Additional Tier One Deal of the Year
Barclays Plc
£1.25bn 8.875% perpetual non-call March 2028 additional tier one
Barclays
Barclays’ additional tier one (AT1) was an exemplary triumph over one of the biggest challenges that faced European banks in 2022 — the ability to raise subordinated debt capital in unstable and short-lived issuance windows.
The UK bank navigated market turbulence to launch its riskiest debt capital at just the right time, ultimately refinancing a £1bn AT1 that had a call option due later in the year, while at the same time providing a confidence boost to a fragile FIG bond market.
Having conducted investor work in advance, Barclays emerged with a rare gem — its first sterling AT1 since 2019. Meanwhile, aggressive price tightening served as a differentiator and signalled the issuer’s strength.
Investors liked what they saw and pushed the book to £4.25bn, making it the biggest order book for an AT1 in any European currency in 2022.
Senior Deal of the Year
JP Morgan Chase & Co
€2.5bn 1.93% March 2030 non-call 2029 bail-in senior
JP Morgan
The start of the war in Ukraine in February sent shockwaves through unprepared European capital markets, resulting in a month-long drought of FIG bond issuance.
But in mid-March, JP Morgan brought the strength of its balance sheet to bear, re-opening the market in euros with this jumbo-sized deal.
It wasn’t just the size that mattered, either. The US money centre bank stretched beyond the short-dated, defensive issuance that defined the market for senior bonds at the time to take long-dated funding.
An €8bn order book was a blow-out result and the largest for an unsecured FIG bond in any European currency this year. It gave confidence to other banks that they could get riskier deals done — longer duration, or subordinated issuance.
Tier Two Deal of the Year
Bank of Ireland Group
€500m 6.75% March 2033 non-call 2028 tier two
Bank of America, HSBC, JP Morgan, Morgan Stanley, UBS
Who would have thought that in the final days of the year a bank from the eurozone periphery would achieve the biggest spread tightening for a tier two euro FIG deal for more than two years? But Bank of Ireland did just that as it reined in the spread on its bond by 60bp in late November, off the back of an order book that was almost 10 times the issue size.
Investors spied a chance to pile into a credit whose spreads had not yet performed as well as its equity had. This demand allowed the bank to price with a minimal new issue concession of 0bp-10bp and shave the spread down to 415bp over mid-swaps. Although the deal landed roughly 30bp back of the Irish lender’s August sterling tier two visit, this differential was erased after a single day of trading.
And after a torrid and tricky year for issuers and investors, the Irish lender affirmed that liquidity was still sloshing around unseasonably deep into November.
Senior Sterling Deal of the Year
NatWest Markets Plc
£750m 6.375% November 2027 operating company senior
NatWest Markets
After former UK chancellor Kwasi Kwarteng’s disastrous mini-budget caused extreme volatility and damaged the sterling market’s credibility, NatWest succeeded in restoring market access for financial institutions.
Building on its experience from an earlier £750m 3.619% March 2029 non-call 2028 holding company senior bond in March — which also re-opened the shuttered sterling market after Russia’s invasion of Ukraine — the November deal provided what investors were clamouring for.
The market was in need of a national champion to get issuance back on track and NatWest delivered at the operating company level, attracting a book of £2.2bn. The deal ushered in an almost £7bn burst of FIG supply by late November.
The deal’s size impressed market participants as NatWest harnessed weeks of pent-up demand. Ultimately, the trade capped the sterling crisis and proved to the market that despite the volatility it had endured, the currency still offered issuers the chance to print in size.