Best M&A House

Morgan Stanley

When we sat down to consider which firm had made the most indelible impression on the M&A landscape this year it didn't take us long to conclude it was Morgan Stanley.
And in conversations with some of the firm's less zealous competitors, they reluctantly agreed with our view. One rival head of M&A was fairly confident that in a year where fee-cutting has been the norm, Morgan stood firm and has raked in far and away the biggest fee pool.
Indeed, from what we can glean it has been a record year for Morgan Stanley's M&A team.
Run by veteran M&A professional Harry Van Dyke, the firm has been involved in almost all the major transactions this year.
It was the advisor to the buyer in the biggest transaction of the year, the $10.5 billion acquisition of Optus by SingTel.
It was the advisor to the seller on our M&A deal of the year, Huawei's $750 million sale of Avansys to Emerson.
It was the adviser to OUB in its merger with UOB, the biggest of the Singapore bank mergers (at $5.5 billion).
It was an adviser to Guoco on its $5.7 billion sale of Dao Heng Bank to DBS.
And it is the adviser to Daewoo Motors in its $2.6 billion asset sale to General Motors (one of Korea's most significant deals if it ever closes).
In India, it also advised on BPL-Birla Tata merger, which reconfigured the mobile phone industry and was valued at $2.1 billion.
Other transactions include the merger of ICICI with ICICI Bank; the $2 billion merger of StarHub and Singapore Cable Vision; the sale of Celestica to Omni Industries for $936 million; and Shinhan Bank's sale of a minority stake to BNP Paribas; and many many more.
The results show that Morgan Stanley's strategy of picking winning clients and spotting strategic trends is working. Congratulations to the whole team, and to M&A guru James Pearson who led the SingTel/Optus and Emerson/ Huawei deals.

Best International Bond House

JPMorgan

Top of the league tables both in terms of issuance volume and number of transactions, JPMorgan continues to dominate international bond issuance from Asia. The bank has featured absolutely everywhere during 2001, spanning the whole gamut of investment grade and non-investment grade issuers, large benchmark deals and small scale opportunistic placements. In Hong Kong, which has driven much of the year's issuance, the bank has also been bookrunner on five of the eight major dollar deals.

In a recessionary year, during which many banks have scaled back their fixed income teams, JPMorgan has successfully consolidated its operations with Chase. What has emerged is a strong integrated platform and single P&L across bonds, loans and swaps, which the bank hopes to use as a springboard to even greater activity during 2002.

The advantage it now holds over many of its rivals comes from the combination of Chase's legacy lending relationships and JPMorgan's DCM skillset. Many that do not have the same capital at their disposal have often accused the bank of playing fast and loose with its balance sheet. However, the deals it has completed across the entire platform during 2001 show that it is moving away from cheque book transactions into more structured deals on the loans side and using these relationships as added leverage into bond transactions.

The merger of all its legacy operations has also left the bank with an impressive array of originators. Co-heads Marc Jones and Paul Bartlett have complementary skills and a 15 strong origination team behind them, allowing Jones to continue fostering the bank's FIG expertise and Bartlett to migrate clients from the loan to the bond markets. Working alongside them is Chris Nicholas, former head of Asian fixed income at Chase and currently head of sales, trading and research. He also brings with him a number of key relationships, which has led to successful transactions for the Federation of Malaysia, Bangko Sentral ng Pilipinas (BSP) and most recently PCCW-HKT.

The $750 million bond issue and $250 million re-opening for the Hong Kong telecommunications group underlined JPMorgan's aggression in pushing out its rivals and its strategic skills in knowing how to position a credit which had a lot of work to do cultivating long-term relationships with investors.

On the FIG DCM side, JPMorgan also has one of the strongest and biggest teams in the region. Jones, who has years of experience in the field, has however been progressively handing over the reins to former Australian tennis champion Mark Follett and the energetic Korean American Paul Kim. Follett, for example, has structured transactions for both UOB and DBS, while Kim worked on Bank of East, which opened the year with a $550 million lower tier 2 deal.

