BNP Paribas is no stranger to winning the bank award for Central and Eastern Europe, but this year it has added its first Africa award to its haul. A closely integrated approach that sees the emerging markets team working closely with BNP Paribas’s broader credit businesses — whether that is leveraged finance, the high yield and investment grade debt markets and the growth markets — has been crucial to success, says Fred Zorzi, global head of primary markets.
“Everything is linked, and that’s why in these growth markets we usually have an originator to cover all the products within a region — everything is under one umbrella,” says Zorzi. “In CEE and Africa, everything starts with the sovereign. If you’re not good with the sovereign you’re unlikely to be good with corporates. The fact that we excel on the sovereign side gives us opportunities to deliver our expertise to corporates.”
However, given the funding demands and volatility of the year, bond issuance in the regions has been dominated by sovereigns. BNP Paribas, which counts Slovenia as one of its closest relationships, helped re-open the CEE market with a €1.1bn deal for the country in late March.
“When we brought Slovenia to market in the early spring, it was very a tense world in lockdown,” says Alexis Taffin de Tilques, head of debt capital markets, CEEMEA for BNP Paribas. “Relationships really make a difference in growth markets. At a time of the crisis issuers are going to naturally go where they feel trust and where they feel comfortable with the execution process.”
He says that maintaining relationships was never more important than during the spring — even though that was when there was little chance of getting a deal done for most emerging market credits.
“At the start of the crisis — when markets everywhere were shut — we said collectively as a team that this is the time when we need to be talking to our clients, we need to let them know that we are there for them.
“It’s perhaps why we got this award: we managed to stay focused and carry on having conversations with issuers and investors. There’s no magic formula, it’s about creating a relationship of trust with clients.”
BNP Paribas has since worked on more complex credits, bringing Serbia to market in May for instance, as it polishes up what has long been a successful CEE franchise.
Unlike many international banks, its approach to Africa is to do deals only in countries and with the companies that fit the bank’s overarching strategic objectives. It has a strong retail presence in Senegal, Cote d’Ivoire, Algeria and Morocco for example, a large CIB operation in South Africa, and significant CIB activity in Egypt.
It also works with corporates with which it has deep links, such as First Quantum Minerals, the Toronto-listed copper mining firm with assets in Zambia, which visited the bond market in January and September.
“The strategy is not simply doing as many deals wherever we can but is about doing deals that support the African economy in places where BNP Paribas has built longstanding relationships over the years,” says Taffin de Tilques.
“It’s a very targeted approach and I think it’s the reason why we’ve been successful since clients know that they are not just one deal among many, but that the whole bank and its management is behind the transaction. There’s a full alignment between the policy of the bank and the primary markets business in Africa.”
Among its notable transactions in Africa this year was the market-reopening deal for Egypt in May. The sovereign raised $5bn from a triple-tranche bond, becoming the first African issuer to print after the spring volatility.
“It was a blow-out success and very good news for the market,” says Taffin de Tilques.
