dl.magazinedl.comdl.magazinedl.com/magazinedl/IFR Asia/2020/IFR Asia... · 2020. 6. 7. · IFR ASIA INTERNATIONAL FINANCING REVIEW ASIA JUNE 6 2020 1141 Easy does it: NetEase recalls

IFRASIAI N T E R N A T I O N A L F I N A N C I N G R E V I E W A S I A

JUNE 6 2020 ISSUE 1141 www.ifre.com

Easy does it: NetEase recalls HK IPOglory days despite virus, tensions

Star board rolls out the red carpet forchipmaker SMIC’s record homecoming

International banks play down talk of buyouts for US-listed Chinese stocks

BONDS

The house alwayswins: Sands Chinaleads Macau bondmarket comeback06

BONDS

PTTEP blitzesthrough curve asinvestors go madfor Thai paper08

BONDS

Ascott opens upPandora’s Box afterchoosing not tocall Sing dollar perp08

PEOPLE & MARKETS

Riding the tiger:HSBC, StanChart back China in HK, feel the backlash14

PLUS: MONTHLY LEAGUE TABLES

[email protected]

LPC is the premier global provider of information on the syndicated loan markets. Our first-to-

the-market news and comprehensive real-time and historical data help industry players stay

informed about market trends and facilitate trading and investment decisions.

LPC’s publications, end-of-day valuations, online news, analysis, and interactive databases are

used every day by banks, asset managers, law firms, regulators, corporations and others to drive

valuation, syndication, trading, research and portfolio management activities.

CONNECT TO THE GLOBAL SYNDICATED LOAN MARKET WITH LPC.

LOOKING FOR A WIDER VIEW OF THE GLOBAL SYNDICATED LOAN MARKET?LOOK TO LPC

International Financing Review Asia June 6 2020 1

Upfront OPINION INTERNATIONAL FINANCING REVIEW ASIA

Toe the line

There is an air of inevitability about big businesses

HSBC and Standard Chartered both added their endorsement last week to China’s controversial plans for a national security law for Hong Kong, with HSBC even announcing on WeChat that its local chief executive had signed a petition in favour of the move – to the dismay of many of its customers and employees (and not just those in

Pressure to toe the Chinese Communist Party line is

2017 of a requirement to give “Party organisations” a say in

More recently Hong Kong businesses have come under

support for the national security law a week before HSBC

Of course, while it might have been inevitable (even, perhaps, understandable) for Hong Kong’s note-printing banks to fall in line, it is still jarring at a time when banks are desperately attempting to convince the world that they actually care about the “S” and the “G” in environmental,

say now that, at least in the case of these two banks, if the choice is between making money and good governance and

This kind of corporate pressure is going to become

Companies with a big presence in Hong Kong and China

point where they will leave, potentially taking Hong Kong’s

For China, which values political stability (and the CCP staying in power) above everything else, that may seem

comes with these heavy-handed tactics is irreversible, and will shape the way international businesses negotiate with

markets in the long term, it needs to recognise that markets function best when they are backed by a predictable, impartial rule of law and participants are free to carry out their activities without having to toe a particular political

Behind the curve

Wwere paying up to 30bp in new issue concessions

Oddly enough, that has coincided with better trading

came days after Sands China moved pricing on a 10-year

focused investors have built up oodles of cash that needs to be deployed, as issuance in the region has lagged far behind

The slower pace looked to be the result of an

premiums that Disney and Coca-Cola were shelling out to

between the offshore and domestic bond markets or bank

the sell-off in March, bid-ask spreads were wide enough to drive a bus through, making secondary levels useless as a

The new deals show that the market is barely more liquid now, leaving cashed-up investors scrapping for bigger allocations on new issues and making price discovery a

Pricing inside the curve looks like a good result, but it just

may not be as healthy as the latest batch of new issues

This kind of corporate pressure is going to become more

2 International Financing Review Asia June 6 2020

INTERNATIONAL FINANCING REVIEW ASIA

HONG KONG, HEAD OFFICE

ICBC Tower, 18/F, 3 Garden Road, Central, Hong Kong +852 3761 1800

TOKYO

30F Akasaka Biz Tower, 5-3-1 Akasaka, Minato-ku, Tokyo, Japan 107-6330 +813 6441 1119

SINGAPORE

18 Science Park Drive, Singapore 118229, Singapore +65 6775 5088

LONDON

5 Canada Square London E14 5AQ United Kingdom +44 (0)20 7250 1122

NEW YORK

3 Times Square, 18th Floor New York, NY10036 +1 646 223 4000

IFR Asia is a sister publication of International Financing Review. The contents of this publication, either in whole or part, may not be reproduced, stored in a data retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without written permission of the pub lishers. Action will be taken against companies or individual persons who ignore this warning. The information set forth herein has been obtained from sources which we believe to be reliable, but is not guaranteed. Subscriptions to IFR

photocopying is illegal.

EDITOR

Steve Garton +852 2912 6670

HEAD OF ASIAN CREDIT

Daniel Stanton +65 6417 4548

ASIA EQUITIES EDITOR

Fiona Lau +852 2912 6673

DEPUTY EQUITIES EDITOR, ASIA

S. Anuradha +65 6417 4547

SENIOR CREDIT CORRESPONDENT, ASIA

Kit Yin Boey +65 6417 4549

ASIA PACIFIC BUREAU CHIEF, LOANS

Prakash Chakravarti +852 2912 6671

SENIOR ANALYST: TOKYO

Takahiro Okamoto +813 6441 1773

SENIOR REPORTER: SYDNEY

John Weavers

+61 2 9373 1655

SENIOR REPORTERS: HONG KONG

Thomas Blott

+852 2841 5878

Carol Chan

+852 2912 6604

ASIAN CREDIT CORRESPONDENT

Krishna Merchant

+65 6417 4544

REPORTERS: HONG KONG

Candy Chan

+852 2912 6672

Jihye Hwang

+852 2843 1679

EQUITIES RESEARCHER: BEIJING

Karen Tian

+86 10 6627 1045

EDITOR, IFR

Matthew Davies +44 (0)20 7542 7504

DESK EDITOR

Vincent Baby +852 2912 6612

SUB-EDITOR

David Holland +852 2912 6676

HEAD OF PRODUCTION

Victor Ng +852 2912 6678

PRODUCTION ASSISTANT

Mike Tsui +852 2912 6677

IFR ASIA AWARDS MANAGER

Paul Holliday +44 (0)20 7542 8018

GLOBAL ADVERTISING PRODUCTION MANAGER

Gloria Balbastro +44 (0)20 7542 4348

HEAD OF GLOBAL ADVERTISING AND SPONSORSHIP

Shahid Hamid

+65 9755 5031

SUBSCRIPTION SALES

China, Hong Kong, Taiwan, Korea and Japan Alan Wong +852 2912 6606

India, Singapore, Malaysia, Thailand, Indonesia and Australia Samantha Harris +612 9373 1749

SUBSCRIPTION ACCOUNT MANAGER

Pia Batuan +65 6403 5542

CLIENT SERVICES

WEBSITE

www.ifrasia.com

EMAIL ADDRESSES

Abano Healthcare Group 41

ACM Research (Shanghai) 5

Adira Dinamika Multi Finance 38

Agora.io 31

Agrocorp International 43

Angkasa Pura II 39

Arena REIT 25

Arena REIT Management 25

Asahi Group Holdings 39

Ascendas REIT 9

Ascott Residence Trust 8

Asian Development Bank 41

Aurizon Network 24

Baidu 7

Beijing Kawin Technology

Share-Holding 33

Beijing Shenogen Pharma Group 33

Blue Sail Medical 33

BlueScope Steel 24

Boral 24

Borealis 40

Bright Food Singapore Holdings 31

Cambricon Technologies 31

Canadian Imperial Bank of Commerce 21

CAR Inc 27

Central American Bank for

Economic Integration 45

Chailease International Finance 31

China Bohai Bank 5

China Everbright Water 29

China Meidong Auto 33

China Pacific Insurance (Group) Co 31

China Traditional Chinese

Medicine Holdings 29

China Vanke 32

Citic Envirotech 9

CNCE Group (Hong Kong) 30

Columbus Capital 22

Dada Nexus 32

Daimler 29

Doosan Heavy Industries

and Construction 44

Doosan Infracore 44

Dr Peng Telecom & Media Group 30

ECL Finance 36

Evergreen Marine 45

Ever Sunshine Lifestyle Services 32

Excellence Commercial Property &

Facilities Management 32

Federal International Finance 39

First Abu Dhabi Bank 44

Garuda Indonesia 39

Genworth Financial

Mortgage Insurance 22

Gurunavi 40

Hangzhou Tigermed Consulting 5

Han’s Laser Technology

Industry Group 33

HDFC Life Insurance 37

Hilong Holding 26

Hongkong Electric 10, 34

Housing Development Finance Corp 36

Hyflux 11

Hygeia Healthcare 5

Ichthys Liquefied Natural Gas 23

Immunotech Biopharm 5

Indian Hotels 36

Indian Railway Finance Corp 36

Indomobil Finance Indonesia 38

Inpex Corp 23

Investment Global 29

Iress 25

JD.com 5, 7

Jiangsu Carephar Pharmaceutical 5

JSW Steel 36

Kaisa Group Holdings 25

Kangji Medical 5

Keppel REIT 9

KfW 22

Kiatnakin Bank 46

Kommunalbanken 41

Korea Electric Power Corporation 44

Korea Land and Housing 44

Kotak Mahindra Bank 37

KrisEnergy 44

Legend Biotech 32

Long Chen Paper 45

Luckin Coffee 27

MacMahon Holdings 25

Mahindra and Mahindra 36

Metropolitan Bank & Trust 42

Mingfa Group (International) 26

Minor International 47

Minsheng Education 33

Mitsubishi UFJ Financial Group 39

Motech Industries 46

Nan Hai Corp 27

NetEase 5, 7

North Eastern Electric Power Corp 36

Northern Territory Treasury Corp 21

NZME 41

Ocean Park Corp 34

Ofilm Group 33

Pepper 22

Pepper PRS26 22

Pop Mart 33

Provincial Electricity Authority 46

PTT Exploration and Production 8

Pylon Technologies 33

Qatar National Bank 28

REC 36

Red Star Macalline Group 33

Reliance Industries 37

Rentenbank 41

Republic of Indonesia 38

Rise Education Cayman 31

Sands China 6

Sansiri 47

Sarawak Energy 40

Seazen Group 28

Semiconductor Manufacturing

International Corp 4

Shandong Ruyi Technology Group 27

Shanghai ZJ Bio-Tech 5

Shengyi Electronics 33

Shinsun Holdings 33

Sichuan Languang Development 28

Singapore Airlines 43

Singapore Telecommunications 10, 42

SMBC Sydney 9

Smoore International 5

Speedcast Communications 23

Starhill Global REIT 42

State Bank of India 35

State Grid Intelligence Technology 5

Sumitomo Mitsui Banking Corp 21, 29

Taiyo Holdings 40

Tata Power 36

Tata Steel 36

Tencent Holdings 30

Thai Airways International 47

Tiphone Mobile Indonesia 38

Total 23

Trans Retail Indonesia 39

Triton 2020-2 22

UEM Sunrise 41

Unison Developing Co 46

Vedanta Limited 35

Vedanta Resources 35

Vicinity Centres 23, 25

Vinpearl 47

Vocus Group 24

Wing Tai Properties 9

Xiangtan Urban & Rural Construction

Development Group 28

Yageo Corp 45

Yancoal Australia 24

Yang Ming Marine Transport 45

Yes Bank 36

Yinchuan Tonglian Capital

Investment Operation 29

Zhenro Properties Group 29

Zhongtai Securities 33

Zhongyu Gas Holdings 30

COMPANY INDEX


ContentsINTERNATIONAL FINANCING REVIEW ASIA

JUNE 6 2020 ISSUE 1141

COVER STORIES

EQUITIES

04 SMIC takes aim at Star recordHong Kong-listed Semiconductor Manufacturing International Corp has filed for a Rmb20bn A-share IPO, the biggest so far on Shanghai’s Star board.

EQUITIES

05 NetEase opens IPO floodgatesA HK$21bn secondary listing of NetEase has kicked off a busy month for Hong Kong IPOs, with at least seven other issuers looking to raise a combined US$8bn.

LOANS

06 Lenders cool on US buyout talkA US bill that may force Chinese companies to delist over US$1trn of shares has sparked Asian lenders to talk of an unprecedented wave of event-driven financings.

NEWS

06 Sands China ups the anteSands China reopened the offshore market for the hard-hit Macau casino sector with a US$1.5bn dual-tranche Yankee that got tighter pricing than expected.

08 PTTEP fuels market frenzy Thai company PTTEP’s bond offering priced

well inside its curve but still jumped in secondary trading.

08 Ascott opens Pandora’s box Higher pricing and tighter structures may

come to Singapore perps after Ascott did not redeem its perp at the first call.

09 International banks swoop Down Under With no local supply, global

banks have netted a hefty A$13.5bn from Australian dollar bonds since April.

PEOPLE & MARKETS

14 HSBC, StanChart bend the kneeHSBC and StanChart have thrown their weight behind China’s new security law in Hong Kong, breaking with a long history of political neutrality.

15 Credit Suisse gets 51% stake in JV Credit Suisse has become the latest

global bank to acquire a majority stake in its China securities joint venture.

16 China filters out ‘clean coal’ for green bonds Beijing has excluded so-

called clean coal from an updated list of projects eligible for green bonds.

14 Who’s moving where Julian Peck has left his role as Morgan Stanley’s

Australia co-head of investment banking to join gas pipeline operator APA.

16 In brief Japan’s FSA and the BoJ have sent a letter to the CEOs of major

financial institutions urging them to take action over the end of Libor.

ASIA DATA

48 This week’s figures

21 AUSTRALIA

SMBC Sydney branch, raised a

hefty A$2.4bn from a three-part

MTN sale, the latest issuance

to benefit from the absence of

local major bank supply.

25 CHINA

Chinese property developer

Kaisa Group Holdings managed

to reprice its dollar curve with

a short-dated new issue that

closed eight times covered.

34 HONG KONG

Hongkong Electric has raised

US$500m from a 2.25% 10-

year bond that received final

orders of over US$2.25bn from

more than 130 accounts.

35 INDIA

Vedanta Resources wants to

amend its US dollar bonds

covenants as chairman Anil

Agarwal takes indirect unit

Vedanta Limited private.

38 INDONESIA

Indonesia aims to sell Samurai

bonds in the second half of

2020. The sovereign is a regular

Samurai bond issuer visiting the

market once a year since 2015.

39 JAPAN

Mitsubishi UFJ Financial Group

priced a €500m four-year

Sustainability bond that will

be used to support Covid-19

recovery efforts.

40 MALAYSIA

Sarawak Energy has increased

the issue size of a dual-tranche

sukuk to M$1.9bn on robust

demand from investors seeking

diversification.

41 MONGOLIA

Asian Development Bank has

raised 21bn Mongolian tugrik,

equivalent to US$7.5m, in the

first offshore bond offering in

the currency.

41 NEW ZEALAND

KBN accessed the Kauri market

for the first time in almost two

years with a NZ$250m five-year

sale via joint lead managers

ANZ and TD Securities.

42 PHILIPPINES

Metropolitan Bank & Trust has

raised Ps10.5bn from one-year

three-month bonds at 3%,

payable quarterly, according to

a filing on the stock exchange.

43 SINGAPORE

Singapore Telecommunications

has printed a US$750m 1.875%

10-year bond after receiving

final orders of more than

US$4.1bn from 225 accounts.

44 SOUTH KOREA

Doosan Infracore has mandated

four for a proposed US dollar

bond offering that is expected

to be guaranteed by Korea

Development Bank.

44 TAIWAN

First Abu Dhabi Bank has priced

a US$500m 30-year non-call

five zero coupon Formosa bond

at par to yield 3.7%. StanChart

Taiwan was the bookrunner.

46 THAILAND

Provincial Electricity Authority

raised Bt5bn from 10 and 15-year

bonds, pricing Bt1bn 10-year

notes at par to yield 2.27% and

Bt4bn 15-year notes at 2.71%.

47 VIETNAM

Vietnamese conglomerate

Vingroup’s hospitality

subsidiary, Vinpearl, is sounding

the market for a US$200m

debut offshore loan.

COUNTRY REPORT

News

SMIC takes aim at Star recordEquities Chipmaker on fast track to complete landmark domestic listing

BY KAREN TIAN, FIONA LAU

Hong Kong-listed SEMICONDUCTOR

MANUFACTURING INTERNATIONAL

CORP has filed for a proposed Rmb20bn (US$2.8bn) A-share IPO, the biggest so far on Shanghai’s technology-focussed Star board.

The chipmaker plans to offer 1.69bn A-shares, or 25% of its enlarged capital, with a 15% greenshoe. It is also on a fast track to market, having received a first round of enquiries from the Shanghai Stock Exchange last Thursday, only three days after it filed. That shattered the four-day record held by Guangdong Jia Yuan Technology Shares and was comfortably inside the 20 working days stipulated under the Star board application process.

Haitong Securities and CICC are joint sponsors and joint bookrunners with Guotai Junan Securities, China Securities, China Development Bank Securitie and Morgan Stanley Huaxin Securities.

RED CHIP RECORD-BREAKER

Based on its target size, SMIC’s listing would be the biggest in the A-share market since the coronavirus outbreak triggered a nationwide lockdown at the end of January. It would also set a record for the Star board, beating China Railway Signal and Communication’s Rmb10.5bn IPO last July.

“Although the deal is currently the largest one on the Star board, I don’t think the IPO will have any difficulty to sell,” a person familiar with the deal said. “After all, demand for Star board stocks still exceeds supply.”

SMIC is the first overseas-listed red chip to apply for an A-share listing, making its announcement just one working day after

China lowered the market capitalisation requirements on April 30.

Regulators first allowed overseas-incorporated Chinese companies to sell shares at home in 2018, but set a high minimum market cap of Rmb200bn for those with shares already traded overseas. China Resources Microelectronics – which delisted in Hong Kong in 2011 – is the only red-chip Chinese company to complete a Shanghai IPO, raising Rmb3.75bn on the Star board in February.

The China Securities Regulatory Commission in April cut the minimum capitalisation test for innovative companies to Rmb20bn, allowing smaller overseas-listed technology companies to sell shares in the domestic market.

“The listing is a pilot for policy reform,” said a person familiar with the deal. “Chinese regulators hope to attract high-quality red chips to come back.”

“SMIC had been willing to return to the A-share market and has been waiting for the

opportunity and a change to the red-chip policy for a long time.”

SMIC raised US$1.8bn from a dual listing in Hong Kong and New York in March 2004, led by Credit Suisse First Boston and Deutsche Bank.

BANS WITH BENEFITS

SMIC’s domestic listing comes as rising tensions between China and the United States are reshaping supply chains in the technology sector. The US in mid-May toughened export restrictions to block semiconductor manufacturers globally from using US technology and software to design or produce chips for companies on a trade blacklist, which includes Chinese telecom equipment maker Huawei and other Chinese technology firms such as SenseTime and Megvii.

SMIC warned potential investors in its preliminary prospectus that a continued escalation in trade frictions between the US and China may lead to equipment and raw material shortages and customer churn. However,

China’s top chipmaker is seen as less exposed to US restrictions than market leader Taiwan Semiconductor Manufacturing Company, which supplies more advanced chips.

“Last year, the US banned American companies from directly selling chips to Huawei, so Huawei could look for other foundries like TSMC to process its chips. Under last month’s new rules, high-level foundries like TSMC have no way to produce chips for Huawei, and Huawei has only one way to go: to look for Chinese foundries such as SMIC for production,” a salesperson at a leading US chip company explained.

SMIC’s capabilities, however, lag behind its international rivals. Its mass production facilities produce 14-nanometre chips, while TSMC’s most advanced chip in mass production is 5nm.

“The smaller the size of the chip, the more precision is required in the manufacturing process. SMIC clearly has not yet reached this international standard,” she said.

According to market research firm IC Insights, SMIC is the world’s fourth

Few loan pickings in US delistings 06 Sands China 06 PTTEP frenzy 08


Uncalled perps 08 Japanese casino financings 10 Troubled waters at Hyflux 11

biggest semiconductor foundry by sales, after TSMC, Global Foundries, and United Microelectronics. It is number one in China.

Rising tensions are expected to spur domestic investment in China’s semiconductor industry. SMIC said it will use the proceeds of the IPO to upgrade its capabilities to 14nm and below, fund research and development and replenish working capital.

SMIC also announced on May 15 that two state-owned funds, China IC Fund and Shanghai IC Fund, will inject US$1.5bn and US$750m respectively into the company before the end of this year, helping it fund research and the production of more advanced chips.

The company posted net profit of Rmb1.27bn in 2019, up 252%, while revenues fell 4% to Rmb22bn.

Its H-shares have surged 76% in the past six months, closing at HK$18.68 last Thursday for a market capitalisation of US$13.3bn.

ACCELERATED CAPITAL

The rate of IPO applications in China is increasing as companies resume fundraising now that the Covid-19 epidemic is coming under control.

Alongside SMIC, another 16 companies filed for Star IPOs last week as of last Thursday to raise a combined Rmb12.2bn. Of those, ACM RESEARCH (SHANGHAI), SHANGHAI ZJ BIO-TECH, JIANGSU

CAREPHAR PHARMACEUTICAL, and STATE GRID INTELLIGENCE

TECHNOLOGY plan to raise over Rmb1bn apiece, with targets of Rmb1.8bn, Rmb1.36bn, Rmb1.59bn, and Rmb1.03bn respectively. The first two are sponsored by Haitong Securities, and the last two are working with Sinolink Securities and Citic Securities respectively.

A total of 87 companies have filed for Star IPOs in the past two months, with a combined fundraising target of Rmb72.1bn.

NetEase opens IPO floodgatesEquities At least seven other companies plan Hong Kong listings totalling US$8bn

BY FIONA LAU

A HK$21bn (US$2.71bn) secondary listing of NETEASE has kicked off a busy month for Hong Kong IPOs, with at least seven other issuers looking to raise a combined US$8bn.

Buoyed by overwhelming demand from both institutional and retail investors, Nasdaq-listed NetEase last Friday priced an offer of 171m shares at HK$123 per share, equal to a 2% discount to the company’s close of US$405.01 in the US on Thursday.

More than 370,000 investors participated in the retail tranche with many of them pre-paying their subscriptions on margin, leaving the tranche more than 350 times subscribed. The institutional books were also more than 10 times covered.

“Appetite is much stronger than what we thought. Being the first sizable deal after the coronavirus outbreak has

attracted pent-up demand. The strong debuts of recent Hong Kong IPOs and the rising stock markets helped as well,” said a banker on the deal.

The seven Hong Kong IPOs of more than US$100m which priced since February have all seen their shares rise on debut. Chinese biotech company Akeso and medical device maker Pejia, for instance, soared 46% and 68%, respectively, on their first

trading day.Another banker said the

positive experience of Alibaba’s US$13bn Hong Kong float last November had helped drive interest in the NetEase deal.

“Investors like the home listing theme and the Alibaba deal already shows a Hong Kong listing could help re-rate the stock,” said another banker.

Investors are getting another chance to bet on a big deal. Nasdaq-listed JD.COM was set to open books on Friday night for a Hong Kong secondary listing, raising about US$3.75bn from a 4.3% post-money stake, based on its US close of US$56.52 on Thursday. The retail tranche will run from June 8 to June 11.

CHINA BOHAI BANK is also lining up a sizable float. The national joint-stock commercial bank, which counts Standard Chartered as its second-largest shareholder, will seek listing approval on Tuesday for a Hong Kong IPO of about US$2bn. Pre-marketing will start on Wednesday or Thursday if approval is granted.

Chinese medical equipment maker KANGJI MEDICAL, Chinese hospital operator and radiotherapy equipment maker HYGEIA HEALTHCARE and biotech firm IMMUNOTECH BIOPHARM are all planning to start pre-marketing this week for respective IPOs of US$400m, US$300m and at least US$100m.

Many other listing aspirants, including Shenzhen-listed Chinese clinical research service provider HANGZHOU

TIGERMED CONSULTING (US$1bn) and e-cigarette maker SMOORE

INTERNATIONAL (US$400m), are planning to seek listing approval this month.

SEIZE THE WINDOW

Issuers are catching up after the coronavirus outbreak made dealmaking difficult since

February. “Markets were much more

volatile back then and most of the people were working from home, so issuers were

not too keen to push ahead,” said an ECM banker. “Now that markets seem to have stabilised and to hold up well, and with more and more people heading back to the office in Hong Kong, issuers think it’s a good time to get their deals out.”

As of Thursday, Hong Kong’s benchmark Hang Seng Index was up 6.1% this month, trimming the year-to-date loss to 13.6%.

Adding to the urgency is the fact that many potential issuers have filed listing applications based on end-2019 financials, which are only valid until the end of June. After that date, issuers will have to spend time updating their numbers first. For their part, bankers are keen to seize the market window.

“There is so much uncertainty which can change market sentiment overnight. The escalating tension between China and the US, especially over the security law in Hong Kong, can put the city under threat and close the market window quickly,” said another ECM banker.

The Hong Kong shares of NetEase are scheduled to start trading on June 11. CICC, Credit Suisse and JP Morgan are sponsors and global coordinators.


For daily news stories visit www.ifre.com

“With more and more people heading back to the office in Hong Kong, issuers think it’s a good time to get their deals out.”

“Appetite is much stronger than what we thought. Being the first sizable deal after the coronavirus outbreak has attracted pent-up demand.”

Sands China ups the anteBonds Casino bond beats pricing expectations after Macau shutdown

BY DANIEL STANTON

SANDS CHINA on Tuesday reopened the offshore bond market for the hard-hit Macau casino sector with a US$1.5bn dual-tranche Yankee offering that achieved much tighter pricing than expected.

Sands priced the longer 10-year tranche a full 100bp inside initial price thoughts, despite the risk that the Baa2/BBB–/BBB– notes could be downgraded to junk as the coronavirus pandemic hurts Macau’s tourism industry.

The resort operator priced a US$800m 3.8% tranche due January 2026 at 99.901 to yield 3.819% and a US$700m

4.3% 10-year at 99.58 to yield 4.427%. This was equivalent to respective spreads over Treasuries of 350bp and 375bp, well inside initial price thoughts in the 437.5bp and 475bp areas.

The 100bp revision on the 10-year tranche is one of the biggest moves in guidance for an Asian dollar bond in recent years, and will raise expectations for further issuance from Macau casino operators.

Sands China, which owns and operates resorts including the vast Venetian Macao, built an order book that peaked at around US$17.3bn, and orders were still in the double digit billions even after

active bookrunners Barclays, Bank of America and Goldman Sachs tightened guidance aggressively. Final distribution statistics have yet to be disclosed.

“The strength of the response caught us by surprise,” said one of the bookrunners.

After a record US$5.1bn of issuance in 2019, this was the first US dollar bond from the Macau casino sector since Wynn Macau printed a US$650m 10-year bond in December, and secondary prices were not much help as a reference point. Sands China’s dollar bonds were trading at wide bid/offer spreads of 30bp–50bp, with its 2023s bid

at Treasuries plus 350bp, its 2025s at 365bp and its 2028s at 375bp, a sign that few secondary transactions were actually going through.

Nomura’s credit sales and trading desk had estimated fair value for the long five-year and 10-year tranches at Treasuries plus 390bp and 426bp, respectively.

Both tranches priced well inside those estimates, and even using the mid-point of secondary spreads the deal looked to have priced flat to the curve or even inside it.

The secondary paper rallied, and the new bonds were both quoted 5bp–10bp tighter in trading on Wednesday morning.

DOWNGRADE PROTECTION

The notes have expected ratings of Baa2/BBB–/BBB–,

Lenders cool on US buyout talkLoans Potential delisting candidates face funding challenges

BY APPLE LI

A bill that could force Chinese companies to delist over US$1trn of shares from US markets has sparked chatter among Asian lenders of an unprecedented wave of event-driven financings as a potential consequence.

The latest attempt by US lawmakers to restrict China’s access to the world’s biggest stock market comes amid rising tensions between the two superpowers, prompting companies from Alibaba Group Holding to Baidu to review their reliance on US capital.

Bankers, however, do not expect a wave of buyouts, given the challenge of raising the vast sums of debt required against a bleak outlook for the global economy in the wake of the coronavirus crisis.

“Many of those companies are privately owned enterprises. With the growing uncertainties in the global markets, based on the risk and return involved,

it would be challenging for some banks to support these take-private financings,” said a senior loans banker at an

international bank.The Holding Foreign

Companies Accountable Act, passed by the Senate in mid-

May, would ban companies from the US stock market if they fail to disclose connections to the Chinese Communist

News


Party or if US regulators are unable to oversee their audit process for three consecutive years – something that Chinese laws do not allow.

The bill needs to clear the Democrat-controlled House of Representatives and the president’s desk before it becomes law, but won strong bipartisan support in the Senate. Anti-China rhetoric, already spurred by tense trade negotiations in recent years, has escalated since the Covid-19 outbreak and China’s move to impose a national security law in Hong Kong.

Chinese companies have also come under renewed scrutiny in the US after the collapse of Luckin Coffee, whose Nasdaq-listed stock had been a star performer until it said in March its staff had fabricated sales totalling over US$300m.