Other stand out deals of the year led by JPMorgan include: Hutchison Whampoa's $1.5 billion issue in February, which marked the group's return for the first time since the Asian crisis; Hong Kong Land's hugely popular $600 million debut in May; The People's Republic of China's long-awaited $1 billion issue in the same month; The Federation of Malaysia's $1 billion deal in July, which saw the government take advantage of a US dollar rate cut to access the market quickly; Kumgang Korea's $100 million debut in June; Jardine Strategic's $300 million debut in November and the BSP's twin $200 million and $400 million deals of April and October.

Special mention:

In a year dominated by lowering interest rates and increasing international debt volumes, three other houses stand out. Goldman Sachs, which only just lies behind JPMorgan at the top of the league tables, has had one of its best years ever and participated in many of the year's largest and most important transactions. As a result of a new focus towards structured products, the bank has also delivered a number of innovative solutions for its key clients, of which the tier 1 hybrid issue for DBS Bank in March is a clear example.

Following closely behind is Salomon Smith Barney, which has come charging back up the league tables during the second half of the year and has become a true powerhouse, enabling it to deliver bond issues across all the G3 currencies with, for example, a euro issue for the Philippines, a Yen issue for Thailand and dollar issue for SingTel, which it led with Goldman and has been chosen as our international bond deal of the year.

Finally there is HSBC, which has enjoyed a breakout year. The bank has not only been a bookrunner on virtually every single major dollar issue from Hong Kong, but has also used its increasingly powerful pan-Asian bond platform to deliver solutions that range from Tenaga's landmark debt exchange to Bank Mandiri's debut FRN, the first sovereign related benchmark from Indonesia since the financial crisis.

Best Domestic Bond House

HSBC

Choosing the best domestic bond house is often a case of selecting a first among equals and in 2001 it is HSBC which stands out. The bank has always sat at the top of the league tables because of its dominating presence in the Hong Kong dollar bond market, but this year has seen it take its most pro-active role to date in developing local currency markets across the region.

In the US dollar markets, it is more a question of flow and structuring solutions for individual clients. In the fast growing domestic markets, banks have a more important role to play developing the right infrastructure and importing international best practice. In this respect, HSBC has made great strides with the creation of ALBI (Asian Local Bond Index), the first fully comprehensive local market bond index. The bank is on the verge of publicly launching the index and hopes that it will complement its existing and highly successful ADBI (Asian Dollar Bond Index), which tracks liquid international bonds by Asian issuers.

ALBI, which has 350 constituents across eight Asian countries (Hong Kong, India, Korea, Malaysia, the Philippines, Singapore, Taiwan and Thailand), will track the total return performance of liquid domestic currency bonds. While designed to serve the needs of both local and international investors, the index is likely to be particularly helpful for overseas investors seeking a pan-Asian benchmark. As such, a tool which aids investors' global asset allocation decision making process, should bring follow-through liquidity to domestic markets.

HSBC has always pursued a strategy of being in-country and as a result, has become the first house to place dedicated local currency fixed income research analysts in the region's major markets. It consequently has nine analysts across the region, of which six sit in Hong Kong and one each in Singapore, Kuala Lumpur and Bangkok.

Leading the charge for the bank is Mark Bucknall, one of Asia's most youthful but longest standing DCM bankers. Renowned for his hands-on approach down to even the smallest documentation issue, Bucknall brings an international outlook as a result of his position as global head of fixed income and desire to standardize market practice through his role as Asian chairman of IPMA (International Primary Markets Association).

Where deal flow is concerned, HSBC had captured 11% of overall volume to the end of November, lead managing a total of 156 deals across seven markets and raising $6.408 billion for its clients. Stand-out transactions include: a HK$5 billion issue for the Hong Kong Mortgage Corporation, which marks the largest fixed rate issue in the market to date; a M$550 million issue for Genting Sanyen Power, which represented the first bookbuild issue in Malaysia; a Baht deal for IFCT (Industrial Finance Corporation of Thailand), which is the first upper tier 2 debt issue in any regional Asian currency; a $220.4 million synthetic note issue for the Republic of the Philippines which has won FinanceAsia's most innovative debt deal of the year and finally an S$800 million issue for Singapore Airlines, which set an important debut benchmark shortly after 9/11 when airline companies were clearly out of investor favour.

