Significance of Privatisation Issues

1
Significance of Privatisation Issues

• Privatisations continue to account for a
  significant proportion of all Equity Issuance
• Europe (Western Eastern) continues to account
  for over 70 of all privatisation issues

2
Significance of Privatisation Issues

• Following the success of large privatisations,
  large corporates have been encouraged to issue
  larger amounts of equity
• As privatisation issues become less, the number
  of large transactions continues to grow

3
Selected Privatisations
4
Impact on Banking Sector

• Fees paid by Governments on high profile
  transactions have fallen and now stand at under
  2 for most secondary offerings
• Consolidation within the investment banking has
  made up for some of the fall in gross spreads ...
• ... but there is now a greater concentration of
  the major offerings among the leading banks

5
Impact on Banking Sector

• Competition for these offerings is more intense
  than ever, with fees often being the main
  bargaining method
• As a result of this squeeze, syndicates have
  become smaller and transactions have taken on an
  increasingly global nature
• Increased cross-border investment, particularly
  within the Euro-zone, aided by the move to
  sectoral as opposed to regional investment, has
  facilitated the success of tight global
  structures as used in France Telecom II and
  Endesa IV

6
Syndicate Trends

• The effect of the fall in fees on syndicate
  composition is clear
• Syndicates have become smaller with the value
  added by junior members reducing as more
  importance is placed on the role of Bookrunner