“Our clients have been looking for months into different options to hedge the risk of a single listing in the US as the trade war continues,” said a senior loans banker at a Chinese investment bank. “Delisting is one of several options.”

As of September 2019, 172

Chinese companies were listed on the three largest US exchanges, with a total market capitalisation of more than US$1trn, according to the US-China Economic and Security Review Commission.

It would take just a few of those to decide to take their stock private to create significant demand for debt funding.

BUYOUT TEMPLATEIn 2015, following a spate of accounting scandals and short-seller attacks that pushed down equity valuations, 30 out of 127 US-listed Chinese companies announced take-private deals. That led to over US$11bn in loans in 2016, making up 22% of the total M&A loan volume from China that year, according to Refinitiv LPC data.

Any repeat would largely depend on the support of Chinese relationship banks, especially as the ongoing spat between China and the US and worries over global credit quality post Covid-19 means fewer international lenders would be willing to back any debt funding.

“The recent developments

don’t bode well for the take-private situations, especially relating to the involvement of non-Chinese lenders,” said another senior loans banker at an international bank in Hong Kong.

“Covid-19 has upended many businesses and brought many uncertainties to the fore, so lending to support a Chinese company’s delisting presents greater risks now, including political ramifications.”

For the first time in decades, China has abandoned a GDP growth target for 2020. Last year, the country grew 6.1%, the lowest rate in nearly 30 years.

PLAN B Bankers expect more US-listed mainland firms to seek secondary listings in friendly markets closer to home as a back-up plan, without abandoning the US capital markets entirely.

Hong Kong fits the bill as its boasts one of the largest bourses in Asia and has undertaken reforms in past years to encourage secondary listings of Chinese companies. The Stock Exchange of Hong Kong also revised its rules in

2018 to permit the listing of companies with dual-class shares or weighted voting rights.

Alibaba, which chose the New York Stock Exchange for its IPO in 2014 after Hong Kong refused to allow its management structure, returned to Hong Kong for a US$13bn secondary listing last November.

Online gaming company NETEASE is set to raise us$2.7bn from a secondary listing in Hong Kong, while e-commerce firm JD.COM has also won approval for a similar move. The founder of Nasdaq-listed search engine giant BAIDU said the company was paying close attention but had “many choices of destination” for a listing beyond the US, according to state-run China Daily.

“Privatisations and relistings involve higher costs. It is simpler and faster to go for a secondary listing. It depends on the companies’ strategies which option to go for,” said the second banker, adding that the need for loan financing would be lower for a company that has a secondary listing.



but the respective Baa2 and BBB– ratings from Moody’s and S&P are on review for possible downgrade, so investors ran the risk that the bonds could be cut to junk if visitors do not return to Macau soon.

To give investors some comfort, the coupon will increase by 25bp for each one-notch downgrade below investment grade, up to a maximum of 200bp. The interest rate will return to the original coupon if the ratings return to their original level, and the rating-linked step-up feature will be permanently removed if the ratings are upgraded to Baa1/BBB+/BBB+ or higher.

“That tells investors that Sands will probably try hard to defend their ratings,” said the lead, noting that the deal attracted all the typical fund

managers and bank treasuries that would normally participate in an Asian investment-grade deal.

Investors can also put the bonds at par if Sands China loses its gaming licence in Macau, giving them extra peace of mind when it seeks to renew the permit in 2022.

Fitch has a stable outlook on Sands China’s rating, but warned in April that Macau’s economy would shrink by 24% in 2020, assuming a 40% drop in gaming revenue.

Total gaming revenue fell 60% year on year in the territory in the first quarter, according official industry figures, including declines of 88% in February and 80% in March.

The special administrative region shut down casinos from February 5-19 and travel restrictions meant tourism

from mainland China dried up. Casinos have since reopened, but customers now have to wear masks and the number of seats at each gaming table has been reduced, cutting into earnings.

Sands China reported a net loss of US$180m in April, compared with a US$148m profit in the same month last year. As of May 29, it had US$801m of cash and cash equivalents, and US$1.61bn of borrowing capacity available. That is enough to last it for two years, given that it is currently spending about US$200m per month on operating expenses, interest payments and capital expenditure.

In March it obtained a waiver from lenders on its credit facility so that it would not need to comply with covenants requiring it to keep its leverage

ratio to no more than 4x and maintain a minimum interest coverage ratio of 2.5x until July 2021.

In April, Sands cancelled plans to pay a dividend to shareholders, but it expects to be able to continue with projects including the renovation and expansion of Sands Cotai Central into a new integrated resort called The Londoner Macao, which will feature replicas of the Big Ben clock tower and the Houses of Parliament.

Las Vegas Sands, which owns a 70% stake in Sands China, has ample liquidity to cope with “near zero revenue” for around 18 months while continuing with its existing development plans in Macau and Singapore, according to its first-quarter earnings presentation in April.

Ascott opens Pandora’s boxBonds Bondholders expected to put perpetual structure under microscope after precedent

BY KIT YIN BOEY

Bond investors are expected to demand higher pricing and tighter structures in Singapore dollar perpetual bonds after ASCOTT RESIDENCE TRUST set a precedent by choosing not to redeem its S$250m (US$178m) perpetual bond at the first call date on June 30.

“We believe this will be the primary focus for investors going forward looking at potential new issues, demanding larger step-ups and/or other structures which protect investors against a collapse in rates and rising non-call risk,” said OCBC credit analyst Wong Hong Wei.

Fixed income investors typically expect issuers to redeem perpetual bonds at the first call, even though

they trade at higher yields to reflect that option. Over the years, the structure of perpetual bonds in Singapore has loosened amid strong demand from yield-chasing investors. Some transactions

have excluded step-ups if the bond is not called or featured a coupon reset at a later date. Such features generally do not incentivise issuers to exercise the call option, although not doing so can damage the issuer’s reputation with

investors.For ART, not calling the perp

will allow it to make significant cost savings when the distribution rate resets on June 30 to the prevailing Singapore dollar SOR plus a credit spread

of 250bp, in line with the bond’s terms. When the 4.68% bond was issued in June 2015, the five-year SOR was around 2.2%. It has since tumbled to 0.65% as of Thursday, which will lower ART’s coupon to about 3.1%.

ART said that it needed to be prudent in preserving cashflow and liquidity after the Covid-19 pandemic resulted in lower occupancies and room rates across its global portfolio of properties.

“This is a good development for the market,” said one DCM banker. “The non-call move will lead to a re-pricing of all perpetual bonds. It should then bring back some normalcy to the differential between senior and subordinated bonds which narrowed in last year’s markets.”

The gap between senior and subordinated bond yields has been closing. Last October, CapitaLand printed a S$500m perpetual non-call five bond at par to yield 3.65%, just 65bp more than Keppel paid for a S$200m seven-year senior bond in September. In 2018, the difference was around 100bp.

TREND SETTER

The largest Singapore-listed

PTTEP fuels market frenzyBonds Thai energy producer prices inside curve, but bond still rallies

BY DANIEL STANTON

Thailand’s PTT EXPLORATION AND

PRODUCTION (Baa1/BBB+/BBB+) threw pricing expectations out the window on its return to the offshore market on Thursday, as its bond priced well inside its curve but still jumped in secondary trading.

The upstream oil and gas giant priced US$500m seven-year bonds at par to yield 2.587%, equivalent to seven-year Treasuries plus 195bp, in an offering that was more than 14 times subscribed.

Pricing came at the tight end of final guidance of Treasuries plus 195bp–200bp and a whopping 75bp inside initial guidance.

“This deal shows there is appetite for strong names and

investors have tremendous liquidity to deploy,” said Raj Malhotra, head of debt capital markets, Asia Pacific, at Societe Generale. “Asia is still catching up with Europe and the US

where issuers have been more active.”

PTTEP is one of the most frequent issuers from Thailand – in fact, it is the kingdom’s only issuer of dollar bonds so

far this year, having sold 10-year paper in January – and has a well-established curve. Still, joint bookrunners Bank of America, Citigroup, HSBC and Societe Generale had to look

beyond the secondary prices. When books opened, the

2030 was trading at a G spread of 242bp, pointing to fair value of Treasuries plus 230bp for the new seven-year. By the time

final guidance was announced, the 2030 bonds had tightened 12bp in secondary trading, but the new issue priced 25bp inside fair value even if the updated curve was used as a reference.

“To pierce fair value by that much is notable, since they have a defined curve,” said one of the leads. “Thailand does not have a lot of paper out there and it’s a diversification play, so whenever a Thai issuer comes out you can anticipate a lot of interest from global investors.”

Despite the new issue appearing to leave nothing on the table for investors, orders barely dropped from a peak of US$8bn to a final book of US$7.4bn from more than 320 accounts.

PTTEP had aimed to raise

News


“To pierce fair value by that much is notable, since they have a defined curve. Thailand does not have a lot of paper out there and it’s a diversification play, so whenever a Thai issuer comes out you can anticipate a lot of interest from global investors.”

“This is a good development for the market.The non-call move will lead to a re-pricing of all perpetual bonds. It should then bring back some normalcy to the differential between senior and subordinated bonds which narrowed in last year’s markets.”

US$300m–$500m and decided to stick to its upper limit even in the face of overwhelming demand, allowing the leads to be bold in narrowing guidance.

“It was aggressive, but we had a sense of where investors’ price limits were,” said another lead.

Secondary trading provided another surprise. The new bonds trade against 10-year Treasuries in the secondary market and tightened from a 175bp spread at issue to around 155bp on Friday morning.

The seven-year tenor is rare in Asia, with only a handful of issuers like Hysan Development opting for it this year, but PTTEP was understood to have chosen the tenor in order to manage its maturity profile, having previously pushed out as far as 40 years.

Asia took 60% of the Reg S/144A bonds, EMEA 17% and the US 23%. Fund managers booked 72%, insurers, pension

funds and public institutions 17%, banks 7%, and private banks and others 4%.

The issue has expected ratings of Baa1/BBB+ (Moody’s/Fitch).

Wholly owned subsidiary PTTEP Treasury Center Company will issue the bonds with a guarantee from PTTEP. Issuing through a treasury centre gives companies an exemption on withholding tax on interest payments on the bonds.

The bonds have an unusual change of control clause, which is in line with PTTEP’s previous issue. Instead of a put option, the interest rate will increase by 100bp if PTT ceases to own at least a 50.1% stake in PTTEP, or PTTEP ceases to own at least 50.1% of the issuer, leading to a rating downgrade.

Oil and gas company PTT, in which the Ministry of Finance holds a 51% shareholding, owns a 64.79% stake in PTTEP.

International banks swoop Down Under

Bonds Local supply drought opens window for overseas

issuers

BY JOHN WEAVERS

International banks have netted a hefty A$13.5bn (US$9.3bn) from Australian dollar bonds via their Sydney branches or in Kangaroo format since April 2, taking advantage of the absence of competing local supply.

None of Australia’s four major banks have sold bonds locally since January 13, while there has been no senior unsecured issuance by any domestic authorised deposit-taking institution (ADI) since mid-February.

Subsequently Suncorp and Bank of Queensland each printed A$750m of covered bonds, while Macquarie Bank, which had several subordinated redemptions earlier in the year, issued Additional Tier 1 and Tier 2 notes for A$641m and A$750m.

“The lack of issuance from the Australian majors in particular has left a void which overseas banks have stepped in to fill,” said Paul White, global head of capital markets at ANZ.

“Pent-up demand, including investors looking to put recent large redemptions back to work, has certainly helped boost the size of recent deals from international banks, though pricing outcomes for these issuers remain above pre-coronavirus levels.”

Eight international banks (four Canadian, two Swiss, one Japanese and one French) have raised a combined A$13.5bn from 10 Aussie dollar senior unsecured and covered offerings over the last nine weeks. In late May, the Export-Import Bank of Korea also raised A$700m from a Kangaroo offering.

These unusual supply dynamics are unlikely to change much anytime soon as local ADIs continue to have

access to far cheaper sources of funding, notably the Reserve Bank of Australia’s A$90bn Term Funding Facility.

The TFF provides Australian ADIs with funding for three years at a fixed interest rate of just 0.25% and it makes little sense from a cost perspective to look at far more expensive borrowing alternatives before the TFF closes on September 30.

Though international banks have stepped up their issuance in recent weeks, price compression has been relatively sluggish compared with the tightening for the Australian majors as market confidence recovered from its late February/early March troughs.

For example, on February 11 Sumitomo Mitsui Banking Corp (A1/A/A), Sydney branch, priced an A$800m 2.5-year floating-rate note at three-month BBSW plus 66bp, indicating a three-year sale at the time would require a margin around 70bp.

Last Tuesday’s A$1.2bn SMBC

SYDNEY three-year FRN, as part of a A$2.4bn triple-tranche transaction, priced 25bp back of that indicative spread at 95bp over three-month BBSW.

In contrast, the lack of supply as well as the relative resilience of the Australian economy and housing market has helped domestic ADI margins fall back to very near their pre-coronavirus crisis levels.

Sydney syndication desks estimate a new major bank senior unsecured three-year MTN would price in the low 60s, in line with the 62bp spread paid by ANZ on January 7.

They see a new five-year in the low 80s or just 5bp or so back of the 76bp and 77bp spreads paid by ANZ and National Australia Bank on January 7 and 13.



hospitality trust is not the first corporate issuer to skip the first call on perpetual bonds, but it is the first issuer to do so while not in financial distress, opening the door for more financially sound issuers to do so.

Among the REITs, ASCENDAS

REIT and KEPPEL REIT are next in line with calls on their respective perpetual bonds in October and November. Ascendas REIT’s 4.75% bond has a call and reset on October 14, which will result in a distribution rate of around 3.08%, based on last Thursday’s SOR levels. Keppel REIT’s 4.98% callable on November 2 will reset to around 3.35%.

Should they choose to skip the call options, both trusts will benefit from substantial cost savings.

Bankers said these REITs were fundamentally strong credits with good access to capital, so it was not a question

of credit weakness but one of preserving flexibility amid uncertain economic conditions. For instance, ART has a market capitalisation of S$2.5bn with a fairly modest aggregate leverage of 35.4%, well below the 50% regulatory cap.

Among non-REIT corporate issuers, WING TAI PROPERTIES and CITIC ENVIROTECH are approaching call dates for their bonds in August and October. OCBC’s Wong believes that Wing Tai Properties is more likely to skip the first call as a reset will only take place in 2027. It faces higher costs if it wants to refinance its outstanding 4.35% perpetual callable on August 24 with another perpetual bond.

Citic Environment, however, is likely to refinance or redeem its 3.9% perpetual callable on October 19 because a reset will raise the distribution rate to around 7.8%, due to the 500bp step-up and a 238bp credit spread that it will have to pay.

Utilities capture investor focusBonds Singtel, HK Electric price inside curve in quieter market

BY JIHYE HWANG

Two investment-grade utilities companies from Asia printed US dollar bonds last week, capturing investors’ attention in a thinner market than a week earlier.

SINGAPORE TELECOMMUNICATIONS, rated A1/A (Moody’s/S&P), raised US$750m from a 1.875% 10-year bond, while HONGKONG ELECTRIC, rated A– by S&P, sold a US$500m 2.25% 10-year note.

Both Reg S senior unsecured notes priced at the tight end of final guidance and around 50bp inside initial guidance. Singtel’s 2030s were almost 5.5 times covered, while Hongkong Electric attracted orders worth 4.5 times the deal size.

“These bonds from high-grade issuers will always be oversubscribed, but the overall sluggish international bond supply from Asia compared to the US or Europe is affecting the market in general, including

the pricing,” said a fixed income portfolio manager at a sovereign wealth fund in Asia.

International bond supply from Asia Pacific in G3 currencies rose to US$11.4bn in the last week of May, boosted by Tencent’s US$6bn four-tranche issue, up from US$5.4bn the previous week, according to Refinitiv data. Issuance last week dropped again to around US$3.3bn as of Friday morning.

Singtel’s 2030s priced at 99.313 to yield 1.951% or Treasuries plus 123bp, which offered a negative new issue concession of 7bp-8bp, according to bankers on the deal. The telecom operator’s existing 2029s were trading at a G-spread of around 130bp on the day the new bonds were priced.

Singtel, which is a regular issuer, previously tapped the international bond market last August and printed new bonds flat to its curve. Singtel is 52.5%-

owned by Temasek Holdings, which is wholly owned by Singapore’s government.

The bond received final orders of more than US$4.1bn from 225 accounts.

Proceeds will be used to fund regular business activities.

Hongkong Electric priced its new bonds at 99.370 to yield 2.321%, or Treasuries plus 165bp, inside initial guidance in the 220bp area.

The deal received final orders of over US$2.25bn, including US$70m from the leads, from more than 130 accounts. It lost some investors after orders peaked at US$5bn, but only as it tightened pricing with a capped issue size.

“The bonds priced extremely tight compared to the issuer’s existing notes, but the issuer was looking for a tighter level by identifying broader comparables,” a banker on the deal said. “There was no single

fair value point.”Hongkong Electric’s 2026s

were trading around Treasuries plus 180bp, while Singapore Power’s 2029s, another key comparable, were around Treasuries plus 122bp, according to a note sent to investors on the day of pricing.

The Hong Kong utility is a rare issuer, having previously tapped the international bond market in 2016. It has a 4.25% US$750m bond due in December this year.

“We were facing refinancing needs and thought it was a nice time to take some risk off the table as the market is open,” said a funding official at Hongkong Electric.

The new bonds of both Singtel and Hongkong Electric continued trading tighter by around 5bp in secondary last Friday.

Citigroup, DBS Bank and HSBC were joint bookrunners for the Singtel deal.

BNP Paribas, HSBC, Mizuho Securities and UBS were joint global coordinators, bookrunners and lead managers for the Hongkong Electric notes.

Japanese lenders bet on casinosLoans Megabanks eye multi-billion-dollar project financings

BY WAKAKO SATO

Japan’s megabanks are hoping to hit the jackpot on up to ¥1.8trn (US$17bn) of project financings from the country’s first integrated resort casinos, for which senior bank debt is expected to play a pivotal role in funding plans.

The government has authorised three IR licences with total project costs of up to ¥3trn and is expected to receive bids next year from major cities such as Osaka, Tokyo and Yokohama as well as Nagasaki and Wakayama.

The megabanks – Mizuho Bank, MUFG and Sumitomo Mitsui Banking Corp – expect to play a leading funding role for the IR projects, the bulk of which is likely to be through

long-tenor project financings that tap into the flush liquidity in the country’s banking system.

“IR projects in other markets are often financed by limited recourse bank debt and corporate or high-yield bonds,” said Yusuke Abe, partner at Clifford Chance. “However, Japan enjoys strong bank liquidity with attractive pricing and does not have, as yet, a deep high-yield bond market. Thus, we expect that senior bank debt will play a vital role in Japanese IR financing”.

The three IR projects, which are expected to open from 2026, could require as much as ¥1.5trn–¥1.8trn in debt funding, which would eclipse financing in Macau and Singapore – the cities that have

taken the lead in developing IRs in Asia.

Since ending the previous monopoly and awarding its first three casino licences in 2002, Macau has overtaken Las Vegas as the world’s biggest gaming market by revenue. US gaming giants such as MGM Resorts International, Las Vegas Sands and Wynn Resorts are among the IR operators in the former Portuguese colony.

The three US groups, among others, have raised multi-billion-dollar loans and bonds. Since 2004 the tally of loans for Macau’s IR sector has skyrocketed to US$54.25bn, according to Refinitiv LPC data.

Sands China, which operates the Venetian Macao, home to the world’s biggest casino, sold US$1.5bn of US dollar bonds

on Tuesday, split between a US$800m 3.8% January 2026 and a US$700m 4.3% 10-year, the first bond issue from the sector since the coronavirus outbreak began.

Singapore’s two IRs – Marina Bay Sands and Resorts World Sentosa – have also generated US$43.38bn in loans since first raising debt in 2006-07.

HIGH COSTS

Any debt financing for the Japanese IRs would whet the appetite of lenders hungry for yield in a low interest rate environment.

Some Japanese banks have a track record in the sector, having lent to Macau and Singapore IRs. However, the quantum of debt for

News


Hyflux probe threatens workoutRestructuring Singapore opens investigation into company and its directors

BY KIT YIN BOEY

More trouble lies ahead for HYFLUX after regulators launched an investigation into the cash-strapped Singaporean company over suspected false and misleading statements, and breaches of disclosure requirements and accounting standards.

The water treatment services company and its current and former directors will be under investigation, complicating Hyflux’s efforts to restructure its finances.

A joint statement from the Commercial Affairs Department of the Singapore Police Force, the Monetary Authority of Singapore and the Accounting and Corporate Regulatory Authority said Tuesday that a review announced in April last year into Hyflux-related disclosure and compliance with auditing and accounting standards had

“disclosed reasons to suspect that offences may have been committed”.

Specifically, the joint investigation will determine if there were lapses in Hyflux’s disclosures related to the Tuaspring integrated water and power project, as well as non-compliance with accounting standards between 2011 and 2018.

The company owes S$2.81bn (US$2bn) in debt, including S$900m of subordinated preference shares and perpetual securities and S$265m of senior unsecured bonds. It entered court-supervised protection in May 2018 and has since been searching unsuccessfully for a white knight.

Advanced talks with potential Indonesian investors Salim Group and Medco Group collapsed in March 2019, soon after the Public Utilities Board took control of the water desalination unit of the

TIWP because of Hyflux’s failure to meet operational obligations.

A subsequent agreement with United Arab Emirates-based Utico also fell apart when a S$400m restructuring agreement expired as conditions precedent were not fulfilled. Utico on May 26 proposed a new deal that would see all creditors paid in stock, not in cash, but its deadline of June 4 has passed with no public response from Hyflux at press time.

Hyflux said on Monday it remained in discussions with Utico and was concurrently pursuing other options, including discussions with other potential investors. These are Singapore-based Aqua Munda, which has an existing offer to buy senior unsecured debt, Singapore-based consultancy Longview International Holdings, which has submitted an expression of interest with an unidentified Chinese partner,

and European water company FCC Aqualia, which has submitted a letter of interest.

Aqua Munda has extended its offer to purchase senior unsecured debt to include preference shares and perpetual bonds but gave no details. It has not disclosed pricing. The potential investor is also offering to provide at least S$10m in cash to meet Hyflux’s operational and working capital needs, and had said it was prepared to begin formal discussions towards an agreement.

It is not clear what impact the official investigations will have on Aqua Munda’s offers, but bankers said they were a game changer, and would help improve and tighten accounting and audit standards.

The Securities Investors Association Singapore, which is representing some 34,000 investors holding the preference shares and perpetual bonds, has asked Hyflux directors to step aside.

A moratorium on legal proceedings will expire on July 30.



the Japanese IRs could be constrained given the greater risks the projects pose compared with the typical PF deals from other sectors.

The expected debt funding for the long-awaited IR projects represents around 50%–60% of the estimated costs. It means sponsors would still have to fork out significant equity contributions, much higher than typical PF deals in Japan. For instance, debt funding for domestic renewable energy projects can account for up to 85% of the costs.

Some gaming giants have already baulked at the high costs expected in Japan.

Las Vegas Sands ended its plans for an IR in Japan last month after having pulled out from bidding for a project in Osaka in 2019. Caesars Entertainment and Wynn Resorts have also withdrawn from casino projects in Japan.

Nonetheless, other gaming

companies remain committed. MGM has teamed up with Japanese leasing and financial services group Orix to bid for an IR in Osaka, while Hong Kong-based Melco Resorts & Entertainment and Galaxy Entertainment are in the fray for the Yokohama IR.

“IR is a new business for Japan. While Japanese companies will no doubt play a key role in IR projects, we still believe that the expertise and extensive experience of international IR operators which have been built up over the years is extremely important for the success of new IR projects in Japan,” Clifford Chance’s Abe said.

BATTLING THE ODDS

Japan’s IRs come with additional challenges, including a short tenor for the IR concession, mandatory background checks for financiers and the coronavirus

pandemic.The initial validity of IR

licences will be 10 years with renewals required every five years. Some bankers feel this is too short for sponsors to recoup the initial costs in the time remaining after construction is completed.

For instance, Macau’s first batch of licences awarded in 2002 were valid for 20 years. In April 2019, Singapore extended the exclusivity period for both its IRs from an original 2017 expiry date to the end of 2030.

Background checks on financiers pose another hurdle for lenders. To address public concerns around links between gaming and organised crime, the Japan Casino Regulatory Commission is expected to scrutinise executives involved in financing and operating casinos, potentially demanding access to personal bank statements, loans and assets, as well as criminal records,

education, family history and military records.

“Background checks on lenders are a unique feature in Japan’s IRs, which could interfere with syndication. Some international and domestic investors with smaller-sized tickets may get cold feet because of this,” said Kentaro Soh, director of power and infrastructure project finance at MUFG.

Some also believe Japanese regional banks would be more conservative towards the gaming sector. And while Covid-19 has not affected the timeline for bids for Japan’s IRs, the impact of the virus elsewhere could raise flags.

In the past three months SJM Holdings, MGM China and Sands China have all sought waivers on financial covenants, with the latter two winning consent from their lenders for waivers until the second quarter of 2021.

League tables


Top bookrunners of Asian fixed and floating-rate

bonds for G3 currencies ex-Japan, inc-Australia

(inc-Samurais and Yankees)1/1/20 – 31/5/20

Amount

Name Issues US$(m) %

1 Macquarie 15 4,870.4 21.0

2 Goldman Sachs 12 4,644.7 20.0

3 JP Morgan 14 3,632.2 15.7

4 UBS 15 2,936.5 12.7

5 Morgan Stanley 4 1,206.7 5.2

6 RBC Capital 5 1,138.9 4.9

7 Citigroup 5 915.1 4.0

8 Bofa Sec 4 886.6 3.8

9 Bell Financial 32 670.9 2.9

10 Canaccord Genuity 33 406.1 1.8

11 Credit Suisse 2 204.8 0.9

12 Moelis & Co 4 158.4 0.7

13 Ord Minnett 3 146.4 0.6

14 Morgans Financial 12 141.3 0.6

15 Shaw & Partners 12 138.0 0.6

16 Euroz Sec 8 136.9 0.6

17 Petra Capital 3 132.5 0.6

18 Argonaut 9 93.2 0.4

19 Berenberg 1 73.0 0.3

20 NatWest Markets 1 61.0 0.3

Total 278 23,175.0

*Market volume

*Includes Asian Development Bank issuance.

