LONDON, Jan 9 (IFR) - Commonwealth Bank of Australia has
become the first borrower to have orders for a new issue
submitted electronically, with industry-backed Ipreo's bookbuild
software used to syndicate its five-year covered bond last week.
The technology, which is backed by several of Europe's
leading DCM banks, allows investors to electronically submit
orders directly to lead managers and receive notification of
details such as pricing and allocations.
CBA printed the £350m five-year on Thursday via HSBC, Nomura
and the issuer's own investment bank.
"The number of buyside participants who have signed up to
Investor Access is around 100 and growing rapidly but only a
handful of those are currently able to submit orders via
Investor Access," said Chris Jones, managing director, debt
syndicate at HSBC in London.
"We would expect the number of enabled investors to grow
into the hundreds within a short period of time and ultimately
expand to the thousands representing the relevant investor base
for European credit."
Jones said that in the medium term syndicates would likely
run parallel processes, with a growing number of orders coming
electronically and others through traditional channels.
This appears to have happened on CBA. One source involved in
the syndication process said he had no idea some orders had come
via Investor Access, as he had used his regular method and
Another source close to the deal said final allocations were
not impacted by the way orders were submitted.
TIME IS MONEY
In contrast to the widespread automation of various
financial markets such as foreign exchange and equity trading,
bond syndication remains woefully antiquated.
The process remains labour intensive with sales officials
often taking orders via telephone before inputting them into
electronic order books, which then sometimes have to be
Jones said the primary benefit of the technology was freeing
up the time of individuals both within his own salesforce and
those at buyside firms, "which will result in more time spent
discussing the transaction in detail rather than a superficial
exchange of terms".
The bonds priced at Gilts plus 67bp, with UK accounts
allocated 77%, Switzerland 7%, Germany 6% and others 10%. Fund
managers got 78%, official institutions 14%, insurance and
pension funds 4% and banks another 4%.
Investor Access's original sponsoring group includes BNP
Paribas, Credit Agricole, Commerzbank, Goldman Sachs, HSBC, ING,
MUFG, NatWest Markets, Santander, Societe Generale and UBS.
Ipreo is owned by Blackstone and Goldman Sachs.
(Reporting by Tom Porter)