Deutsche Telekom’s launch of the biggest German corporate bond of 2016 has given the European banks that handled it a boost in the league tables.
Deutsche Telekom returned to the euro-denominated benchmark bond market after a three-year break on March 14, pricing a €4.5 billion transaction spanning four, seven and 12-year tranches.
According to data firm Dealogic, the deal nudged ahead of a $ 5 billion bond from development bank KfW to become the largest German bond issue in 2016. Among corporate borrowers, Deutsche Telekom’s offering eclipsed a €3.5 billion deal launched by DaimlerChrysler on March 1.
Barclays, BNP Paribas and UniCredit were bookrunners on the telecoms company’s deal, which attracted some €18 billion of interest from investors during the bookbuilding period, according to bankers involved in the deal.
Mark Lynagh, head of investment-grade corporate bonds for Europe, the Middle East and Africa at BNP Paribas, said Deutsche Telekom benefited from pent-up investor demand amid a shortage of “core liquid European names to issue”.
Lynagh added: “Deutsche Telekom got its timing absolutely spot-on. Investors were initially guided to expect a slightly smaller transaction, but the demand for the deal caught even the most bullish market commentators off guard. It’s the biggest order book I can remember for many years for a euro corporate deal.”
The transaction stretched Barclays’ lead over Deutsche Bank in the league table for international bond issuance from Germany in 2016, as it pushed the UK bank’s deal credit for the year to date to $ 10.2 billion. Unicredit has risen from fifth to fourth in the standings, while BNP Paribas stands in sixth, up a place thanks to its role on the deal.
All four banks are dealers on Deutsche Telekom’s €25 billion debt issuance programme.
Deutsche Bank has run more bond offerings for Deutsche Telekom than any other bank, and worked on its last euro-denominated bond in January 2013, according to Dealogic.
Deutsche Bank had not returned a request for comment by the time of publication.