Goldman bankers lock in $15 million refuel at Caltex

Goldman Sachs is expected to earn up to $15 million for trading Chevron’s $4.73 billion Caltex Australia stake.

Sources said Goldman had done the deal at the lower end of the block trade fee spectrum, charging the global oil giant an estimated 25 basis points for underwriting and selling the shares.

Still, when it is Australia’s biggest ever block and the world’s biggest sole underwritten block in 2015 to-date, it signals a hefty payday for the Wall Street giant.

No doubt there are some interesting discussions at Goldman Sachs to see how the fee is split between local and offshore bankers. Chevron would be a huge client for Goldman Sachs globally with the key relationships in the United States and well above the pay grades of anyone sitting in Sydney, Melbourne or even Hong Kong.

But obviously it was Goldman Sachs’ Australian team who did the deal and whose jobs would have been on the line should anything go wrong.

The other issue is how the fee gets split between the bankers who secured and planned the trade and the equities desks that sold the stock.

Senior bankers at other Wall Street banks said it was industry standard to split the fee equally between the investment banking and securities teams. The banking side of the fee would go up into the global fee pool, while the securities fee would be assigned to desks in line with stock allocations. Whoever sold the most stock gets the biggest fee.

The deal takes Goldman Sachs back to the top of the equity capital markets league table. After topping the 2014 scoreboard, Goldman’s local equity capital markets team had struggled to get runs on the board in the March quarter with much of the focus on preparing float candidates MYOB, Greenstone, Costa Group, Adairs and Amaysim.

Up until Friday night, the bank’s archrivals UBS, Macquarie Capital and Morgan Stanley had dominated the year’s block trades.