The debt markets have been rich hunting ground for Barclays since the June 23 Brexit vote, Dealogic data shows
Analysis of transactions and since the June 23 EU membership referendum found the banks have been the most active in a tricky period for completing deals. The number and value of UK equity capital markets deals and mergers and acquisitions involving a UK company have fallen year-on-year, although the value of bonds sold by UK issuers has risen.
FN used Dealogic data to identify the top banks in each area – by deal value – in the period before and after the referendum to see what effect deals struck since the Brexit vote had on the standings.
The most notable changes have been in M&A, where three new advisers have entered the top five annual rankings for mandates involving a UK business since June 23.
The level of change is unusual. In 2015, there was only one change in the top five during that period, although the individual firms shifted places.
Goldman Sachs has risen from number two on the referendum date to top place as of October 11, having secured the most work during the post-referendum period thanks to its role advising British chip manufacturer ARM Holdings on its £24.4 billion sale to Japan’s SoftBank, announced in July.
Other advisers on that transaction received a healthy boost that took them into the top slots for the year-to-date. Lazard and UBS, both of which advised ARM, rose from eighth and sixth respectively before the referendum to second and third now. Robey Warshaw, which advised SoftBank, has also entered the top four.
James Robertson, a managing director in UBS’s UK investment banking team, said: “Brexit presented opportunities as well as hurdles – the key is to move swiftly to help our clients identify and execute on the opportunities rather than get stuck on the hurdles.”
Bank of America Merrill Lynch, which had topped the UK M&A ranking as of June 23, is now sixth.
A gradual pick-up in ECM activity has also left the UK bookrunner rankings looking markedly different to before the referendum. JP Morgan still tops the table, but second place goes to Bank of America Merrill Lynch, which worked on a greater share of deals by value in the post-vote period and so was lifted from fifth place. Its deals included the largest ECM transaction since the Brexit vote, a £1.65 billion rights issue by Melrose Industries in August.
James Fleming, BAML’s co-head of ECM for Europe, the Middle East and Africa, said: “Post-Brexit we have had an active UK ECM calendar by focusing on our core broking and IPO clients. Despite initial volatility post the referendum we have successfully placed stock for WorldPlay, Ascential, Segro and Melrose. Consistent client coverage has been key throughout.”
A strong showing for Goldman Sachs’s ECM team since the Brexit vote has also helped the Wall Street enter the top five for the year to date from sixth on June 23.
Credit Suisse and Numis Securities have each fallen one place since the referendum, to third and fourth.
In 2015, the banks making up the top five advisers were unchanged over the same dates.
Barclays leads the league table for post-Brexit bonds, which has seen it rise from fifth in the UK DCM bookrunner ranking before the vote to fourth now.
Mark Lewellen, co-head of global debt capital markets and risk solutions group at Barclays, said: “It’s been an unprecedented period for everyone but we have remained completely focused on helping our borrowing clients post the UK vote. Issuers demand best advice and execution from their banks to get the right funding strategy in place to navigate market uncertainty.”
There has also been a notable jump for RBS – the bank was second on the UK bond league table for the period since the Brexit vote, allowing it to rise from 10th place before the vote to sixth now.
Mark Kitchen, head of Northern European corporate DCM at BAML, said: “Borrowers in the UK were keen to de-risk any financing prior to the Brexit vote, which drove issuance volumes in the first half of the year.”
Kitchen added: “Following the election result, the rally in gilt yields and credit spreads courtesy of the Bank of England has encouraged issuers to accelerate funding plans to lock in current attractive yields ahead of what could be a more volatile market once article 50 has been invoked, not to mention other geopolitical events such as [the US election].”
Many bankers now see capital markets and M&A activity picking up, although most acknowledge there are still plenty of risks.