Proportional credit

Source: Refinitiv data SDC Code: AR1

Top bookrunners of Asian fixed and floating-rate

bonds for G3 currencies ex-Japan and Australia

(inc-Samurais and Yankees)1/1/20 – 31/5/20

Amount


1 Macquarie 15 4,870.4 21.0

2 Goldman Sachs 12 4,644.7 20.1

3 JP Morgan 14 3,632.2 15.7

4 UBS 15 2,936.5 12.7


6 RBC Capital 5 1,138.9 4.9

7 Citigroup 5 915.1 4.0

8 Bofa Sec 4 886.6 3.8




12 Moelis & Co 4 158.4 0.7

13 Ord Minnett 3 146.4 0.6

14 Morgans Financial 12 141.3 0.6

15 Shaw & Partners 12 138.0 0.6

16 Euroz Sec 8 136.9 0.6

17 Petra Capital 3 132.5 0.6

18 Argonaut 9 93.2 0.4

19 Berenberg 1 73.0 0.3

20 NatWest Markets 1 61.0 0.3

Total 275 23,161.1

*Market volume

Proportional credit

Source: Refinitiv data SDC Code: AR2

Top bookrunners of Asia Pacific

syndicated loans G3 currencies

(ex-Japan, inc-Australia)1/1/20 – 31/5/20

Amount

Name Deals US$(m) %

1 HSBC 18 2,506.4 7.3

2 Bank of China 8 1,698.7 4.9

3 SMFG 15 1,556.6 4.5

4 Standard Chartered 16 1,530.0 4.4

5 BNP Paribas 6 1,529.5 4.4

6 Mizuho 7 1,511.5 4.4

7 CCB 6 1,235.7 3.6

8 ANZ 7 1,233.7 3.6

9 Citigroup 6 1,228.5 3.6

10 UOB 5 1,184.1 3.4

11 Maybank 4 1,152.2 3.3

12 MUFG 9 1,084.4 3.1

13 DBS 9 1,032.8 3.0

14 JP Morgan 3 1,027.0 3.0

15 Citic 4 900.2 2.6

16 Bank Mandiri 2 800.0 2.3

17 SPDB 4 788.0 2.3

18 OCBC 2 744.0 2.2

19* Siam Commercial 1 719.0 2.1

19* UBS 1 719.0 2.1

19* Kasikornbank 1 719.0 2.1

Total 74 34,591.2

*Market volume

Proportional credit

Source: Refinitiv data SDC Code: S3k


syndicated loans All currencies (ex-Japan, inc-Aus-

tralia)1/1/20 – 31/5/20

Amount

Name Deals US$(m) %

1 Bank of China 131 18,413.5 19.2

2 China Merchants Bank 10 4,869.0 5.1

3 DBS 17 4,523.0 4.7

4 HSBC 28 3,788.8 3.9

5 ANZ 19 3,468.4 3.6

6 SMFG 22 2,987.7 3.1

7 CCB 14 2,498.2 2.6

8 ABC 7 2,449.6 2.6

9 MUFG 12 2,378.0 2.5

10 Citigroup 10 2,293.6 2.4


12 ICBC 8 2,089.3 2.2

13 Bank of Shanghai 2 2,037.3 2.1

14 CBA 11 2,017.6 2.1

15 State Bank of India 9 2,010.1 2.1

16 Citic 8 1,990.5 2.1

17 CTBC Financial 8 1,923.7 2.0

18 Mizuho 10 1,856.4 1.9

19 BNP Paribas 9 1,787.3 1.9

20 UOB 7 1,733.2 1.8

Total 340 96,170.6

*Market volume

Proportional credit

Source: Refinitiv data SDC Code: S3


syndicated loans Int’l currencies, Rmb and NT$

(ex-Japan, inc-Australia)1/1/20 – 31/5/20

Amount

Name Deals US$(m) %

1 Bank of China 151 24,811.8 27.0


3 DBS 18 4,545.8 4.9

4 ANZ 19 3,471.0 3.8

5 ABC 10 3,296.0 3.6

6 HSBC 21 3,075.8 3.3

7 SMBC 21 2,937.6 3.2

8 ICBC 10 2,634.0 2.9

9 MUFG Bank 12 2,378.0 2.6

10 CCB 16 2,089.6 2.3


12 CBA 11 2,017.9 2.2


14 China Citic Bank 8 1,993.1 2.2

15 CTBC 8 1,923.7 2.1

16 Citigroup 9 1,762.1 1.9

17 Bank of Communications 7 1,718.6 1.9

18 First Commercial Bank 13 1,330.6 1.4

19 Bank of Taiwan 10 1,319.6 1.4

20 Mizuho Bank 9 1,137.4 1.2

Total 349 92,013.5

*Market volume

Proportional credit

Source: Refinitiv data LPC


syndicated loans All currencies (ex-Japan and Aus-

tralia)1/1/20 – 31/5/20

Amount

Name Deals US$(m) %

1 Bank of China 129 18,018.4 21.3


3 DBS 17 4,523.0 5.3

4 HSBC 25 2,971.3 3.5

5 SMFG 19 2,699.4 3.2

6 CCB 14 2,498.2 3.0

7 ABC 7 2,449.6 2.9




11 Citic 8 1,990.5 2.4

12 ICBC 7 1,979.8 2.3

13 MUFG 9 1,969.0 2.3


15 Citigroup 7 1,760.0 2.1

16 BoCom 6 1,649.7 2.0

17 UOB 6 1,418.2 1.7

18 First Financial 13 1,402.6 1.7

19 Maybank 6 1,260.4 1.5

20 Taiwan Financial 8 1,249.9 1.5

Total 301 84,723.5

*Market volume

Proportional credit

Source: Refinitiv data SDC Code: S5c



Top bookrunners of

all Asian currencies

(excluding Japan and Australia)

(inc-certificates of deposit)1/1/20 – 31/5/20

Amount


1 Bank of China 987 72,967.6 6.8

2 ICBC 912 69,585.5 6.5

3 Citic 900 67,916.9 6.3

4 CCB 967 62,430.6 5.8

5 BoCom 793 52,206.5 4.9

6 ABC 732 47,036.5 4.4

7 CSC Financial 565 45,543.9 4.3

8 Industrial Bank 561 37,534.6 3.5


10 Guotai Junan Sec 400 25,598.3 2.4

Total 5,430 1,071,600.1

*Market volume

Proportional credit

Source: Refinitiv data SDC Code: AS1

Top bookrunners of

all Asian currencies

(excluding Japan, Australia and China)

(inc-certificates of deposit)1/1/20 – 31/5/20

Amount


1 NH Inv & Sec 230 12,130.1 9.0

2 KB Financial 212 10,893.8 8.1

3 Axis 75 7,082.2 5.3

4 Korea Investment 105 6,300.0 4.7

5 DB Financial Invest 68 5,554.6 4.1

6 Kyobo Life 139 5,253.0 3.9

7 HSBC 59 4,500.0 3.4

8 Kiwoom Sec 63 4,396.6 3.3

9 Hana Financial 32 4,189.1 3.1

10 HDFC 61 3,748.5 2.8

Total 2,182 134,114.0

*Market volume

Proportional credit

Source: Refinitiv data SDC Code: AS1a


Securitisations (ex-Japan and Australia)

(ex-A$ and CDOs)1/1/20 – 31/5/20

Amount


1* ICBC 1 240.7 22.1

1* MUFG 1 240.7 22.1

1* Citic 1 240.7 22.1

1* BNP Paribas 1 240.7 22.1

5 Standard Chartered 1 66.6 6.1

6 Hong Leong Financial 1 57.7 5.3

Total 3 1,087.1

*Market volume

Proportional credit

Source: Refinitiv data SDC Code: AZ2

Top bookrunners of global common stock

Asia Pacific (ex-Japan)1/1/20 – 31/5/20

Amount



2 JP Morgan 24 5,535.0 7.1

3 China Sec 18 5,410.8 7.0

4 Goldman Sachs 30 5,250.9 6.8

5 UBS 32 4,151.2 5.4

6 CICC 25 3,528.8 4.6

7 Citigroup 19 3,464.5 4.5

8 Macquarie 18 3,202.7 4.1

9 Citic 13 2,996.4 3.9

10 HSBC 13 2,902.1 3.7

11 Credit Suisse 15 2,160.1 2.8

12 Bofa Sec 13 2,141.8 2.8

13 Huatai Sec 10 1,320.6 1.7

14 Guotai Junan Sec 18 1,164.2 1.5

15 Industrial Sec 13 1,130.6 1.5

16 DBS 6 1,067.1 1.4

17 Sinolink Sec 7 1,050.2 1.4

18 Haitong Sec 21 1,000.5 1.3

19 Everbright Sec 13 837.1 1.1

20 RBC Capital 5 712.9 0.9

Total 750 77,623.2

Market volume

Proportional credit

Source: Refinitiv data SDC Code: C4a2

Top bookrunners of global

convertible offering Asia Pacific

(ex-Japan and Australia)1/1/20 – 31/5/20

Amount


1 Citic 12 1,775.3 11.0



4 UBS 5 995.8 6.2

5 Citigroup 5 866.0 5.4

6 CICC 5 822.6 5.1

7 JP Morgan 5 715.8 4.4

8 Bofa Sec 2 666.2 4.1

9 Huatai Sec 3 616.4 3.8

10 Guotai Junan Sec 4 608.4 3.8

11 China Sec 4 496.1 3.1

12 Dongxing Sec 4 454.4 2.8

13 E Asia Qianhai Sec 2 451.8 2.8

14 Shenwan Hongyuan Sec 2 375.6 2.3


16 Guosen Sec 3 311.5 1.9

17 Zheshang Sec 3 307.0 1.9

18 China Renaissance Holdings 2 300.0 1.9

19 Ping An Sec 3 277.0 1.7

20 Bank of China 1 234.3 1.5

Total 78 16,185.7

*Market volume

Proportional credit

Source: Refinitiv data SDC Code: C9b

Top bookrunners of global convertible offering Asia

Pacific (ex-Japan)1/1/20 – 31/5/20

Amount


1 Citic 12 1,775.3 11.0



4 UBS 5 995.8 6.2

5 Citigroup 5 866.0 5.4

6 CICC 5 822.6 5.1

7 JP Morgan 5 715.8 4.4

8 Bofa Sec 2 666.2 4.1

9 Huatai Sec 3 616.4 3.8

10 Guotai Junan Sec 4 608.4 3.8

11 China Sec 4 496.1 3.1

12 Dongxing Sec 4 454.4 2.8

13 E Asia Qianhai Sec 2 451.8 2.8

14 Shenwan Hongyuan Sec 2 375.6 2.3


16 Guosen Sec 3 311.5 1.9

17 Zheshang Sec 3 307.0 1.9


19 Ping An Sec 3 277.0 1.7

20 Bank of China 1 234.3 1.5

Total 80 16,188.8

*Market volume

Proportional credit

Source: Refinitiv data SDC Code: C9b1

Global equity and equity-related

Asia Pacific incl Australasia, ex Japan1/1/20 – 31/5/20

Amount


1 Morgan Stanley 36 10,090.7 11.2


3 JP Morgan 28 5,947.0 6.6

4 China Sec 22 5,906.9 6.5

5 Citic 25 4,771.7 5.3

6 CICC 30 4,351.4 4.8

7 Citigroup 24 4,330.5 4.8

8 UBS 34 4,152.4 4.6

9 HSBC 15 3,127.9 3.5

10 Macquarie 17 2,851.7 3.2

11 Bofa Sec 14 2,564.7 2.8

12 Credit Suisse 18 2,475.2 2.7

13 Huatai Sec 13 1,937.0 2.1



16 Sinolink Sec 10 1,220.4 1.4

17 Haitong Sec 23 1,169.8 1.3

18 DBS 6 1,067.1 1.2

19 China Merchants Sec 10 874.4 1.0

20 Everbright Sec 13 837.1 0.9

Total 673 90,381.2

Source: Refinitiv data

People&Markets

HSBC, StanChart bend the kneeAnglo-Asian lenders back China’s controversial security lawHSBC and STANDARD CHARTERED have thrown their weight behind China’s plans for a new security law in Hong Kong, breaking with a long history of political neutrality in a move that sets a precedent for how banks do business in the special administrative region.

Peter Wong signed a petition backing the law, the bank said on Wednesday. HSBC “respects and supports all laws that stabilise Hong Kong’s social order”, it said in a post on WeChat.

Sources at the bank said views among staff varied from a resigned acceptance that Wong’s support for the new law was the inevitable price of doing business to outrage that he had not stood up for the rule of law that has allowed Hong Kong – and HSBC – to prosper for so many years.

There was particular criticism that HSBC had chosen to be so public in making the move by posting a photo of Wong signing the petition, with many believing that the bank could have been more equivocal.

StanChart’s approach came across as much more restrained with the bank releasing a curt statement in which it said that it believes “the national security law can help maintain the long-term economic and social stability of Hong Kong”.

Its much more understated response in comparison has meant that its decision has gone down slightly better with staff in Hong Kong, although one source at the bank pointed out that it also had less to lose than HSBC.

for the year after a big loss in Europe, and is the only US dollar clearing bank in the special administrative region. StanChart,

last year.

BETWEEN A ROCK AND A HARD PLACEHSBC, in particular, has been singled out for criticism over its reticence up until this point, which many supporters of the proposed law, particularly in the Chinese press, interpreted as a sign of its support for those opposing it.

Leung also weighed in on the matter in characteristically undiplomatic fashion, warning HSBC in a recent Facebook post that it should not take its preeminent status in the former British colony for granted.

The bank’s decision to back the new security law so publicly should quell some of those criticisms, although its relationship with Beijing still remains somewhat strained due to the bank’s role in the US

Huawei, which led to the arrest of Huawei CFO Meng Wanzhou.

panel of banks to determine China’s new benchmark loan prime rate, which was widely interpreted as a snub. StanChart and Citigroup were included.

and StanChart face with their stance on the new security law, their decision to back the proposal publicly has already enraged politicians in both the UK and the US.

Labour peer Andrew Adonis described HSBC’s conduct as “disgraceful” and said he planned to speak with the bank’s

Florida Senator Rick Scott accused HSBC of

Market observers also pointed to the risk to staff morale among those that are opposed to the new law.

The fact that he has signed the petition sends a pretty clear message to staff that you know where the bank stands and that, at the very least, they should keep schtum if they disagree with the new security law,” said Patrick Perret-Green, the former head

strategy in Asia at Citigroup, who now

AdMacro.

COMMERCIAL PRESSUREThe decision to break with the usual custom of not commenting on political controversies related to China certainly sets a troubling precedent for staff.

Some Chinese banks and brokers have been inserting addendums into bankers’ contracts, according to two sources, stating that they must adhere to Hong Kong’s laws, a thinly-veiled reference to the new security law.


TOP STORY SECURITY LAW

Who’s moving where...

Julian Peck has left his role as MORGAN STANLEY’s Australia co-head of investment banking to join gas pipeline operator APA Group. Peck is joining APA as group executive for strategy and commercial. He is due to start around September 1.A well-known

dealmaker in Australia’s infrastructure and energy sector, Peck has longstanding ties with APA having worked on its original IPO in 2000.He was promoted to co-head of investment banking in Australia alongside Richard Wagner three years ago.

Marshall Nicholson, head of Asia ex-Japan equity capital markets at NOMURA, has resigned from the firm for personal reasons, according to people familiar with the situation. Nicholson has worked at Nomura for five years. Before that, he worked at CICC and BOCI, as well as

Macquarie Group and Credit Suisse. Thomas Batt will take up Nicholson’s position, in addition to his current role as head of equity solutions for Asia ex-Japan. He will continue to report to John Goff, co-head of investment banking for Asia ex-Japan.



Credit Suisse gets 51% stake in JVCREDIT SUISSE has become the latest global bank to acquire a majority stake in its China securities joint venture, Credit Suisse Founder Securities.

The Swiss investment bank joins rival UBS, Goldman Sachs, JP Morgan and Nomura among the foreign banks that have

ownership under rules introduced in 2018.

trade deal between China, Hong Kong and

in its JV, HSBC Qianhai Securities, which opened its doors in December 2017.

Credit Suisse also said on Monday that it had appointed Janice Hu, its vice chairwoman for China and a current board member of CSFS, as the new chair of the JV.

the former general secretary of the Chinese Communist Party, is a well-known rainmaker in China and has been with Credit Suisse for a decade and a half.

Established in 2008 and headquartered in Beijing, CSFS holds sponsorship, investment advisory and brokerage licences.

CSFS recorded a net loss of Rmb41.83m (US$5.87m) last year compared with a loss of Rmb35.54m the previous year.

Foreign investment banks have historically found it tough competing in China’s securities market, which is dominated by local houses with sprawling retail brokerage arms and a willingness to work for razor-thin fees.

The nine global banks’ JVs recorded a combined loss of Rmb323.38m last year against Rmb48.1m for the seven banks’ JVs that were operational the year before.

NOMURA, the

last year of the seven JVs that were also operational in 2018 was Rmb183.13m.

Meanwhile, Nomura plans to double

year, a person familiar with the matter told IFR last week.

The Japanese broker, which opened the doors to its China securities business, Nomura Orient International Securities, at the end of last year, is targeting a headcount of 200 this year, rising to 400 in 2021 or 2022.

Nomura, which is targeting wealth

trading sometime in 2021 or 2022 before moving into investment banking in 2023.

The Financial Times reported on Wednesday that Nomura was “seriously”

the scale of its Hong Kong operations. In an interview, the paper quoted CEO Kentaro Okuda as saying there were no plans to relocate Hong Kong-based staff elsewhere in the region, but that Hong Kong was “not the same as it used to be”.

However, in a response to an IFR request for comment, a spokesperson for Nomura disputed elements of the newspaper’s account. “Mainland China is an important market for Nomura, and Hong Kong remains the key hub for our business in

our Hong Kong operations as a result of any

told IFR.Nomura employs around 800 people in

Hong Kong.THOMAS BLOTT

Please contact us if you have information about job moves: [email protected]

Most bankers remain optimistic that the new security law will not impact their work, although there is a precedent with employees at banks being let go last year at the height of the Hong Kong protests after clashing with their superiors.

Ka Chung Law, former chief economist at Bank of Communications (Hong Kong), told IFR that he was sacked last year after forwarding an article to colleagues that outlined how the US could apply sanctions on China. BoCom did not respond to a request for comment.

He said that a lot of analysts engaged in self-censorship when discussing anything to do with China and that during the nearly 15 years that he worked at BoCom, the topics that he was allowed to discuss became narrower and narrower.

intuition to work out what the red lines are,” he said. “If you’ve crossed them,

time I left there was a lot of self-censorship among analysts; enough that whatever was published was not usually interesting to read.”

It is less clear what immediate impact the new security law will have for investment bankers. Several sources said that if Beijing managed to pressure HSBC and StanChart to make statements in support of the new security law, it was not too far-fetched to imagine that lucrative IPO or bond mandates, in future, could be tied to taking the approved stance on a political issue.

sector is not to send them to prison,” said one buy-side source. “It’s to say you will not get this mandate if you don’t comply

law for bankers. It’s enough to apply commercial pressure.”THOMAS BLOTT, MATTHEW DAVIES

Credit Suisse’s

former head of China

equity strategy,

Vincent Chan,

has resurfaced at

independent research

firm ALETHEIA CAPITAL.

Chan will mostly

focus on China

macroeconomic

developments in his

new role. He joins

a number of other

Credit Suisse alumni

at the firm, which

was founded by the

Swiss bank’s former

executive chairman

of global markets

in Asia Pacific, Ali

Naqvi.

Chan spent over

15 years at Credit

Suisse before leaving

earlier this year. He

previously worked at

UBS for three years.

CITIGROUP has

appointed Will McLane Asia Pacific

vice chairman of

technology.

McLane, who remains

in his current role

as vice chairman

of global FIG, will

help the Asia Pacific

technology team

by expanding his

coverage and helping

lead pitching efforts

for banking, capital

markets and advisory,

according to a memo

sent by Tyler Dickson

and Manuel Falco,

global co-heads of

BCMA.

McLane joined

Citigroup in 2012

after 15 years at

Morgan Stanley and

was appointed head

of FIG in Asia Pacific

two years ago.

Citic plans further CLSA integrationCLSA

team is being integrated with parent CITIC

SECURITIES

takes steps to ensure that CLSA operates as part of the wider Citic group.

The integration started on June 1. CLSA’s

team will formally be rebranded as Citic Securities once it is completed.

The Citic Securities brand is already being used on some documentation, such

placement by Chinese property developer China Vanke.

The integration comes just over a year

reportedly due to disagreements with the parent company over strategy and pay.

particularly to Jefferies, supporting the view that Citic was looking to revamp CLSA in its own image after an agreement put

in place at the time of the acquisition that effectively granted CLSA’s management free rein had elapsed.

The recent changes at CLSA contrast with the lofty ambitions Citic had when it took full ownership of the Hong Kong-

to become a global investment bank that

CLSA’s former chairman Tang also previously ruled out ditching the CLSA

“We acquired CLSA four years ago and


People&Markets

China filters out ‘clean coal’ for green bonds

from an updated list of projects eligible for green bonds in a landmark move that market observers said would pave the way for harmonisation with global standards and attract greater foreign investment in its sustainable debt market.

The People’s Bank of China, the National Development and Reform Commission and the China Securities Regulatory Commission published the draft guidelines

the previous one that was published by the central bank in 2015 and included clean coal projects among the list eligible for

The latest guidelines are open for comment until June 12.

Chinese corporates, banks and

topping the rankings for total volumes alongside the US and France.

According to the Climate Bonds

that promotes investments in low-carbon and climate-resilient projects, total green

bond issuance volumes in China last

international standards – were US$31.3bn versus US$51.3bn for the US and US$30.1bn for France.

global standards with the inclusion of so-called clean coal being the main stumbling block. According to the CBI, US$24.2bn worth of green bonds issued last year in China were not in line with international green bond standards.

“Even though China’s the largest green bond market globally, a lot of it is being screened out by investors because of the inclusion of supercritical coal in its catalogue previously,” said Sean Kidney, CEO of the CBI.

“The government does want capital

commitments can’t be met without international private capital.”

plants among the list of projects eligible for green bonds also paves the way for

with the EU Green Bond Standard, which

list of eligible projects. The PBoC and the European Investment

Bank previously set up a working group to

Who’s moving where...

Reiji Terasaka

rejoined the CARLYLE

GROUP on Monday as

managing director in

its Japan corporate

carve-out team.

Terasaka left Carlyle

in 2013 after almost a

decade and has since

gone on to hold a

number of corporate

executive positions in

the US and Japan.

Terasaka started his

career at Japan’s

Ministry of Finance

and worked at Merrill

Lynch before first

joining Carlyle.

In his new role, he will

primarily focus on the

general industries

and consumer, retail,

and healthcare

sectors, working

closely with Hiroyuki

Otsuka, deputy head

of Carlyle Japan.

Temasek Holdings

subsidiary FULLERTON

FUND MANAGEMENT has

hired James Zhang as general manager

of its China entity,

Fullerton Investment

Management

(Shanghai) Co.

Zhang, who started in

the role on Monday,

reports to Jenny

Sofian, the investment

manager’s chief

executive. He is based

in Shanghai.

Before joining

Fullerton, Zhang

was executive

vice-president and

managing director

for sales at China

International Fund

Management.

Zhang is a

replacement for Mark Li, who recently left

the firm.

“Even though China’s the largest green bond market globally, a lot of it is being screened out by investors because of the inclusion of supercritical coal in its catalogue previously.”



look at ways to enable investors to study

between China and Europe, although this only provided comparisons and did not attempt to harmonise the rules.

The CBI’s Kidney also noted that the new guidelines would make it easier for international investors to buy Chinese

unlike in 2015, was issued jointly by the PBoC, the NDRC and the CSRC.

China’s debt capital markets are often characterised as Byzantine because of the overlapping jurisdiction of different regulatory bodies. The fact that there is now only one set of guidelines, whereas previously both the NDRC and the CSRC

matters for investors.Kidney also noted that, in some respects,

the requirements for green bond issuers in China such as quarterly reporting requirements for banks are more rigorous than in the rest of the world, making it easier for Chinese green bonds to meet investors’ ESG mandates.THOMAS BLOTT

Please contact us if you have information about job moves: [email protected]

Rami Hayek,

HSBC’s head of Asia

Pacific institutional

coverage, has left the

bank.

Hayek, who worked

at HSBC for six

years, has joined the

HONG KONG MONETARY

AUTHORITY as a senior

adviser.

Before joining HSBC,

Hayek was head of

Asia Pacific client

coverage at UBS.

He previously

worked in various

investment banks’

markets divisions,

including a stint as

head of distribution

for Asia Pacific at

Credit Suisse and

global head of equity

and fixed income

investments at

Deutsche Bank.

CIMB GROUP

has named ex-

Permodalan Nasional

CEO Abdul Rahman Ahmad as chief

executive, effective

June 10.

Rahman replaces

Zafrul Aziz, who left

earlier this year to

become Malaysia’s

finance minister.

Omar Siddiq, CIMB’s

chief operating

officer, was acting

CEO while the

bank looked for a

permanent successor.

Rahman has run a

number of Malaysian

companies including

property developer

Malaysian Resources

Corp.

He was appointed

CEO of PNB in 2016

and resigned last

year.

spent more than US$1bn, so naturally we want to utilise this platform,” Tang previously told IFR.

“I always joke that you wouldn’t spend HK$1,000 on a Nike jersey just to cut out the logo and put your own brand on it. We have to make full use of CLSA.”

Citic completed the alignment of most of its legacy offshore business, Citic Securities International, under the CLSA umbrella in 2016, although some businesses, including

have continued to be referred to as Citic CLSA. THOMAS BLOTT, FIONA LAU

Global firms consider treasury optionsSome global companies are considering shifting some of their treasury operations out of Hong Kong as the US moves to end the city’s privileges, senior bankers said, in the latest blow to the territory’s status as a

US President Donald Trump has begun the process of eliminating special US treatment for Hong Kong to punish Beijing’s decision to impose a new national security law there.

Against this backdrop, a handful of

their corporate treasury operations to countries such as Singapore, Malaysia, Thailand, and Vietnam, four senior bankers with knowledge of the matter said.

“Companies’ treasury operations follow

questions around Hong Kong’s status as a trade hub,” said a Hong Kong-based banker

Hong Kong’s special relationship with the US sees the city’s goods subject to the same, higher rates paid by companies in mainland

with the US.“Some (multinational corporations) are

considering shifting a part of their treasury operations (out of Hong Kong) to start with and then gradually scale it up,” the banker said.

A leading US retail chain, which operates hundreds of stores around Asia, is in early talks with its banks to move some cash management-related operations to

Singapore from Hong Kong, the banker said.The bankers, who declined to be named

due to the sensitivity of the matter, help companies set up the treasury centres and manage them. They are in talks with the companies about their likely relocation plans but said there was no strict timeline.

Such a development would deal another blow to Hong Kong’s status as a major

democracy protests last year.Already there are signs rich Chinese are

seeking to park fewer funds in Hong Kong.The Hong Kong Monetary Authority, the

city’s de facto central bank, told Reuters via e-mail that interest from corporates in setting up treasury operations in Hong Kong remained strong.

“There is no noticeable sign of fund

or banking system,” it said.The end of preferential treatment could

hurt Hong Kong’s hard-fought progress in competing with Singapore for treasury operations centres in Asia.

While Singapore has historically had

pro-business policies, Hong Kong recovered some ground in recent years as the HKMA

Chinese and global companies favour Hong Kong to run their treasury operations and reroute enormous amounts of trade via the city, lured by the presence of large

All of this could come under threat if the US pulls the plug on Hong Kong’s special relationship.

“These political moves will see global companies putting in place back-up plans for their critical treasury operations,” said another banker with a European bank.SUMEET CHATTERJEE


People&Markets

Japan calls for improved CLO risk managementJapan’s Financial Services Agency and the Bank of Japan published a report on Tuesday urging Japanese banks to enhance risk management of their leveraged loan and CLO investments, and to be cautious when investing as the economy could worsen again because of the coronavirus pandemic.

the report following a survey of about 400

According to the survey, Japanese

loans to foreign borrowers to ¥160trn (US$1.47trn) and investments in foreign credits to ¥100bn as of the end of March

US$752bn CLO market.The FSA/BoJ report said that megabanks

Triple-A tranches, which is much higher

British banks, and will therefore be able to contain losses as long as they hold until maturity. As the megabanks do plan

until maturity, the FSA and the BoJ doubt these lenders would cause a sell-off spiral provided they secured stable sources of foreign currency funding.

The watchdogs think Japanese banks

domestically, but warn that banks need to be mindful of continued uncertainty over the impact of the coronavirus on the economy and the duration of its impact. They also warned of potentially large cash

markets in times of stress, as happened in March, and a resulting spike in default rates.

NORINCHUKIN BANK is a large buyer of CLOs,

of 2020 but still holding ¥7.7trn, according to its latest earnings report. MITSUBISHI

UFJ FINANCIAL GROUP had ¥2.3trn, and JAPAN

POST BANK ¥1.77trn, their earnings reports showed. TAKAHIRO OKAMOTO

PrivEx to launch secondary loans exchangeSingapore-headquartered PRIVATE EXCHANGE

GROUP

loans trading later this year.

members to facilitate secondary trading in corporate loans.

proprietary and highly secure platform providing optimal price discovery, enhanced liquidity and data analytics, according to its website.

It won a licence as a recognised market operator from the Monetary Authority of

Singapore last December.

loan market veteran P-Wa Tang and lawyer Eugene Lim.

held various leadership positions in loan sales and syndicate, debt capital markets, special situations and distressed trading and derivatives.

bankers Stephen Ching and Sean Liu ahead of launching its operations.

Ching, based in Hong Kong, joined as managing director in April from boutique investment bank StormHarbour Securities, where he was responsible for credit origination and structuring.

He joined StormHarbour in November 2017 after nearly 15 years with China Citic Bank International and has previously worked at Standard Chartered, Credit

Lyonnais and CTBC Bank.

South and South-East Asia in Singapore. He was previously with Taipei Fubon Bank in Singapore for nearly two years with responsibility for loan syndications in South and South-East Asia.

Liu has also worked in loan origination and syndications at ANZ and UOB in Singapore.

market veterans on its advisory council, including Avinder Bindra and Clarence T’ao.

Bindra quit the banking industry in 2005 following a distinguished 30-year career

two-and-a-half decades at Citigroup.T’ao worked with Bindra at Citigroup

until 2000 before moving to BNP Paribas, where he spent another 18 years.PRAKASH CHAKRAVARTI


IN BRIEFChina Foreign Exchange Trade System

Extension of bond trading hours

China plans to extend interbank market trading

hours as part of efforts to increase the appeal

of its bond market to foreign investors, three

sources told Reuters.

Trading will initially be extended to 8pm local

time from 5pm currently, and will gradually cover

global trading hours, according to the sources.

The announcement was made during an online

conference held on May 29 by the China Foreign

Exchange Trade System, which overseas China’s

interbank market.

Other measures to open up China’s bond market

include promoting foreign use of interest rate

derivatives, and facilitating onshore bond

purchase by overseas institutions, CFETS said at

the meeting.

The People’s Bank of China was not immediately

available to comment.

China has been accelerating the opening up of

its capital markets amid a domestic economic

slowdown and rising tensions with the United

States.

During the meeting, a CFETS official also

warned of rising bond market volatility due to

higher leverage, the sources said.

China has been pumping liquidity into the banking

system, and guiding interest rates lower to aid the

coronavirus-ravaged economy. Lower bond yields

have prompted some investors to increase their

leverage as a way to seek higher returns.

Bank of Japan

Banks should prepare for Libor’s end

Japan’s Financial Services Agency and the Bank

of Japan sent a letter to the CEOs of major

financial institutions last Monday, urging them

to take action in preparing for the planned end

of Libor and to submit any materials showing

the progress they have made in doing so.

In the letter, the financial authorities called

on the institutions to develop a transition plan

for products and transactions based on Libor,

add fallback provisions to new contracts and

products that are linked to the benchmark,

implement new IT systems for products based

on risk free rates by early 2021, and review

operational rules and procedures if the new IT

systems cannot be implemented.

The authorities requested major financial

institutions to submit by July 10 materials on

topics such as their governance frameworks

for the end of Libor, how it will affect their

operations, their transition plans and

schedules, and how they would respond if

liquidity in Libor-linked products drops ahead

of the termination of the 50-year-old interest

rate benchmark.

