| LONDON, Sept 17
LONDON, Sept 17 Prestige, not pay, was the main
goal for banks who completed Europe's biggest equity capital
market deal so far this year, in the shape of Britain's sale of
3.2 billion pounds ($5 billion) worth of shares in Lloyds
The Treasury and UK Financial Investments (UKFI) - which
holds Britain's stakes in Lloyds and Royal Bank of Scotland
- did not pay any fees to the banks and advisers who
handled the sale of the 6 percent stake.
JP Morgan Cazenove, which is acting as UKFI's
adviser on its privatisation strategy, was joined by Bank of
America Merrill Lynch and UBS as bookrunners
on the deal. Lazard was capital markets adviser.
Banks see it as prestigious to work on such a high profile
deal and are keen to form good relations with governments.
So fees for government work are typically non-existent or
cut to the bone - often as low as 0.1 or 0.2 percent of the
total deal value, compared with a typical fee of around 0.5
percent for a big share placing for a non-government client.
One significant benefit is that banks will get credit on
league tables which rank the performance of firms and are
The Lloyds deal lifted JP Morgan and BofA Merrill Lynch
above Morgan Stanley into third and fourth spots,
respectively, in the EMEA ECM league tables for the year so far,
according to Thomson Reuters data.
UBS retained sixth spot, but widened its lead over nearest
Bankers said firms on the deal can also attract more of the
future flow in trading in a stock to make it worthwhile.
The banks working on the Lloyds sale would have received a
slim brokerage commission from buyers of the stock, but the
amount, which varies by buyer, is likely to have been less than
10 million pounds for all involved.
Despite the low fees, there was tough competition to handle
the Lloyds sale - and any future RBS deal - and all of the big
investment banking names are on a shortlist to handle deals at
Those at JP Morgan involved included Tim Wise, vice-chairman
of JP Morgan Cazenove, Ina De, co-head of UK investment banking,
plus Jonathan Wilcox, Manuel Esteve and Piers Davison.
UBS's team included David Soanes, head of corporate client
solutions for Europe, Middle East and Africa, along with
Christopher Smith and Peter Norton,
BofA Merrill Lynch's team included Alex Wilmot-Sitwell,
president of Europe, plus Craig Coben and Arif Vohra.
Britain pumped a combined 66 billion pounds into Lloyds and
RBS in 2008, leaving it with 39 percent of Lloyds and 81 percent
of RBS, and plans to sell down both stakes. Lloyds could be
fully sold by 2015, but RBS is likely to take years.
"They are not a small seller, they have got plenty to go,"
said one banker.
Future share sales or a more complex sale to the public
further down the line could garner bigger fees, and even a low
rate of 0.2 percent could earn 130 million pounds from the