Announcing the mtn-i 14th Americas Structured Note Awards
While preparing to announce mtn-i’s 14th Americas Structured Note Awards, global markets were shaken to their core due to the advent of Covid-19. Never before, not even during the financial crisis of 2007, have our markets experienced such unprecedented levels of volatility and uncertainty.
However, during these times, the structured note markets have showcased unrivalled resilience and elasticity. The products allowed investor base to achieve their widely varying goals by providing enhanced returns, protected downsides and exposure to asset classes otherwise out of the reach of many buyers.
mtn-i’s mission is to reveal how structured products constantly evolve to meet investor needs in response to market conditions, and the current situation has offered an unparalleled insight into this process.
We have therefore decided to recognise UBS as a power performer during the crisis, leading the USD16bn wave of US equity-linked issuance the hit the market during the crisis with a range of products allowing investors to enhance their participation in the following equity market recovery.
With some investors flocking to the relative safety of fixed-rate and step-up callables Wells Fargo stepped up to the plate and provided over a third of US interest rate structures during the crisis, helping support a 50% year-on-year increase in rate-linked supply.
mtn-i’s 14th Americas Structured Note Awards for the period ending just before Coronavirus hit global markets in February 2020 underscored the continued growth and innovation in structured note markets across the Americas.
Last year we decided to announce our Americas awards grouped by 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 year we continue on this path, highlighting the main drivers of innovation and investors solutions through 2019 as verified by mtn-i’s data.
The foremost players in structured note markets across the market accessed multiple growth trends via multiple asset classes. Bank of America, mtn-i’s US Structured Products Dealer of the Year, led from the front, tapping into multiple trends in the ELN market while rapidly expanding its rates platform to meet the needs of its broad client base.
In ELN space, Barclays has recaptured the top spot on the issuers league table, increasing its market share in an ever-competitive environment and making it once again the Equity-Linked Issuer of the Year.
Taking two House of the Year awards alongside an Editor’s Award Citigroup. As a leader in structured rates products the bank was integral in the resurgence of lighter structures also growing feeding demand for more complex products and was a leading dealer of the World Bank‘s callables in the US.
The rapid and sustained expansion of its US ELN business, tripling its issuance volumes since 2016, earns Citigroup an Editor’s Award and in Latin America the issuer consolidated its leadership reaching close to 15% of market share in the region and grew its penetration of a range of distribution channels.
A wave of demand for lightly structured rates products hit the market during 2019. The World Bank made a herculean push into the US market for fixed-rate callables, reaching more than USD20bn in issuance over the course of 2019 and earning them the accolade for Callable Issuer of the Year.
Tapping into the same trend, Ford Motor Credit Corp, mtn-i’s Corporate Issuer of the Year, accounted for 50% of all SEC-registered retail-targeted corporate callables thanks to the reach if Incapital‘s InterNote program.
In Canada, CIBC has delivered an excellent performance, further consolidating its N.1 position with a 38% market share of structured capital at risk products issuance. Their continued strength is recognised once again by the Canadian Structured Products Issuer of the Year award.
The diversification of exposures is a trend that has transcended the pre and post-coronavirus eras as investors have accelerated their search for new structures and underlyings. At one end of the spectrum, BBVA structured tweaks on traditional products while on the other end Credit Agricole led the way with a dynamic fund-linked solution. AAM and Desjardins, meanwhile, brought greater international equity exposure to their respective markets.
Environmental finance will be perennially relevant to capital markets. Amid the scarcity of green initiative, some have shown exceptional bravery in structuring new green solutions. BNP, always at the forefront of green innovation globally, stood out with a unique approach to an NGO sponsored tree-planting scheme. During BNP Green Week 2019, for every USD1,000 raised in ELNs one tree would be planted in Peru, resulting in a total of USD31m raised and 31,123 trees planted.
Investor appetite of the yield enhancement of structured rate products has grown over the past year and endured the recent crisis, becoming even more essential. the quest for yield endured and became even more crucial. Citigroup and Royal Bank of Canada led the USD14bn of World Bank callable notes, offering an attractive spread over Treasuries while maximising volatility and optionality value with perfect timing.
With a 50% market share, Toronto Dominion‘s journey in the SEC-market continues to be a story of growth, winning it the Rates Issuer & Dealer Rising Star award while Morgan Stanley‘s innovation in SOFR and Libor products lands the bank a power performer award.
The worsening trade-related tensions between the US and China, coupled with the anticipation of interest rate cuts from the Fed resulted in a huge gold-linked revival that has accelerated through the recent crisis. Underscoring this trend, JP Morgan offered the largest gold-linked pure-play of the last 6 years and reached a dominant position in the market with a 70% share.
Interest in accessing multiple asset classes to either enhance returns or to broaden exposure has persisted for more than 18 months. Societe Generale fed this hunger for hybrids notes combining equity and CMS spreads as the steepening of the curve post-March 2019 created an opportunity for investors.
Incapital took its market-linked product sales to USD5.7bn by the end of 2019, a record breaking achievementthat has landed it a Distributor of the Year award. The growth story is evident across Incapital’s business which saw a 9% growth in overall note sales and more than a 70% expansion in its distribution of rates structures. Alongside this Incapital also became a leading liquidity provider in the secondary market.
The return of value plays, and in particular a focus on high dividend paying equities, increasingly captured the attention of the market throughout 2019 and into the new year. Bank of America led the way by printing a series of notes linked to the STOXX Global Select Dividend 100 Index, identifying a pool of demand that several other issuers later came to utilise with their own structures.