Australia & New Zealand Banking Group

Sale of asset finance unit

AUSTRALIA & NEW ZEALAND BANKING GROUP has

agreed to sell its New Zealand asset finance

business to SHINSEI BANK.

Shinsei Bank will pay NZ$637m (US$399.9m)

to acquire UDC FINANCE, which represents a price-

to-book ratio of 1.2 times net tangible assets as

of March 31.

Australia’s fourth largest lender said the sale

would add A$439m (US$297.8m) in Level 2

group CET1 capital.

ANZ has looked at selling UDC Finance since it

abandoned plans to list the unit in 2018.

Shinsei Bank said in a statement that its capital

adequacy ratio would be reduced by about

0.4 percentage point once the acquisition is

completed.

The sale is due to be completed during the

second half of this year.


MAKE THE MOST OF YOUR SUCCESS STORIESREINFORCE YOUR MARKETING MESSAGE WITH REPRINTS FROM IFR Asia

If your company has been singled out for praise by one of IFR Asia’s independent

journalists, a high-quality reproduction of the article will make a valuable

addition to your marketing collateral.

IFR Asia reprints act as a powerful reinforcement of your sales message by

providing a credible and authoritative third-party endorsement.

Reprints can be provided in hard copy or electronic format and we can tailor the

design to include logos, adverts and contact details.

For more information on the various advertising and sponsorship opportunities

available within IFR, email: [email protected]

For over 40 years, IFR has been clarifying the complex global capital markets by providing intelligence on current deals and new opportunities, along with reliable data and trusted opinions.

The IFR website at www.ifre.com has been redesigned. It now features improved search capabilities, expanded navigation, powerful personalization tools and a more intuitive layout. It combines IFR’s industry-leading content from across all the global capital markets asset classes onto a single, consolidated platform.

When you’re looking for clarity on the global capital markets, look to the new IFR.

Intelligence, enhanced.

ifre.com/new-ifr-website


COUNTRY REPORT Australia 21 China 25 Hong Kong 34 India 35 Indonesia 38 Japan 39 Malaysia 40 Mongolia 41

New Zealand 41 Philippines 42 Singapore 43 South Korea 44 Taiwan 44 Thailand 46 Vietnam 47

AUSTRALIA

DEBT CAPITAL MARKETS

› SMBC TRIPLE-TRANCHER NETS A$2.4BN

SUMITOMO MITSUI BANKING CORP (A1/A/A), Sydney branch, raised a hefty A$2.4bn (US$1.63bn) from a three-part MTN sale last Tuesday, the latest issuance to benefit from the absence of local major bank supply.

A combined final order book in excess of A$2.6bn helped a A$1.2bn three-year floating-rate note price inside initial 100bp–105bp and revised 100bp guidance at three-month BBSW plus 95bp.

Similarly, a A$1.025bn five-year FRN priced tighter than initial 120bp–125bp and revised 120bp guidance at three-month BBSW plus 115bp. A A$175m 1.5% five-year fixed-rate note priced at 99.689 to yield 1.565%, 115bp wide of asset swaps.

Australian accounts bought 78% of the three-year FRN with Asia taking 22%. Banks were allotted 57%, asset managers and insurance companies 22%, official institutions 19%, middle market 1% and others 1%.

For the five-year FRN, Australians received 69% and Asia 31%. Banks took 71%, asset managers and insurance companies 27%, middle market 1% and others 1%.

There was broader geographical interest in the fixed-rate five-year note as Australian investors bought 38%, Asia 35%, EMEA 23% and the Americas 4%. Banks were allocated

52%, asset managers and insurance companies 47% and others 1%.

CBA, SMBC Nikko, TD Securities and Westpac were joint lead managers for SMBC Sydney, which will use the proceeds to fund its local corporate lending operations.

› CIBC KANGAROO POUCHES A$800M

CANADIAN IMPERIAL BANK OF COMMERCE (Aa2/A+/AA–) attracted strong Australian and Asian support for a A$800m dual-tranche three-year senior unsecured Kangaroo bond offering last Wednesday via joint leads ANZ, CIBC, NAB and Nomura.

Asian investors bought 52% of a A$575m floating-rate note, which priced inside 140bp area guidance at three-month BBSW plus 135bp. Australian and New Zealand accounts took 44% and EMEA 4%.

Asset managers and insurance companies dominated with a 75% allocation, while banks received 19%, middle market 3% and others 3%.

For a A$225m 1.6% fixed-rate note, which priced at 99.934 for a yield of 1.6225%, 135bp wide of asset swaps, Antipodean investors bought 48%, Asia received 39%, EMEA 10% and North America 3%.

Asset managers and insurance companies bought 64%, banks 27%, official institutions 4%, middle market 1% and others 4%.

CIBC previously issued Australian dollars via its Sydney branch in covered format, with a A$600m sale of three-year FRNs on April 2 that was tapped for A$200m on April 27.

› NTTC TAPS FOR A$195M

NORTHERN TERRITORY TREASURY CORP, rated Aa3 (Moody’s), tapped its 3.75% April 21 2033 bond for A$195m last Thursday, increasing the size of the line to A$400m.

UBS was sole lead manager for the reopening, which priced at 115.877 to yield 2.315%, in line with EFP (10-year futures) plus 132bp guidance and 117.5bp over the April 2033 ACGB.

The addition had an indicative minimum size of A$50m.

Long-dated semi-government bonds

Top lead managers of Australian dollar-

denominated domestic securitisation,

inc-self-funded transactions ex-CDOs1/1/20 – 31/5/20

Amount

Name Issues A$(m) %

1 Westpac 6 3,398.5 41.7

2 NAB 7 1,186.6 14.5

3 CBA 4 938.3 11.5

4 Macquarie 2 607.3 7.4


6 ANZ 2 325.5 4.0

7 JP Morgan 1 247.8 3.0

8 Bofa Sec 2 212.3 2.6

9* Natixis 1 205.6 2.5

9* Citigroup 1 205.6 2.5

9* HSBC 1 205.6 2.5

Total 11 8,160.5

*Market volume and including Kangaroo bonds

Proportional credit

Source: Refinitiv data SDC Code: AJ5

Top lead managers of Australian dollar-

denominated domestic bonds, inc-Kangaroo bonds,

ex-self-funded transactions, ABS, MBS1/1/20 – 31/5/20

Amount

Name Issues A$(m) %

1 ANZ 32 13,619.8 17.2

2 UBS 14 12,763.4 16.2

3 CBA 24 11,294.4 14.3

4 Westpac 24 9,618.9 12.2

5 Citigroup 11 8,656.9 11.0

6 NAB 28 6,155.8 7.8

7 Deutsche 7 5,018.9 6.4

8 TD Sec 20 2,256.2 2.9

9 Bofa Sec 4 1,672.2 2.1

10 RBC Capital 8 1,612.2 2.0

Total 91 79,053.9


Proportional credit


Top lead managers of all Australian debt, inc-

ABS, MBS (ex-self-funded transactions)1/1/20 – 31/5/20

Amount

Name Issues A$(m) %

1 ANZ 34 13,945.4 16.0

2 Westpac 30 13,017.4 14.9

3 UBS 14 12,763.4 14.6

4 CBA 28 12,232.7 14.0

5 Citigroup 12 8,862.5 10.2

6 NAB 35 7,342.4 8.4

7 Deutsche 7 5,018.9 5.8

8 TD Sec 20 2,256.2 2.6

9 Bofa Sec 6 1,884.5 2.2

10 RBC Capital 9 1,712.0 2.0

Total 102 87,214.5


Proportional credit

Source: Refinitiv data SDC Code: AJ3a

Top lead managers of all Australian securitisation,

inc-self-funded transactions ex-CDOs1/1/20 – 31/5/20

Amount

Name Issues A$(m) %

1 Westpac 6 3,398.5 39.8

2 NAB 7 1,186.6 13.9

3 CBA 4 938.3 11.0

4 Macquarie 2 607.3 7.1

5 SMFG 1 377.7 4.4


7 ANZ 2 325.5 3.8

8 JP Morgan 1 247.8 2.9

9 Bofa Sec 2 212.3 2.5

10* Natixis 1 205.6 2.4

10* Citigroup 1 205.6 2.4

10* HSBC 1 205.6 2.4

Total 11 8,538.2


Proportional credit



have benefited from increased offshore demand in recent weeks.

This upturn reflects the relatively attractive yields on offer for high quality Australian dollar bonds, especially at the long end, an advantage underpinned by the Reserve Bank of Australia’s continued opposition to negative domestic interest rates.

› KFW ADDS A$200M TO 2022 LINE

KFW (Aaa/AAA/AAA) tapped its 2.9% June 6 2022 Kangaroo bond for A$200m last Thursday, increasing the size of the line to A$1.7bn.

The reopening, via sole lead Nomura, priced at 104.65 to yield 0.54%, 34bp wide of asset swaps and 25.75bp over the July 2022 ACGB.

The German government-guaranteed agency previously tapped the bond for A$200m on April 29 at a yield of 0.625%,

39bp and 40.5bp over asset swaps and the July 2022 ACGB.

› GENWORTH MARKETS TIER 2 NOTE

GENWORTH FINANCIAL MORTGAGE INSURANCE, rated A/A (S&P/Fitch), is taking indications of interest at three-month BBSW plus 500bp area for a potential Australian dollar floating-rate 10-year non-call five Tier 2 note offering.

NAB and Nomura are joint bookrunners for the subordinated note, which is expected to be rated BBB+ by S&P.

STRUCTURED FINANCE

› PEPPER READIES PRS26 RMBS

Non-bank lender PEPPER has released initial price thoughts for a A$700m (US$483m) no-grow, non-conforming RMBS offering,

PEPPER PRS26, expected to launch early this week.

CBA is arranger and joint lead manager

Columbus lands A$600m prime RMBS Structured Finance Australian non-banks dominate reopened market

The Australian RMBS market continues to

function smoothly for non-bank lenders, with

COLUMBUS CAPITAL becoming the fifth such

issuer to execute a deal since the asset class

reopened on March 27.

Columbus sold a A$600m (US$414m)

RMBS offering, TRITON 2020-2, last Friday that

was not directly supported by the Australian

Office of Financial Management’s A$15bn

Structured Finance Support Fund scheme.

The AOFM did not buy any of the previous

two RMBS offerings, the A$1.25bn La Trobe

non-conforming RMBS on May 12 and

Resimac’s prime RMBS on May 27.

However, both of these mortgage

originators, unlike Columbus, have benefited

from the AOFM’s secondary market RMBS

purchases, which free up existing investors to

buy new bonds on offer from the same issuer.

So far the AOFM has bought A$292.55m

from 46 RMBS tranches in the secondary

market, ranging from Class A2 to Class E

notes, issued by non-banks Liberty, Pepper,

Resimac, RedZed, Firstmac, Think Tank, La

Trobe and Mortgage House.

The AOFM previously supported Firstmac

and Liberty by buying into their March 27 and

May 8 RMBS offerings, which helped drive

margins lower on some tranches.

The SFSF was formed on March 19 to

purchase targeted RMBS and other ABS

originated by smaller lenders in the primary

market as well as provide warehouse financing.

The SFSF subsequently invested A$20m in

Columbus’s warehouse facilities on April 17.

Meanwhile the AOFM and Australian

Securitisation Forum are still working to

finalise arrangements for the creation of

a Forbearance Special Purpose Vehicle to

compensate investors for cashflows deferred

by repayment holidays due to the coronavirus.

WIDER PRICINGNon-bank RMBS have been helped by the lack

of competing issuance from authorised deposit-

taking institutions (mostly banks) which have

far cheaper funding sources available to them.

“RMBS makes no sense whatsoever in a

funding-only perspective for ADIs given that

they can currently borrow at a fixed 0.25%

for three years from the RBA’s Term Funding

Facility,” said one DCM manager.

Despite explicit or implicit AOFM support

and the lack of bank-originated supply, new

issuers are having to pay significantly higher

margins than before the coronavirus outbreak.

The Australian economy and mortgage

market have held up relatively well in global

terms, but mortgage payment problems are

clearly mounting.

Moody’s reported on June 2 that the

30 plus days delinquency rate for prime

Australian RMBS increased to 1.79% in March

2020 from 1.55% in December 2019 and will

likely continue to rise as GDP contracts and

unemployment increases.

“Government measures provide some

relief but do not fully offset impact,” the

agency said.

The Columbus Capital Triton 2020-2

prime RMBS A$270m of Class A1-AU notes,

with a 1.5-year weighted-average-life, priced

at one-month BBSW plus 140bp.

The A$240m of Class A1-3Y, A$42m of

Class A2, S$16.8m of Class AB, A$12.6m of

Class B, A$8.4m of Class C, A$4.2m of Class

D, A$2.7m of Class E and A$1.8m of Class F

notes, all with 2.7-year WALs, priced 160bp,

190bp, 220bp, 260bp, 350bp, 425bp, 650bp

and 800bp wide of one-month BBSW.

The transaction was completed by A$1.5m

of retained Class G notes.

For the A$1bn Columbus Capital Triton

2020-1 prime RMBS on February 28 spreads

were significantly tighter, despite comparable

tranches having much longer tenors.

The 2020-1 Class A1-AU note with a 2.8-

year WAL priced at one-month BBSW plus

125bp, 15bp inside the new Class A1-AU note

which has a 1.5-year WAL.

The 2020-1 Class A2, AB, B and C notes,

all with 4.3-year WALs, priced 140bp, 160bp,

185bp and 245bp over one-month BBSW, or

30bp, 60bp, 75bp and 105bp tighter than the

latest notes which have 2.7-year WALs.

NAB was arranger and joint lead manager

for Triton 2020-2 with Natixis, Standard Chartered Bank and Westpac.

JOHN WEAVERS

Top bookrunners of Australia syndicated loans1/1/20 – 31/5/20

Amount

Name Deals US$(m) %

1 ANZ 8 1,724.3 19.0

2 CBA 10 1,652.0 18.2

3 HSBC 3 817.5 9.0

4 NAB 4 785.7 8.7

5 BNP Paribas 4 657.9 7.3

6 Mizuho 4 630.6 7.0

7 Westpac 3 479.1 5.3

8 Morgan Stanley 2 426.9 4.7

9 Bank of China 2 395.2 4.4

10 MUFG 2 316.0 3.5

Total 28 9,058.7

* Based on market of syndication and market total

Proportional credit

Source: Refinitiv data SDC Code: S7


COUNTRY REPORT AUSTRALIA

with NAB, Macquarie, Standard Chartered Bank and Westpac.

Guidance for the A$160m Class A1s and A$330m Class A1a notes, both with 30% credit support and respective weighted average lives of 0.6 and 3.1 years, is one-month BBSW plus 105bp and 180bp–185bp.

The Class A2 to Class G1 notes are not available while the G2 notes are retained.

SYNDICATED LOANS

› S&P RATES SPEEDCAST LOANS

S&P has assigned Double B ratings to SPEEDCAST COMMUNICATIONS’ superpriority debtor-in-possession term loans totalling US$180m.

A US$90m first-out piece of the DIP loan is rated BB, while another US$90m second-

The first-out piece is a new-money loan, while the second-out facility refinanced a like amount of Speedcast’s pre-petition first-lien debt, according to S&P’s report published last Wednesday.

The assigned ratings primarily reflect S&P’s view of credit risk borne by the DIP lenders and are not indicative of any ratings the firm may assign to exit facilities or the reorganised firm after bankruptcy.

The communications satellite company

filed for Chapter 11 bankruptcy protection on April 23. Credit Suisse is the DIP agent.

› VICINITY CENTRES TAPS NEW DEBT

Australian retail property group VICINITY

CENTRES is looking to raise up to A$1.70bn (US$1.13bn) through equity and new debt in response to the uncertainty created by the coronavirus pandemic.

Vicinity is seeking an equity raising of up to A$1.4bn for debt repayment as well

as new short-term facilities of A$300m, and an extension to existing debt of A$650m, according to its filing to the Australian Securities Exchange last Monday.

Following the institutional share placement, the company’s pro forma gearing is expected to fall to 26.6% as of December 31 from 34.9%, and pro forma cash and undrawn debt facilities to be at A$2.6bn.

The company only has a A$150m medium-term note maturing prior to FY2023, while A$1.30bn, A$1.275bn and

Lenders mass to Ichthys LNG borrowing Loans Sponsors finalise US$8.3bn financing

French oil and gas giant TOTAL and Japan’s

INPEX CORP have signed an around US$8.3bn

financing backing ICHTHYS LIQUEFIED NATURAL

GAS project in Western Australia after initially

delaying the process earlier in the year over

the coronavirus pandemic.

The sponsors have obtained a US$4.2bn

loan from 27 commercial lenders for

refinancing purposes, and repriced a

US$4.1bn facility from export credit

agencies.

Citigroup and Mizuho Bank are the

joint financial advisers of the refinancing

and repricing exercise. Drawdown for the

facilities, which have an 8.5-year tenor and

mature in December 2028, is slated for June

15.

BNP Paribas, Commonwealth Bank of

Australia, Mizuho, MUFG and Sumitomo

Mitsui Banking Corp are the initial mandated

lead arrangers and bookrunners of the

commercial loan.

ANZ, Credit Agricole CIB and Societe

Generale joined as MLABs, while Banco

Santander, Caixabank, China Construction

Bank, HSBC, ING, KfW and National Australia

Bank came in as lead arrangers.

Citigroup and Sumitomo Mitsui Trust

Bank joined as arrangers, while Bank

of Communications, Chiba Bank, Credit

Industriel et Commercial, BayernLB, Bayfront

Infrastructure Management, DZ Bank,

Industrial & Commercial Bank of China,

Resona Bank, Shinkin Central Bank and

Shinsei Bank came in as participants.

Export credit agencies including Bpi

Finance, Euler Hermes, Atradius, Nippon

Export & Investment Insurance (NEXI), Korea

Trade Insurance Corporation (K-Sure), Import-

Export Bank of Korea (Kexim) are repricing the

ECA-cover loan.

The financing backing Ichthys’ LNG project

was postponed because of increased market

volatility caused by the Covid-19 outbreak

after proposals were originally due in

February.

In August 2017, Total raised a US$1.8bn

sponsor loan for the project, after completing

a repricing exercise for a US$3bn project level

debt in June the same year.

ANZ and BNP Paribas were the

coordinators of the combined US$4.8bn

financing, which attracted 19 other

lenders. The other banks were ABN AMRO,

Agricultural Bank of China, Banco Santander,

Bank of America, Bank of China, CCB,

Citigroup, Commerzbank, CACIB, DBS Bank,

HSBC, ICBC, Scotiabank, SMBC, SocGen,

Standard Chartered Bank, SMTB, Taipei

Fubon Bank and Westpac, according to

Refinitiv LPC data.

The repriced US$3bn facility due in

December 2028 offered an interest margin of

95bp over Libor.

The Ichthys LNG project began production

in July 2018 and is located in the Browse

Basin, 220km offshore Western Australia and

820km south-east of Darwin.

MARIKO ISHIKAWA, WAKAKO SATO

Top bookrunners of Australian equity and

convertible offerings1/1/20 – 31/5/20

Amount


1 Macquarie 15 4,870.4 21.0

2 Goldman Sachs 12 4,644.7 20.0

3 JP Morgan 14 3,632.2 15.7

4 UBS 15 2,936.5 12.7


6 RBC Capital 5 1,138.9 4.9

7 Citigroup 5 915.1 4.0

8 Bofa Sec 4 886.6 3.8



Total 278 23,175.0

*Market volume

“Standard Exclusion not applicable”

Proportional credit

Source: Refinitiv data SDC Code: AK1

Top bookrunners of Australian equity 1/1/20 – 31/5/20

Amount


1 Macquarie 15 4,870.4 21.0

2 Goldman Sachs 12 4,644.7 20.1

3 JP Morgan 14 3,632.2 15.7

4 UBS 15 2,936.5 12.7


6 RBC Capital 5 1,138.9 4.9

7 Citigroup 5 915.1 4.0

8 Bofa Sec 4 886.6 3.8



Total 275 23,161.1

*Market volume


Proportional credit

Source: Refinitiv data SDC Code: AK2


A$400m in bank loans fall due in FY2023, FY2024 and FY2025, respectively.

Vicinity is also temporarily reducing working hours and pay, and reducing or deferring variable, non-critical capital expenditure and operating expenses.

“This equity raising, combined with a range of cost and capital reductions implemented to date, significantly strengthens Vicinity’s financial position,” said Vicinity’s chief executive officer and managing director Grant Kelley. “It provides capacity to invest in our assets to ensure they continue to deliver on consumer, retailer and community expectations.”

In late March, the company suspended a A$300m seven-year loan until further notice amid the market volatility from the Covid-19 outbreak.

Mizuho Bank was the mandated lead arranger and bookrunner of the facility, which was launched into syndication earlier that month offering an interest margin of 125bp over BBSY.

On March 19, the company withdrew its FY20 earnings and distribution guidance following the escalation of the epidemic and increased uncertainty surrounding its impact on retail trading and operating environment.

Vicinity Centres is rated A2/A (Moody’s/S&P).

It had A$26bn in retail assets under management across 63 shopping centres as of December 13, according to its website.

› VOCUS CLOSES REFI WITH 17 JOINING

Australian telecommunications company VOCUS GROUP has closed its A$1.38bn-equivalent refinancing after attracting 17 banks in general syndication.

DBS Bank joined ANZ, Commonwealth Bank of Australia, HSBC and National Australia Bank as the mandated lead arranger and bookrunner.

Bank of Communications, ING Bank, Kookmin Bank and Sumitomo Mitsui Banking Corp came in as lead arrangers, while Credit Suisse, Credit Industriel et Commercial and State Bank of India joined as lead managers.

Bank of Baroda, China Everbright Bank, Citigroup, First Commercial Bank, Goldman Sachs, Siemens Financial Services, Taiwan Cooperative Bank, UBS and Woori Bank participated as managers.

The facility is split into six parts – a A$232.5m 4.25-year bullet revolving credit tranche A1 (in Australian and US dollars), a A$232.5m 4.25-year bullet term loan tranche A2, a A$465m-equivalent 3.25-year bullet revolver tranche B (in Australian and US dollars), a NZ$135m 3.25-year bullet

revolver tranche C, a A$125m-equivalent 3.25-year revolver D (in Australian, New Zealand, Singapore and US dollars), and a A$200m 2.25-year amortising tranche E.

The deal offers initial interest margins of 290bp, 310bp and 330bp over base rates for the 2.25, 3.25 and 4.25-year tranches respectively, based on net leverage between 2.75x and 3.00x.

The pricing is richer than the borrower’s previous loan completed in July 2018 when it raised a A$1.417bn-equivalent refinancing with 12 banks joining in general syndication.

The 2018 transaction comprises a A$510m-equivalent 4.25-year bullet revolver tranche A, a A$510m-equivalent 3.25-year bullet revolver tranche B, a NZ$150m 3.25-year bullet revolver tranche C, a A$75m-equivalent 2.25-year bank guarantee and letter of credit tranche D and a A$175m 2.25-year amortising tranche E.

The initial margins were 230bp, 215bp and 200bp for tranches A, B and C, and E, respectively, based on the then net leverage of 2.50x–3.00x. Tranche D offered a margin of 135bp over BBSY/BKBM/Libor/Sibor for all levels.

› AURIZON NETWORK TAPS A$1.3BN REFI

Australian rail freight operator Aurizon Holdings has obtained bilateral loans totaling A$1.3bn to refinance its subsidiary’s existing syndicated loans.

The new facilities for AURIZON NETWORK mature between 2023 and 2025, and existing syndicated loans maturing in 2021 and 2022 will be repaid and cancelled, the company said in a filing to the Australian Securities Exchange last Wednesday.

Aurizon Group will have more than A$1.1bn of available liquidity and has no further refinancing requirements until 2023 after repaying a A$525m medium term note due in October from the proceeds of the bilateral loans.

In 2017, Aurizon Network obtained a A$500m five-year revolver maturing October 2022, according to Refinitiv LPC data. ANZ, Bank of China, Commonwealth Bank of Australia, Industrial and Commercial Bank of China, Mizuho Bank, MUFG Bank, National Australia Bank, Sumitomo Mitsui Banking Corp, Westpac Banking Corp, and United Overseas Bank were the lenders of the club facility.

In November 2015, Aurizon Holdings self-arranged a A$500m 5.5-year revolver that offered a margin of 130bp over BBSY based on the borrower’s Baa1/BBB+ ratings (Moody’s/S&P) at the time and a 50bp participation fee. The commitment fee for the undrawn portion was 45% of the applicable margin. The facilities refinanced

a A$3bn refinancing signed in 2013. Aurizon Network and Aurizon

Operations are both rated BBB+/Baa1 (S&P/Moody’s), according to the company website. Aurizon Holdings’ ratings were withdrawn in September 2019.

› BORAL COMPLETES USPP AND BILATERAL

Construction materials supplier BORAL has raised US$1.182bn-equivalent from a US private placement and bilateral loans, according to a filing to the Australian Securities Exchange last Monday.

Boral completed a US$200m senior unsecured USPP comprising five and seven-year bullet maturities with an average coupon of 4.49% and terms and conditions in line with the company’s existing USPP.

The company signed two-year bilateral loans totalling around A$346m and other four-year bilaterals totalling US$740m. The loans replace Boral’s US$750m debt that was due in July 2021.

› YANCOAL MINES FOR GUARANTEE

YANCOAL AUSTRALIA has obtained a A$975m three-year bank guarantee facility to replace an existing loan that matures on September 1.

The replacement facility is secured against certain subsidiaries of Yancoal Australia, according to its filing to the Australian Securities Exchange last Monday.

The covenants are substantially similar to those on the A$1bn syndicated loan being replaced and will now be tested less frequently on a semi-annual basis, according to the filing.

In mid-2017, the borrower’s Chinese parent company Yankuang Group was in talks for a bridge loan of up to US$2.1bn to back its US$2.69bn acquisition of Rio Tinto’s unit in Australia.

› BLUESCOPE FORGES A$1.205BN IN LOANS

BLUESCOPE STEEL has signed a new A$405m two-year revolving credit facility and extended maturities on existing debt to boost its liquidity in light of uncertainty caused by the coronavirus pandemic.

The new loan matures on May 2022, while two existing A$400m loans have been extended to August 2023 and August 2024, respectively.

ANZ, Commonwealth Bank of Australia, Credit Suisse, HSBC, JP Morgan, National Australia Bank, MUFG, Sumitomo Mitsui Banking Corp, Standard Chartered Bank and Westpac Banking Corp are the lenders in the new and existing loans, according to Refinitiv LPC data.

In May 2018, Bluescope Steel issued a US$300m 4.625% five-year Reg S bond at


COUNTRY REPORT CHINA

Treasuries plus 180bp. That followed an increased US$500m five-year non-call two senior 144A/Reg S bond issued at Treasuries plus 517bp in April 2016.

In December 2015, BlueScope raised a A$850m loan to finance its acquisition of joint venture partner Cargill Inc’s 50% stake in the North Star mill. Credit Suisse and HSBC were joint underwriters for the facility, which saw eight other banks join in general syndication.

› MACMAHON EYES A$200M LOAN

Contract miner MACMAHON HOLDINGS is sounding out potential lenders for a loan of around A$200m.

MacMahon had cash and unutilised working capital facilities totalling A$155m at December 31, it said in a filing to the Australian Securities Exchange on April 3.

In November 2015, the company obtained a A$30m 12-month multi-option facility from Commonwealth Bank of Australia after retiring an existing syndicated facility earlier that year.

In September 2014, MacMahon completed a A$317.5m three-year refinancing, comprising a A$50m revolving credit tranche, a A$35m bank guarantee piece and a A$232.5m revolving credit tranche for capital expenditure.

CBA and HSBC led the deal, which drew seven other lenders in syndication.

The facility offered an opening margin of 300bp over BBSY based on an interest coverage ratio of 4x. The margin steps up to 325bp and 350bp over BBSY if the ICR is 3.5x and less than 3.5x respectively.

› IRESS OBTAINS A$105M LOAN

Financial markets software company IRESS has extended maturities of existing debt by four years and obtained an additional A$105m at the end of April.

The company is also seeking an equity raising of up to A$170m to fund its proposed acquisition of OneVue Holdings, according to a filing to the Australian Securities Exchange last Monday.

The company’s pro forma cash headroom is A$265m as at December 31, including the expected proceeds from the equity raising.

In September 2013, Iress signed a A$370m loan backing its acquisition of Avelo Financial Services of the Untied Kingdom, according to Refinitiv LPC data.

The borrowing comprised a A$125m three-month bridge loan, and two A$122.5m revolvers which matured in August 2016 and August 2018. Goldman Sachs was the mandated lead arranger and bookrunner, while National Australia Bank joined as participant.

› ARENA REIT RAISES LOAN, TAPS EQUITY

ARENA REIT MANAGEMENT has increased its syndicated loan by A$50m and is also raising equity for the same amount to repay debt.

The loan increased to A$330m now comprises A$130m, A$150m and A$50m tranches, which fall due on March 31 every year in 2023, 2024 and 2025, respectively.

Following the institutional placement, pro forma gearing as at December 31 will fall to 17.6%, and the weighted average cost of debt will be at 3.20%, Melbourne-based Arena REIT said in a filing to the Australian Securities Exchange last Tuesday.

The equity raising will help Arena REIT to pursue further social infrastructure property investments, according to the filing.

