UBS ascends G-3 bond ranks on contacts with rich
UBS AG (UBSN) used contacts with China’s richest people to help it climb into the top-five arrangers of G-3 bonds in Asia for the first time since 2011.
The Swiss lender, which runs the Asia-Pacific region’s second-largest private bank, has jumped five spots from last quarter to become the thirdbiggest arranger of notes in dollars, euros and yen, according to data compiled by Bloomberg. Citic Telecom International Holdings Ltd., a unit of China’s largest stateowned investment firm, picked UBS among managers of its inaugural U.S. currency bond, while China Vanke Co., the country’s largest developer, also hired the bank for its debut dollar offering.
“We’ve had the right focus on the right clients and have had a pretty high hit rate in terms of focusing marketing,” said Paul Au, the head of syndicate at UBS in Hong Kong. “We work extremely well with our wealth management colleagues in terms of deal origination and identifying the right product for our clients.”
UBS helped arrange highyield bonds for Chinese issuers as dollar offerings in Asia excluding Japan have risen to a quarterly record of $42.6 billion. Yields on dollar debt from China have fallen 226 basis points, or 2.26 percentage points, in the past 12 months to 5.51 percent, according to JPMorgan Chase & Co. indexes. That’s a bigger decrease than the 64 basis point decline to 4.34 percent for notes in the currency sold by all Asian companies, the indexes show.
Asia is a bright spot for Switzerland’s largest lender, which announced in October that it would largely exit fixedincome trading and fire a total of 10,000 workers from that and other divisions. The bank has fallen 2 spots to 14th in U.S. bond rankings this quarter from the previous three-month period, Bloomberg-compiled data show.
In Asia, HSBC Holdings Plc held its No. 1 position in arranging debt in G-3 currencies, taking 15.2 percent of all deals, up from 14.7 percent in the last three months of 2012.
“We have a large and diversified client base in Asia who regard us as being a safe pair of hands to lead manage their bond deals,” said Stephen Williams, head of debt capital markets for the Asia-Pacific region at HSBC. “Connecting with different parts of the organisation is critical. We have had several deals this quarter that have emanated from referrals from our private banking business.”
Standard Chartered Plc followed with an 11.2 percent market share, up from 5.9 percent last quarter when it ranked seventh among arrangers, according to the data. UBS had 8.9 percent this year.
“Clients understand we are product agnostic and can deploy a range of alternatives, depending on their requirements,” said Aaron RussellDavison, the global head of bond syndicate at Standard Chartered. “Bonds have been attractive in the first quarter, but issuers also appreciate that we bring other products to their table.”
Citigroup Inc. is the fourthlargest underwriter in Asia so far this year, with an 8.5 percent share, down from 10.6 percent last quarter when it ranked third, the data show. JPMorgan Chase & Co. is in fifth place with 8.2 percent of issuance, down from fourth with 10.5 percent in the three months ended Dec. 31.
“We aren’t targeting to be a certain number on the league tables,” said Murlidhar Maiya, the Hong Kong-based head of debt capital markets for Asia ex-Japan at JPMorgan. “What we are targeting is generating good solutions for our clients and at the same time running a profitable business.”
James Griffiths, a Hong Kong-based spokesman for Citigroup, declined to comment on the bank’s position in the league table. Citigroup was the biggest private bank in the Asia-Pacific region by assets in 2011, followed by UBS, according to a Private Banker International survey released in October last year.