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Citi
Away from the distractions of the US sub-prime market, the ABS industry has made significant strides over the past 12 months. Following several years of innovation in leveraged finance, over the past year securitization has established itself as a primary driver of M&A activity. Citi has positioned itself firmly at the centre of this trend internationally with the $10 billion GMAC acquisition financing and the Softbank whole-business securitization in Japan. In Europe the bank is behind a series of benchmark deals that will have a profound impact on future deal flow across the securitization market.
Citi is not the largest securitization house on the Street – it was ranked number three for 2006 with a 7.2% market share, a position it has maintained in the first half of this year. But it has been behind many of the most interesting and innovative deals and seems to have regained its appetite for leading the industry into uncharted territory.
In the US, the GMAC transaction demonstrated the effect that the ABS market’s acceptance of non-investment grade risk could have on acquisition costs, and opened up the financial services sector to private equity.