Rexam has won The Treasurer’s Deals of the Year Award for its hybrid bond, the first from a UK corporate, with Vodafone named as Treasury Team of the Year. The Association of Corporate Treasurers (ACT), publishers of The Treasurer magazine, today declared Rexam overall winner of the prestigious Deals of the Year Awards 2007. Now in their tenth year, the awards celebrate excellence and innovation in treasury. Winner of the individual corporate structured finance award category, beverage can and packaging manufacturer Rexam also won the overall award for its landmark deal in the European corporate bond market which marked the very first hybrid from a UK corporate. Vodafone took the inaugural title of Treasury Team of the Year, having impressed the City over the past year, with bankers, financial advisors and treasury professionals commenting on high levels of professionalism, technical excellence and strong execution of treasury strategy. Richard Raeburn, Chief Executive of the ACT, said:
“The strength of these awards is derived from the fact that they represent the treasury practitioners’ view of what constitutes excellence in treasury. We have been impressed by the number and the quality of the entries we have seen this year – from both before and after the credit crunch – a testament to the resilience of many relationships between the companies and their banks and the stability that can be achieved through sound treasury practice. Richard Raeburn, Chief Executive of the ACT
Diana Brightmore-Armour, CEO Corporate Banking and Co-head of Corporate Markets, Lloyds TSB said:
This event is a well renowned benchmark for best practice across the industry and Lloyds TSB Corporate Markets is delighted to support the ACT and its members through its sponsorship. Over the past year, the commitment and skill of UK corporate treasurers in funding their companies has been clear for all to see. 2008 is set to be another uncertain year and the funding challenges are set to continue. But as awards such as these demonstrate so powerfully, both corporates and banks are well equipped to overcome any obstacles. Diana Brightmore-Armour, CEO Corporate Banking and Co-head of Corporate Markets, Lloyds TSB
The Deals of the Year Awards are organised by the ACT’s Treasurer magazine and supported by Lloyds TSB Corporate Markets. They are the only treasury awards where the winners are judged by fellow practitioners. Winners were announced at an awards ceremony dinner held at Drapers’ Hall, London on Wednesday 23 January 2008, attended by over 100 treasurers and finance directors from leading FTSE and European companies. Winners are:
The full list of winners can be viewed at www.treasurers.org/thetreasurer/awards
2007 marked the tenth anniversary of the prestigious Deals of the Year Awards organised by The Treasurer, the official magazine of the ACT and supported by Lloyds TSB Corporate Markets. The awards celebrate the achievements of the corporate treasurer in successfully accessing the debt and equity markets on behalf of their company. All types of deal are considered and judged on the basis of demonstrating innovation and excellence in treasury, rather than on the size of the deal. The challenge of determining which deals win an award rests with a distinguished panel of experts which includes treasurers with billions of issuance behind them. To mark the tenth anniversary of the awards, 2007 saw the launch of a new award – Treasury Team of the Year. Members of the ACT, readers of The Treasurer magazine and the wider treasury community were invited to vote for the team that stood out most across the different aspects of treasury, including cash management, risk, corporate finance, treasury operations and corporate governance. Winners were presented with their awards at the Deals of the Year Awards dinner, an exclusive evening event held on Wednesday 23 January 2008 at Drapers’ Hall attended by over 100 treasurers and finance directors from leading FTSE and European companies. Previous winners of the Deals of the Year Awards include: Arsenal FC, Bayer, Cadbury Schweppes, Croda, Invensys, Land Securities, NXP Semiconductors and Tesco. For further information on the ACT please vist the Press Room
Packaging group Rexam made the headlines in June, when it completed a £750m hybrid bond deal that marked the European corporate bond market’s first hybrid security to be sold by a British company. The rationale for the transaction was to refinance the \$1.825bn strategic acquisition of Owen-Illinois’s plastics division. The financing package, which included the issuance of hybrids, an equity placing and senior bank debt, was designed to preserve Rexam’s investment-grade ratings post-acquisition. Without the hybrid Rexam would have issued either more senior debt, resulting in a ratings downgrade below investment grade, or further equity, which would have diluted earnings per share. In nominating the deal, Graham Buckland, Director for Investment Banking at Barclays Capital, wrote:
The transaction was the first issue of hybrid securities by a UK corporate since the ratings agencies published their methodologies for the instruments. The deal was structured to provide Rexam with flexibility while containing several creditor protections. By establishing a template for an issue of hybrid by a UK-domiciled corporate, Rexam has allowed other UK corporates to have more choice in the financing of instruments, whether for M&A situations or more general funding. Graham Buckland, Director for Investment Banking at Barclays Capital
The hybrid demonstrated how integral financing structure is in an M&A. Rexam had to investigate the tax consequences of the proposed transaction, the ratings implications and how it would be perceived in the equity market. Extensive due diligence made sure that the hybrid would protect the interests of Rexam’s existing stakeholders, including senior creditors and shareholders. In structuring the hybrid, the key points were flexibility, the tax treatment and attracting investors. Rexam wanted protection from changes in treatment from tax authorities, rating agencies and accounting standard setters, plus an ability to exit the hybrid at any time. It completed the transaction in less than two weeks from announcement.
The Vodafone team is well known in the City. One banker said:
They have confidence and the experience to debate markets to the point where we treat them as a counter party rather than a corporate client. Staff are highly skilled and can develop their skills through various roles within the treasury and outside into complementary finance functions, including corporate finance and insurance.
Vodafone has subsidiary operations in 17 countries, and joint ventures, associates and partner market/franchises operations in a further 40. Their ability to manage a global operation is impressive. As Gerry Bacon, Group Treasurer and Chief Financial Officer of Vodafone Group Services explains,
we have staff located mainly in Newbury, UK, but also in Germany, India and the US, giving us 24-hour coverage, which is helpful when M&A is heavy. Gerry Bacon, Group Treasurer and Chief Financial Officer of Vodafone Group Services
2007 was another busy year for the department culminating in a competitive bid for a mobile business in India with an enterprise value of \$19bn which was debt financed, firstly in the bank and commercial paper markets and later in the US and euro bond markets.