Best Syndicated Loan House

Citibank

The breadth and depth of Citibank's syndicated loan franchise in Asia makes it the leading syndicated loan bank this year. It has a dominant position in terms of both the sheer number of deals which is has arranged this year, as well as a broad product and geographic mix. The bank has lead arranged deals in all the major markets in the region including Hong Kong, Singapore, Taiwan, Korea, China and the Philippines.

Key deals that the bank has worked on include: the $1.5 billion facility for Singapore Telecom; a $600 million facility for Shanghai General Motor; a $641 million financing for Cheung Kong Finance; and a groundbreaking $2 billion facility for LG Philips.

Citibank views its syndicated loan business as a strategic and core element of its overall banking product. It is difficult to look at the syndicated loan business on a standalone basis as the bank integrates its loans much more into general financing solutions for its clients than most other banks. This means that while sometimes it might not do as many large low costs deals for triple A clients as other banks, the loans it does arrange always make sense from the clients; and from the syndicates; perspective.

The LG Philips loan, for instance, came after LG and Philips had formed their joint venture with the help of Salomon Smith Barney, Citibank's investment banking partner within Citigroup. The loan was then structured to give the optimal terms to let the new company grow. Syndicate banks bought in on the strategy and the deal was oversubscribed by 120% at the sub-underwriting level.

The bank took a strategic approach again with the provision of a $1.65 billion acquisition loan for SingTel, which helped the acquisitive Singaporean company in its acquisition of Optus in Australia.

In sum, the bank is a leader when it comes to origination, arranging, structuring and syndication of market defining deals, using its balance sheet where necessary to get deals done.

Best Project Finance House

Citibank

Citibank has had a remarkable year in regional project finance, given the paucity of deals in the market and the general wariness of risk. The bank has, in one word, dominated the project finance scene for the year bringing a total of 12 deals to market with a debt value of $7.2 billion for total project value of $11.3 billion. The firm has done deals in six Asian countries and in six sectors  aviation, telecom, oil and gas, water, power and technology.

The firm has arranged project loans as well as one project bond. It has also acted in a wide variety of roles within its projects including: lead arranger, financial advisor, foreign exchange bank, account bank, security agent, technical bank, inter-creditor agent, hedging bank and book runner. The bank has also raised project debt in a variety of local currencies, which is key for financing most Asian projects these days. This variety of roles and capacities shows the depth of service that Citigroup as a whole can bring to the Asian project market.

The Citibank project finance team, ably led by Saadia Khari, has closed many of the key transactions of 2001. In July it closed the $235 million project financing for Globe Telecom in the Philippines through a judicious mix of ECA backed international financing and peso denominated debt. This deal closed oversubscribed despite harsh economic conditions, testament to the structuring of the deal by Citi.

In Hong Kong, again in the telecom sector, the bank arranged a HK$4.4 billion ($564 million equivalent) project financing for Hutchison Global Crossing. This was the first time that non-recourse financing had been arranged for non-incumbent carrier in Asia. The bank also joint lead arranged the financing for the GB3 Lamut Power Plant Project in Malaysia. This deal made use of the local appetite for Islamic bonds and was structured with such tight controls that Rating Agency Malaysia gave it a AA2 rating, the highest of any Greenfield IPP in the country.

Citibank uses its size, strength and understanding of the many diverse sources of funding available to get its projects closed. The one concern is that maybe its project finance division is too client led rather than being a project led operation. This means that in some years it will miss out on the key projects due to a lack of client involvement. But in 2001, it secured its seat at the head of the Asian project finance table. And this is a position is looks set to keep given the strength of its project pipeline going into 2002.

Best Securitization House

ING Barings

It was a difficult decision to make but the award for best securitization house goes to ING Barings. The main reasons why the bank stood out in 2001 were its consistency in doing international deals at different times of the year and the volumes it was able to securitize.

