The most important transactions carried out by the different CIB departments and the highlights of the first nine months of 2013 are summarized below:
The Mergers & Acquisitions unit continues to be the Spanish leader in financial advice for M&A deals. During the quarter it has provided advice on: the reorganization of Cemex operations with Holcim in Europe; the sale by Bankia of 20.1% of Indra to Sociedad Estatal de Participaciones Industriales (SEPI) and the acquisition of Delion (an Indra subsidiary) by the venture capital fund Springwater Capital. The Corporate Finance franchise in Mexico has also performed well. Among the main operations this quarter in Mexico are the advice given to: Megacable (the biggest independent cable operator in Mexico) for the acquisition of 51% of the capital of LETI and 51% of FIDELIZAR; Gorditas Doña Tota on the sale of 80% of its capital to FEMSA (one of the main Coca-Cola bottlers in the world); and ICA on the sale of 18.7% of the RCO highway network to various Goldman Sachs funds.
In its equity capital markets business, BBVA has acted as agent bank in arranging the Repsol scrip dividend and repurchase of preferred securities; as adviser for SEPI in the purchase from Bankia of 20.1% of Indra; and as agent bank for the payment of the dividend in cash and kind by Europac. In Europe, BBVA has participated as co-bookrunner in the issue of Aperam convertible bonds. In Mexico it has been bookrunner in the follow-ons of Banorte, Inbursa and OMA. In Peru, it has participated as co-manager in the share capital increase of Graña y Montero.
In Project Finance, BBVA has consolidated its leading position in Spain by acting as mandated lead arranger (MLA) in the following operations: finance of the Benavente-Zamora section of the A-66 highway, the new hospital in Vigo, and the municipal building in Vitoria (Lepazar); and refinance with bonds and structured bank debt of Madrileña Red de Gas (project bond) and Euroports. In Latin America it has helped close the finance for the Mitla-Tehuantepec highway in Mexico, the acquisition of the Intercontinental, Ritz and Crowne Plaza hotels in Santiago de Chile and the hydroelectric power station of Chaglla in Peru.
In Leveraged Finance, BBVA has led four leveraged buy-outs (LBO): the acquisition of Marrelli Motori by the Carlyle Group; the acquisition of San Antonio Colombia by Southern Cross; the acquisition of Gamo Outdoor by BRS Capital; and the refinancing of the structured debt granted to Angulas Aguinaga by Portobello Capital.
In Corporate Lending, BBVA has closed 27 operations in Spain, the most important of which are as follows: the financing of Colomer for €120m and the syndicated loan granted to the regional government of Vizcaya for €136m. In the rest of Europe there were closings of the revolving credit facilities (RCF) for major European companies: Daimler, Evonik, Carrefour, Edison, Siemens, Deutsche Post, Unilever and Lactalis. In Latin America loans were arranged for América Móvil and the Federal Electricity Commission. In the United States, BBVA Compass has closed finance for Strike LLC and lending to Philips 66.
In Global Transactional Banking the most notable operations in the third quarter were: in Europe, the issue of guarantees for a leading company in the infrastructure sector for the construction of a tunnel in Sydney; and the naming of BBVA as depository for the pension plan of a major company in the energy supply industry. In Mexico, major credit facilities have been closed with the subsidiary of the leading renewable energy group and with a company of major importance in the mobile telephony sector. In the United States four standby letters of credit have been issued on the orders of a major construction company. The following new functions are worth noting in “BBVA net cash”: in Colombia, the development of “Adenda Créditos”, which provides additional information for customers on the payments they make into their accounts; in Europe, the adaptation of the SEPA direct billing applications to COR 1 (standard), which allows customers to present debits only one day in advance. In addition, the United States has implemented the “Spend Net Navigator” tool to make it easier to manage credit cards online. Lastly, BBVA has been named “Best Trade Finance Bank in Latin America” by the prestigious magazine Trade & Forfaiting Review.
Global Markets delivered between January and September 2013 a gross income of €964m, a year-on-year rise of 26.5%. The strategy and business model of this unit aims to involve its customers in the business opportunities presented by the broad spectrum of markets in which BBVA operates. At the same time, it carefully examines the sustainability of each proposal through a firm commitment to risk control and an efficient use of liquidity. That is why Euromoney has recently recognized BBVA CIB as “Best Investment Bank in Spain”.
By geographical areas, in Spain, BBVA continues to lead the ranking of intermediation in the Spanish stock exchange, with a market share that has risen to 16.2% (according to the latest information available through September). It generated cumulative gross income of €311m, a year-on-year rise of 11.0%.
In the rest of Europe and Asia, gross income accumulated to September 2013 of €170m is nearly double (up 95.3%) that for the same period in 2012.
In Mexico, Global Markets has continued to consolidate its leading position. Gross income generated between January and September stands at €231m, a rise of 6.3% over the previous 12 months. Revenue has continued its positive trend in all customer segments as a result of the synergies generated with the branch networks. There has been a notable performance by the equity products, which grew 33% in the last 12 months.
South America has obtained sound results, with a year-on-year growth in gross income of 56.2% to €268m. The figures are very favorable in practically all the countries in the region.
In the United States, cumulative gross income through September amounted to €66m, supported strongly by the increased activity with institutional customers (up 52% year-on-year), and the performance of interest-rate (up 20%) and credit products (up 18%).