Years of work building a first-class equity-linked business came to fruition for HSBC in 2021. Amid waves of issuance, the bank topped league tables, hit its highest deal value ever and dominated a resurgent UK market. Pairing consistency and quality with the vision to open new markets, HSBC is GlobalCapital’s Equity-linked Bank of the Year.
In just five years, the firm’s steady climb up the rankings has taken it from outside the top 10 to second place for the whole of EMEA in 2021. In the European league table, HSBC finished first in terms of deal value and far ahead of its closest competitor. The bank acted as global coordinator in almost two-thirds of its transactions.
“It was really the culmination of a long-term project to position the bank as a leading equity-linked house,” says Nick Bevan, the bank’s global co-head of strategic equity & financing. “We’ve raised awareness of the product across HSBC and, in particular, within our commercial banking business.”
This is the culmination of a long-term project to position the bank as a leading equity-linked house
Much of the bank’s success with UK equity-linked issuers in 2021 came from this pool of mid-market commercial banking clients. The bank executed five out of the six UK deals last year - the majority of them as global coordinator, such as IAG and ASOS - and recorded double the total deal value of its closest competitor. But HSBC’s preeminence in the UK is also a microcosm of its success in the wider market - where it is reaping the benefits from a multi-year engagement effort.
“We spent a lot of time over the last few years elevating the convertible product in the UK,” says Ilyas Amlani, HSBC’s head of EMEA equity-linked. “Last year’s result came from time spent educating board rooms and speaking to shareholders, advisors and law firms, but also our ability to correctly identify potential issuers early on.”
This willingness to do the hard work has brought the firm primacy in specific sectors as well as countries. HSBC is the only bank to have led every single airline issue in EMEA since the start of the pandemic. Starting with the highly successful Lufthansa convertible bond back in 2020, HSBC has leveraged expert insight and market knowledge to become the go-to global coordinator for aviation borrowers in EMEA and Asia Pacific. Achieving this level of recognition from issuers, says Amlani, takes much more than just putting together a pitch book and pricing.
“It’s about going above and beyond in a challenging time for the sector, to understand investor views, structure tailored solutions and build the trust of management. We had numerous occasions where issuers appointed us because of our track record, market intel and confidence in HSBC to deliver for them,” he says.
HSBC also demonstrated its ability to combine ascendancy in mature markets with trailblazing transactions in new territories.
We had numerous occasions where issuers appointed us because of our track record, market intel and confidence in HSBC to deliver for them
The firm continued to dominate the German market, with deals for TUI AG, Global Fashion Group and Delivery Hero Across the last four years, HSBC is in pole position in Germany. At the other end of the spectrum, 2021 saw the bank bring the first ever Turkish transaction and a highly structured bespoke private deal for McLaren.
The €200m deal for SASA Polyester was Turkey’s inaugural international convertible bond, and the result of years of engagement with regulators, lawyers and investors. The landmark deal boasted novel structural features and set a precedent for future supply from the region. With an international reach and having proven its capabilities as a pioneer, HSBC is ideally placed to break ground in other territories and with innovative structures in the coming years.
“We’d like to explore the appetite for new markets on both the funding and investor side,” says Bevan. “European equity-linked has historically been weighted towards French and German issuers but we have looked to grow the market both via developing new territories and utilising different structures.”
This search for new markets is only part of the bank’s focus on maintaining momentum now that it has scaled the league tables and become a go-to global coordinator for deals across a range of sectors and geographies. “Our success in equity-linked should provide a halo effect for other parts of the business,” says Amlani. “It will act as a platform for our broader structured equity business and is a key component of our success in ECM”.