ING was first off the blocks in the Asian cross-border market in March when it arranged a $200 million deal backed by auto loan receivables for Samsung Capital, the Korean consumer finance company. Samsung was able to pierce the sovereign ceiling and achieve triple-A ratings from Moody's and S&P with the transaction because it was guaranteed by Financial Security Assurance, the triple-A rated monoline insurer.

This was the first instance of a Korean originator receiving such ratings and the return of the monolines to the Asian ABS market was a feature of the year.

Another first was the use of a revolving structure by a Korean issuer, adding flexibility because collections on existing receivables can be used by Samsung to originate new loans, the revenues of which can be added to the underlying pool of assets.

The use of revolving structures became ING's signature touch. It was used again in September on Samsung Capital's second ABS, a $234 million offering backed by consumer loans, and on the $500 million transaction issued by Samsung Card. The latter deal was the largest ever ex-Japan Asia securitization and the first to be backed by card loan receivables.

Featuring similar structural features as the two Samsung Capital deals, the deal was wrapped by MBIA to enable triple-A ratings. With an average life of 4.5 years, the deal was privately placed and priced just south of 50bp over three month Libor.

The transaction that sealed the choice of ING as best securitization house was a $121.25 million collateralized debt obligation launched in November. The issue, backed by $450 million of credit default swaps, was noteworthy for a number of reasons.

To start with it was the first synthetic arbitrage CDO to be managed by an Asian portfolio manager, as ING worked with OUB Asset Management to bring the deal to market.

Unlike the S$224 million CLO arranged by JPMorgan for DBS  which was designed to allow DBS to manage its capital adequacy ratio more efficiently, not for funding purposes  the ING deal was a completely market driven exercise.

Although the deal was made up of credit default swaps between the SPV and 90 non-sovereign entities, many of which are located outside of Asia, a lot of the marketing effort was concentrated on tapping the region's investor base.

The fact that the deal was well received in Asia indicates an increasing sophistication among investors, and both ING and OUB should be given credit for spotting what was previously a gap in the market.

Special mention:

Credit Suisse First Boston. If the decision for best securitization house was to be made two weeks later, it could have been quite possibly been awarded to CSFB, which had a storming end to 2001. The bank was tied up for much of the year on the $278 million deal for the Korea Deposit Insurance Corp, but at the end of November, it arranged the first international primary CBO to be issued out of Korea. One particularly notable achievement with the $250 million deal was the speed with which CSFB was able to bring the deal to market. It was only mandated by the Korea Technology Guarantee Fund in mid-October, and structuring and selling the deal inside six weeks made it the fastest ever ABS term deal from Asia.

Soc Gen. Like CSFB, SG had to employ most of its resources in 2001 on the KDIC transaction, but was also able to do its bit promoting the market in Taiwan, a country that has not yet embraced securitization. There had been talk for much of the year that SG was working in a special advisory role with the Taiwanese government to see how to kick-start an ABS market. This was formalized in September when it was announced that SG had signed an agreement with the state run Industrial Bank of Taiwan for that very purpose.

Best Fixed Income Research House

Deutsche Bank

They call it the flow machine, and it is starting to pay. Deutsche Bank, led by Martin Hohensee (sovereign) and Nuj Chiaranussati (corporate credit) topped our fixed income research poll in November. Scoring well across macro, bank research, investment grade, high yield, sovereign and strategy, Deutsche scored 178 points, with JPMorgan and CSFB in joint second place with 172.
Our poll was conducted over three weeks and saw 117 of the biggest investors in Asian credits vote.
Hohensee says that some of the bank's best calls this year included its advice to buy Indonesian recap bonds, and its timely calls on Philippine debt and buying Thai sub debt against the sovereign. William Oswald consistently had a brilliant call on the effect of onshore market dynamics on external debt spreads, and this has often been a crucial factor in 2001.
And says Hohensee, "Another issue we have addressed is that there has been a difficult decision on whether to go high grade or high yield. We've generally advised our clients to remain defensive rather than scale up on their risk into the high-yield, high-beta sector. But no matter which way you were positioned it has been a very tough year for you, from time to time. So increasingly we're inclined to tell clients to take risk within each of those sectors, but to stay generally flat beta against their benchmark - if you see what I mean. There is enough money to be made trading Korean sub-debt against other high yield paper like the Philippines or Indonesia, and money to be made trading Korea against Malaysia and Hong Kong against China, without having to take huge market exposure by trading say, China against Indonesian exchange loans."

