These may not have been the most successful deals launched last year. But they all share a common characteristic – they stretched and redrew the boundaries of what is possible in the capital market.
Washington Mutual went out on a limb and broke the mould to become the first US-based issuer of covered bonds.
ABN Amro structured the first constant proportion dynamic obligation (CPDO), creating a wave of copycat transactions and arguably the most important innovation in credit markets since the single-tranche CDO.
ICBC showed how an IPO can cement a country’s position in the international capital markets as it drew overwhelming demand – in stark contrast to the other emerging market IPO that caught everyone’s attention in 2006, from Russia’s Rosneft.
The acquisition of UK airport operator BAA by a consortium led by Spain’s Ferrovial showed not only the growing investor appetite for infrastructure assets, but also how advisers are coming up with ever more complex deal structures for M&A activity.
As the private equity boom gathered pace, the perceived wisdom held that buyout firms would be unable to break into financial services. Cerberus Capital Management’s $7 billion acquisition of GMAC blew such preconceptions out of the water.
But no deal demonstrated the new world order of finance – and that, in 2006 at least, anything was possible – better than the hostile acquisition of Arcelor by Mittal Steel. The deal had everything – intrigue, an industry-reshaping rationale, the wall of national interest, clashes of corporate governance cultures and the clearest sign yet that companies originating from the developing markets are now predators as much as prey.
Mittal Steel’s takeover of Arcelor
ICBC’s initial public offering
Washington Mutual’s covered bond
Cerberus FIM Investors’ acquisition of GMAC
ABN Amro’s Surf constant proportion dynamic obligation
Airport Development and Investment acquisition of BAA
