Were the fees paid to the book runners in line with the market?

76. A placing of bonds contractually undertaken as a book building process is still rare in the United Kingdom so there is no standard fee basis and little evidence for the outcome of fee negotiations. We should expect fee negotiations to be benchmarked against standard fees for an underwritten placing. The fees paid for the book building process were substantially below those for an underwritten transaction. The published fees on the bonds were as follows:

77. This compares well with the fee levels for Eurobonds issued for borrowers such as EIB where the published fees on a large new underwritten bond might be up to £0.45% for a long issue and £0.375% for a medium date. However, fees paid by the highest quality borrowers are generally negotiable and a further substantial discount was negotiated for the book building process, resulting in the actual fees paid being below the published levels quoted above. Given the work and resources involved, reputational risk and support of the issue required, the level of the actual fees paid does not, in our opinion, seem unreasonable.