The winner in this year’s Bonds Above £750m category was talent solutions and advisory company Adecco, with the company’s largest-ever bond offering – a deal that one bank described as “one of the most successful and efficient acquisition-financing case studies in the capital markets”.
Seeking to pre-finance its acquisition of AKKA Technologies, Adecco took advantage of a post-summer issuance window to achieve market-leading terms across a three-part offering consisting of two senior tranches of euro debt and a hybrid issuance as follows:
As well as being considerably larger in amount than previous Adecco bond issuances, the dual-tranche senior bond represented the lowest coupons in the company’s capital structure, with the tightest credit spreads ever achieved by the company. The hybrid bond, meanwhile, achieved the third-lowest yield ever on a hybrid, and the second lowest in the BBB category.
Adecco opted for a same-day marketing and execution process, which maximised investor participation across formats. Pre-hedging the combined senior and hybrid issuance also resulted in a significant unwind gain of around €10m.
The company’s entire treasury team was involved in developing and finalising the proposals, with the group treasury required to work closely with legal, tax and accounting, as well as providing comprehensive updates and gaining formal approvals from the board of directors. The scale of the undertaking was illustrated by a due-diligence call with bankers and legal counsel, which was attended by more than 100 people.
Provider: Société Générale was lead bank in the M&A transaction and a lead bank in the acquisition financing takeout. Barclays, Bank of America Securities, Deutsche Bank, ING, Natixis, Société Générale and UniCredit were joint bookrunners on the senior bonds. JPMorgan and Société Générale acted as joint structuring agents, and Barclays, BNP Paribas and UBS acted as further joint bookrunners on the hybrid bond.
Structure: Senior €500m seven-year bond, senior €500m 10-year bond, hybrid €500m bond.
“This was a heavily contested category with many worthy contenders, but Adecco’s issuance was the deal that stood out – the pricing and execution were very tight.”
NATS
The judges also commended NATS in this category. The regulated en-route air-traffic control business completed a full refinancing of a securitisation debt structure that had been in place since 2003, in an exercise that involved issuing £750m of unsecured bonds, and agreeing £850m of new unsecured bank facilities – all at a time when air traffic was at an unprecedented low level. Together with significant cost-saving activity, this refinancing exercise provided the liquidity needed for the business to continue operating during the pandemic and support the recovery of the aviation sector.