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Volatility Rises, Structures Surge!
mtn-i is excited to announce its 13th Americas Structured Note Awards in a period when volatility across asset classes and rising rates drove the biggest year in a decade for the US structured products market.
New structuring techniques enhanced value for investors, including the use of AI and key consolidations in the digital platform space set the scene for a revolution in distribution and the potential for this market to connect with advisors and investors.
US sales grew 15% to USD65bn as manufactures and distributors delivered an expanded toolbox of solutions to navigate choppy equities, volatile rates and swings in other asset classes that defined the last 12 months.
mtn-i’s mission to reveal how structured products constantly evolve to meet investor needs in response to market conditions and identify the market’s most relevant themes and growth stories always drives our award decisions.
For the first time we are announcing and presenting our Americas awards grouped by these themes – spotlighting more clearly the range of the market’s solutions and relevance to investors in each case and the firms leading their innovation.
This also highlights which themes are finding the strongest traction with investors as verified by mtn-i’s data.
Digital Distribution & AI Indices
Online distribution platforms have reached a jumping-off point as issuers and dealers scramble to find new and more efficient channels to reach a widening pool of buyers.
The new found independence of SIMON, and its onboarding of the leading manufacturers as equity partners, the continued innovation and independence of HALO, and the consolidation of two of the market’s deepest distribution channels into LUMA, have inspired manufacturers, issuer and advisor to see digital execution and distribution as reaching critical mass in its potential to be powerful force in driving the market’s future – and earning them a collective Editor’s Award.
SIMON is also scooping a Market Futures Award for leading the growing enthusiasm for the online distribution of structured notes and transforming the conversation around multi-issuer platforms.
In the proprietary index space Credit Suisse utilised RavenPack‘s artificial intelligence algorithms to leverage hard and soft data to create the Artificial Intelligence Sentiment Index. The benchmark harnesses the power of ‘big data’ analytics to make sector allocation decisions.
Investors have sought ways to monetize and hedge against volatility in the equity-linked market with overall sales increasing 10% to USD57bn. Helping buyers get a pick-up on the downside UBS led the issuing and distribution of index-linked bear notes while JP Morgan worked with Advisor Asset Management to print a unique stock structure.
The US investment bank’s Manufacturer award also recognises its pioneering of dual-direction worst-of products while BNP Paribas brought a growing number of RIAs to the structured note arena with bespoke solutions.
Meanwhile, Canadian investors looked to stock-linked structures to find returns in a more volatile environment with Bank of Montreal providing the greatest number of tickets to the market.
The rally in US dollar interest rates led to more than a doubling in fixed-rate callables, step-ups and structured floaters, jumping to USD4.5bn. Toronto Dominion built on its strong credit quality and substantial distribution channel to print some of the largest fixed and floating-rate structures seen in recent years to both institutional and retail client.
Corporate credits also found traction in this environment with Incapital providing retail with access to Caterpillar, Ford, General Motors and Verizon while Toyota Motor Finance Corp made its landmark debut outing in the US retail space, issuing USD2bn in IncomeDrive Notes.
Meanwhile, interest rate swap-linked products alongside structures such as range accruals found renewed demand. Bank of America straddled trends in both complex and more lightly structured products, quadrupling its issue volume and landing it a Power Performer Award.
Range accruals returned to the GSE space care of FHLB. Barclays, Morgan Stanley and Stifel Nicolaus all found demand for the re-emergent structure. Barclays led innovation in US dollar CMS pushing a USD20m series of principal-at-risk paper linked to the 10-year rate.
Providing Mexican investors with a solution to falling returns on traditional rate-linked products BBVA opened the market for notes linked to TIIE swaps. An uptick in rates also prompted the appearance of floating coupons in the ELN market with Bank of Nova Scotia pioneering the product in Canada.
As inflation rose investors demanded structures linked to US CPI. Notes on the measure exceeded USD300m for the first time in seven years. Barclays led the growth with multiple structures providing 40% of the market volume.
Greater volatility also birthed new multi-asset solutions to compete against more traditional products. Citi found traction with best-of multi-asset portfolio plays tackling a high degree of market uncertainty.
Credit Agricole has sown the seeds for growth in the bank-issued structured green market leading the way in green products to retail through a series of rate and equity-linked notes while also placing the largest ever FIG US green structure.
Attractive pricing opportunities in oil futures-linked notes fuelled a 13-fold increase in issues. Morgan Stanley, as both an issuer and a dealer, accounts for over 40% of the market.
