Supporting "DACH" corporates during COVID-19
Head of DCM for Germany, Austria and Switzerland
Mizuho Securities Europe GmbH
Head of EMEA Primary Debt Markets
The onset of the COVID-19 pandemic has had well documented, far reaching impacts on multiple industries. Decreasing revenues, increasing need for working capital and a strategic interest in ensuring a larger financial cushion have led many corporates to increase their debt financing in both the loan and capital markets. This has been particularly true in investment grade corporate issuance in Germany, Austria, and Switzerland. Here corporate DCM issuance, across all currencies, increased in H1 2020 to €97 billion from €54 billion in the same period last year. While significant increases in corporate debt issuance have been seen across Europe, this region’s 80% year-on-year increase is notably larger than the approximately 65% increase seen across all of Europe.
Having taken the strategic decision to establish a full-service EU investment banking business in Frankfurt, catering to European clients, Mizuho now has almost 100 full time, Germany-based employees across the corporate and investment banking business. This has led to growth in client activity across product types, reflecting closer relationships and improved alignment with European clients. In particular, during the tough market conditions of the last three months, Mizuho has seen further growth in both its loans and DCM businesses as clients’ financing needs have increased and the group is able to support and advise them in line with their strategic objectives.
In H1 2020, Mizuho achieved a 5th place ranking for Germany/Austria/Switzerland Corporate Investment Grade DCM issuance, supporting DCM clients in lead roles on a number of important and high profile transactions these past few months. These have included Infineon Technologies’ €2.9 billion senior unsecured notes offering (June), Siemens’ €3.5 billion and £450 million senior unsecured notes offering (May) and Deutsche Bahn’s €750 million 20- year senior unsecured notes offering (April). The investment bank also had a strong start to Q3, acting as a joint bookrunner and co-ordinating bank on Bayer’s €6 billion multi-tranche senior bond offering on 1 July.
What is driving this success?
Head of DCM for Germany, Austria and Switzerland, Christoph Paul comments:
“We’ve focused very hard on providing quick financing advice and support, in significant size and across the spectrum of products, to our client base who were looking for financing in difficult and volatile times. Being able to provide the right combination of balance sheet support and access to capital markets, across different currencies, was well received by our clients. Advice on timing, structuring and detailed execution of bond issuance was more important than ever during times of such high volatility, and providing this effectively has helped to strengthen and deepen many relationships over this period. For some transactions, access to investor demand out of Japan and Asia has been useful, particularly as the COVID-19 crisis has started to recede in parts of Asia, and investors began actively looking for new opportunities in Europe.”
Guy Reid, Head of EMEA Primary Debt Markets also comments:
“The success we’ve enjoyed across the EMEA DCM business, particularly the financing we have delivered for clients in Germany, Austria and Switzerland, has been a real validation of our strategy to grow our business and presence there. The COVID-19 crisis required us to respond quickly to the needs of our clients and we’ve worked hard to co-ordinate closely across the firm to deliver the best individual solutions for them.”
Disclaimer: This publication has been prepared by Mizuho International and MHEU and represents the views of the authors only. It has not been prepared by an independent research department and it has not been prepared in accordance with legal requirements in any country or jurisdiction designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
This publication is indicative in nature and has been prepared for information purposes only. It should not be construed as an offer or solicitation to buy or sell any security or any interest in securities or enter into any transaction.
Reproduction or communication to another party of any part of this publication is expressly forbidden, unless it is with the prior approval of Mizuho International plc and Mizuho Securities Europe GmbH. All liability under any applicable laws howsoever arising in connection with the use of this material by the recipient is hereby excluded to the fullest extent permissible by law.