The Australian real estate investment trust invests in sectors such as childcare, healthcare, education and government-tenanted facilities leased on a long-term basis, according to its website.

Arena REIT Management and Arena REIT are responsible entities of Arena REIT No.1 and Arena REIT No.2.

In February 2019, Arena REIT signed a A$50m bilateral loan due March 2022 with National Australia Bank, according to Refinitiv LPC data.

EQUITY CAPITAL MARKETS

› ARENA REIT UPSIZES PLACEMENT

Australia’s ARENA REIT has completed an upsized A$60m (US$42m) share placement to pursue further investments in social infrastructure properties.

It issued 26.3m shares, instead of the planned 21.9m, at A$2.28 each, or a 5% discount to the pre-deal close of A$2.40 on June 1.

The placement received strong support from existing shareholders and new investors.

The REIT is also raising up to A$10m from retail investors through a share purchase plan.

After the placement, Arena’s pro forma gearing as of December 31 2019 will be reduced to 17.6%.

Arena has a pipeline of 20 development projects at a total forecast cost of A$112m with A$67m of capital expenditure outstanding. The projects are expected to be delivered over the next 18 months.

Morgan Stanley is the lead manager of the placement.

› VICINITY STRENGTHENS BALANCE SHEET

VICINITY CENTRES has raised A$1.2bn through a placement to strengthen its balance sheet.

It issued 810.8m shares, or 22% of shares on issue, at a fixed price of A$1.48 each, representing an 8.1% discount to the pre-deal close of A$1.61 on May 29.

The placement received support from existing shareholders and new investors.

The retail property company is also raising A$200m through a share purchase plan.

Gandel Group has committed to subscribe to A$100m of new shares in the placement.

The placement will reduce Vicinity’s gearing from 34.9% to 26.6% and net tangible assets per share from A$2.40 to A$2.23, with cash and undrawn debt facilities standing at A$2.6bn.

Vicinity has also established A$300m of new debt facilities and extended A$650m of existing facilities to withstand the financial impact of Covid-19.

Rental income remains uncertain but the company expects it will improve as stores continue to reopen and foot traffic increases. It received only 49% of billings from March to May as it continues negotiations with tenants on short-term lease adjustments.

No dividend will be paid for the six months ending June 30.

Credit Suisse and Macquarie were the underwriters of the placement.

CHINA


› KAISA GROUP REPRICES CURVE

KAISA GROUP HOLDINGS, rated B1/B/B, last Wednesday managed to reprice its dollar curve with a short-dated new issue that closed eight times covered.

The Chinese property developer priced US$300m 364-day notes at par to yield 7.875%, inside initial guidance of 8.375% area.

Kaisa opted for a short tenor for cost reasons, according to one of the leads, but with the intention of setting a new benchmark for its secondary curve.

US dollar yields spiked to prohibitive levels for Chinese property companies in March, as global markets reacted to the spread of the coronavirus and China shut down property showrooms.

Kaisa’s 2025 bonds were bid as low as


60 cents on the dollar in March, implying a yield of more than 20%, although few trades were actually going through at these levels.

When initial guidance for the new deal came out last Wednesday, Kaisa’s 2025 bonds jumped three points to a cash price of 91.5, lowering the yield by almost a whole percentage point to 12.2%, according to Refinitiv data.

Final books for the new issue were over US$2.5bn from 162 accounts, including US$215m from the leads, with few orders falling away despite the 50bp revision in guidance.

The unrated senior issue was capped at US$300m.

Asia took 80% of the Reg S bonds and Europe 20%. By investor type, fund managers booked 85%, financial institutions

4% and private banks 11%.Credit Suisse, Deutsche Bank, BOC

International, Haitong International and UBS were joint global coordinators. They were also joint bookrunners with Fulbright Securities and Kaisa Financial Group.

› MINGFA PAYS 22% YIELD

Chinese property developer MINGFA GROUP

(INTERNATIONAL) plans to raise up to US$176m

Hilong sweetens exchange terms Bonds Company adds cash portion to attract bondholders

HILONG HOLDING has added a cash portion

to an exchange offer for its outstanding

US$165.114m 7.25% senior unsecured notes

due June 22 and also extended the deadline.

Under the revised terms, for each US$1,000

principal amount of the 2020s, eligible

holders will receive US$900 in principal

amount of new 1.75-year US dollar senior Reg

S notes due 2022 and US$100 in cash as an

upfront cash consideration plus US$5.00 in

cash as an early incentive, according to a stock

exchange filing on May 29.

Before the revision, there was no upfront

cash consideration, with holders set to

receive the new 2022s on a par-to-par

basis. The new 2022s have expected ratings

of B2/B (Moody’s/Fitch) and will have a

minimum yield to maturity of 9.75% per

annum.

The Hong Kong-listed Chinese oilfield

equipment and service provider also

extended both the exchange expiration

deadline and the early participation deadline

by two days to June 5 at 4pm, London time.

The early participation deadline had already

been extended to June 3 from May 27.

After adding the upfront cash

consideration and extending the deadline to

attract more holders of the 2020s, Hilong

also increased the threshold for proceeding

with the exchange offer. It said it would not

go ahead unless at least 80% in principal

amount of the 2020s were tendered and

accepted, up from 75%.

Settlement will be on or about June 11.

Admiralty Harbour, CLSA, HSBC and

SPDB International are dealer managers

on the exchange offer and DF King is the

information and exchange agent.

Despite the sweetened terms, Citigroup

said it still sees challenges after Hilong raised

the minimum acceptance amount, while there

are reports that “there appeared to be a lack

of holders or anchors of a sufficient amount to

influence the (exchange offer) result”.

Hilong’s dollar bonds have dropped 6-16

points in cash prices since the exchange offer

announcement on May 20, with its 7.25%

2020s falling to the low 50s and its 8.25%

2022s to the mid-30s.

Citigroup said it sees “opportunistic value”

in Hilong’s bonds, especially the 2022s, as

the downside should be limited compared to

other default and restructuring cases in Asia.

It wrote in a note that Hilong benefits

from a “relatively high recovery value in the

longer term given its leading position in the

niche market, relatively good track record

during the previous oil down cycle, relatively

low liability to asset ratio, as well as the

company’s efforts to diversify business into

areas less affected by oil price movements”.

Meanwhile Hilong said in a stock exchange

filing on June 1 it had withdrawn a plan to

distribute a final dividend of HK2.0 cents per

share for the year ended December 31 2019.

The decision was made as a

precautionary measure to “reserve

financial resources for the purpose of cash

management and business operations” in

the face of volatile market conditions amid

uncertainties over the impact of Covid-19

on the oil and gas industry and the global

economy as a whole, it said.

CAROL CHAN

Top bookrunners of China syndicated loans1/1/20 – 31/5/20

Amount

Name Deals US$(m) %

1 Bank of China 116 15,747.6 54.1


3 ABC 6 2,262.4 7.8


5 ICBC 2 1,303.7 4.5

6 BoCom 2 1,117.1 3.8

7 Citic 3 985.7 3.4

8 CCB 4 785.6 2.7

9 HSBC 3 428.2 1.5

10 CDB 1 339.9 1.2

Total 151 29,088.8


Proportional credit

Source: Refinitiv data SDC Code: S8b

Top bookrunners of Dim Sum bonds

(Rmb issued and settled offshore bonds)1/1/20 – 31/5/20

Amount

Name Issues Rmb(m) %

1 HSBC 10 5,400.0 23.6

2 Societe Generale 2 2,155.0 9.4

3 Natixis 2 2,000.0 8.7


5 Credit Agricole 3 1,262.3 5.5

6* LBBW 1 1,000.0 4.4

6* Nomura 1 1,000.0 4.4

6* Goldman Sachs 1 1,000.0 4.4

6* BNP Paribas 1 1,000.0 4.4

6* JP Morgan 1 1,000.0 4.4

Total 31 22,896.5

*Market volume

Proportional credit


Top bookrunners of all renminbi bonds,

ex-self-funded transactions1/1/20 – 31/5/20

Amount

Name Issues Rmb(m) %

1 Bank of China 983 511,911.1 7.8

2 ICBC 910 489,086.2 7.4

3 Citic 900 477,471.8 7.2

4 CCB 967 439,108.0 6.7

5 BoCom 792 366,960.6 5.6

6 ABC 730 330,629.2 5.0

7 CSC Financial 565 319,977.1 4.9

8 Industrial Bank 561 263,561.1 4.0


10 Guotai Junan Sec 400 180,123.0 2.7

Total 3,248 6,592,635.4

*Market volume

Proportional credit




from a private placement of short-dated dollar notes, according to a stock exchange filing.

The Reg S notes, to be issued at par to yield 22%, will mature on December 5 2020.

Proceeds will be used for debt refinancing and general corporate purposes.

Galaxy Earnest, which owns 83.47% of the Hong Kong-listed company, will

subscribe for US$24m of the bonds.Head & Shoulders Securities is the placing

agent.Mingfa in the past two years also issued

dollar notes with tenor of less than one year via Head & Shoulders Securities.

The company’s shares have been suspended from trading since April 1 2016.

› NAN HAI PRICES CREDIT-ENHANCED BOND

Film distribution and property development company NAN HAI CORP has priced US$350m Reg S credit-enhanced senior notes after drawing over US$900m final orders.

The two-year non-call one notes were priced at par to yield 2.9%, the tight end of final guidance of 2.9%–2.95% and inside initial guidance of 3.25% area.

The bonds will be issued by the Hong Kong-listed company’s wholly owned subsidiary Amber Treasure Ventures and have the benefit of an irrevocable standby letter of credit denominated in US dollars issued by China Citic Bank Shenzhen branch (Baa2/BBB+/BBB).

The notes have an expected Baa2 rating by Moody’s.

Proceeds will be used to repay offshore debt due within one year.

No geographic allocation was disclosed. By investor type, banks took 83%, asset

managers and fund managers 10%, and private banks and others 7%.

China Citic Bank International was sole global coordinator, sole bookrunner and sole lead manager.

Nan Hai on April 29 priced US$500m two-year non-call one credit-enhanced senior notes at par to yield 3.5% via Amber Treasure Ventures. The notes have the benefit of an irrevocable standby letter of credit issued by China Citic Bank’s Shenzhen branch.

› RUYI LOSES SUPPORT FROM SOE

SHANDONG RUYI TECHNOLOGY GROUP has lost a white knight after a state-owned background shareholder reversed a plan to buy a 26% stake in the textile and clothing manufacturer.

Jining City Urban Construction Investment had agreed in October to buy the stake for Rmb3.5bn (US$492m) from Ruyi’s biggest shareholder, Beijing Ruyi Fashion Investment Holding.

Jining has now agreed to retain a symbolic 0.01% holding for Rmb1.00 and return the rest of the stake to Beijing Ruyi Fashion, which will hold 79.48% of Ruyi following the latest change, according to a public filing.

Ruyi expanded rapidly in recent years

CAR Inc gets a boost from BAIC investment Equities/Bonds New state-owned shareholder would be positive for embattled car rental company

CAR INC’s shares and bonds got a boost last

Monday after it said state-owned Beijing

Automotive Group (BAIC) may acquire up

to 450.79m shares or a 21.26% stake in the

company from UCAR, based on a non-legally

binding strategic cooperation agreement

entered into on May 31.

The Chinese car rental company’s shares

jumped 23.3% to close at HK$2.22. Its two

outstanding US dollar bonds both gained

about 12-13 points on last Monday’s morning

before some of the gains were pared in the

afternoon on profit-taking. Its 6% bonds

due 2021 were up about 7.75 points at

74.25/78.75 and its 8.875% bonds due 2022

were up about 10.5 points at 67/70 in the

afternoon, according to a trader.

“The possible introduction of a SOE (state-

owned enterprise) background shareholder is

definitely good news,” said the trader.

CAR also said in a stock exchange

filing that Amber Gem Holdings, which is

controlled by private equity fund Warburg

Pincus, had informed the company that it

would not proceed with the second tranche

of a share acquisition from UCAR after it

completed the purchase of a 4.65% stake in

CAR in April.

The termination of the agreement on the

second tranche has released UCAR from

its “exclusivity obligations to consider other

potential transactions”, the filing said.

CAR’s shareholding structure has come

under scrutiny following an accounting scandal

at LUCKIN COFFEE. CAR and the coffee chain

are separate companies, but the market sees

them as related because both are controlled

by Chinese billionaire Lu Zhengyao, who also

controls UCAR. Rating agencies slashed CAR’s

credit ratings in April over the Luckin scandal

and its potential effect on CAR’s access to

capital markets and bank funding.

Amber Gem purchased its 4.65% stake by

buying 98.608m CAR shares from UCAR at

HK$2.30 each. Under the earlier agreement

between Amber Gem and UCAR, there

had also been a conditional acquisition of

CAR shares at HK$3.40 each for a total

consideration of not more than US$115.817m,

or about 264.08m shares, representing up to

12.46% of CAR’s total issued share capital.

Citigroup wrote in a note that the potential

shareholding change, “if crystalized, is even

more positive” for CAR given that BAIC is one

of the biggest auto manufacturers and the

third biggest car rental player in China, so it

can have a greater level of business synergy

with CAR and help improve its funding

channels.

Currently, UCAR owns a 21.26% stake in

CAR, Legend Holdings 26.6%, and Amber

Gem 14.76%. If BAIC buys the 21.26%

stake, the combined stake held by UCAR

and Legend will drop to below the 35%

change-of-control clause on CAR’s dollar

notes, potentially leading to their immediate

repayment.

Citigroup expects CAR to launch a consent

solicitation for the bonds to waive or change

the CoC terms to facilitate BAIC’s stake

purchase.

CAROL CHAN

Top bookrunners of China equity and

convertible offerings1/1/20 – 31/5/20

Amount



2 China Sec 22 5,906.9 11.7

3 Citic 25 4,771.7 9.5

4 CICC 28 4,253.3 8.4

5 Huatai Sec 13 1,937.0 3.8


7 Citigroup 10 1,477.5 2.9

8 UBS 11 1,459.0 2.9


10 Sinolink Sec 10 1,220.4 2.4

Total 292 50,470.5

*Market volume


Proportional credit

Source: Refinitiv data SDC Code: C1m


through overseas acquisitions that left it with a hefty debt burden. It managed to redeem US$345m of 7.5% offshore bonds on schedule on December 19, but on March 15 it deferred the annual interest payment of about Rmb75m on Rmb1.0bn of March 2022 medium term notes by three months to June 15, following an agreement with bondholders.

On March 24, Moody’s downgraded Ruyi’s issuer rating to Caa3 from Caa1 and its US dollar bond rating to Ca from Caa2, citing elevated refinancing risk amid increased economic uncertainty. The ratings outlook remains negative.

According to Moody’s, Ruyi has Rmb4.4bn of maturing and puttable domestic bonds in the second half of this year.

› SEAZEN PRINTS US$400M BOND

Property developer SEAZEN GROUP, rated Ba2/BB/BB, last Thursday priced US$400m two-year senior notes at par to yield 6.45%, the tight end of final price guidance of 6.45%–6.50% and well inside initial 7% area guidance.

The deal drew final orders of over US$2.8bn from 164 accounts, including

US$200m from the leads.Asia Pacific investors were allocated

95% and EMEA 5%. Fund managers, asset managers and hedge funds received a combined 77%, banks and financial instiutions 18%, private banks 4%, and corporates 1%.

The Reg S issue has an expected Ba3 rating from Moody’s.

The newly priced bonds traded up last Friday morning to a range of 100.15–100.25.

Proceeds will be used for offshore debt repayment.

Haitong International and CLSA were joint global coordinators as well as joint lead managers and joint bookrunners with Seazen Resources Securities and Central Wealth Securities Investment.

Seazen last tapped the dollar bond market in mid-January with a US$350m 6.80% 3.5-year non-call two senior bond priced at 98.933 to yield 7.15%.

› SICHUAN LANGUANG PRICES TWO-YEAR

SICHUAN LANGUANG DEVELOPMENT, rated B1/B+ (Moody’s/S&P), drew final orders of over US$1bn from 49 accounts for a US$250m senior unsecured bond offering, including US$455m from the leads.

The 11% two-year bonds were priced at 99.129 to yield 11.5%, inside initial guidance in the 11.875% area.

All the bonds were taken by Asian investors. Fund managers bought 86%, banks and financial institutions 9%, and private banks 5%.

Hejun Shunze Investment is the issuer and the Shanghai-listed parent company is the guarantor.

The Reg S issue has expected ratings of B2/B (Moody’s/S&P).

Proceeds will be used to refinance offshore debt.

Guotai Junan International, Credit Suisse, China Everbright Bank Hong Kong branch, Barclays, CEB International, DBS Bank, CMB International, Orient Securities (Hong Kong), Admiralty Harbour and CMBC Capital were joint global coordinators, joint lead managers and joint bookrunners.

› XIANGTAN LGFV PRINTS SBLC-BACKED

XIANGTAN URBAN & RURAL CONSTRUCTION

DEVELOPMENT GROUP has priced US$105m three-year credit-enhanced bonds at par to yield 4%, inside initial guidance of 4.8% area.

The Reg S unrated bonds are backed by

QNB puts Dim Sum back on the menu Bonds For foreign CNH issuers, after-swap funding costs remain main consideration

QATAR NATIONAL BANK, an active issuer in

different currencies, has returned to the

offshore renminbi market with a Rmb1.2bn

(US$168m) public bond offering.

Last Wednesday, the Aa3/A/A+ rated

lender priced the five-year senior unsecured

Reg S bonds at par to yield 3.80%,

unchanged from price guidance.

The government-owned bank’s first public

offering in offshore renminbi in more than

a year is a boost for the Dim Sum market,

where supply has dwindled in recent years

because of the depreciation of the Chinese

currency.

Including QNB’s deal, there have been

only four issuers in the Dim Sum market so

far this year - and the other three have been

Chinese lenders. Bank of Communications,

Agricultural Development Bank of China and

China Construction Bank have all tapped the

market.

“QNB is a repeat issuer in the CNH market

and it has issued bonds denominated in

different currencies for a long time,” said a

person familiar with the situation. “The major

consideration is whether the funding cost

makes sense for the issuer after swapping

into US dollars.”

For foreign CNH issuers like QNB, the

timing of a deal is key because of the

volatility of the cross-currency swap market.

At final pricing, after the currency swap,

the cost of the deal is in line with that of

QNB’s US dollar bond private placements,

the person said.

He said demand for CNH bonds is intact

despite the renminbi depreciating by about

2% so far this year on weak China GDP

numbers and escalating US-China tensions.

“Many investors have cash. Demand depends

on the name and pricing. For an issuer like

QNB, we’ve seen very strong demand, partly

due to the lack of supply in the market.”

The bond will be listed in Taipei, as well

as London, which allowed the deal to benefit

from support from Taiwanese investors.

THIN SUPPLY

The last public deal in the CNH market was a

Rmb1bn two-year offering from CCB’s Astana

branch that priced on March 12. This was issued

as part of CCB’s efforts to promote Kazakhstan’s

capital as a financial hub in Central Asia and to

internationalise the renminbi.

The person familiar with the situation

expects the supply of CNH bonds to remain

light and believes the market is unlikely to

return to the boom years of 2016 and 2017 in

the short term.

“For Chinese CNH issuers, onshore

funding cost is very low compared to offshore

currently,” he said. The incentives for Chinese

corporate issuers to issue offshore is low,

unless they have maturing CNH bonds,

though regular issuers such as Chinese

financial institutions are likely to continue to

visit the market.

QNB’s new bonds traded around reoffer in

the aftermarket.

The bonds will be issued off a US$17.5bn

MTN programme and have an expected Aa3

rating by Moody’s. Standard Chartered Bank (Taiwan) was sole lead manager.

QNB does not have CNH bonds maturing

this year, according to Refinitiv data. Its last

CNH deal, a Rmb500m 4.35% three-year

note, was priced on January 22 2019.

CAROL CHAN



an irrevocable standby letter of credit from Bank of Changsha.

Proceeds will be used for offshore debt refinancing and working capital.

Central Wealth Securities Investment was sole global coordinator as well as a joint bookrunner and joint lead manager with Zhongtai International, Huatai Financial Holdings (Hong Kong), Admiralty Harbour, CRIC Securities and Po Tai Securities (Hong Kong).

The issuer is an infrastructure construction and land development local government financing vehicle of the Xiangtan municipal government in China’s Hunan province.

› YINCHUAN TONGLIAN SELLS THREE-YEAR

YINCHUAN TONGLIAN CAPITAL INVESTMENT OPERATION, rated Baa3/BBB (Moody’s/Fitch), has priced a US$260m three-year bond at par to yield 4.45%, inside initial guidance of 4.75% area.

The issue size is slightly short of its initial target of US$300m.

Final statistics were not available at the time of writing but orders were said yesterday to be over US$900m at final guidance, including US$509m from the leads.

The proposed senior unsecured bonds are expected to be rated BBB by Fitch.

Proceeds will be used for debt refinancing.

CMB Wing Lung Bank, BOC International, China International Capital Corp and Guotai Junan International were joint global coordinators. They were also joint lead managers and joint bookrunners with BoCom International, CEB International, Central Wealth Securities Investment, China Citic Bank International, China Merchants Securities (HK), CMBC Capital, CNCB Capital, DBS Bank, Haitong International, Huatai Financial Holdings (Hong Kong) and SPDB International.

Yinchuan State-owned Assets and Supervision Commission owns Yinchuan Tonglian, which is the city’s largest state-owned enterprise and the main vehicle for urban development, water and gas utilities, and public transportation. The municipal government is also planning to inject state tourism assets into the SOE, according to Fitch.

› ZHENRO DRAWS LARGE BOOK

ZHENRO PROPERTIES GROUP, rated B1/B/B+, has priced US$200m 3.25-year non-call 2.25-year senior notes at 99.940 to yield 8.3%, inside initial 8.75% area guidance.

The deal drew final orders of over US$2.8bn from 170 accounts, including US$266m of demand from the leads.

Asian investors took 85% of the bonds and Europe 15%. Fund managers and

financial institutions were allocated a combined 97% and private banks 3%.

The Reg S notes have an expected B+ rating by Fitch.

There is an issuer call option at 103 on or after September 15 2022.

Proceeds will be used for debt refinancing.

Deutsche Bank, CCB International, Haitong International, HSBC and Standard Chartered Bank were joint global coordinators. They were also joint lead managers and joint bookrunners with BNP Paribas, Bank of East Asia, China Everbright Bank Hong Kong branch, China Citic Bank International, CMB International, Goldman Sachs and Zhenro Securities.

Zhenro on May 14 priced US$200m 3.8-year non-call, non-put 2.8-year notes at an 8.35% yield to put, reopening the US dollar bond market for high-yield Chinese developers. The Reg S deal, which ran alongside a tender offer for a bond due to mature in June, was the first public print from the sector since the Covid-19 outbreak and an oil price slump triggered a panicked sell-off in early March.

› CHINESE MEDICINE MAKER EYES PANDA

CHINA TRADITIONAL CHINESE MEDICINE HOLDINGS is planning a Rmb2.2bn three-year Panda bond offering in China’s interbank market.

The issuer and the bonds are rated AAA by China Chengxin.

The Hong Kong-incorporated and listed company plans to use the proceeds to redeem bonds and replenish working capital.

China Merchants Bank is lead underwriter and bookrunner.

› DAIMLER SELLS THREE-YEAR PANDA

German carmaker DAIMLER has sold Rmb3bn of Panda bonds via a private placement in China’s interbank market.

The three-year bonds were priced at 3.25%, near the top end of an indicative range of 2.75%–3.35%. The deal was 1.1 times covered.

Daimler International Finance BV is the issuer and Daimler is the parent guarantor. The bonds are rated AAA by China Bond Rating.

Bank of China was lead underwriter and Agricultural Bank of China was joint underwriter on the transaction.

› EVERBRIGHT WATER PLANS PANDA

CHINA EVERBRIGHT WATER is planning a Rmb1.2bn five-year Panda bond offering in China’s interbank market.

The issuer and the bonds are rated AAA

by Shanghai Brilliance.The deal represents the first tranche of

a Rmb3bn quota registered with Chinese financial regulators.

Books will open on June 8 and settlement will be on June 10.

The Bermuda-incorporated, Hong Kong and Singapore-listed company plans to use the proceeds for working capital.

Bank of China is lead underwriter and bookrunner. Guosen Securities is joint lead underwriter.

› SMBC MARKETS PANDA BONDS

SUMITOMO MITSUI BANKING CORP is marketing Rmb1bn three-year Panda bonds in an indicative range of 2.3%–3.3% via a private placement in China’s interbank market.

Bookbuilding started on June 4 and settlement will be on June 8.

The issuer is rated AAA by S&P Global China.

CCB, ICBC, BOC, Citic Securities and HSBC are joint lead underwriters on the transaction.

SYNDICATED LOANS

› BAIC DRIVES TO DOUBLE DAIMLER STAKE

Chinese state-owned Beijing Automotive Group (BAIC) is seeking a €2.8bn (US$3.18bn) nine-month loan to double its stake in Frankfurt-listed automaker Daimler.

Credit Agricole CIB, Industrial and Commercial Bank of China, HSBC and Natixis are the mandated lead arrangers and bookrunners of the financing, which has been launched into syndication.

INVESTMENT GLOBAL is the borrowing entity, while BAIC is providing a guarantee.

Commitments are due by June.BAIC will use the funds to increase

its stake in Daimler from 5% to around 10%. Upon completion, BAIC will be the single largest shareholder of the German automaker, winning a seat on the board.

BAIC completed the purchase of the first 5% stake in Daimler last year.

The transaction was backed by a €2.2bn-equivalent loan from 22 lenders, including Bank of China Luxembourg branch, CACIB, DBS Bank and Natixis as MLABs.

The 2019 facility offered a top-level all-in pricing of 117.82bp based on a margin of 100bp over Libor.

› CHEMCHINA BACK FOR €860M REFI

State-owned China National Chemical Corp has launched a €860m multi-tranche refinancing within weeks of obtaining a waiver on a much larger existing loan.


Banco Santander, China Construction Bank (Asia) and Natixis are the mandated lead arrangers and bookrunners of the bullet loan, which comprises a €560m three-year tranche A, a €240m five-year tranche B and a €60m one-year tranche C.

The interest margins are 135bp, 173bp and 85bp over Euribor, respectively.

Only tranches A and B are being syndicated.

MLAs joining with €75m or above will receive top-level all-in pricing of 170bp and 200bp for tranches A and B, respectively, based on upfront fees of 105bp and 135bp.

Lead arrangers with tickets of €50m–€74m earn all-in pricing of 165bp and 195bp based on fees of 90bp and 110bp, while arrangers taking €25m–€49m will receive all-in pricing of 160bp and 190b via fees of 75bp and 85bp.

ChemChina is the guarantor, while its wholly owned CNCE GROUP (HONG KONG) is the borrower.

Commitments are due by July 10.Funds are for general corporate and

refinancing purposes.Last month, ChemChina won consent

from lenders for a delay in completing the registration with the State Administration

of Foreign Exchange in relation to a change in the borrowing entity on an existing US$5.5bn loan. ChemChina now expects to complete the registration by mid-June.

› LIMITED SELLDOWN FOR TENCENT’S UMG

Some lenders are looking to sell down the €900m five-year loan which financed a TENCENT HOLDINGS-backed consortium’s acquisition of a stake in Universal Music Group.

Bank of America, Bank of China, HSBC, Industrial and Commercial Bank of China (Asia) and Morgan Stanley funded the deal with unequal commitments in March following which drawdown took place at the end of that month.

The five-bank group decided not to launch the deal into general syndication because of market volatility stemming from the coronavirus pandemic.

The facility offers an interest margin of 100bp over Euribor.

On March 31, Vivendi, the French media conglomerate and parent company of UMG, said that it had completed the sale of 10% of the US music entertainment company to a Tencent-led consortium.

That was three months after the signing of an agreement on December 31 valuing the world’s largest music label that houses Lady Gaga and The Beatles at €30bn.

Vivendi added that the Tencent-led consortium had the option to buy up to 10% more of UMG’s share capital at the same price by January 15 2021.

Tencent Music Entertainment and other financial co-investors are part of the consortium.

A separate agreement enabling Tencent Music Entertainment to acquire a minority stake in UMG’s subsidiary holding its Greater China operations complements the December 31 deal.

Hong Kong-listed Tencent, best known for its WeChat mobile app, is rated A1/A+/A+.

› ZHONGYU GAS FIRES UP US$300M REFI

Hong Kong-listed ZHONGYU GAS HOLDINGS has returned to the market with a US$300m three-year refinancing.

Bank of China (Hong Kong), China Citic Bank International, Hang Seng Bank and HSBC are the mandated lead arrangers and bookrunners of the transaction, which offers an interest margin of 180bp over Libor and has an average life of 2.75 years.

Dr Peng Telecom gets extension line Restructuring Undersea cable operator wins over bondholders with increased coupon

Offshore holders of DR PENG TELECOM & MEDIA

GROUP bonds have approved a restructuring

proposal, under which the maturity of its

US$423.35m 5.05% bonds due June 1 will

be extended, but there will be no haircut on

principal.

The Shanghai-listed Chinese

telecommunications operator proposed

increasing the coupon to 7.55% and

extending the maturity date by 18 months to

December 1 2021, with two partial principal

redemptions before that date.