The World Bank cemented it position as a leader in solutions-focused new structures becoming the only supra active in commodity-linked issues with a unique floating rate, callable, puttable product.
Against increasing competition from a growing number of rivals our House of the Year Awards recognise the strongest performances overall in structured notes across the Americas.
In the US JP Morgan stands as the benchmark against which other names compare themselves growing its business by 10% and gaining market share. Leading volume and innovation in the equity-linked space across structures and underliers, the name is also competitive across asset classes and channels of distribution making it our Manufacturer of the Year.
The World Bank, mtn-i’s Americas Issuer of the Year, spread recognition of its name across institutional and retail clients with a range of structures targeting the US and LatAm.
Meanwhile, Goldman Sachs has provided leadership in rates, across light and complex structures, while Societe Generale supplied volume and innovation in the 3a2 market. Among broker-dealers Incapital stands out for wide spread distribution of structured products from a range of credits.
CIBC has been spotted at the front of many of the recent trend in Canada’s structured note market including single stock notes on a variety of domestic and foreign underlyings, hybrid index linkers and oil future plays. For its innovation in onshore deals in Mexico and Brazil alongside its third-party structuring Citi wins a Latin American Structurer of the Year Award.
For their overall performances in the US two Canadian names rose to prominence. National Bank of Canada rocketed out of the starting gate with USD800m of ELNs issued while Bank of Nova Scotia expanded its output in equities and rates, bringing in new distribution channels and going toe-to-toe with the biggest names in the third-party space.
Book your seat now for our poolside Showcase and Awards on April 4th and don’t miss the inspiration and company of Americas’ most creative and influential structured note players.
What a night!
mtn-i’s Annual MTN Awards reached their 16th anniversary last week with a fantastic turnout and GBP6,000 raised for children’s charities – all hosted by the voice of the UK National Lottery!
Over 50 institutions were represented at the event. The World Bank, the EBRD, the IFC, the Federal States of North Rhine-Westphaliaand Saxony-Anhalt, the Region of Wallonia, KfW, L-Bank, Rentenbank, AFL, Caffil, CFF, Pirelli, Puma and Toyota were all among the illustrious list of borrowers recognised.
Click here… to see all of the evening’s images!
Dealers and Issuers of the Year!
This year’s recognitions continued to range across private debt markets, embracing the year’s key themes (Green/SRI Debt, Schuldscheine, Covered Bonds, Bail-in Debt, Next-Generation Structuring, Post-Libor Products and Frontier FX), as well as traditional MTN and structured notes.
Citi and HSBC were Cross-Border MTN and Private Placement Houses of the Year, respectively, while the World Bank scooped Issuer of the Year.
Credit Agricole won MTN Dealer Power Performer, while Citi also claimed Global Rate Structure Dealer & Issuer and JP Morgan took home Third-Party Rate Structure Dealer of the Year. Societe Generaleand Toyota were Corporate Dealer and Issuer of the Year, respectively.
In addition, our Rising Stars, Deals of the Year, Investor Solutions, Power Performer and Market Future categories spotlighted yet more entrepreneurial dealership, innovative structuring, investor discovery and intrepid issuing in MTN and private placement markets.
Click here… to see all our award-winners!
GBP6,000 for charity!
The generous donation of auction items and bidders on the night raised GBP6,000 for two children’s charities.
CATs, the charity founded by our business development manager, Daniel Lewi, supports families and children affected by Tay-Sachs and Sandhoff disease.
We were also honoured to be joined by Free To be Kids co-founder Rachel Nichols. Free to be Kids provides residential therapeutic adventures and activities for vulnerable children.
mtn-i is proud to be supporting innovative charity start-ups and give them long-term support.
Our 13th Americas Structured Note Showcase & Awards – 4th April, Miami
With so much coming up we would like to share some key 2019 dates for your diary for you and your team to join us and the MTN community…
7th FEBRUARY, 16th MTN Awards, London
NOW, NOMINATIONS OPEN for Americas Structured Note Awards
4th APRIL, 13th Americas Structured Note Showcase & Awards, Miami
8th JULY, NOMINATIONS OPEN for APac & Uridashi Awards
3rd OCTOBER, 2nd Uridashi Awards, Tokyo
21st OCTOBER, NOMINATIONS OPEN for MTN Awards
3rd DECEMBER, mtn-i Christmas Party, London
NOMINATIONS CLOSING SOON
You can still nominate or pitch deal, dealer or issuer achievements in the following categories across North and Latin America:
You have until 15th February to submit your nominations and complete a conference call to pitch with the mtn-i team.
