D E A L S O F T H E Y E A R

Denise Bedell examines the year’sdeals that defined their respectivemarkets and opened the way forother corporates to show their skill.

With so many excellent deals to choose from, selecting a winner and runnner-up from each cat e g o ry was not an easy task. Deals submitted far exceed thecriteria used to evaluate winners – including sound treasury manag e m e n t , i n n o v ative or optimal structuring, e fficient pricing and relative success in the face ofexisting market conditions. Those criteria offered ACT members and readers of The Tr e a s u r e r, who voted, and members of the Deals of the Year Panel, w h oselected final winners, a framework to look at a transaction in terms of how it best met the needs of the company and how the deal process showed thefortitude and ingenuity of the treasury and finance team in getting the deal done.

The equity markets left much to be desired once again this year, and winners in this cat e g o ry showed perseverance in completing deals on their own terms.Winner Northumbrian Wa t e r’s IPO saw equity investors committing without a prospectus or meeting the management team. R u n n e r-up Ye l l launched its IPOafter postponing in the face of bad market conditions last year. It was upped in size on outstanding demand.

The equity-linked markets were stronger than ever, and manyc o r p o r ates took advantage – the market saw record issuance in2 0 0 3 . E M I was the winner, with a deal that was part of abroader financing packag e , all three elements of whichhad to be managed simultaneously. R u n n e r- u pS c o t t i s h P ow e r launched a unique perpetual convertible,which offered outstanding pricing and saw strongdemand from a buoyant market.

The European high-yield markets woke up after a longsleep this year. C at e g o ry winner Focus W i cke s t o o ka d v a n t age of a changed market to launch a deal withunique call provisions, which allow the company to redeeme a r ly with little penalty under certain predefined exitc o n d i t i o n s . R u n n e r-up H e i d e l b e rg C e m e n t launched a strongdeal as part of a larger refinancing that helps the gr o u pincrease financial fl e x i b i l i t y.

I n v e s t m e n t - grade bond markets were calm in the face ofw o r l d - c h a n ging events and issuers took advantage to launchrecord issues. Winner Te s c o brought a robust multi-tranche, m u l t i -currency issue to market with a well-received debut euro tranche.R u n n e r-up British American To b a c c o took advantage of positivenews on US tobacco litigation to launch an oversubscribed deal.

It is a changed market for syndicated lending, and many corporates facebankers keen to reduce corporate exposure and re-evaluate credit relat i o n s h i p s .Winner Six Continents faced a tough market when arranging three separat efacilities for its demerger into Intercontinental Hotels Group and Mitchells &B u t l e r. The treasury and finance team persevered to set up thefacilities and complete the demerger. R u n n e r-up E . O Nhad a tough remit – how to set up one of thelargest corporate facilities ever and explain arevamped group strat e gy to banks.

F i n a l ly, the securitisation market saw anumber of unique and innovative dealsand new asset types being explored. B B Cwon the Deal of the Year for its complexsingle-property-backed bond toredevelop its fl agship property,Broadcasting House. To make mat t e r smore diff i c u l t , it was the debut issuefor the BBC. R u n n e r-up M e t r o n e tused a hybrid structure with elementsof PPP and corporate financing toclose a deal for the renovation of theLondon Undergr o u n d .

The Treasurer congr at u l ates allthe winners on excellent deals andexceptional achievements.

JAN | FEB 2004 THE TREASURER 39