Lead senior debt arrangers on European and UK buyouts

EUROPE

In a table characterised by figures lower than last year, Royal Bank of Scotland has continued its accession through the ranks to take first place in 2001’s European table with deals worth $6.5 billion. Last year it gained sixth place with $3.8 billion. David Yeoman, head of leveraged finance syndication at Royal Bank of Scotland, said: “2001 was obviously a great year for us but it got harder as it went on.” Boosting Royal Bank of Scotland’s placing was its participation, alongside BNP Paribas, in the EURO770 million MBO of Cegelec/Alstom Contracting in May, backed by CDC Equity Capital and Charterhouse Development Capital.

Yeoman said the bank had been successful in pursuing its strategy to upscale the size of its deals but would still cover its traditional market for smaller deals as well. “The market’s appetite for syndication has returned after Q4 but the real issue is whether private equity houses can beat the prices of trade buyers.” After the problems of 2001 he expects debt multiples to move upwards again this year although lenders will be more selective about the industries which can take high leveraging.

New entrants in 2001’s league table include Goldman Sachs in second place mainly on the strength of Messer Greisheim and Cognis. Oliver Duff, executive director of loan syndication at Goldman Sachs, says: “The Messer Griesheim and Cognis deals suited Goldman Sachs as they were both highly complex transactions and required an ability to commit large amounts from our balance sheet. We’re pretty bullish about the market for 2002 from both a sponsor and investor standpoint, although the LBO market will depend to a degree on the state of the economy at large.”

Deutsche Bank and Barclays rise to third and fourth in this year’s table from ninth and tenth in 2000 when they arranged debt totaling $3.5 billion and $2.3 billion, respectively. This is due to the autumn completion of the EURO3 billion Eircom deal, which also benefited AIB, (which did not place last year), Bank of Ireland and Goldman Sachs.

Lehman Brothers rises from fifteenth position last year, with two deals worth $1.5 billion, to eighth place with deals worth EURO3.49 billion. Peter Combe, head of financial sponsors and leveraged finance at Lehman Brothers, said: “2001 was a year of two halves. The first half was one of the biggest LBO markets we’ve seen for a long time but it faded dramatically in the second half.” Also making an appearance in the top half of the table is HypoVereinsbank, which participated in the EURO2.3 billion acquisition of Cognis in November, backed by Permira.

In a straight swap with Royal Bank of Scotland the leader of last year’s European debt table JP Morgan Chase, which completed nine deals worth $7.3 billion, has fallen to sixth place with five deals worth $3.9 billion. Citibank/Schroder Salomon Smith Barney falls from third position last year with three deals totaling $5.02 billion, to ninth. Merrill Lynch, second last year having completed seven deals worth $6.97 billion, slips to fifth this year with only three deals totalling just EURO4.12 billion. Bank of Scotland, now incorporating Halifax, falls from seventh position last year with 74 deals worth $3.8 billion to thirteenth, although the group still led on the volume of deals.

UK

On the back of two mega-deals Merrill Lynch takes the top slot for UK buyouts this year from Royal Bank of Scotland. The transactions were Yell, acquired by Apax Partners and Hicks, Muse, Tate & Furst for GBP2.14 billion, and Nomura’s GBP1.9 billion Le Meridien deal. Last year Merrill Lynch completed three UK deals worth $1.6 billion, which earned eighth place. In second position, Royal Bank of Scotland arranged $382 million less debt in 2001 than the $3.5 billion it completed last year in 48 separate deals.

Lehman Brothers more than doubled the total amount of debt arranged last year, some $1.5 billion in two transactions, despite adding only one extra deal. Accordingly Lehman rises from ninth position last year to take third place this year. Lehman’s 2001 deals included the buyout of Whitbread’s pubs and bars businesses backed by Morgan Grenfell Private Equity (MGPE), Nomura’s acquisition of Le Meridien Hotels, and the public-to-privates of both Britax and Burford Holdings. Combe attributed the difference in Lehman’s placing this year and last to the lumpy market in buyouts, where one or two big deals make the difference.

Having been placed fourteenth last year, BNP Paribas makes it into the UK table for 2001, and also creeps into the top half of the European table. Notable deals for the French bank in 2001 included Cegelec, Lafarge (a EURO890 million CVC Capital Partners deal) and in the UK, Cannons, which was taken private for GBP260 million by Royal Bank Private Equity.

As in the European table, Bank of Scotland (HBOS) falls from second to fourth place but leads by number of deals. Last year the bank arranged debt totalling $3.5 for 64 UK deals. JP Morgan Chase also drops from third last year, with four deals worth $3.2 billion, to sixth with two deals worth just $605 million. WestLB, which did not gain a place in last year’s UK table, enters in sixth place with three deals worth $663 million.