Email your submission to firstname.lastname@example.org or call us on +44 (0)20 7437 1331.
Save the date to celebrate: 4th April 2019, The Four Seasons, Miami.
We are currently running a 10% early-bird discount on all bookings. Email email@example.com to book your delegate pass now!
Nominations are now open!
The search has started for the deals, dealers, issuers, investors, innovations and landmarks that will star in our 13th Americas Structured Note Showcase Awards.
We invite your nominations across all of our award categories…
Send your nominations in Word, PDF, Powerpoint or email format. Term sheets, data submissions and other supporting material are welcome.
PITCH DEADLINE: 15th February 2019
Book your pitch call / meeting with us by email to firstname.lastname@example.org or call +44 (0) 20 7437 1331.
SAVE THE DATE TO CELEBRATE: 4th April 2019, Miami
We are currently running a 10% early-bird discount on all bookings. Email email@example.com to book your table now!
Making Sense of MTNs
The goal of mtn-i’s awards has always been to recognise where the MTN market has created most value for issuers, dealers and investors as it keeps adapting and evolving solutions that meet their needs. As MTN private placements ever more innovatively infiltrate every part of the capital market product, asset class, credit and capital class spectrum, that’s an increasingly challenging task!
To put it in context: the market has delivered some 43,000 notes in 2018, topping USD550bn of sales in nearly 50 currencies across nine asset classes, 70 identified product types and a dozen maturity buckets, according to mtn-i data. As many as 600 issuers and 130 dealers feature in these flows.
Moreover, a record 37 dealers and issuers submitted pitches to spotlight their contributions – posing a dizzying selection task for our editorial team this year.
It’s also our goal that our coverage spotlights the market’s strongest growth stories and pinpoint the performances driving them. So this year for the first time we’ve aligned our decisions with the Top 10 trend and growth story research we present at our regional showcases. The 2018 mtn-i awards are MTN growth trend-driven, guided by your pitches and our coverage, data and research.
We hope you share our view that this is the most valuable way of foregrounding the market’s most compelling value, innovation and performance for issuers and investors in 2018 and going forward.
Our Houses of the Year constitute the global elite of MTNs and private placements. Citi and HSBC, our Dealers of the Year, continue to display unmatched multi-regional strengths that enables them to remain market leaders in origination and distribution of non-public debt. Even as competition intensifies still further, their reach and relevance remain exceptional.
In addition, Credit Agricole breaks into the top tier as our Power Performer of the Year – a reflection of the firm’s exceptional capabilities both in cross-regional flows into and out of Asia and in SRI debt.
The World Bank, meanwhile, stands out as an unequalled issuer of these products. The senior supra has driven innovation in the SRI area with sustainable pay-off structures that go beyond use of proceeds and its highlighting of the water-related SDGs through ‘blue’ MTNs in multiple currencies and structures. It has also pioneered technology in capital markets through its bond-i blockchain breakthrough.
2018’s 200% growth in complex rate structure demand drove our recognitions in this sector. Citigroup’s strategic prioritisation of rate structures as a funding source over benchmarks – anticipating competitive FIG public market conditions next year – drove a big cross-regional lead as an issuer and dealer with over USD4bn of rate sales in 18 structure types.
We also recognise JP Morgan’s leadership in third-party rate structure sales.
Our Deals of the Year and Investor Solutions awards include Credit Agricole’s innovative CMS10/10-year structure, which avoids negative carry for insurance buyers. National Bank of Canada’s USD400m CMS dual range accrual series and Federal State of North Rhine-Westphalia and Region Wallonne’s EUR500m leveraged CMS steepeners emphasise the complex rate trend.
The sophistication, speed and flexibility of the MTN and structured debt markets in meeting investor needs is the common theme of our three Market Future awards. Credit Suisse’s jumbo Deal of the Year repackaged a multi-asset package of risk to deliver its buyer’s desired outcome, while Natixis pioneered the first repack of sovereign green bond debt.
Meanwhile, Leonteq harnessed its proprietary technology to offer over 10,000 structured notes this year on a unique set of underlyings that included thematic equity plays, newly IPOed stocks, bull and bear credit-linkers, and crypto currencies.
FIG scarcity continued to drive huge investor demand for corporates in 2018, particularly in the Euro 2-year FRN space. Societe Generale‘s prominence in the product’s 65% surge in sales to EUR19bn and leadership of the overall USD76bn corporate MTN space scoop our Corporate Dealer of the Year award.
