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Significance of Privatisation Issues

Significance of Privatisation Issues. Privatisations continue to account for a significant proportion of all Equity Issuance Europe (Western & Eastern) continues to account for over 70% of all privatisation issues. Significance of Privatisation Issues.

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Significance of Privatisation Issues

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  1. Significance of Privatisation Issues • Privatisations continue to account for a significant proportion of all Equity Issuance • Europe (Western & Eastern) continues to account for over 70% of all privatisation issues

  2. Significance of Privatisation Issues • Following the success of large privatisations, large corporates have been encouraged to issue larger amounts of equity • As privatisation issues become less, the number of large transactions continues to grow

  3. Selected Privatisations

  4. Impact on Banking Sector • Fees paid by Governments on high profile transactions have fallen and now stand at under 2% for most secondary offerings • Consolidation within the investment banking has made up for some of the fall in gross spreads ... • ... but there is now a greater concentration of the major offerings among the leading banks

  5. Impact on Banking Sector • Competition for these offerings is more intense than ever, with fees often being the main bargaining method • As a result of this squeeze, syndicates have become smaller and transactions have taken on an increasingly global nature • Increased cross-border investment, particularly within the Euro-zone, aided by the move to sectoral as opposed to regional investment, has facilitated the success of tight global structures as used in France Telecom II and Endesa IV

  6. Syndicate Trends • The effect of the fall in fees on syndicate composition is clear • Syndicates have become smaller with the value added by junior members reducing as more importance is placed on the role of Bookrunner

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