Holders of 91.93% of the notes voted at a

meeting on May 29, and 99.82% of the votes

were in favour of the proposal.

Dr Peng provides broadband and cloud

computing services in China and North

America. It has invested in the Pacific Light

Cable Network, an undersea fibre optic cable

project that will be the first to connect Hong

Kong and Los Angeles.

Dr Peng’s subsidiary, Pacific Light Data

Communications, teamed up with US tech

giants Google and Facebook to build the

undersea cable. PLDC owns four of the six

pairs of ultra high-capacity optical fibres,

while Google and Facebook each own one

pair.

Dr Peng blamed complications including

typhoons and the coronavirus pandemic for

delays to the cable construction schedule,

but US authorities have also played a part.

The US Department of Justice in April ruled

that Google should be allowed to use the

link to connect between LA and Taiwan,

but not Hong Kong, due to national security

concerns.

Dr Peng said that extending the maturity

of its offshore bonds by 18 months would give

it time to complete the construction of the

undersea network, obtain all the approvals

necessary to begin operation, and potentially

to sell it.

Under the restructuring terms, the

company redeemed US$50.682m, or 12%

of the principal, at face value in cash on the

original maturity date of June 1. It will then

redeem a further US$65.352m, or 15% of the

principal at par on October 1 2020.

Dr Peng will also attach additional security

to the bonds, in the form of first ranking

security over a Cayman Islands-based limited

partnership that will monetise some of its

investments and a Hong Kong bank account

that will receive the proceeds of the asset

sales.

In March, Dr Peng announced a plan to

sell up to 429.718m new shares to Shenzhen

Xinpengyun Technology and other investors,

though the exact terms and timing have yet

to be decided.

If the share sale and/or one or more asset

sales go ahead and raise net proceeds of

at least US$105m, Dr Peng will use 20% of

the proceeds to redeem more bonds, up to

a maximum of US$63.3525m in principal

amount.

Dr Peng will pay the cash equivalent of 1%

of face value to bondholders who consented

to the changes.

Latham & Watkins is legal adviser to the

company and Alvarez & Marsal is financial

adviser.

Moody’s downgraded the bonds, which

were issued through Dr Peng Holding

Hongkong, to Caa3 from Caa1 following the

changes.

DANIEL STANTON



MLAs joining with US$50m or above will earn a top-level all-in pricing of 215bp via a 96bp fee, while lead arrangers with tickets of US$35m–$49m receive an all-in pricing of 210bp via a 82.5bp fee. Arrangers taking US$15m–$34m will earn an all-in pricing of 203bp via a 63bp fee.

Proceeds will be for refinancing and general corporate purposes.

In February last year, Zhongyu Gas obtained a US$583m-equivalent three-year term loan from 21 lenders, including Hang Seng Bank and HSBC as MLABs.

That facility, increased from an original US$250m-equivalent target, offered a top-level all-in pricing of 230bp based on a margin of 200bp over Libor or Hibor.

Zhongyu Gas builds and manages gas pipeline infrastructure projects and distributes natural gas in China.

Hong Kong-listed China Gas Holdings, which is about 24%-owned by Beijing Enterprises Group, holds about 40% of the borrower.

› BRIGHT FOOD RAISES €800M CLUB

State-owned Bright Food (Group) has signed a €800m one-year club loan with seven lenders.

Bank of China, BNP Paribas, China Construction Bank (Asia), DBS Bank, Industrial and Commercial Bank of China, Shanghai Pudong Development Bank and Standard Chartered Bank are the lenders. StanChart was also the facility agent.

BRIGHT FOOD SINGAPORE HOLDINGS, Bright Food’s subsidiary, is the borrower. Bright Food International, the immediate parent of the borrower and a unit of Bright Food, is the guarantor.

Funds are for refinancing purposes.In March 2018, the borrower raised

a €220m three-year club loan from five banks. ABN AMRO, China Construction Bank, ING Bank, Intesa Sanpaolo and Oversea-Chinese Banking Corp were the lenders to that transaction, according to Refinitiv LPC data.

Bright Food, a wholly owned unit of the Shanghai State-owned Assets Supervision and Administration Commission, is engaged in modern agriculture, food production, processing and production.

› RISE EDUCATION WINS WAIVERS

Nasdaq-listed English-language learning school RISE EDUCATION CAYMAN has obtained lenders’ consent to waive coming covenant tests on its US$140m loan that backed its dividend recapitalisation in 2017 until the end of the year.

The China-based K-12 education provider also obtained consent to partially defer its

installment due in September to next year.As at May 15, the outstanding amount

of the loan is US$74.25m. Amortising instalments of US$19.25m, US$24.75m and US$30.25m will be repaid on each respective anniversary from this year onwards, Rise said in its 1Q2020 unaudited financial results announced on May 14.

The company breached the debt-to-Ebitda and interest coverage ratio covenants on the facility as the coronavirus pandemic has significantly hurt its business.

Rise’s learning centres have been closed since mid-January and all self-owned learning centres remain closed as of May 15.

In response to the challenging environment, the company implemented measures to stabilise its business through targeted cost controls, adjusted capital expenditure and liquidity plans to preserve cash.

The company also officially launched its first online small group class product through Rise+ in early March.

CTBC Bank was the mandated lead arranger and bookrunner of the US$140m five-year loan and had brought several Taiwanese banks into the transaction in 2017.

› CHAILEASE INTERNATIONAL LIFTS LOAN

CHAILEASE INTERNATIONAL FINANCE has increased its three-year term loan to Rmb3.79bn from Rmb2.5bn after attracting a dozen banks in general syndication.

Mizuho Bank (China) was the sole mandated lead arranger and bookrunner of the new loan, which offers an interest of 85bp over the one-year loan prime rate.

Banks were offered a top-level participation fee of 30bp.

In March, the borrower raised a Rmb625m four-year loan from seven Taiwanese banks, paying a much lower margin of 37.5bp over the five-year loan prime rate, which was then at 4.75%. Bank of Taiwan was the MLAB of the transaction.

Last September, Chailease International Finance raised an increased US$300m three-year term loan. ANZ and Taishin International Bank were the MLABs on that deal, which offers an interest margin of 140bp over Libor. Lenders were offered a top-level upfront fee of 25bp.

Chailease International Finance is a unit of Taiwan-listed Chailease Holding.

Based in Shanghai, the borrower provides leasing services to the manufacturing, construction, transportation, healthcare and the fishery industries, as well as automotive financing.

For full allocations, see www.ifre.com.


› CPIC READIES GDR SALE

Shanghai and Hong Kong-listed CHINA PACIFIC

INSURANCE (GROUP) CO is planning to kick off a sale of global depositary receipts in London this month, according to people close to the deal.

The Chinese insurer received approval recently from the China Securities Regulatory Commission to issue not more than 125.7m GDRs in London, according to a company announcement last Tuesday. The proposed GDRs represent about 629m A-shares, or up to 10% of its existing A-share capital.

Based on the company’s A-share close of Rmb29.47 last Tuesday, the deal could raise about Rmb18.5bn (US$2.6bn).

In a separate announcement, CPIC said Swiss Re will be a cornerstone investor for the GDR offer, taking up not more than 1.5% of the company’s enlarged share capital with a three-year lock-up.

The proposed GDR sale is subject to the final approval of UK regulators.

Huatai Financial and UBS are leading the GDR sale.

› AGORA.IO PLANS US IPO

AGORA.IO, a real-time voice and video communication company, is planning to raise about US$200m–$300m from a US IPO this year, according to people close to the deal.

Headquartered in Santa Clara, Agora was founded in 2014 by Tony Zhao, formerly chief technology officer of Chinese social media giant YY.com.

The company raised US$70m from a private round in November 2018 led by Coatue Management. Other investors in the company include SIG, Morningside and Shunwei Capital.

Agora’s business has benefited from the coronavirus outbreak as consumers and organisations turn to online video streaming to stay connected. The platform has seen a 300% growth in developer sign-ups from the last quarter of 2019 to the first quarter of 2020.

Bank of America and Morgan Stanley are leading the transaction.

› CAMBRICON TECH CLEARS IPO HEARING

AI chipmaker CAMBRICON TECHNOLOGIES has cleared a Shanghai Stock Exchange hearing for a proposed Rmb2.8bn Star board IPO despite losing a major customer in the past year.

Cambricon, which counts Alibaba Group Holding as a shareholder, plans


to offer 40.1m new shares for a 10% free float. Proceeds will be used for three chip projects and to replenish working capital.

The company’s net loss widened to Rmb1.18bn in 2019 from Rmb41m a year earlier, while revenue soared to Rmb444m from Rmb117m. But revenue dropped 18.9% year on year to Rmb11.5m in Q1 this year after former partner turned rival AI chip developer Huawei HiSilicon cut all links with Cambricon last year.

At the SSE hearing, the issuer was questioned about the risk of being unprofitable for a long time. However it received the green light for the IPO just two months after filing on March 26.

The company has had five fundraising rounds since it was founded in 2016, attracting investments from Alibaba, Citic Securities, state-owned China Reform Holdings, Shenzhen-listed AI company Iflytek and CICC Capital, among others.

Cambricon aims to build core processor chips for intelligent cloud servers, smart terminals and intelligent robots.

Born as a spin-off from the Institute of Computing Technology of the Chinese Academy of Sciences, Cambricon was included last year in technology forecaster CB Insights’ list of Chinese AI unicorns, valued at around US$2.5bn.

Citic Securities is the sole sponsor of the deal, and joint bookrunner with CICC, Guotai Junan Securities, and Essence Securities.

› CHINA VANKE BUILDS WAR CHEST

Chinese property developer CHINA VANKE has raised HK$7.9bn (US$1bn) from a private placement of Hong Kong-listed shares.

The company sold 316m H-shares, or 2.7% of its enlarged share capital, at HK$25 a share.

The placement price represents a discount of 4.8% to the close of HK$26.25 last Wednesday.

The shares were sold to a small group of long-only investors and hedge funds, according to people close to the deal.

Vanke plans to use the proceeds to repay outstanding overseas debt and not for the development of residential properties.

Citic Securities was global coordinator while CICC and UBS were co-global coordinators. The three banks were also placing agents with CMB International.

› EVER SUNSHINE DOES TOP-UP

EVER SUNSHINE LIFESTYLE SERVICES has raised HK$1.58bn from a top-up placement.

The property management company sold 134m shares or about 8% of the enlarged

share capital at HK$11.78 per share for a discount of 7% to the pre-deal close of HK$12.66, versus the marketed range of HK$11.66–$12.03.

There is a 90-day lock-up.Proceeds will be used for M&A, strategic

investments, working capital and general corporate purposes.

Credit Suisse, Haitong International and Morgan Stanley were bookrunners.

› EXCELLENCE MANAGEMENT FILES IPO

EXCELLENCE COMMERCIAL PROPERTY & FACILITIES

MANAGEMENT has filed for a Hong Kong IPO with CMB International and Haitong International as sponsors.

IFR reported in February the property management arm of Shenzhen-based developer Excellence Group planned to raise about US$300m from a Hong Kong listing this year. The company posted a net profit of Rmb234m for 2019, up 43% from a year earlier.

As of December 31, Excellence Management had 308 projects under management in China with an aggregate gross floor area of 23.5 million square metres, of which 101 projects were located in the Greater Bay Area (Guangdong, Hong Kong, Macau).

China-to-US IPOs shrug off delisting threat Equities Legend prices IPO above range while Dada sells more shares

DADA NEXUS and LEGEND BIOTECH last week

raised more than planned from their US

IPOs despite the risk that Chinese companies

could be delisted from US bourses if they

do not comply with US regulatory and audit

standards.

Dada Nexus, a Chinese online grocery and

delivery firm, opened books for a US$281m

float on Monday, below its original target of

about US$500m when pre-marketing started

on May 13.

The deal drew strong interest during pre-

marketing as the company’s business has

benefited from the coronavirus pandemic. It

posted net revenues of Rmb1.1bn (US$155m) for

the first three months of 2020, almost double

the Rmb527m for the same period in 2019.

However, political tensions between China

and the US have eaten into valuations. On

May 20, the US Senate passed legislation

that could ban many Chinese companies

from selling shares in the US without

adhering to US regulatory and audit

standards, and delist companies that fail

to comply for three years. The bill needs to

clear the Democrat-controlled House before

President Trump can sign it into law.

China’s foreign ministry said last Friday

that forcing Chinese firms to retreat from US

stock exchanges would severely harm US

interests.

“We were seeing more pushback after the

Senate passed the legislation. Investors want

a lower valuation to reflect the potential risk,”

said a person close to the deal.

Taking into account investors’ feedback,

Dada subsequently launched a smaller deal

comprising 16.5m ADSs at the US$15–$17

range with a US$3.5bn–$4bn valuation,

down from the valuation of at least US$4bn

that it had previously targeted.

The company also secured support from

existing shareholders JD and Walmart, which

have indicated interest in subscribing for up

to US$60m and US$30m of the IPO shares,

respectively.

The cheaper price tag helped the deal

build momentum. Supported by strong

demand, Dada eventually sold 21m ADSs at

US$16 per share.

“Demand then became stronger during

bookbuilding as the US stock market traded

well,” said another person on the deal.

The Nasdaq Composite Index was up 1.3%

from Monday to Thursday.

Goldman Sachs, Bank of America and

Jefferies are the bookrunners.

Legend Biotech, a cell therapy unit owned

by Hong Kong-listed Genscript Biotech, is

also set to raise US$423m from a bigger-

than-expected Nasdaq IPO after pricing the

deal above the indicative price range.

The company intends to sell 18.4m ADSs

at US$23 per share compared with the

US$18–$20 range.

“Many US biotech listings have done well

this year and Legend definitely benefits from

that sentiment. I won’t say investors are not

cautious on Chinese IPOs at all but it really

depends on sector,” said a banker on the deal.

Genscript is investing another US$12m in a

concurrent private placement.

Morgan Stanley, JP Morgan and Jefferies

are bookrunners.

FIONA LAU



› FOUR COMPANIES JOIN STAR IPO QUEUE

SHENGYI ELECTRONICS, a printed circuit board manufacturer, has filed to the Shanghai Stock Exchange for a proposed Rmb3.96bn Shanghai Star IPO.

The company plans to offer up to 166m shares, or 20% of its enlarged capital.

Proceeds will be used to fund two circuit board printing projects, build a research and development centre, and replenish working capital.

It posted a net profit of Rmb3.1bn in 2019, on revenue of Rmb441m.

Dongguan Securities is the sponsor.Meanwhile BEIJING SHENOGEN PHARMA GROUP,

PYLON TECHNOLOGIES and BEIJING KAWIN TECHNOLOGY

SHARE-HOLDING have also filed for Star IPOs to raise Rmb2.02bn, Rmb2bn, and Rmb1.09bn. Huaxi Securities, China Securities and Haitong Securities are their respective sponsors.

› HAN’S LASER TO OFF-SHOOT CONTROLS

Shenzhen-listed HAN’S LASER TECHNOLOGY

INDUSTRY GROUP plans to spin off its numerical controls unit on an unspecified A-share market.

The company said the proposed spin-off is still in the pre-preparation stage and will need approval from shareholders.

Han’s Laser’s shares are down 18% year to date.

› MEIDONG AUTO SEALS PLACEMENT

CHINA MEIDONG AUTO has raised HK$1.28bn from an upsized top-up share placement.

The deal, which was increased to 81m shares from 61m shares at launch, was priced at the bottom of a HK$15.84–$16.52 price range. The final price represents a discount of 9.9% to the pre-deal close.

The company plans to use the proceeds for opportunistic M&A and general corporate purposes.

There is a 90-day lock-up on the company.

Bank of America and Goldman Sachs were bookrunners.

› MINSHENG EDU UPSIZES PLACEMENT

MINSHENG EDUCATION has upsized a top-up placement to raise HK$244m.

The company sold 200m shares, or 4.98% of the enlarged share capital, against 165m shares at launch, at HK$1.22 each, or a discount of 8.3% to the pre-deal close of HK$1.33. The shares were marketed at HK$1.20–$1.25.

There is a 90-day lock-up.Proceeds will be used for working capital,

general corporate purposes and M&A.CICC is the bookrunner.

› OFILM GROUP PLANS SEQUEL

Shenzhen-listed OFILM GROUP plans to raise Rmb6.76bn from a proposed private share placement for three cellphone camera lens projects.

The company will sell up to 808m shares, or up to 30% of current shares, to up to 35 investors including two state-owned companies, Hefei Construction Investment Holding (Group) and Hefei Heping Investment, which have committed to buy Rmb1.2bn and Rmb1bn of the offering respectively.

Proceeds will also be used to build a research and development centre and replenish working capital.

The proposal still needs approval from shareholders and regulators.

› POP MART FILES FOR IPO

Chinese toy retailer POP MART has filed for a Hong Kong IPO with CLSA and Morgan Stanley as sponsors.

IFR reported earlier this month that the company plans to raise about US$200m–$300m from the float this year.

Beijing-based Pop Mart sealed a pre-IPO financing of more than US$100m last month from investors including Sequoia Capital, China Renaissance and Loyal Valley Capital.

Founded in 2010, Pop Mart started as a retailer of lifestyle goods such as toys, digital and beauty products. It then evolved into a blind box toys designer and produced some popular figures.

The company posted net profit of Rmb451m for 2019, more than fourfold Rmb99.5m in 2018.

As of December 31, Pop Mart operated 114 stores and 825 automated vending machines in China. It also sells products on Taobao’s Tmall marketplace.

› RED STAR MACALLINE EYES FOLLOW-ON

Hong Kong and Shanghai-listed RED STAR

MACALLINE GROUP is planning a Rmb4bn private A-share placement.

The company will sell up to 913m shares, or 25.7% of the current shares, to up to 35 investors.

Proceeds will be used to build new furniture malls in three Chinese cities, fund a decoration business and distribution on the Taobao online marketplace, and repay debt.

The proposal still needs approval from shareholders and regulators.

› SHINSUN PLANS HK US$400M IPO

Chinese real estate developer SHINSUN

HOLDINGS has filed to the Stock Exchange of Hong Kong for an IPO which people close to the deal say could raise US$300m–$400m.

The Shanghai-headquartered company has 195 mostly residential and commercial projects totalling 23 million square metres.

It posted profit of Rmb3.2bn in 2019, up more than seven times from Rmb428m a year earlier.

ABC International and CCB International are joint sponsors.

› ZHONGTAI SEC HITS 44% CAP ON DEBUT

ZHONGTAI SECURITIES’ A-shares surged 44% to Rmb6.31 on their debut on June 3, up from the IPO issue price of Rmb4.38 per share and hitting the cap on a stock’s first-day gains.

The brokerage sold 697m A-shares for a 10% free float, down from the proposed 2.09bn shares, to raise Rmb3.05bn from a Shanghai IPO last month.

It had to postpone the books to May 20 from April 29 under Chinese regulations as the issue price translated into a 2019 P/E of 48.08, higher than the average P/E of 39.83 for its listed peers in March.

Institutional and retail investors didn’t take up subscriptions totalling 1.85m shares or Rmb8.12m, which will be underwritten by bookrunners.

Zhongtai Securities will use the proceeds on its margin trading business and securities brokerage and investment banking operations. The funds will also support the development of subsidiaries engaged in asset management, alternative investments, private equity investments and futures, as well as to upgrade IT services.

The company posted a 2019 net profit of Rmb2.34bn on revenue of Rmb9.97bn, up 42%. Income from investment banking accounted for 7.1% of revenue at Rmb708m.

The CSRC had cancelled a hearing for the IPO scheduled for November 7 as it followed up on “some related matters” that it said needed further verification.

Soochow Securities was the sponsor and joint bookrunner with Essence Securities, GF Securities and Western Securities, which will split the sponsor and bookrunner fee of Rmb114m.

› BLUE SAIL MEDICAL COMPLETES CB

Shenzhen-listed BLUE SAIL MEDICAL has raised Rmb3.14bn from a six-year convertible bond.

The company sold Rmb2.12bn or 67.5% of the offering to current shareholders and the rest to retail investors.

Retail investors failed to pay for 0.33% of the deal, or Rmb10.4m, which will be underwritten by the bookrunners.

The CBs pay a coupon of 0.4% in year one before stepping up to 2% in year six. The initial conversion price has been set at Rmb17.79 and the CBs have received a AA rating from United Rating.


Proceeds will be used to acquire Swedish medical device manufacturer NVT, Chinese firm Gauke International Trading, and the shares Blue Sail does not own in Cayman Islands-registered CB Cardio Holdings II. Funds will also be used to set up and upgrade production lines for nitrile gloves, repay bank loans and replenish working capital.

Blue Sail currently holds a 93.37% stake in CB Cardio. Gauke is a Wuhan-based manufacturer of first-aid kits mainly for automobile manufacturers such as Mercedes-Benz, BMW, Audi and Renault.

Morgan Stanley Huaxin Securities and Citic Securities are the joint sponsors of the deal.

HONG KONG


› HONGKONG ELECTRIC OVERSUBSCRIBED

HONGKONG ELECTRIC has raised US$500m from a 2.25% 10-year bond that received final orders of over US$2.25bn, including US$70m from the leads, from more than 130 accounts.

The Reg S notes priced at 99.370 to yield 2.321%, or Treasuries plus 165bp, the tight end of final guidance and 55bp inside initial guidance.

Asia took 81% and the rest went to Europe. Fund managers bought 53%, banks 21%, sovereign wealth funds and pension funds 12%, insurers 11% and private banks 3%.

Hongkong Electric Finance is the issuer and Hongkong Electric is the guarantor.

The senior unsecured notes have an expected rating of A– by S&P, in line with the guarantor.

Proceeds will be used for refinancing and general corporate purposes.

Hongkong Electric, owned by HK Electric Investments, is entitled to a permitted return on assets of 8% from 2019 to 2033 under the Scheme of Control Agreement with the government.

Pimco’s recent report on the impact of the coronavirus outbreak also points out that utilities, along with e-commerce and online services, have benefited or experienced limited impact from the uncertainty.

Hongkong Electric’s new bonds will be drawn under the issuer’s guaranteed US$5bn MTN programme.

BNP Paribas, HSBC, Mizuho Securities and UBS were joint global coordinators, bookrunners and lead managers.

SYNDICATED LOANS

› OCEAN PARK BAILOUT BUOYS LENDERS

Lenders to cash-strapped OCEAN PARK CORP will breathe a sigh of relief after Hong Kong lawmakers approved a controversial bailout plan to inject HK$5.4bn (US$697m) into the theme park for paying down debt and keeping it afloat for another 12 months.

The bailout plan was approved late last Friday with 32 votes in favour, 20 against and two abstentions.

Of the HK$5.4bn emergency funding, HK$3.1bn will repay existing debt owed to Bank of China (Hong Kong). That includes the outstanding balance on a HK$2.638bn five-year refinancing completed in 2016, a HK$650m development loan, and a HK$1bn revolving credit facility obtained last year, government documents show.

The balance from the emergency funding

will help keep Ocean Park afloat for another 12 months.

Ocean Park officials had warned earlier the theme park could run out of cash given it was spending more than HK$140m every month.

The funding also provides relief for lenders to a separate HK$3.6bn loan obtained last year for the Ocean Park Marriott Hotel, as a “material adverse change” could have been triggered on the loan had Ocean Park entered into bankruptcy.

The hotel, opened in February last year, is a joint development between Lai Sun Group, Ocean Park and Marriott International.

Ocean Park has recorded operating losses for four consecutive years. The net operating deficit amounted to HK$588m in 2019, more than double from 2018 as operating costs have risen significantly.

This year the park has registered no income as it was forced to close temporarily since January because of the coronavirus pandemic.

Top bookrunners of Hong Kong syndicated loans1/1/20 – 31/5/20

Amount

Name Deals US$(m) %

1 HSBC 19 2,205.6 12.8

2 Bank of China 11 2,201.2 12.8


4 SPDB 5 1,027.9 6.0

5 Citic 5 1,004.8 5.8

6 CCB 9 993.7 5.8


8 ICBC 5 676.1 3.9

9 Citigroup 3 648.3 3.8

10 BoCom 4 532.7 3.1

Total 40 17,220.1


Proportional credit


Top bookrunners of Hong Kong dollar bonds,

inc certificates of deposit, commercial paper1/1/20 – 31/5/20

Amount

Name Issues HK$(m) %

1 HSBC 47 20,182.0 40.2



4 Bank of China 4 1,350.0 2.7

5 Mizuho 2 1,210.0 2.4

6 CBA 4 1,090.0 2.2

7 BNP Paribas 5 1,050.0 2.1

8 DBS 2 900.0 1.8

9 Deutsche 3 850.0 1.7

10* ABC 2 750.0 1.5

10* JP Morgan 2 750.0 1.5

Total 105 50,177.0

*Market volume

Proportional credit


Top bookrunners of Hong Kong dollar bonds,

ex-certificates of deposit, commercial paper1/1/20 – 31/5/20

Amount

Name Issues HK$(m) %

1 HSBC 32 16,842.0 40.9



4 Mizuho 1 950.0 2.3

5 DBS 2 900.0 2.2

6* Deutsche 3 850.0 2.1

6* BNP Paribas 3 850.0 2.1

8* ABC 2 750.0 1.8

8* Bank of China 2 750.0 1.8

8* CBA 2 750.0 1.8

8* JP Morgan 2 750.0 1.8

Total 73 41,168.0

*Market volume

Proportional credit


Hong Kong global equity and equity-related1/1/20 – 31/5/20

Amount


1 Citigroup 2 1,117.6 18.6

2 Goldman Sachs 4 865.3 14.4



5 Bofa Sec 3 562.9 9.4

6 HSBC 3 391.4 6.5

7 China Tonghai Sec 2 353.9 5.9


9 UBS 2 226.7 3.8

10* CICC 1 55.5 0.9

10* DBS 1 55.5 0.9

Total 53 6,005.7



COUNTRY REPORT INDIA

INDIA


› VEDANTA SEEKS BOND AMENDMENTS

VEDANTA RESOURCES is seeking to amend certain covenants on its US dollar bonds to give it more flexibility to incur debt as chairman Anil Agarwal takes India-listed indirect subsidiary VEDANTA LIMITED private.

The energy and metals producer is seeking consent for the changes from holders of its US$900m of 8.250% 2021s, US$1bn of 6.375% 2022s, US$500m of 7.125% 2023s, US$1bn of 6.125% 2024s, US$400m of 8.000% 2023s and US$600m of 9.250% 2026s.

Holders of the 2021s will receive a payment of US$3.75 per US$1,000 of principal if they agree to the changes by an early bird deadline of June 23, and for the other bonds it will be US$5.00.

The offer drops to US$2.50 per US$1,000

for all bonds tendered after the early bird deadline but by June 26.

Credit Suisse and JP Morgan are solicitation agents, and Morrow Sodali is information agent.

In 2012, Sterlite merged with Sesa Goa to create Sesa-Sterlite, later renamed Vedanta Limited, before combining it with Cairn India in 2016. Vedanta Resources delisted from the London Stock Exchange in 2018.

Vedanta Resources and its affiliates currently hold a 51.1% stake in Vedanta Limited.

“The group believes that a delisting of Vedanta Ltd is the next logical step in this simplification process and will provide the group with enhanced operational and financial flexibility in a capital intensive business,” wrote Vedanta Resources in an exchange announcement.

JP Morgan is advising Vedanta on the delisting.

› SBI EYES US$1.5BN LONG-TERM BONDS

STATE BANK OF INDIA is seeking board approval to raise US$1.5bn from long-term bonds in

one or more tranches, according to a filing on the BSE.

The unsecured notes will be offered in US dollars or any other convertible currency in Reg S/144A format through a public or private offering.

The board meeting is scheduled for June 11.

Downgrade flags risks to Indian bonds Bonds IG bonds widen briefly after Moody’s rating cut

Indian companies may face higher US dollar

funding costs after Moody’s downgraded the

country’s sovereign rating to one level above

junk last week.

On June 1, Moody’s cut India’s credit rating

to the lowest rung of investment grade,

citing a prolonged period of slow growth,

rising debt and persistent stress in parts of

the financial system. The rating agency said

the cut to Baa3 from Baa2 was not driven

directly by the impact of the coronavirus, but

that the pandemic had amplified existing

vulnerabilities in India’s credit profile.

“The downgrade is not just the reflection

of the sovereign but where the underlying

system is,” said Sonal Varma, Nomura’s chief

economist for India and Asia ex-Japan on

the Nomura Investment Forum Asia webinar

on June 2. “The credit risk of individual

companies itself is much higher,” she said.

While the dollar bond market will remain

shut for high yield issuers because of the

Reserve Bank of India’s all-in cost ceiling

cap of 450bp over US dollar Libor, DCM

bankers say some investment grade issuers

will be reluctant to raise dollar bonds after

the Moody’s downgrade because their cost of

borrowing will increase.

“The global technical factors in terms of

flows, investor appetite et cetera will play a

role, but at the margin it will be a bit more

challenging for Indian companies to raise

funds offshore and the spreads will be a bit

wider compared to last year,” Varma from

Nomura said.

Spreads for public sector investment grade

bonds widened after the downgrade. The

benchmark spread for Indian Railway Finance

Corp’s 3.249% February 2030 bonds rose by

12bp to 282bp, or a yield of 3.507%, while

Power Finance Corp’s 3.95% 2030 bonds

widened by 8bp to 411bp or a yield of 4.78%,

according to Refinitiv data. The spreads

snapped back to their previous levels after

the initial knee-jerk reaction, though.