Best Equity House

Merrill Lynch

Equity capital markets has traditionally been the biggest fee generator for investment banks in Asia and in the highly competitive arena this fosters, Merrill Lynch has always been in the top rung of the league tables. In 2001, which has been a challenging year for equity to say the least, it has been particularly successfully walking a difficult tightrope to ensure that it prices a good deal for issuers, yet enables investors to benefit from aftermarket performance.

Not one of its transactions this year has been downsized or postponed at the last minute. The bank has also been consistent in being able to bring a deal virtually every month and to the end of the third quarter, its deals had performed better than anyone else's, up 15.4%.

But what really makes the house stand out is the sheer diversity of its reach across the whole of the region, resulting in $3.564 billion of issuance and a 17.5% market share. Out of India, for example, Merrill's has led every single straight equity deal, bringing ADR issues for Satyam Computers, HDFC Bank and Dr Reddy's, the year's best performing international deal, up 86.75% to December 7.

In the case of China, the clear focus of all its major rivals, Merrill's has also led the largest and virtually only major IPO of the year. In bringing China National Oil Corporation (CNOOC) to market, Merrill's and its two other lead managers - BOCI Capital and CSFB - were faced with an investment community scarred by the recent trading performance of the major Chinese privatizations. The leads knew that the deal needed to come at a compelling valuation and consequently decided to strip the company's NAV of its two key attributes - unproven reserves and production sharing contracts.

The same successful strategy was applied later in the year to the Petroleum Authority of Thailand (PTT), which has been awarded FinanceAsia's IPO of the year. This deal also gave investors a free option to ride the upside of PTT's downstream operations and has been instrumental in re-opening the Thai equity market to international investors.

Towards the tail end of the year, some of the focus has switched back to the smaller markets of South East Asia and Merrill's has been spearheading the charge, first with PTT and more recently with Indonesia's PT Telkom, which launched a well-received placement earlier this month.

In Singapore, where M&A activity has dominated 2001, Merrill's has also been active. Its standout deal in this respect is its clever forward monetization of Cable & Wireless' holding in SingTel, which has also won FinanceAsia's most innovative equity deal of the year.

Also worthy of mention is its $291million block trade for TSMC in June. Audacious enough to pip arch rival Goldman in a bidding contest for the deal, Merrill s subsequent placement appeared to proceed without a hitch and the deal is currently trading up at 26.04% as of December 7.

Merrill's can be justifiably proud of its achievements in 2001 both on a stand-alone basis and as a team working alongside a number of other banks on the year's key transactions. Unlike some its competitors, for example, Merrill's has never been faulted for being parsimonious with syndicate fees.

Behind this large catalogue of deals is one of Asia's smallest ECM teams, led for the majority of the year by Aj Rahman and supported by the workaholic Kester Ng. In recognition of his achievements in equity, Rahman has recently been made co-head of investment banking and Angus MacPherson has been re-located from Singapore to fill the ranks.

Best Equity-Linked Bond House

Credit Suisse First Boston

Julian Hall, CSFB's head of Asian convertibles is known as the billion dollar man within the bank and the league tables highlight why. Since his arrival in Asia in June 2000, a combination of luck, foresight and a strong investment banking platform in Korea has meant that CSFB has captured a a majority of deals to come out of the Republic.

With equity markets volatile and depressed for much of 2001, equity-linked issues have come into their own this year and the Korean government has been particularly adept at using the structure as a monetization tool for its privatization programme. CSFB has been at the forefront of delivering the right solution and has produced three large deals of note.

The first - a $353 million exchangeable for the Industrial Bank of Korea in Korea Tobacco & Ginseng - fell just outside FinanceAsia's 2000 awards as it was launched a week before Christmas. However, the deal which used a novel triple-A rated collateralized structure removing issuer credit risk through an SPV, paved the way for a second $467 million issue for Hyundai Motor into Kia Motors in May.

