UBS as­cends G-3 bond ranks on con­tacts with rich

The Pak Banker - - COMPANIES/BOSS -


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.

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