Barclays steps in as JBS scandal drives away Wall Street banks

Bloomberg

Barclays Plc has emerged as the go-to bank for the world’s largest meat supplier after scandals at the company pushed Wall Street to the sidelines.
JBS SA and its subsidiaries have sold at least four overseas bond deals totaling $2.75 billion since 2017, when the Brazilian powerhouse’s owners became embroiled in allegations of corruption. Barclays underwrote all of them. And another windfall could be on the way: The London-based bank is a top candidate to handle JBS’s planned initial public offering in the US, according to people familiar with the matter.
The company’s previous banks, including JPMorgan Chase & Co., Bank of America Corp. and Morgan Stanley, have backed off. That’s because JBS is controlled by Wesley and Joesley Batista, the billionaire brothers who confessed to bribing more than 1,800 politicians in Brazil. While JBS’s parent company agreed in 2017 to pay 10.3 billion reais ($2.8 billion) as part of a leniency agreement with Brazilian prosecutors, no deal has yet been reached with the US Department of Justice to avoid prosecution under US anti-bribery laws.
JBS has taken steps in the wake of the scandal that may assuage the concerns of compliance teams from banks, including the agreement with Brazil prosecutors, improved corporate-governance practices and the removal from management of the Batista brothers and other executives, the people said.
Barclays Chief Executive Officer Jes Staley, in charge since 2015, has been pushing the lender’s investment-banking unit to take more “measured risk” to boost returns. The firm has gained market share across trading and banking businesses, unlike many of its European rivals, helped by its prowess as an arranger of debt sales for clients, a February 21 presentation shows.
A representative of Barclays declined to comment on the JBS relationship, as did officials at Morgan Stanley, JPMorgan and Bank of America. JBS declined to comment on its relationships with banks or the progress of talks with the Justice Department.
JBS, which has most of its operations in the US, is resuming plans for a listing in New York as a way to access cheaper financing. In 2016, before the scandal broke, the idea was to take public a unit comprising JBS’s non-Brazilian businesses and the domestic foodmaker Seara Alimentos Ltda. While Morgan Stanley had been hired to handle that deal, it’s now less likely the New York-based company will get the business if the meat producer doesn’t reach a legal agreement in the US, the people said.
Morgan Stanley was the top equity underwriter in the US last year, according to data compiled by Bloomberg. Barclays ranked sixth, after JPMorgan and Bank of America.