Both issues were designed to facilitate complicated divestments that might otherwise take years to come to market because of liquidity, documentation or credit issues. As a result, they enabled IBK and then Hyundai to monetize huge stakes, representing 50% of the freefloat and 90 days trading in the case of the former and 59% of the freefloat in the case of the latter (the highest ever from Asia).

In essence the structure benefits those issuers with no immediate use of proceeds (which are invested in US Treasuries that act as collateral for the deal), yet remain keen to dispose of an unwanted equity stake. For Hyundai Motor, which has been attempting to reduce gearing since the middle of 1999, the structure also appealed because it would incur no additional debt on its balance sheet.

Because the company carries a weak Ba3/BB- rating, an uncollateralized exchangeable structure would have proved more costly and tough to market among a risk-averse investor base. A credit enhanced structure, on the other hand, was more cost efficient for the issuer and an easier sell to investors that had to give little thought to credit.

The third Korean deal of note was a $500 million offering for Korea Tobacco & Ginseng, which has been awarded FinanceAsia's equity-linked offering of the year. This deal also resulted in a unique approach, which saw the Korean government sell down part of its stake through a DR and KT&G use proceeds from a convertible to purchase part of the stake itself.

Finally, CSFB has also been responsible alongside Deutsche Bank for bringing a Malaysian issuer (YTL Power) back to the equity-linked markets for the first time since June 1997.

Alongside Hall, bankers Roger Lam and Ronald Leung have helped propel CSFB into the premier league of Asian convertible houses.

Special mention:

Salomon Smith Barney. The US investment bank has the strongest equity-linked platform of any of its rivals in Taiwan, (traditionally the most active source of Asian issuance) and in its ECM head Scott Ferguson, the longest standing and arguably most skilled equity-linked practitioner to be based in the region. During 2001, Salomon and Citibank did more deals than anyone else, raising $880 million via six transactions. Aside from the bank's structuring skills, it also benefits enormously from Citibank's entrenched position in the Island Republic, which always allows it to accurately pinpoint the correct credit spread in a market driven by asset-swap activity.

Best Brokerage House, Best Equity Research House

UBS Warburg

With top-ranked analysts; victory in several polls; membership of eight exchanges in Asia; a local presence; not to mention a total 80 analysts covering 459 stocks in 10 countries and 200 Asia-Pacific equity salespeople, there can be little doubt of UBS Warburg's justified reputation as an Asian secondary markets powerhouse.
Top ranked teams include Joe Zhang and Vincent Chan's China team, Seung Hoon Lee's South Korea team, and Franklin Lam's pan-Asian property sector team. And recent hire, Sharon Su, was rated number one for Taiwan research. The firm has been scooping up talent - such as microstrategy guru, James Spence - while others retrench.
Indeed, with sales run by John Holland and research marshaled by the affable Michael Oertli, there can be little doubt that UBS Warburg's secondary equity platform has moved forward this year where others have stood still, or more significantly, moved backwards.

Best Small Cap House

BNP Paribas Peregrine

BNP Paribas Peregrine has worked hard to create an enviable small cap franchise. The firm knows what it is trying to achieve, and has no interest in going head to head with Goldman Sachs to get a PetroChina-style mandate.
This year the firm again showed its placing power by raising over $260 million in placements for Beijing Datang, COFCO, China Travel and Hong Kong Construction.
Additionally, it has led four GEM offerings, raising $60 million. Three of these deals were in technology, and the deal for ERP software company, Kingdee (the number two software developer in China) has since tripled in price from issue.
Its deal for Li & Fung group member, Convenience Retail - which runs the Circle K 24-hour stores in Hong Kong, saw BNP Paribas Peregrine move back from the tech sector to the old economy. It is up 150% from its issue price in January, which has left investors delighted.
The firm will continue to build its China franchise, and consolidate its strong position in Hong Kong under ECM head, Gilbert Wong and his able deputy, Darius Yuen.

