Yesterday, 16 January 2018, for the fifth successive year, Belfius was voted ‘No. 1 Bond Finance House of the Year’ by Euronext. This prestigious award was presented to Belfius at a ceremony attended by Belgian Finance Minister Johan Van Overtveldt and confirms the strategic role played by the bank in providing alternative financing solutions on the bond markets to Belgian companies, public and semi-public entities. Over the course of 5 years, Belfius has enabled more than 80 issuers of varying sizes and from all sectors (large companies and SMEs, property developers, town, cities and provinces, Regions and Communities, schools and universities, etc.) to raise finance for themselves on the bond market, totalling 16.3 billion EUR.
In 2017, through its activity on Debt Capital Markets (DCM), Belfius was involved in long-term bond issues on behalf of Belgian issuers for a total transaction amount of almost 5 billion EUR. As the market leader in bond financing in Belgium and with a participation rate of 86% in the (semi-)public sector and 58% in the corporate sector, Belfius was again the most active bank in this area last year.
By way of example, in 2017 Belfius helped guide the following companies and organisations in diversifying their long-term financing through the issue of bonds.
- in the property sector: Atenor, Befimmo, BPI Real Estate Belgium, Care Property Invest, Codic International NV, Cofinimmo, Extensa Group, MG RE Invest, Wereldhave NL;
- in the utilities sector: Aquafin, Eandis (the only retail bond issued on the Belgian market in 2017), Elia System Operator, Fluxys Belgium;
- in the corporate sector: ELIA, Proximus, Codralux, FNG Benelux Holding
- for local government and the provinces: the province of Antwerp, the town of Zottegem, the city of Namur;
- for regional government: the French Community, The German-speaking Community, the Walloon Region, the Flemish Community and the Brussels Regional Refinancing Fund of Municipal Treasuries;
- in education: Haute École Léonard de Vinci.
Among the transactions completed successfully in 2017 were 4 “benchmark issues” (i.e. a minimum of 500 million EUR) and 3 “sub-benchmark issues” (i.e. a minimum of 250 million EUR). Through their bond issues, more than 30 different issuers were able to draw on the expertise of Belfius in this area, as well as on the bank’s extensive network of potential investors. 7 of these issuers were embarking on a long-term bond issue for the very first time. In 2017, Belfius was also the first Belgian bank to conduct two“Non-Preferred Senior (NPS)” issues on its own behalf, operating under new legislation passed during the course of the year.
A win-win solution for issuers and investors alike – and a form of investment that also appeals to private investors
The issue of long-term bonds can be an attractive alternative to conventional loans for businesses and public services alike, enabling them to diversity their sources of funding, as well as their terms of settlement. In certain cases they have even seen their financing costs fall as a result.
In contrast to the investment banks, Belfius focuses not only on large corporations, but also on towns, cities and provinces, Communities and Regions, SMEs, schools and universities, etc., giving them access to a wide range of potential private and/or institutional investors, depending on their strategy, activities, the amount being issued and the form of the bond, etc.
For instance, among the bonds offered last year to institutional investors, there were issues from the Flemish Community (1.25 billion EUR), the German-speaking Community (150 million EUR) and Wallonia-Brussels (150 million EUR). The smaller transactions included issues for Haute Ecole Léonard de Vinci (2.1 million EUR) and the city of Namur (17.5 million EUR). At the same time, Belfius also offered Private Banking customers two issues from the property developer Extensa (75 million EUR in total). Bonds were also issued by Codic (35 million EUR) and BPI (30 million EUR). This is without mentioning the successful issue of bonds by Eandis (200 million EUR) for private investors for whom the offering is relatively limited and who, with this type of bond, they have an opportunity to invest in an institution or company that they know well, with the prospect of generating a higher return than with a savings account.
16.3 billion over five years
With approximately 350 long-term issues representing 16.3 billion EUR conducted since 2013, Belfius has become the go-to partner in the bond market for many companies and entities in the (semi-)public sector. To meet the funding requirements of these customers in optimum fashion, Belfius is also one of the most innovative providers in the market. In 2015, Belfius became the first bank to issue bonds in the area of education (“educational bonds”), listed on Euronext, to support the growth of the Vrije Universiteit Brussel (VUB). The same year, Belfius also pioneered the very first issue of Green Bonds for a Belgian issuer. Since that time, Belfius has implemented all three issues of Green Bonds for Belgian companies (Aquafin in 2015 and 2017, Cofinimmo in 2016). These issues are a clear confirmation of the growing interest that investors have in this type of bond to fund sustainable, environmentally friendly investments with a low carbon footprint.
Dirk Gyselinck, member of the management board at Belfius Bank, was delighted with Belfius being awarded ‘Nº 1 Bond Finance House of the Year’ for the fifth year in a row. “We are a bank that provides advice,” he said. “That’s why we guide our customers from A to Z and we think with them about the best funding solutions to support their growth and finance their projects, depending on their situation, their circumstances within the market and so on. Raising finance on the bond market can be of interest not only for large companies, but also for smaller entities, both corporate and public. This award is clearly confirmation of the relevant nature of our approach.”
