)
Australia
Royal Dutch Shell
PetroChina
Australia
UBS
Citi
Rothschild
Morgan Stanley
3,357
Target Advisor
Greenhill & Co
Macquarie Group
Grant Samuel Corporate
Finance
Acquiror
Advisor
Lazard
Bank of America Merrill
Lynch
Value ($m)
8,742
* Core IB includes DCM, ECM and M&A transactions. Dealogic Revenue Analytics employed where fees are indisclosed.
Copyright © 2010 Dealogic Holdings Plc
Page 2 of 2