Best FIG House

JPMorgan

Run by the suave and dynamic James Von Moltke, JPMorgan's FIG group is a class act. Moreover their expertise on the sub-debt side is praised time and time again thanks to the insights of Marc Jones and Mark Follett on the DCM side.
As such, JPMorgan has been reshaping the financial institutional landscape in Asia in recent years and 2001 has been a particularly significant one for the firm.
The landmark event for FIG this year was Singapore Inc's attempt to expand beyond its borders, and consolidate within them. In both cases, JPMorgan was deeply entrenched in the process.
When DBS went abroad to buy Dao Heng in Hong Kong, JPMorgan advised the selling Guoco Group (along with Morgan Stanley), and given the price achieved, the advice must have been good. Then when OCBC went hostile for Keppel Capital, JPMorgan advised on the defence and managed to raise the selling price by 8%.
With the ink barely dry on that merger document, its debt team went out and won the mandate to finance UOB's acquisition of OUB, and after putting in place a bridge loan went into the Singapore dollar bond market and broke new ground with a S$1.3 billion upper tier two capital issue for UOB that was three times oversubscribed and upsized from S$750 million. The innovative 15 step-up 10 structure was a first of its kind in Asia.
Credit for these mandates lies with the irrepressible South East Asian investment banking head, Philip Lee.
In Hong Kong meanwhile, JPMorgan had helped create the largest locally-owned bank through the merger of Bank of East Asia and First Pacific. This year it then helped Bank of East Asia fund the deal via a $550 million 10 year step up five subordinated bond having first provided an innovative bridge capital deal. It was also the rating advisor and helped the bank achieve a Baa1/BBB+ rating.
And it has also picked Taiwan as a key FIG market. It advised Dah An Commercial Bank on its merger with Taishin International Commercial Bank - the first test of the country's new financial institutions mergers and acquisitions law. It also advised China Development Industrial Bank on the sale of its 53% owned asset management subsidiary, China Securities Investment Trust Corporation to the HSBC Group for $200 million. And significantly it advised Cathay Life Insurance on its $6.4 billion restructuring into an all-service financial holding company. As part of the restructuring, JPMorgan advised on the announced acquisition of Capital Securities Corporation.
And finally, in China it advised Fortis on its 24.9% investment in Tai Ping Life for $88 million.
Little wonder some say the FIG group is the jewel in the JPMorgan crown.

Best Telecom House

Morgan Stanley

The Morgan Stanley telecom team has had another stellar year. They have been involved in some of the defining transactions of 2001 across a broad range of countries and through a broad range of products.

In Korea, the bank successfully completed the follow on offering for Korea Telecom after its successful IPO of 2000. At $2.2 billion this was the biggest deal of the year and it was also one of the best executed, with few of the shocks that have beset other large deals this year. In China, the team have built on their success with Unicom's IPO last year to win further mandates for the company, which have yet to be executed. They advised Alcatel on the restructuring of its Shanghai business in a deal valued at $312 million. In Taiwan the team has advised Taiwan Cellular Corporation on its $410 million acquisition of TransAsia, one of the more significant mobile deals this year.

But perhaps it was Morgan Stanley s involvement with Singapore Telecom's (SingTel) acquisition of Optus that has really earned the bank its stripes. This $10.2 billion deal was crucial for SingTel to close. With Morgan Stanley as its sole adviser, the company successfully beat off the competition to acquire C&W Optus. It was the largest Singaporean M&A deal ever, the largest Australian takeover ever and the largest M&A in Asia this year. With three different options for Optus shareholders to choose from, the deal was also one of the more complex transactions of the year and is testament to the intellectual capital that the Morgan Stanley telecom team can bring to their deals.

The success the bank has had with the SingTel/Optus transaction is mirrored in the wider world of Asian telecom M&A. The bank has advised the acquirer on four out of five of the largest telecom M&A deals this year in the region. In the fifth deal, the bank advised the target. These deals are: Singtel/Optus; Birla AT&T/BPL Communication; Starhub/SCV; Huawei/Emerson; and TCC/TransAsia.

The one product area in which the bank has been weak is in the debt capital markets arena. There have been a number of telecom sector bond issues that the bank has not been involved in. But this reflects a wider malaise at the firm rather than any failings with the telecom group.