Given the downgrade and difficulty in

meeting the RBI’s all-in ceiling cap, state-

owned issuers will prefer to raise funds in

the domestic market, where yields are at

their lowest point in over a decade, said DCM

bankers.

NEGATIVE OUTLOOK

More than the downgrade, market

participants were surprised that Moody’s kept

the outlook unchanged at negative.

Since November 2017, Moody’s had rated

India one notch higher than Fitch and S&P,

both of which rate the sovereign at BBB-

with a stable outlook. But Moody’s decided

to keep the rating outlook negative, citing

worsening government finances as the

coronavirus continues to hurt the economy.

Fitch, which affirmed India’s BBB- rating

and maintained a stable outlook last

December, did not comment on the outlook

for its own rating, but said by email “the

projected medium-term fiscal path after the

pandemic will play an important role in our

assessment of India’s sovereign rating”.

India’s economy is expected to contract

by 4% in the fiscal year ending March

2021 after growing at 3.1% in the January-

March quarter, which was the slowest

quarterly growth in eight years, according

to Moody’s.

The country’s debt burden is expected to

rise to 84% of GDP in fiscal 2020 from 72%

the previous year because of the economic

shock from the coronavirus pandemic

and limited room for fiscal spending, said

Moody’s.

However, if India does get downgraded to

junk there will be a potential impact on the

term premium - the spread between yields

on 10-year and three-month paper - and the

rupee, preventing the country’s inclusion in

global indices, according to a UBS note dated

June 3.

KRISHNA MERCHANT

Top lead managers of Indian rupee bonds1/1/20 – 31/5/20

Amount

Name Issues Rs(m) %

1 Axis 75 522,822.3 25.1

2 HDFC 61 277,914.3 13.3

3 ICICI Bank 66 250,959.8 12.0

4 Trust Group 54 178,546.1 8.6

5 Punjab National Bank 52 151,245.7 7.3

6 AK Capital 47 138,721.4 6.7


8 Kotak Mahindra 26 69,693.8 3.3

9 Tipsons 27 62,407.3 3.0

10 Edelweiss Financial 12 57,750.4 2.8

Total 130 2,084,390.8

*Market volume

Proportional credit



Credit Suisse estimates Indian banks must raise US$20bn of capital, including US$10bn–$13bn by public sector banks, as they look to shore up capital buffers.

› TATA STEEL PAYS 408BP OVER REPO RATE

TATA STEEL raised Rs4bn (US$52m) from three-year bonds linked to the repo rate, according to a filing on the BSE.

The effective coupon was fixed at 8.08%, equivalent to a 408bp spread over the Reserve Bank of India’s repo rate of 4%.

The bonds are rated AA by Care and India Ratings.

SBI Capital Markets is the arranger.On May 19, Tata Steel raised Rs10bn from

three-year bonds at 8.25%.

› ECL FINANCE ISSUES THREE-YEAR BONDS

ECL FINANCE has raised Rs4.25bn from three-year bonds at 9.75%, payable semi-annually, according to a BSE filing.

The non-banking financial company was targeting Rs4.25bn plus a greenshoe amount of Rs3.75bn.

Care and Crisil have assigned a AA rating to the bonds.

ECL Finance raised Rs2bn from three-year notes at the same yield last month.

› HDFC TARGETS 18M BONDS AT 6.22%

HOUSING DEVELOPMENT FINANCE CORP is planning to raise up to Rs50bn from 18-month bonds at 6.22%, according to a market source.

It is targeting Rs20bn plus a greenshoe amount of Rs30bn. India’s largest non-banking financier has asked investors to place bids on the NSE’s electronic platform on June 9 from 11:00am to 12:00pm India time.

Crisil and Icra have assigned a AAA rating to the bonds.

ICICI Bank is said to be the arranger for the bond offering.

HDFC is yet to make an official announcement on the planned bond sale.

› INDIAN HOTELS ISSUES THREE-YEAR

INDIAN HOTELS has raised Rs3bn three-year bonds at 7.95%, according to a filing on NSE.

ICICI Bank is the arranger for the bond issue. Care has assigned a AA+ rating to the bonds.

The coupon will be increased by 25bp for every rating downgrade from AA+ to AA– and an additional 40bp if the rating is downgraded to A+ or lower.

› IRFC PRINTS LONG-TERM BONDS

INDIAN RAILWAY FINANCE CORP has raised Rs25.65bn from 15-year bonds at 6.901%, according to a filing on NSE.

It was targeting Rs5bn plus a greenshoe amount of Rs25bn.

Care, Crisil and Icra have assigned a AAA rating to the bonds.

On April 24, IRFC raised Rs31.9bn from three-year bonds at 6.19%.

› JSW STEEL SEALS RS10BN PRINT

JSW STEEL has raised Rs10bn from one-year four-month bonds at 8.50%, according to a filing on BSE.

India Ratings has assigned a AA rating to the notes.

Standard Chartered Bank is the arranger for the bond issue.

On May 22, JSW Steel received board approval to raise up to US$4bn of funds in various formats. It is targeting US$1bn from fixed-rate bonds in the international market and the same amount from foreign currency convertible bonds, global depository receipts or warrants. It is also looking to raise up to Rs70bn in the domestic bond market and the same amount from equity shares or convertible securities onshore.

The proceeds will be used for capital expenditure, and the re-financing and repayment of outstanding loans.

› M&M PLANS FIVE-YEAR BONDS AT 6.19%

MAHINDRA AND MAHINDRA plans to raise Rs5bn from five-year bonds at 6.19%, according to market sources.

Kotak Mahindra Bank is said to be the arranger for the bond issue.

The vehicle manufacturer’s bonds are rated AAA by Care, Crisil, Icra and India Ratings.

Investors have the option to redeem the

notes in full at the end of three and four years.

The issuer is yet to make an official announcement on the planned bond sale.

› NEEPCO SEEKS BIDS

NORTH EASTERN ELECTRIC POWER CORP is seeking bids to raise up to Rs5bn from eight-year bonds, according to market sources.

It has asked investors to place bids from 11:30am to 12:30pm on the BSE’s electronic platform on June 8.

It is targeting Rs500m plus a greenshoe option of Rs4.5bn.

The bonds, rated AA by Icra and Care, have a call option at the end of the fifth year and a staggered redemption of 25% from year 5.5 onwards.

Interest will be paid semi-annually.The issuer is yet to make an official

announcement on the planned offering.

› REC SETS YIELD FOR TIER 2 BONDS

REC, formerly known as Rural Electrification Corp, has fixed the yield on Rs20bn of 10-year seven-day subordinated bonds at 7.96%, according to market sources.

It was eyeing Rs5bn plus a greenshoe amount of Rs15bn for the June 15 2030 bonds.

Care, Crisil, Icra and India Ratings have assigned a Triple A rating to the Tier 2 notes.

Last month, REC scrapped a sale of Rs15bn 10-year subordinated bonds.

› TATA POWER RAISES THREE-YEAR MONEY

TATA POWER raised Rs3bn three-year four-month bonds at 8.21%, according to a filing on NSE.

The August 31 2023 notes are rated AA (stable) by India Ratings.

AK Capital is the arranger.The coupon will step up by 25bp for

every notch rating downgrade.


› YES BANK PLANS FOLLOW-ON

YES BANK is planning to file for a Rs80bn–Rs100bn (US$1.06bn–$1.33bn) follow-on offer later this month, people with knowledge of the transaction said.

The bank has board approval to raise up to Rs150bn via a qualified institutional placement, rights issue or follow-on offer in one or more tranches.

The bank has opted for a follow-on offer as it will be able to offer a higher discount to investors. An issuer can offer a discount

Top bookrunners of India syndicated loans1/1/20 – 31/5/20

Amount

Name Deals US$(m) %


2 SMFG 9 829.9 11.2

3 ICICI Bank 8 761.0 10.3

4 Indusind-Bank 4 644.8 8.7

5 Axis 5 484.7 6.6


7 Bank of Baroda 3 353.2 4.8

8 DBS 4 328.0 4.4

9 MUFG 4 316.3 4.3

10 L&T Financial Services 3 266.6 3.6

Total 33 7,381.4


Proportional credit



COUNTRY REPORT INDIA

of only 5% above the floor price in a QIP but there is no cap for a follow-on offer.

Axis Bank, Bank of America, Citigroup, HSBC, Kotak, and SBI Capital are the banks on the transaction.

In March, State Bank of India acquired a 48.2% stake in the loss-making bank for Rs60.5bn. A combined Rs39.5bn was invested by peers Housing Development Finance Corp (for an 8% stake), ICICI Bank (8%), Axis Bank (4.8%), Kotak Mahindra Bank (4%), Federal Bank (2.4%), Bandhan Bank (2.4%) and IDFC Bank (2%).

SBI must maintain a stake of at least 26% for the next three years, while the others must keep at least three quarters of their stakes over the same period.

› KOTAK SELLS KOTAK BANK SHARES

KOTAK MAHINDRA BANK founder Uday Kotak has raised Rs69bn through the sale of 56m of the bank’s shares at the top of a Rs1,215–Rs1,240 range, people with knowledge of the transaction said.

The shares were sold at a 0.7% discount to the pre-deal close of Rs1,248.40 and rose 7.6% to Rs1,342.90 the following day.

Books were multiple times covered with around 60 accounts participating. Demand came from local and foreign long-only institutions, with the latter being the majority. Some investors who did not buy shares in a qualified institutional placement

last week bought in this offering. The top 20 accounts were allocated 90%

of the block. The shares sold represent 2.83% of the

overall share capital and will bring down Kotak’s stake in the bank to 26.1% from 28.93%.

There is a 60-day lock-up on the vendor. Kotak Securities is the sole executing

broker and is also joint placement agent with Goldman Sachs and Morgan Stanley.

The previous week Kotak Bank sold primary shares worth a total of Rs74bn at Rs1,145 each, diluting Kotak’s stake to 28.93% from 30%. The shares were sold at a discount of 0.7%.

Kotak is selling his shares to fulfil a regulatory requirement.

India’s central bank expects private sector bank owners to reduce their holdings to 40% within three years of getting a banking licence, to 20% within 10 years and to 15% within 15 years.

Kotak received an exemption from those rules by capping his voting rights at 15% from April 1, but has to reduce his stake to 26% from 30% by August.

› STANDARD LIFE PRICES HDFC LIFE BLOCK

Standard Life has raised Rs20bn through the sale of 40m HDFC LIFE INSURANCE shares at Rs496.40 apiece, or a 1% discount to the pre-deal close of Rs501.35, a person with

knowledge of the transaction said. The shares were marketed in a Rs490–

Rs501.35 range. The shares closed at Rs517.60 on Thursday.

Around 30 accounts participated in the transaction with the top 10 investors getting 90% of the deal.

The shares sold represent 1.98% of the capital and the vendor’s remaining 10.27% stake is locked up until March 29 2021.

Reverse enquiries from large anchor investors who had participated in a March 26 block prompted Standard Life to waive a 90-day lock-up which was to end on June 25.

Bank of America is the bookrunner.

Reliance wraps up India’s largest rights issue Equities Deal moves conglomerate Rs351bn nearer to fulfilling its debt-free pledge

RELIANCE INDUSTRIES completed a Rs531bn

(US$7bn) rights issue, India’s largest-ever

equity capital market transaction, but more

asset sales are expected from the group

in order to deliver on its committment to

becoming debt-free.

The rights offer was 1.59 times covered

when books closed on Wednesday.

Excluding the rights reserved for the

controlling shareholder, the offer was

1.22 times subscribed, Reliance said in an

announcement.

Mukesh Ambani and his family, who

own around 50% of the company, are

underwriting the entire deal, as is common in

India where banks do not typically underwrite

rights issues.

The proceeds from the rights issue will be

used as part of a plan to eliminate net debt of

Rs1.53trn by 2021, as Ambani pledged to do

at a shareholder meeting last year.

Analysts say the company’s gross debt is

higher at Rs2.57trn, though, and that it will

need to sell a stake in its oil-to-chemicals

and telecom fibre businesses. Furthermore,

only 25% of the proceeds will be immediately

available as buyers have been allowed to

stagger their payments.

Investors have to pay an initial 25% and the

rest of the instalments will be announced later.

Analysts expect the cash calls to be completed

only in the financial year to March 2022.

Some of the asset divestments are unlikely

to materialise soon. A plan to sell a 20%

stake in the company’s oil-to-chemicals

division to Saudi Aramco may be on hold

because of the slump in oil prices. Reliance is

still negotiating with investors to buy shares

in its telecom fibre business, which has been

spun off into an infrastructure investment

trust.

The group has been successful in

monetising its digital subsidiary Jio

Platforms, though. Since the end of April,

Reliance has sold 19% of Jio in total for a

combined Rs876bn to Facebook, Silver Lake,

Vista, General Atlantic, KKR and Mubadala.

Around 422.6m rights shares were sold

in a 1-for-15 ratio at Rs1,257 each, a 14%

discount to the pre-deal close of Rs1,466.

The shares are up 12% since end April, when

the rights issue was first proposed.

“The success of Reliance’s rights issue,

seen in the context of the prolonged

nationwide lockdown necessitated by

the Covid-19 pandemic, is also a vote of

confidence, by domestic investors, foreign

investors and small retail shareholders, in

the intrinsic strength of the Indian economy,”

Ambani said.

Axis, Bank of America, BNP Paribas, Citigroup, Goldman Sachs, HDFC Bank, HSBC,

ICICI Securities, JM Financial, JP Morgan, Kotak, Morgan Stanley and SBI Capital Markets are the banks on the rights issue.

S ANURADHA

India equity and equity-related1/1/20 – 31/5/20

Amount


1 JP Morgan 5 2,771.1 26.3

2 HSBC 4 1,688.5 16.0


4 Bofa Sec 4 861.8 8.2

5 Axis 4 632.3 6.0

6* Citigroup 3 503.4 4.8

6* Goldman Sachs 3 503.4 4.8

8 BNP Paribas 2 454.1 4.3

9 ICICI Bank 2 320.2 3.0

10 Kotak Mahindra 2 315.3 3.0

Total 31 10,551.9

Source: Refinitiv data SDC Code: C1L


On Wednesday, Housing Development Finance Corp sold 26m HDFC Life shares at Rs490 each for a total Rs13bn.

The shares were sold on the local stock exchange to a handful of investors. Citigroup worked on the transaction.

These shares represented 1.29% of the share capital, cutting HDFC’s stake to 50% in accordance with a request last month from the Reserve Bank of India to do so by December 16.

HDFC Life listed in a Rs85bn IPO in 2017 at Rs290 per share.

INDONESIA


› INDONESIA EYES H2 SAMURAI ISSUE

The REPUBLIC OF INDONESIA aims to sell Samurai bonds in the second half of 2020, Reuters reported.

“We have started to do the preparation for Samurai bond (issuance) in Japan,” Reuters quoted Deni Ridwan, director of sovereign bonds at the finance ministry, as saying in a video call.

Sources told IFR Indonesia had planned to return to the Samurai market last month but had decided to hold off.

The sovereign is a regular Samurai bond issuer having visited the market once a year since 2015. Last year it raised a massive ¥177.7bn (US$1.62bn) from a six-tranche offering of three, five, seven, 10, 15 and 20-year bonds.

› ADIRA FINANCE EYES TWO-TRANCHER

ADIRA DINAMIKA MULTI FINANCE is planning to raise Rp1.5trn (US$106m) from two-part

bonds, according to a term-sheet.The issue includes a Rp200bn sukuk

tranche. The Indonesian consumer finance firm

has announced indicative yield ranges of 6.5%–7.5% for a 370-day piece and 7.5%–8.5% for a three-year portion for both tranches.

Pefindo has assigned a AAA rating to the bonds.

The books opened on June 3 and will close on June 16.

Mandiri Sekuritas, RHB Sekuritas, OCBC Sekuritas, Trimegah Sekuritas and Indo Premier Sekuritas are the lead arrangers for the bond offering.

SYNDICATED LOANS

› TIPHONE SEEKS DEBT RESTRUCTURING

TIPHONE MOBILE INDONESIA is restructuring its debt after lenders called a default on a US$181m-equivalent three-year loan signed in June 2018.

The company missed its interest payment due in March.

Tiphone has hired a financial adviser, which is expected to provide a restructuring proposal to lenders soon.

Bank Central Asia, Bank CIMB Niaga and Standard Chartered were the mandated lead arrangers and bookrunners of the bullet deal, which attracted 10 banks in general syndication.

The deal, which comprises a Rp1.25trn (US$88m) tranche and a US$93m portion, offers an interest margin of 300bp over Jibor for the onshore portion and 200bp over Libor for the offshore piece.

Lenders were offered a top-level all-in pricing of 218.2bp through a 45bp

management fee for the offshore tranche. The Jakarta-listed borrower sells mobile

phones, SIM cards, accessories, spare parts and offers phone repair services. It also provides content through its units.

› INDOMOBIL FINANCE PREPS LOAN

INDOMOBIL FINANCE INDONESIA is expected to launch into general syndication in the coming weeks a US$240m three-year facility for which it mandated eight banks in early April.

Bank of China, Korea Development Bank, Maybank, Mizuho Bank, OCBC, RHB Bank, Sumitomo Mitsui Banking Corp and Sumitomo Mitsui Trust Bank are the mandated lead arrangers and bookrunners of the amortising loan, which has an average life of 1.625 years.

The borrowing is Indomobil Finance’s second visit to the syndicated loan markets following a slightly larger loan in June last year.

That three-year loan was nearly tripled to US$290m from US$100m after nine banks joined in general syndication.

The borrowing paid a top-level all-in pricing of 135bp (onshore) and 125bp (offshore) based on interest margins of 105bp (onshore) and 95bp (offshore) over Libor respectively, and an average life of 1.625 years.

ANZ, CTBC Bank, DBS Bank, OCBC Bank, Sumitomo Mitsui Banking Corp, Taipei Fubon Commercial Bank and United Overseas Bank were the MLABs on that loan.

Pricing on the 2019 deal was tighter than a US$275m three-year amortising loan completed in July 2018, which offered a top-level all-in pricing of 133.4bp (onshore) and 123.4bp (offshore) based on margins of 110bp (onshore) and 100bp (offshore) over Libor. The facility had an average life of 1.625 years.

Top bookrunners of Indonesian rupiah bonds1/1/20 – 31/5/20

Amount

Name Issues Rp(m) %

1 Bank Mandiri 15 3,936,695.0 10.3

2 Trimegah Sec 13 3,762,601.7 9.8

3 JP Morgan 7 3,011,485.9 7.9

4 Indo Premier Sec 12 2,958,336.7 7.7

5 BCA Sekuritas 9 2,713,204.7 7.1

6 Pt Cgs-Cimb Sekuritas 8 2,485,015.8 6.5

7 DBS 6 2,379,025.0 6.2

8 Danareksa 8 2,250,345.8 5.9

9 Bahana Sec 8 2,182,774.5 5.7

10 Bank Negara Indonesia 10 2,141,419.2 5.6

Total 56 38,347,139.2

*Market volume

Proportional credit


Top bookrunners of Indonesia syndicated loans1/1/20 – 31/5/20

Amount

Name Deals US$(m) %


2 SMFG 4 406.6 12.7


4 CTBC Financial 3 292.2 9.2

5* UOB 2 254.0 8.0

5* MUFG 2 254.0 8.0

7 DBS 3 158.2 5.0

8 Maybank 2 133.2 4.2

9 Taishin Financial 2 98.2 3.1

10* BNP Paribas 1 73.2 2.3

10* Deutsche 1 73.2 2.3

10* Rabobank 1 73.2 2.3

10* First Abu Dhabi Bank 1 73.2 2.3

Total 8 3,191.1

Based on market of syndication and market total

Proportional credit


Indonesia global equity and equity-related1/1/20 – 31/5/20

Amount


1 UOB 6 51.8 20.6

2 Jasa Utama Capital 4 25.9 10.3

3 Mirae Asset Daewoo 2 25.4 10.1


5 Pan Indonesia Bank 5 15.1 6.0

6 Profindo Intl Sec 4 14.1 5.6

7* Pan Pacific Intl 3 13.2 5.2

7* Erdikha Elit 3 13.2 5.2

7* Mahanusa Capital 3 13.2 5.2

10* Makinta Securities 1 8.0 3.2

10* Surya Fajar Capital 3 8.0 3.2

Total 26 251.2



COUNTRY REPORT JAPAN

The borrower, controlled by the Indomobil Group, provides motor vehicle and heavy-duty equipment financing services.

› TRANS RETAIL DRAWS 18 LENDERS

TRANS RETAIL INDONESIA has closed syndication of a US$740m-equivalent five-year dual-currency loan with 18 lenders joining.

Bank of East Asia, Cathay United Bank, China Citic Bank, Shanghai Pudong Development Bank and Taichung Commercial Bank committed a total of €125m in further rounds of syndication after the deal had already attracted 13 lenders in March.

Bank BTPN, BNP Paribas, CTBC Bank, DBS Bank, Deutsche Bank, First Abu Dhabi Bank, Maybank, Rabobank, Standard Chartered, Sumitomo Mitsui Banking Corp and Taishin International Bank were the mandated lead arrangers, bookrunners and underwriters of the deal, which comprises a US$90m term loan (facility A) and a €593m (US$650m) portion (facility B).

Facility A was not syndicated. Facility B offered a top-level all-in pricing of 303.75bp via an initial interest margin of 275bp over Libor and an average life of four years.

After 12 months, the margin will be based on the borrower’s consolidated net debt to consolidated Ebitda.

Proceeds of the loan will be used for refinancing and general corporate purposes.

The borrower’s last loan was a five-year amortising financing in 2017, which offered a top-level all-in pricing of 380bp based on an interest margin of 350bp over Libor and a four-year average life.

That deal saw participation from 31 banks, including MLABs Bank of China, BNP, CTBC, Deutsche, Industrial and Commercial Bank of China, Maybank and SMBC.

Trans Retail is a unit of Indonesian conglomerate CT Corp and operates hypermarkets, supermarkets, and cash-and-carry stores under the Carrefour and TRANSmart brands.


› FIF RAISES US$280M CLUB

FEDERAL INTERNATIONAL FINANCE has signed a US$280m one-year facility with a dozen lenders, returning to the loans market after a year and defying weaker market sentiment caused by the coronavirus pandemic.

ANZ, Bank of China (Hong Kong), BNP Paribas, Cathay United Bank, DBS Bank, Korea Development Bank, Mizuho Bank, MUFG Bank,

OCBC, Shinsei Bank, Sumitomo Mitsui Banking Corp and Taipei Fubon Commercial Bank are lenders of the facility, which closed as a club.

SMBC was the coordinating bank and is the facility agent of the deal, which will be used for general corporate purposes.

FIF last raised a US$200m three-year club with 10 banks in May 2019. ANZ, BOC, Citigroup, CTBC, DBS, HSBC, KDB, OCBC, Shinsei Bank and Standard Chartered were the lenders.

The borrower, a provider of motorcycle financing services, is a unit of Astra International.

› ANGKASA PURA II LANDS BILATERAL

Indonesian state-owned airport operator ANGKASA PURA II has obtained a bilateral loan of up to Rp750bn from Bank Negara Indonesia.

The credit agreement was signed on May 29 and the proceeds will be used for general corporate purposes, the borrower said in a press release on Saturday.

AP II manages 19 airports across the Indonesian archipelago, including the Soekarno-Hatta airport that serves the capital Jakarta.

In May the company reduced expected capital expenditure for the year from Rp7.8trn to Rp1.4trn to cut costs following the disruption in operations because of Covid-19.

RESTRUCTURING

› GARUDA WINS ENOUGH SUPPORT

GARUDA INDONESIA said it had received sufficient support from holders of its US$500m 5.95% sukuk due on June 3 to amend the terms, a week ahead of a consent solicitation deadline.

The Indonesian airline is proposing to extend the maturity by three years and waive covenants until operations return to normal after the coronavirus pandemic caused airline passenger volumes to slump.

Garuda said holders of 89% of the sukuk had approved the proposal by the early-bird deadline of June 1.

It will pay 1.25% of principal amount to holders who consent to the proposal by June 1, if the measures are passed. This payment drops to 0.5% for those who give their approval after June 1 but by June 8.

Garuda, which is 60% state-owned, is in discussions about possible government support. The airline said the structure and details of the potential government support package are still under discussion, though it expects that, if this support came in the

form of debt, the repayment would be due after the restructured sukuk matures in June 2023.

PJT Partners is financial adviser to Garuda and Allen & Overy is legal adviser.

Clifford Chance is legal adviser to an ad hoc committee of investors that holds 28% of the sukuk and intends to vote in favour of the proposal.

To pass, holders of 75% of the sukuk need to vote at a meeting, and 75% of those present must approve the measures.

JAPAN


› MUFG FUNDS COVID-19 RECOVERY

MITSUBISHI UFJ FINANCIAL GROUP (A1/A–/A–) last Tuesday priced a €500m (US$561m) four-year Sustainability bond that will be used to support Covid-19 recovery efforts, in the first deal of its kind from Japan.

The senior unsecured Reg S notes priced at par to yield 0.978% or mid-swaps plus 128bp, inside initial guidance of 160bp area.

Morgan Stanley and MUFG were joint bookrunners.

The use of proceeds includes financing and refinancing to small and medium-sized businesses and sole proprietors hit by the spread of viruses such as Covid-19, as well as loans to medical care facilities and pharmaceutical companies.

MUFG last month expanded the scope of its green, social and sustainability bond framework to allow it to issue Covid-19 relief bonds. Sustainalytics has provided a second-party opinion on the framework.

Last year, MUFG said it aimed to provide ¥20trn (US$183bn) of sustainable finance between FY2019 and FY2030, of which ¥8trn is targeted for environmental projects.

SYNDICATED LOANS

› ASAHI TAPS ¥400BN HYBRID FOR CUB BUY

ASAHI GROUP HOLDINGS signed a ¥400bn (US$3.72bn) 60-year subordinated loan last Monday as a back-up line for refinancing a bridge loan that funded its purchase of Anheuser-Busch InBev’s Australian subsidiary.

The loan, which can be repaid after five years, carries a 30bp step-up in the interest margin after 10 years and a 70bp step-up


after 25 years, the Japanese beverage company said in a statement. The initial margin is undisclosed.

The hybrid loan is a back-up plan for equity issuance the company is planning as a part of the refinancing, which also includes a ¥300bn 60-year subordinated bond.

Japan Credit Rating Agency has assigned a AA– rating to the loan and is treating it as 50% equity, as is Rating & Investment Information.

The two rating agencies are also treating the subordinated bond as 50% equity.

On May 28, Sumitomo Mitsui Banking Corp completed the ¥1.185trn one-year bridge for the A$16bn (US$11bn) acquisition of Carlton & United Breweries.

The acquisition was completed on Monday, delayed from the original target of the first quarter of 2020 due to the late regulatory clearance from the Australian Foreign Investment Review Board.

Asahi’s last major acquisition was in early 2017 when it paid €9.85bn (US$11.1bn) to buy AB InBev’s eastern European business as well as the Grolsch and Peroni brands.

The Japanese company raised €7.4bn in bilateral bridge loans from SMBC and Mizuho Bank to finance that acquisition.

› BOREALIS RETURNS WITH ¥15BN SAMURAI

Austria’s BOREALIS is returning to tap Japanese liquidity with a ¥15bn five-year Samurai borrowing following its debut Ninja loan last September.

MUFG has launched the loan into general syndication with closing targeted next month.

The loan pays an all-in of 62bp via a margin of 60bp over yen Libor and a 10bp fee.

Pricing is richer than the borrower’s US$221m-equivalent five-year Ninja

loan closed last September. MUFG also led that debut loan, which attracted 17 lenders and was increased from US$149m-equivalent.

The loan was split into US$175m and ¥5bn tranches paying interest margins of 100bp and 45bp over Libor, respectively.

Despite the richer pricing on the latest deal, it might not attract some of the existing lenders as they are focused more on supporting local clients affected by the coronavirus pandemic, sources said.

Yen-denominated deals syndicated in Japan for overseas borrowers are classified as Samurai loans. Ninja deals include Samurai loans and can be denominated in any currency.

Borealis produces polyolefins, base chemicals, and fertilisers. The company is 64%-owned by Abu Dhabi’s Mubadala, with the remaining 36% belonging to Austria’s OMV.

› TAIYO TAPS ¥28BN LOAN

TAIYO HOLDINGS is raising a ¥27.6bn unsecured loan for growth investments, the Tokyo Stock Exchange-listed chemical company said in a statement on Monday.

Bank of Kyoto, Mizuho Bank, Norinchukin Bank, Resona Bank, Sumitomo Mitsui Banking Corp and two other banks are the lenders.

Funding is slated this month.In April, the company bought

pharmaceutical assets Inderal, Tenormin, Seloken and Omepralin Japan from AstraZeneca for ¥5.9bn.

Taiyo also plans to build new manufacturing plants for electronic parts in Vietnam and South Korea.

The borrower last tapped the syndicated loan market in September 2019 when it raised ¥40bn in bilateral loans to back its ¥37.6bn purchase of a pharmaceutical plant from a subsidiary of Daiichi Sankyo.

› GURUNAVI DOUBLES COMMITMENT LINES

GURUNAVI has increased its existing commitment lines to ¥12bn from ¥6bn to deal with the impact of the coronavirus

pandemic, the Tokyo-listed restaurant guide website operator said in a statement on May 29.

