Global port operator DP World took this year’s award for Bonds above £750m.
Incorporating four different tranches and spanning four markets, this unique deal saw the Dubai-headquartered company issuing a $1bn sukuk alongside three conventional bonds denominated in USD, EUR and GBP – achieving a total value of around $3.3bn.
Adding to the complexity of the deal, the company simultaneously carried out a liability management exercise in the form of a tender offer.
This innovative deal was intended to raise proceeds for capex and M&A plans across multiple currencies, as well as optimising the liability portfolio by reducing the cost of the company’s outstanding liabilities.
The company’s achievements were all the more impressive given the challenging environment in the Middle East debt capital markets that preceded the transaction.
As well as being the Middle East’s first triple currency offering since the financial crisis, it was also the region’s first GBP benchmark issuance since 2011, and its first EUR benchmark issuance since 2014
The tranches were as follows:
At the same time, DP World announced a tender offer on $650m worth of sukuk certificates due in 2019 for its subsidiary JAFZ.
The highly complex deal came with numerous standout features.
For one thing, the transaction brought several milestones for DP World itself. The deal was the issuer’s debut issuance in GBP and EUR, while the 30-year USD tranche was the company’s second bond issuance after 2007.
The transaction was also notable at a market level: as well as being the Middle East’s first triple currency offering since the financial crisis, it was also the region’s first GBP benchmark issuance since 2011, and its first EUR benchmark issuance since 2014.
The benefits for DP World were likewise significant.
By tapping into the EUR and USD markets, the company gained access to a more diverse pool of investors, with different tranches appealing to different investor bases, as well as extending its debt life.
The strong pricing levels delivered a tighter cost of debt for the company, while the liability management exercise alleviated upcoming debt redemptions and enabled the company to reduce interest expenses.
“Everything about this deal was compelling, from the complexity of the different tranches to the fact that much of what was achieved was relatively new for the region.”
Providers Barclays, Citi, et al
Structure $1bn sukuk; £350m MTN; €750m MTN; $1bn MTN; tender offer on $650m sukuk certificates
In this category, the judges also highly commended Vodafone’s senior unsecured bond issuance and debut hybrid transaction, which were intended to partly fund the proposed €18.4bn acquisition of Liberty Global’s operations in Germany, the Czech Republic, Hungary and Romania.
The deal included an $11.5bn senior unsecured bond consisting of six tranches issued in May 2018 at a EUR equivalent fixed yield of 2%, as well as hybrids worth €4.2bn spanning three currencies issued in September.
Marking Vodafone’s return to the public USD market, the USD offering opened up a significant pool of future liquidity while extending the company’s maturity profile.
Meanwhile, the hybrids helped to secure the company’s credit rating for a significant acquisition.
The judges noted the extraordinary timing of the deal: Vodafone achieved a blended EUR equivalent fixed yield of 3.3% across the hybrid funding – a rate which was all the more impressive given subsequent market deterioration.
The Treasurer’s Deals of the Year Awards recognise the outstanding work of treasurers, both within the treasury community and the wider business world. Through them we champion the success and achievements of treasury teams that have stood out in the market over the prior 12 months. Winning an award is a great way to strengthen your organisation's and your treasury's profile, bringing peer and industry acknowledgement.
This article was taken from the Deals Edition 2019 issue of The Treasurer magazine. For more great insights, log in to view the full issue or sign up for eAffiliate membership