Indeed, the highly rated telecom research team ably backs up the investment bankers. Led by Mark Shuper and Hani Abuali, the team covers 26 Asian telecom stocks. Consistently ranked in the top three by Institutional Investor magazine and Greenwich, the research is an able complement to the efforts of the financiers.

Special mention:

Salomon Smith Barney - Led by Greg Mazur, one of the most talented telecoms bankers in Asia, Salomon's have done great things in the telco field this year, making this award an especially tough call. Apart from the year-long restructuring work for PT Telkom (our most innovative M&A deal of the year), the firm advised Telenor on its acquisition of a controlling stake in DiGi.com as well as the A$3 billion telecom financing for SingTel Optus and our bond deal of the year, the $2.29 billion SingTel megadeal.

Best Technology House

Goldman Sachs

Repeat business is the highest accolade of success. In Goldman Sachs' case it has done repeat business this year with many of the most important tech clients in Asia, including TSMC, Legend, Acer and Compal.
Its 12-strong tech team, run by Helge Weiner-Trapness and Brooks Entwistle has consolidated its position. Meanwhile the firm's equity research team has increased its company coverage by 92%. That's significant in a year when many have pulled back from tech.
Not Goldman. At its tech conference in Hong Kong this September it had the cream of Asia's tech elite speaking, including TSMC's Morris Chang, and Hon Hai chairman, Terry Gou. China's vice minister of science and technology, Madam Deng Nan also gave a keynote speech.
In terms of deals, Goldman have had a notable year. The firm launched the $163 million IPO for Travelsky Technology in February, Compal Electronics $176 million GDR follow on, Digital China's $123 million IPO, TSMC's $240 million conversion sale program III, and and most recently in November placed $320 million worth of ADRs in TSMC on behalf of Taiwan's National Development Fund.
Its M&A activities included the $2.2 billion sale of Acer Inc to Acer Sertek to create a unified IT products and services company. It also advised on the formation of a $200 million JV between Legend and AOL, as well as Hutch and Cheung Kong's $75 million investment in Priceline.com.

Best Financial Law Firm

Linklaters & Alliance

This is the first year FinanceAsia has given this award and it is an extremely difficult award to give. Law firms have varying capabilities and varying specialties, which make direct comparisons very taxing. In some cases there are regulatory prohibitions on what work particular firms can and cannot do. In some cases, strength is concentrated in one or two product areas. Then there is the old US versus UK law firm debate. The US law firms, while still necessary for some deals involving the US SEC, are not that involved in the local Asian markets, with the exception of Sheaman & Sterling. The UK firms, on the other hand, have depth in the local markets but are still playing catch up in the US. This year FinanceAsia felt that Linklaters & Alliance offered the strongest across the board capabilities of any financial law firm in the region.

The brilliant Andrew Carmichael, who can see solutions to complex legal problems where others just see fees, leads the capital markets team. The firm has advised on many groundbreaking deals this year. It worked on the spin off and IPO of Digital China from Legend Holdings, a highly innovative and complex deal. This was a key deal in the future development of shareholder culture in the PRC.

In Hong Kong it worked on the share repurchase of Hong Kong China Gas through a modified Dutch auction structure. This showed its capabilities in the local markets. The firm worked on Hong Kong Land's inaugural bond issue, one of the most successful bond issues of the year. The firm provided US, English and Hong Kong advice showing its across the board capabilities.

Perhaps its greatest penetration lies in Singapore where its joint law venture with Allen & Gledhill has started to bear fruit. Linklaters Allen & Gledhill is perhaps the most embedded law firm in Singapore and is led by the ever-present Lucien Wong. This partnership has spawned huge involvement in the general corporate restructuring that has blown through Singapore during 2001. As a result, the firm has been involved in bank mergers, property securitizations and SingTel's various M&A and capital markets forays. With 70 lawyers and 17 partners, the firm's corporate and financial practice is wide and deep. It is also able to bring deep intellectual capital to complex and challenging deals. Linklaters also comes highly recommended by its clients, the region's investment bankers.