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Runners and Riders: Goldman top of ECM class in 1H but others catching up

In still tricky market conditions, Goldman Sachs has worked hard to finish the first half of the year as top of the EMEA ECM class, but two of its largest competitors are close behind, according to Dealogic bookrunner rankings data.

The data shows though that both Bank of America and Morgan Stanley remain in the hunt for the top spot with over USD 5bn of issuance each, just below Goldman’s USD 6.2bn. Both banks have seen huge increases in their 1H numbers when compared with negligible deal flow in the first half of last year.

Goldman’s main driver of issuance in 1H was block trades and that continued to be a theme in 2Q in a continuation from 1Q. GS not only came top of the class in 1H but increased its deal volume by 17% from 1H 22.

GS held key roles in FEMSA’s clean-up of Heineken [AMS:HEIA] in May, alongside a concurrent sale of the holding company [AMS:HEIO], along with BofA and Morgan Stanley.

Goldman was also sole bookrunner on a USD 400 block in Flutter [LON:FLTR] in April and has been a continuous presence on some of the largest sell-downs in EMEA this year, as well as completing several convertible bonds to complement its offering.

BofA was the top bank of Q2 in terms of issuance volume, although GS printed more deals, 17 to BofA’s 11. Its most significant transaction was as sole bookrunner role on GSK’s [LON:GSK]’s USD 1bn sale of Haleon [LON:HLN] in May. It was also one of the banks on a USD 3bn sell-down in London Stock Exchange Group [LON:LSEG] in May. BofA’s deal volume was 136% higher than 1H22, a huge improvement in the year to date (YTD).

Morgan Stanley, the top bank in 1Q, had roles on several of the mega-block deals in 2Q but shared much of the bookrunner credit with other large banks. But the bank is unlikely to be daunted by not finishing 1H on top, given its global coordinator role on the USD 1.8bn IPO of Romania’s Hidroelectrica [BUC:H2O], Europe’s largest IPO this year, which priced this week.

Morgan Stanley’s YTD total was an impressive 111% higher than at this stage last year.

Outside of the top three American banks JPMorgan, BNP Paribas and Citi are in hot pursuit with total volume of around, or just under, USD 4bn.

BNP Paribas remains the most balanced top ten ECM bank in 1H, with the most even volume of deals spread across follow-ons, IPOs and convertible bonds. The French bank was the most regular issuer of CBs in EMEA across the first six months of 2023.

While deal activity remains muted, especially when compared with bullish markets, there are hopes for more to come soon, especially given the recent IPOs of Hidroelectirca, alongside Thyssenkrupp Nucera [ETR:NCH2] and CAB Payments [LON:CABP]

An upturn in sentiment could finally prompt one of Europe’s highest profile IPO candidates out of the woods.

EQT owned Galderma, which has a score of 54, according to Mergermarket's Likely to Exit (LTE) predictive algorithm.* The Swiss skincare company raised USD 1bn in a private placement last month and an IPO is on the cards, as reported, despite frequent postponements.

Pitching activity is still strong, one ECM banker said, adding that teams are increasingly reconnecting with management teams who were considering an IPO in 2018 or 2019 and would like to revisit their plans.

The return to physical investor meetings is also making it easier to convey equity stories in a more poignant way, he added.

“In those 45 minutes, you can bring in a whole different energy with investors in the room. You can really lay out the story of the company better,” he said.

Hope springs eternal for more ECM deals, but the top banks in 1H showed that even in hard times, there are still wins to be gained.

Analytics by Raj Saiya

*Mergermarket's LTE predictive analytics assign a score to sponsor-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a deSPAC transaction.