Deutsche Bank’s EUR2.25bn FRN for AT&T underlined the depth of money market fund appetite for corporates. Aroundtown and Grand City Properties‘ CMS FRN series with Morgan Stanley highlighted the opportunity for corporate issuers to attract structured funding.
In addition, we recognise Mizuho’s mining of Asian demand for a string of European corporates. Toyota’s global accessing of over USD3.2bn in investor demand from SEC-registered structures to Japanese retail Uridashis, as well as its innovative ‘IncomeDriver’ programme in the US and multi-currency MTN sales internationally, wIn it Issuer of the Year.
The innovative and entrepreneurial diversification of the MTN product’s role has also driven a move at most firms away from a universal flow-based business to a focus on leadership in market segments where individual strengths are best leveraged. Standard Chartered’s domination of the Gulf credit sector for a third year running exemplifies that opportunity in a sector that now has over USD50bn of outstandings.
Natwest’s rejuvenated MTN business exploited the doubling of the sterling MTN market to drive a five-fold ramp-up in volume in 2018 with a focus on FIG origination that is recognised with a Power Performer award.
Another 50% jump in demand drove private SRI MTN sales to an all-time USD13bn high in 2018 and delivered some significant product and credit diversifications and innovations.
The global distribution of one Deal of the Year in this area underlines the investor appeal of sustainable payoffs as well as use of proceeds.The World Bank’s work with BNP Paribas and UBS delivered innovative SRI equity-linked notes that carry payoffs linked to the performance of specialist equity indices of sustainably rated companies.
Meanwhile, Standard Chartered established the blueprint for sustainable marine development in returning the Seychelles to international debt markets. The pair’s Deal of the Year opens the door to further ‘blue bond’ funding.
We also acknowledge the new ground broken by Region Occitanie‘s green/social hybrid with an Investor Solutions award.
Non-syndicated demand has regularly flowed into the new bail-inable senior non-preferred and TLAC capital products as investors hunt yield pick-up via credit, regional and FX combinations that work for their portfolios. Bail-in MTN sales grew a further 40% in 2018.
Credit Suisse’s USD2.1bn TLAC-eligible rate structure series mitigated contracting credit spreads for ultra high net worth clients via embedded rate structures for its parent – the first non-US G-SIB to do so. UniCredit’s USD3bn of senior non-preferred notes underlined the depth of the market’s capacity for benchmark-style liquidity, filling the borrower’s entire TLAC requirement with one trade sold to Pimco.
At the other end of the funding dynamic, Nationwide Building Society’s series of Norwegian krone and yen non-preferred sales revealed it as the sector’s most consistently available issuer, earning it a Rising Star recognition.
With investors starting to adjust to the coming post-Libor environment Royal Bank of Canada pioneered SONIA-linked MTNs for itself and the new benchmark’s debut third-party FIG issuer, while Commerzbank brought SSA debt to the product. In US dollars L-Bank became the first European agency to issue on the new SOFR index.
In a year which saw record long-dated third-party covered MTN sales, Goldman Sachs exemplified the development with its EUR400m Deal of the Year for Commonwealth Bank of Australia. Increased after launch, the 20-year jumbo offered arbitrage funding at benchmark pricing but in an ultra-long maturity unavailable in the public market.
In addition, we recognise DZ Bank for returning swap-linked structures to the sector after a long absence. Its Deal of the Year series with France’s Cafill / CFF marked the first covered CMS FRN bullets in four years.
In the EM and Frontier FX sector CAF Development Bank’s substantial Colombian peso series (including its debut green issue) and rare Peruvian sol sales mark it out as a Power Performer. ING and Citi both contributed to the sector’s Deal of the Year – the IFC’s opening of the Uzbek so’m market. TCX’s vital provision of a swap market for the frontier FX sector earns it an Investor Solutions award.
Despite the volume setback that followed its record 2017, our Schuldschein awards spotlight the market’s ongoing international credit and investor diversification – recognised in UniCredit’s Dealer of the Year Award, and deal awards for Pirelli and Puma that underlined the market’s ability to deliver benchmark funding opportunities and provide borrowers with digital execution. Encevo’s Deal of the Year recognises the SSD market’s embrace of the green bond theme, while our Investor Solutions award spotlights innovative structuring in the format via Natixis‘s range accrual for Saxony-Anhalt.
SAVE THE DATE TO CELEBRATE: 7th February 2019, London
Invite your clients and email firstname.lastname@example.org to book your table now!