The overall winner of Deals of the Year is BAT, with its $5bn multi-tranche bond issuance. At the time, the deal was the largest combined new issue and liability management transaction from an EMEA-based corporate in 2023.
Before announcing the transaction, BAT had around £17bn equivalent of debt maturing over the next four years. With a high level of near-term debt maturities looming, BAT was facing inflated liquidity needs, as well as high refinancing risk as the maturities would need to be funded, regardless of market conditions.
When a window of opportunity arrived in the form of a supportive capital market environment, the BAT team was able to execute the transaction immediately. On 31 July 2023, following the release of BAT’s half-year results, the company launched a new USD benchmark five tranche transaction, ahead of an expected busy post-Labor Day issuance period. At the same time, the company announced a concurrent $2.9bn capped tender offer, targeting GBP, EUR and USD notes maturing between 2024 and 2027.
With robust demand from investors, BAT was able to tighten levels 25bps from Initial Price Thoughts across the curve, with the order book printing $5bn with an average oversubscription of 4.7x per tranche. The tender, meanwhile, attracted interest of around $7bn, enabling BAT to select the optimal portfolio of $4bn to repurchase.
BofA, Deutsche Bank, Goldman Sachs, Santander and Wells Fargo Securities were active bookrunners on the new issue, with BofA, Deutsche Bank and Goldman Sachs acting as dealer managers on the tender offer.
As a result of the deal, BAT was able to achieve its objectives of de-risking its near-term debt towers, while extending its weighted average maturity beyond 10 years. The company is no longer restricted to a single refinancing window in future years, resulting in a more resilient and agile debt portfolio.
In what was a strong field of category winners, BAT stood out as the overall winner. The timing of BAT’s deal, the order book, the concurrent buybacks and the multi-tranche structure all meant that BAT’s transaction was perfectly executed. Pure treasury at its finest.