international Arrangers: Expanding field

24 March 2006
An innovative GCC project finance deal in 2005 resulted in an unusual phenomenon at the upper end of MEED's annual survey of lead arranging mandates. Thanks to the $2,250 million bond to fund the RasGas III project, and the simultaneous $970 million bank tranche, Goldman Sachs and Lehman Brothers topped the table - despite doing no other deals in the region all year. However, in terms of pure mandated lead arranger (MLA) mandates, HSBC retained its ascendancy for the fourth year in a row.

HSBC participated in a total of 11 transactions at MLA level across all GCC markets, accounting for a deal flow of just over $1,000 million - well outstripping its nearest rival. Second place was taken by Calyon, which moves up the table for the second year running and joined 11 regional financings - beating national rivals BNP Paribas and Societe Generale.

The traditional regional heavyweights continued to dominate, but 2005 was notable for the increased lending appetite of other institutions. ABN Amro, which was absent from 2004's top 15, came in at number three, on the back of deals in Oman, Qatar, Saudi Arabia and the UAE. It was one of the three initial MLAs underwriting $500 million on the $1,500 million Sohar Aluminium Company financing, as well as being among the core MLAs on the landmark $2,500 million Shuaibah independent power and water project (IWPP) in Saudi Arabia.

Royal Bank of Scotland's lending appetite also increased considerably in 2005, moving it up to eighth position from 15th. And while this was heavily influenced by participation in the mega Qatari deals on which it advised, the bank also joined transactions in Oman and the UAE. Its appearance among the recently appointed MLA group for the Tasnee cracker project in Saudi Arabia suggests the bank will be looking seriously at the raft of further deals due to come out of the kingdom in 2006.

The Japanese banks returned to form after a comparative dip in prominence in 2004, reflecting partly the heavy involvement of Japanese companies in GCC projects, particularly in the power and petrochemicals sectors. Sumitomo-Mitsui Banking Corporation did twice the number of deals last year, while Bank of Tokyo-Mitsubishi UFJ was also more active. But the biggest change was in the position of Mizuho Financial Group. The bank dropped out of the top 15 arrangers altogether in 2004, but leapt to fifth in the 2005 rankings, doing 10 deals.

Narrowing marginsThe number of European banks in GCC financings is constantly growing, as institutions seek to offset narrowing margins at home. WestLB - which, as the deals concluded since the turn of the year have shown, is becoming an increasingly ubiquitous name - appears in the table at number 14. And among those just outside the leading 15, German institutions are also prominent.

An expanding landscape of lending banks is one of the major trends in the GCC market. Some banks are tempted into specific sectors, such as liquefied natural gas (LNG), while others are attracted by the region's general economic buoyancy and shrinking margins at home. The 'National Bank of Greece phenomenon,' which saw a previous stranger to the region unexpectedly contribute a sizeable chunk of cash to the Qatargas II financing, is set to continue.


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