BNP Paribas and Steinhoff: An evolving partnership

From its early days in South Africa BNP Paribas has developed a strong relationship with Johannesburg-listed furniture and homeware retailer Steinhoff, demonstrating its commitment to the firm by consecutively supporting a number of its bond issuances.

BNP Paribas was appointed in 2010, as joint bookrunner on an issuance by Steinhoff that marked the first euro- denominated convertible bond from a South African company.

This was followed within six months by a convertible bond issue, for which BNP Paribas also served as joint bookrunner, which helped finance Steinhoff s acquisition of a prominent furniture store chain. In 2012, BNP Paribas acted as joint global co-ordinator and joint bookrunner for a third straight convertible bond issuance.

The close ties between the two companies continued in early 2014, when the Bank was mandated as joint bookrunner on a fourth convertible bond issuance that met with robust demand from long-term investors.

Gulf clients benefit from IRB and CIB co-operation in Africa

As BNP Paribas sought to increase its presence across the African continent in the late 2000s, building on long-standing interests in West and North Africa, increased co-operation between the Bank s International Retail Banking (IRB) and Corporate & Investment Banking (CIB) divisions became key.

Historically, BNP Paribas African operations had been the domain of IRB. It was decided to begin a drive for closer collaboration with CIB Middle East and Africa, headquartered in Bahrain.

The initiative began by building a strong relationship between the CIB division and Banque Marocaine pour le Commerce et l Industrie (BMCI), a Moroccan bank owned by BNP Paribas. BMCI began to introduce its clients to CIB, and vice

Although BNP Paribas is a relatively recent arrival in South Africa, the Bank quickly made headway in this fast-developing market. The strength of the BNP Paribas franchise was particularly evident in its growing client list in the country, with the Bank supporting financing projects in the power sector, large national institutions, and energy, mining and minerals giants.

As early as 2011, the Bank was appointed mandated lead arranger on a major shipping transaction by conglomerate Grindrod Group for the purchase of multiple product and bulk tankers.

After establishing a branch, BNP Paribas looked to expand its range of products and services in the country and from 2012, began to make the necessary preparations to offer new capital market business opportunities to South African clients from booking rand assets and taking deposits to trading activity.

In 2013, the branch was granted the status of Authorised Dealer in Foreign Exchange by the South African Reserve Bank, allowing BNP Paribas to undertake capital market activities locally in areas such as fixed income and flow business. Previously such activities had been carried out offshore or in partnership with local banks. In the same year, the branch also obtained its Financial Services Provider (FSP) license, allowing BNP Paribas to serve pension funds and private clients as well as being approved as a Johannesburg Stock Exchange (JSE) clearing member across all derivatives markets and receiving approval to establish a Debt Medium Term Note (DMTN) programme. The Bank undertook multiple important transactions for major South African corporates in 2013, including supporting South Africa-based media group Naspers to meet its investment and funding needs. The same year, the Bank was appointed mandated lead arranger and sub-underwriter on a large transaction for leading pharmaceutical manufacturer Aspen. The deal allowed Aspen to boost its product portfolio and capacity.

BNP Paribas acquires Cadiz Securities

As part of BNP Paribas growth strategy in the Middle East and Africa, the bank acquired a 60 percent stake in South Africa-based Cadiz Securities in 2011, adding a strong trading platform to its offering to clients in the region.

Over 15 years, Cadiz had developed into a market leader in equity derivative trading. Since the acquisition by BNP Paribas, the company further expanded its footprint in cash equities trading and structured products.

But probably the most significant accomplishment by BNP Paribas Cadiz Securities since 2011 has been its leap to the forefront of South Africa s emerging transition management market helping asset consultants and retirement funds trade into target portfolios at minimal cost while running the lowest risk possible.

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