Mizuho Bank, MUFG and Sumitomo Mitsui Banking Corp are providing the one to two-year loans as bilaterals.

MALAYSIA


› SARAWAK ENERGY POWERS UP SUKUK

SARAWAK ENERGY has increased the issue size of a dual-tranche sukuk to M$1.9bn (US$445m) on robust demand from investors seeking diversification from government-guaranteed deals.

The Malaysian hydropower producer, owned by the state of Sarawak, last Wednesday priced a M$650m 10-year tranche at par to yield 3.3% and a M$1.25bn 15-year tranche at 3.65%.

Both tranches priced in line with final guidance, but the issuer managed to tighten the 10-year notes inside initial price guidance of 3.35%–3.45%. Sarawak Energy went for size in the 15-year tranche, pricing in the middle of IPG of 3.6%–3.7%.

The initial issue size target was M$1.5bn. Settlement is slated for the week of June 15 with the notes to be drawn from a M$15bn sukuk programme.

RHB Investment Bank is principal adviser and lead arranger for the programme and was joint lead manager and bookrunner for the deal with AmInvestment Bank, CIMB, Kenanga Investment Bank and Maybank.

The sukuk is rated AAA by RAM to reflect Sarawak Energy’s monopoly in the generation, transmission, distribution and retail sales of electricity in the state.

Top bookrunners of all Malaysian ringgit bonds1/1/20 – 31/5/20

Amount

Name Issues M$(m) %

1 CIMB Group 26 10,341.1 31.9

2 Maybank 20 5,805.0 17.9

3 RHB 12 4,196.9 12.9

4 AMMB 9 3,269.8 10.1

5 K&N Kenanga 19 2,408.3 7.4

6 Hong Leong Financial 6 1,645.6 5.1

7 Affin 7 1,345.0 4.2


9 Public Bank 7 774.0 2.4

10 OCBC 3 475.9 1.5

Total 75 32,421.2

*Market volume

Proportional credit


Top bookrunners of Malaysia syndicated loans1/1/20 – 31/5/20

Amount

Name Deals US$(m) %

1 Maybank 1 300.0 38.5


3* AMMB 1 96.7 12.4

3* Bank Islam Malaysia 1 96.7 12.4

3* HSBC 1 96.7 12.4

Total 3 778.9


Proportional credit


Malaysia global equity and equity-related1/1/20 – 31/5/20

Amount


1 CIMB Group 5 268.6 32.9


3 RHB 5 85.4 10.5

4 Mercury Sec 10 39.2 4.8

5 Affin 1 34.9 4.3

6* Astrum Capital 1 16.1 2.0

6* Zhongtai Sec 1 16.1 2.0

8 UOB 9 11.8 1.4

9 M and A Sec 6 10.6 1.3

10 KAF Investment Bank 3 10.5 1.3

Total 56 816.5



COUNTRY REPORT NEW ZEALAND

› UEM SUNRISE TAKES THREE

UEM SUNRISE, rated AA– by Marc, has raised M$270m from an offering of three-year sukuk priced at par to yield 4.00%.

The final distribution rate was flat to the price guidance shown during bookbuilding on May 29. Demand was healthier than expected, allowing the Malaysian property developer to lift its minimum issue size from M$200m, said a banker on the deal.

CIMB and Maybank were joint lead managers and bookrunners. Settlement is scheduled for June 10 and the sukuk will be issued off a M$2bn Islamic MTN programme.

State-owned investment fund Khazanah Nasional has a 66% stake in UEM Sunrise.

MONGOLIA


› MONGOLIA WELCOMES NOMAD BOND

The Triple A rated ASIAN DEVELOPMENT BANK has raised 21bn Mongolian tugrik, equivalent to US$7.5m, in the first offshore bond offering in the currency.

The five-year “nomad” bond priced at 10.1%. It is denominated in tugrik but settled in US dollars.

ING Bank underwrote the issue, which was sold to a European asset manager.

Proceeds will fund the ADB’s gender-inclusive project to expand milk sourcing and processing capacity at dairy company Milko, a subsidiary of food and beverage group Teso.

Mongolian domestic government bonds only go up to three years, and there has not been a new issue since September 2017, so the ADB bond will provide a fresh benchmark for the currency.

NEW ZEALAND


› KBN RAISES NZ$250M FROM KAURI

Norwegian local government funding agency KOMMUNALBANKEN (KBN), rated Aaa/AAA (Moody’s/S&P), accessed the Kauri market for the first time in almost two years last Wednesday with a NZ$250m (US$160m) five-year sale via joint lead

managers ANZ and TD Securities. The 0.75% June 12 2025s priced at

99.35573 for a yield of 0.882%, in line with mid-swaps plus 52bp guidance and 47.4bp over the April 2025 NZGB.

› RENTENBANK OPENS 2025 LINE

Federal Republic of Germany-guaranteed agribusiness agency RENTENBANK (Aaa/AAA/AAA) issued a NZ$300m five-year Kauri bond on May 26, via sole lead manager BNZ.

The 0.75% June 9 2025s priced at 99.97551132 for a yield of 0.755%, 47bp wide of mid-swaps and 47.5bp over the April 2025 NZGB.

Rentenbank previously sold a NZ$250m five-year Kauri bond back in January 2018.

SYNDICATED LOANS

› ABANO PAYS UP FOR COVENANT RELIEF

ABANO HEALTHCARE GROUP’s banks have agreed to amend and extend its existing loans of NZ$169m (US$106m) to provide the company with flexibility to pursue various transaction possibilities as well as initiatives to optimise its existing operations.

The maturities of the loans will now come due between March 2022 and July 2023 after the 12-month extension, Abano said in its filing to the New Zealand Exchange on Tuesday.

The banks have also granted relief on financial covenants through to November 2021.

As a result of the extension and covenant relief pricing on the facilities has increased, the New Zealand-listed dental service company said.

Abano’s net bank debt as at May 31 was approximately NZ$135m.

Its dental practices in both Australia and New Zealand have now re-opened since the easing of Covid-19 restrictions in mid-May, according to the filing.

In late March, private equity firm BGH Capital and Ontario Teachers’ Pension Plan terminated their proposed acquisition of Abano, citing a material adverse change in the wake of the coronavirus pandemic.

The move was a blow to lenders eyeing a NZ$190m equivalent five-year loan backing the proposed buyout that had been in syndication since November.

Royal Bank of Canada led the loan, which was denominated in Australian and New Zealand dollars and offered opening interest margins of 425bp over BBSY/BKBM for an amortising term tranche and a revolving credit portion, and 400bp for a bullet term tranche.

The sponsors had proposed to acquire

Abano via an entity called Adams NZ Bidco for an enterprise value of NZ$300m.

› NZME EXTENDS NZ$110M LOAN

New Zealand media company NZME has agreed to extend its existing loans with Westpac New Zealand and Commonwealth Bank of Australia by 18 months to July 1 2023 from January 1 2022.

The new NZ$110m facilities will step down each year to a level of A$75m at December 31 2022.

This provides the borrower with significant headroom over a net debt position of NZ$62m as at May 31 and aligns with the company board’s focus on overall debt reduction, the NZME said in a filing to the New Zealand Exchange on Wednesday.

The line fee savings from the reduction in facility limits partially offset an interest margin increase of around 90bp, the filing said. The facilities recognise the current impact of the coronavirus pandemic and provide additional covenant headroom over the term of the financings.

In 2016, NZME tapped a NZ$250m syndicated loan to partially fund a merger with Fairfax Media’s New Zealand business. The loan comprised a NZ$240m revolving credit facility, of which NZ$90m is new money to fund the merger, and a NZ$10m working capital tranche. Westpac committed NZ$100m of the revolver and provided the entire working capital tranche, while Bank of New Zealand and Commonwealth Bank of Australia provided NZ$70m each in the revolver.

Top bookrunners of New Zealand syndicated loans1/1/20 – 31/5/20

Amount

Name Deals US$(m) %

1 ANZ 6 1,296.1 54.3

2 Citigroup 2 449.7 18.8

3 CBA 1 365.7 15.3

4 ING 1 184.0 7.7

5 MUFG 1 93.0 3.9

Total 11 2,388.5


Proportional credit


Top bookrunners of all Pakistani rupee bonds1/1/20 – 31/5/20

Amount

Name Issues Pkr(m) %

1 JP Morgan 1 1,549.9 100.0

Total 1 1,549.9

*Market volume

Proportional credit



PHILIPPINES


› METROBANK ISSUES 1.25YR BONDS AT 3%

METROPOLITAN BANK & TRUST has raised Ps10.5bn (US$210m) from one-year three-month bonds at 3%, payable quarterly, according to a filing on the Philippine Stock Exchange.

The Philippine bank cut short the offer period scheduled for June 3-16, closing the books within a day of opening on the back of strong demand from institutional and retail investors.

This the sixth issue under Metrobank’s Ps100bn bond programme approved by its

board of directors two years ago.First Metro Investment Corp, ING Bank NV

(Manila branch) and Standard Chartered Bank were joint lead arrangers.

Metrobank has raised Ps70.5bn from peso bonds since November 2018.

SINGAPORE


› SINGTEL COVERED 5.5 TIMES

SINGAPORE TELECOMMUNICATIONS has printed a US$750m 1.875% 10-year bond after receiving final orders of more than US$4.1bn from 225 accounts.

Asia took 83% and Europe took the rest of the Reg S notes. Fund managers bought 45%, insurers 21%, banks 19%, public sector and pension funds 12% and private banks 3%.

The bonds priced at 99.313 to yield 1.951% or Treasuries plus 123bp, the tight end of final guidance and inside initial guidance of plus 170bp area.

Singtel Group Treasury is the issuer and Singapore Telecommunications is the guarantor.

Proceeds will be used to fund regular business activities.

Moody’s expects Singtel to use all of

the proceeds to refinance maturing debt. Singtel has about S$4bn in debt, including lease liabilities, maturing over the next 12 months as of the end of March, according to the rating agency.

Moody’s does not expect a meaningful improvement in Singtel’s underlying Ebitda over the next 12-18 months as intense price competition in Singapore and Australia continues to drive down profitability.

The new notes have expected ratings of A1/A (Moody’s/S&P), on par with the guarantor. Singtel is 52.5%-owned by Temasek Holdings, which is wholly owned by Singapore’s government.

Citigroup, DBS Bank and HSBC are joint bookrunners.

› STARHILL FORAYS FOR FIVERS

Singapore-listed STARHILL GLOBAL REIT last Monday sold S$100m (US$71m) of five-year bonds priced at par to yield 3.15%, or a spread of 262bp over Singapore dollar SOR.

The final pricing tightened from initial guidance in the 3.35% area, suggesting that the issuer decided to go with a lower rate over a larger deal size. Some S$225m of orders were placed by 26 accounts. Fund managers, insurance companies and banks bought 90% of the deal, with agency and corporate investors allocated 4% and private banks 6%.

Starhill has three outstanding bonds – a 3.5% note due 2021 that was indicated yesterday at 100.97 with a yield of 2.17%, a 3.4% note due 2023 quoted at 101.125 with

Top bookrunners of all Philippine peso bonds1/1/20 – 31/5/20

Amount

Name Issues Ps(m) %

1 HSBC 3 50,554.3 50.1

2 ING 2 18,448.0 18.3


4 BDO Unibank Inc 3 3,857.1 3.8

5 Unicapital Inc 1 3,700.0 3.7

6* BPI 2 2,357.1 2.3

6* Security Bank 2 2,357.1 2.3

6* RCBC 2 2,357.1 2.3

6* China Bk Capital Corp 2 2,357.1 2.3

10* Philippine National 1 2,142.9 2.1

10* Philippine Commercial Capital 1 2,142.9 2.1

Total 10 100,822.3

*Market volume

Proportional credit


Top bookrunners of Philippines syndicated loans1/1/20 – 31/5/20

Amount

Name Deals US$(m) %

1* Security Bank 1 531.5 25.0

1* Citigroup 1 531.5 25.0

1* ING 1 531.5 25.0

1* Union Bank of the Philippines 1 531.5 25.0

Total 1 2,126.2


Proportional credit


Philippines global equity and equity-related1/1/20 – 31/5/20

Amount


1* BDO Unibank Inc 1 125.7 50.0

1* HSBC 1 125.7 50.0

Total 1 251.3


Top bookrunners of all Singapore dollar bonds1/1/20 – 31/5/20

Amount

Name Issues S$(m) %

1 DBS 21 2,905.8 51.3

2 UOB 11 1,117.5 19.7

3 OCBC 8 800.0 14.1


5 Maybank 2 233.3 4.1

6 HSBC 1 150.0 2.7


8* SPDB 1 2.7 0.1

8* ICBC 1 2.7 0.1

8* China Minsheng 1 2.7 0.1

8* Everbright Sec 1 2.7 0.1

8* GF Sec 1 2.7 0.1

8* Cathay Financial 1 2.7 0.1

8* Hana Financial 1 2.7 0.1

8* Admiralty Harbour Capital 1 2.7 0.1

8* AMTD Global Markets 1 2.7 0.1


8* BEA 1 2.7 0.1

8* ZJKF Sec Investments HK 1 2.7 0.1

8* China Cinda 1 2.7 0.1

Total 27 5,670.3

*Market volume

Proportional credit


Top bookrunners of all Singapore dollar bonds

(non-domestic)1/1/20 – 31/5/20

Amount

Name Issues S$(m) %

1 OCBC 1 175.0 26.5

2 HSBC 1 150.0 22.7

3* Credit Suisse 2 112.5 17.0

3* DBS 2 112.5 17.0

5 UOB 1 75.0 11.4

6* SPDB 1 2.7 0.4

6* ICBC 1 2.7 0.4

6* China Minsheng 1 2.7 0.4

6* Everbright Sec 1 2.7 0.4

6* GF Sec 1 2.7 0.4

6* Cathay Financial 1 2.7 0.4

6* Hana Financial 1 2.7 0.4

6* Admiralty Harbour Capital 1 2.7 0.4

6* AMTD Global Markets 1 2.7 0.4


6* BEA 1 2.7 0.4

6* ZJKF Sec Investments HK 1 2.7 0.4

6* China Cinda 1 2.7 0.4

Total 5 660.3

*Market volume

Proportional credit



COUNTRY REPORT SINGAPORE

a yield of 3%, and a 3.14% note due 2026 seen at 99.50 with a yield of 3.23%.

Settlement was on June 5 with the unrated notes drawn from a S$2bn MTN programme. Proceeds will be used to refinance existing borrowings and fund capital expenditure, as well as for working capital needs.

Starhill Global REIT MTN will be the issuer and HSBC Institutional Trust Services Singapore, in its capacity as the REIT trustee, will be the guarantor. HSBC Institutional Trust Services Singapore is rated BBB by Fitch.

DBS and UOB were joint lead managers and bookrunners. Malaysia’s YTL Corporation is the sponsor of the REIT.

SYNDICATED LOANS

› AGROCORP WRAPS UP US$50M DEBUT BBL

Singapore-headquartered supply chain company AGROCORP INTERNATIONAL has signed a US$50m sustainability-linked loan, which is also the borrower’s debut borrowing base facility.

FMO and Rabobank are equally providing the SLL, with the former’s tranche covering prepayments and inventory, and the latter portion financing receivables, according to a press release on Tuesday.

Rabobank will also act as facility agent on the loan.

The five-year loan does not have interest-rate kickers for meeting sustainability targets, Agrocorp’s head of business

development Vishal Vijay told Basis Point via e-mail.

“Rather the interest rate reduction has already been built in and the sustainability goals are treated the same way that financial covenants would be,” he said.

The borrower benefits from the lower pricing from the signing of the loan and would work towards meeting the sustainability requirements throughout its tenor to avoid breaching covenants and default.

Agrocorp will work with consultancy firm Earth Systems to set and monitor

SIA rights alright but CB snubbed Equities Convertible bond issue subscribed 60% as investors hesitate to lock in funds

Shareholders put their weight behind

SINGAPORE AIRLINES’ S$5.3bn (US$3.8bn)

rights issue but cold-shouldered its S$3.5bn

mandatory convertible bond offer as it would

lock up investor funds.

Stock exchange data show that the country’s

largest-ever rights issue was 1.2x subscribed

with bids for 2.13bn shares against the 1.78bn

on offer. Some 67m rights that were not validly

taken up will be allotted to satisfy excess

applications. The MCB offer, however, was only

60% subscribed at S$2.08bn.

Sovereign wealth fund Temasek Holdings,

which holds 55.46% of SIA, is underwriting

the whole transaction.

An additional S$6.2bn of MCBs can be

issued within 15 months of shareholder

approval.

SIA will be using the money to fund capital

expenditure and operating cashflow at a time

when the Covid-19 pandemic has forced the

airline to ground most of its flights.

Bankers said that the share offer was

straightforward for equity investors, but that the

zero-coupon 10-year MCB was unattractive as

there are no immediate returns.

“The rights issue is a clear winner for

shareholders as they can make profits if they

sell the shares in the market now. However,

a zero-coupon MCB is only issuer-friendly

as they can be redeemed at any point by the

company. Equity investors would rather buy

a more liquid instrument,” an ECM banker

away from the deal said.

Such was the lack of interest in the MCB

that even SIA CEO Goh Choon Phong and

many other directors did not take up their

entitlements. “They are investors first and

directors later,” the ECM banker said.

SIA FARES BETTER THAN RIVALSThe shares have traded well since the closure

of the rights on May 28 and were up 15% as

of Thursday. “SIA is in a great position. It has

raised S$8bn now and has S$6.2bn of dry

powder left. Where else can you find such

support from owners?”, an aviation industry

source said.

In neighbouring Thailand, the government

has declined to give financial support to

state-owned Thai Airways International and

has referred it instead to a bankruptcy court

for restructuring. Indonesia’s Garuda, which

is 60% state-owned, is still in discussions

about possible government support and has

sought to restructure US$500m of debt in

the meantime. Malaysian Airlines has also

sought financial help from the government.

The SIA rights were sold in a 3-for-2 ratio at

S$3 each. The rights issue price was at a 54%

discount to the pre-deal close of S$6.50.

The ratio for the 10-year zero-coupon

MCBs was 295-for-100. If not redeemed

before maturity in 10 years, the MCBs will

be converted into new shares based on a

conversion price of S$4.84.

DBS Bank is the sole adviser and the joint

lead manager with Morgan Stanley.

S ANURADHA

Top bookrunners of all Singapore dollar

bonds (domestic)1/1/20 – 31/5/20

Amount

Name Issues S$(m) %

1 DBS 18 2,693.3 56.0

2 UOB 9 942.5 19.6

3 OCBC 7 625.0 13.0


5 Maybank 2 233.3 4.9


Total 21 4,810.0

*Market volume

Proportional credit


Top bookrunners of Singapore syndicated loans1/1/20 – 31/5/20

Amount

Name Deals US$(m) %

1 DBS 4 3,213.9 85.2

2* Standard Chartered 1 234.1 6.2

2* UOB 1 234.1 6.2

4* Maybank 1 44.5 1.2

4* Bank of China 1 44.5 1.2

Total 4 3,771.2


Proportional credit


Singapore global equity and equity-related1/1/20 – 31/5/20

Amount



2 DBS 3 966.2 27.0



5 UBS 2 138.0 3.9

6 UOB 3 99.2 2.8

7 HSBC 1 95.3 2.7

8* OCBC 1 42.6 1.2

8* CICC 1 42.6 1.2

8* CIMB Group 1 42.6 1.2

Total 19 3,581.3



sustainability targets and reporting requirements for the loan.

The borrower will use the working capital facility to implement a more sustainable food supply chain in emerging countries, starting with farmer training programmes in Myanmar in collaboration with FMO.

Agrocorp has operations in over 20 countries, and specialises in agricultural commodities such as pulses, wheat, rice, oilseeds, sugar, and edible nuts.

RESTRUCTURING

› KRISENERGY IN DOUBT AS GOING CONCERN

Independent auditor Deloitte & Touche has flagged a material uncertainty that could cast doubt on KRISENERGY’s ability to continue as a going concern.

The auditor’s opinion was highlighted in a statement to the Singapore Exchange from the cash-strapped Singaporean oil exploration and production company.

Deloitte & Touche noted that the KrisEnergy group had losses of US$168.9m in the year ended December 31 2019, leading to a capital deficiency of US$145.9m and a net current liability position of US$531.7m at the end of December. It also said principal and interest payments on some US$310.7m of debt were not paid.

As of the end of December, KrisEnergy’s debt comprised a US$192.4m revolving credit facility from DBS Bank due June 30 2020, US$34.4m of unsecured terms loans, S$130m of 4% senior bonds due 2022, S$200m of 4% senior bonds due 2023, and S$139.5m of senior zero coupon bonds due 2024. The company did not make principal and interest obligations on all of the debt, except for partial repayments on the RCF.

The company said it was confident it

could continue as a going concern based on a US87m project financing loan granted by Kepinvest Singapore, a subsidiary of Keppel, as well as plans to restructure or extend its debt obligations, or both. Drew & Napier is legal adviser and Houlihan Lokey Singapore is financial adviser to KrisEnergy.

The Singapore High Court is due to hear on June 18 an application by KrisEnergy to extend a moratorium against legal proceedings to August 27.

SOUTH KOREA


› DOOSAN INFRACORE HIRES FOR DOLLARS

DOOSAN INFRACORE has mandated KDB Asia, Nomura, Standard Chartered Bank and UBS for a proposed US dollar bond offering that is expected to be guaranteed by Korea Development Bank, according to a market source.

The Korean construction equipment manufacturer has a US$300m KDB-backed bond due July and said it is planning to refinance the notes with new bonds with a similar structure and format, without confirming the banks hired for the deal.

The proposed new bonds are expected to be rated Aa2/AA/AA–, on par with the guarantor.

Doosan Infracore’s planned bond issue differs from that of another Doosan Group subsidiary, DOOSAN HEAVY INDUSTRIES

AND CONSTRUCTION, which asked Export-Import Bank of Korea (Kexim) to redeem a US$500m bond due last April on its behalf. The policy bank has converted its guarantee of the now expired bonds into a loan.

Doosan Infracore is the largest

shareholder of Doosan Bobcat, rated Ba3 by Moody’s. Doosan Bobcat printed a US$300m five-year non-call two bond late last month, on which pricing tightened 62.5bp from guidance. Wholly owned subsidiary Clark Equipment Company was the issuer.

Doosan Bobcat has a dominant position in the compact farm and construction equipment market in North America, underpinned by its strong brand equity and extensive dealer network.

› KEPCO HIRES FOR GREEN DOLLARS

KOREA ELECTRIC POWER CORPORATION, rated Aa2/AA (Moody’s/S&P), has mandated Citigroup, HSBC and JP Morgan for a proposed US dollar 144A/Reg S senior unsecured green bond offering with a short to intermediate maturity.

The banks started hosting fixed income investor calls on June 4.

Kepco previously visited the international bond market in June last year with a debut green bond, which was its first offshore deal for nearly nine years.

The company is the near-monopoly operator of South Korea’s electricity grid and distributes power it purchases from its power generating subsidiaries. The Korean government holds a 51% stake in Kepco.

› LH PRINTS SWISSIE

KOREA LAND AND HOUSING (Aa2/AA/AA–) on Wednesday priced a SFr200m (US$208m) sustainable five-year bond in a deal that closed twice subscribed.

The bond priced at par to yield 0.1925%, equivalent to mid-swaps plus 75bp, the tight end of 75bp–80bp guidance.

Pricing was estimated to come around 10bp inside other Korean Swiss franc bonds.

UBS was sole bookrunner.State-owned LH builds affordable

housing, and develops residential areas and industrial complexes.

TAIWAN


› FADB SELLS US$500M FORMOSA BOND

FIRST ABU DHABI BANK has priced a US$500m 30-year non-call five zero coupon Formosa bond at par to yield 3.7%.

The senior unsecured notes have expected ratings of Aa3 by Moody’s and will be listed in Taipei.

Top bookrunners of all South Korea Won bonds1/1/20 – 31/5/20

Amount

Name Issues Won(m) %

1 NH Inv & Sec 230 14,608,000.0 18.0

2 KB Financial 212 13,128,000.0 16.2

3 Korea Investment 105 7,552,640.0 9.3

4 DB Financial Invest 68 6,732,300.0 8.3

5 Kyobo Life 139 6,344,011.0 7.8

6 Kiwoom Sec 63 5,306,077.0 6.5

7 Hana Financial 31 5,083,000.0 6.3

8 Hanyang Corp 71 4,129,300.0 5.1

9 SK Sec 53 3,811,000.0 4.7

10 Mirae Asset Daewoo 59 3,638,000.0 4.5

Total 1,651 81,263,268.0

*Market volume

Proportional credit


South Korea global equity and equity-related1/1/20 – 31/5/20

Amount


1 UBS 2 501.2 22.2

2* Citigroup 2 250.4 11.1

2* Morgan Stanley 2 250.4 11.1

4 Shinhan Financial 5 151.4 6.7

5 Korea Investment 2 146.8 6.5

6 Hana Financial 1 137.7 6.1

7 JP Morgan 1 136.7 6.1

8 Mirae Asset Daewoo 3 131.3 5.8

9 KB Financial 3 106.8 4.7

10 Goldman Sachs 1 100.4 4.5

Total 28 2,259.0

Source: Refinitiv data SDC Code: C1Q


COUNTRY REPORT TAIWAN

The bonds are callable at 119.921 in 2025 and at 297.4149 in 2050.

Standard Chartered Bank Taiwan was the bookrunner.

› CABEI CROSSES THE PACIFIC

The CENTRAL AMERICAN BANK FOR ECONOMIC

INTEGRATION (CABEI) has raised US$375m from a five-year floating-rate Formosa bond at three-month Libor plus 145bp, in line with final guidance.

The senior unsecured notes have expected ratings of Aa3/AA (Moody’s/S&P), on par with the issuer.

The Reg S deal will be listed in Taipei and Luxembourg and drawn off an MTN programme.

CTBC Bank and HSBC (Taiwan) were joint bookrunners.

SYNDICATED LOANS

› LENDERS PILE INTO YAGEO’S TAKEOUT

Electronic components maker YAGEO

CORP has increased its acquisition loan to NT$48.5bn (US$1.6bn) after attracting 16 lenders in general syndication.

Bank of Taiwan, DBS Bank, First Commercial Bank, Hua Nan Commercial Bank, Mega International Commercial Bank and Mizuho Bank were the mandated lead arrangers and bookrunners of the transaction, which was launched at an initial NT$45bn target in early May.

The loan now comprises a NT$41bn five-year tranche A, larger than NT$32bn initially, and a NT$7.5bn three-year tranche B that was cut from NT$13bn.

Yageo reduced the tranche B amount, citing its success in raising a US$180m zero-coupon five-year convertible bond on May 26.

The loan offers an interest margin of 50bp over Taibor, with a pre-tax interest rate floor set at 1.7%. Signing took place on Tuesday.

Proceeds will take out a US$1.1bn 12-month bridge loan Yageo signed in March to fund its US$1.8bn bid for its US rival Kemet Corp in a rare outbound acquisition from Taiwan.

Citigroup, DBS and MUFG were the MLABs on the bridge loan, which pays a margin of 60bp over Libor.

The acquisition is expected to wrap up in the third quarter this year as it has won approvals from Chinese and Taiwanese regulators as well as the Committee on Foreign Investment in the United States.

Yageo’s previous syndicated loan was a NT$10.8bn five-year borrowing in April 2017. Mega International Commercial Bank and Taipei Fubon Commercial Bank were the MLABs of the transaction, which pays a margin of 60bp over Taibor, with a pre-tax interest rate floor of 1.7%.


› TAIWAN COOPERATIVE TO JOIN BRIDGE

Taiwan Cooperative Bank is participating in bridge loans totalling NT$16bn to partially state-owned YANG MING MARINE TRANSPORT and private sector operator EVERGREEN MARINE to help the duo navigate difficult market conditions arising from the coronavirus pandemic.

The bank will join Mega International Commercial Bank in providing the two-year loans, which are expected to pay interest margins of around 1.1%.

Taiwan Cooperative is likely to provide NT$8bn to Yang Ming Marine, while Mega is expected to lend NT$8bn to Evergreen Marine.

The loans for the two container shippers are part of the Taiwanese government’s

NT$30bn bailout for the shipping industry announced in late April

The Ministry of Transportation and Communications unveiled new measures that include loans and tax relief for major shipping companies, with the Covid-19 pandemic hitting the global container industry.

The government will provide special funds as credit guarantees and it will also offer interest subsidies to companies.

Takeout financings from Yang Ming Marine and Evergreen Marine are expected at a later stage.

Yang Ming Marine and Evergreen Marine reported net losses of NT$818m and NT$442m respectively for the first quarter of 2020 because of the slow resumption of manufacturing after the Lunar New Year holiday in late January, coupled with a service and space reduction plan in response to Covid-19.

› LONG CHEN PAPER RAISES BIGGER REFI

Taiwan-listed LONG CHEN PAPER has increased its five-year refinancing to NT$4bn after attracting 10 lenders in general syndication.

First Commercial Bank was the mandated lead arranger and bookrunner on the facility, which was launched at an initial NT$3.2bn target in April.

Bank of Taiwan, EnTie Commercial Bank, Hua Nan Commercial Bank, Mega International Commercial Bank, Taiwan Cooperative Bank and Yuanta Commercial Bank joined as equal status arrangers.

The loan now comprises a NT$1.6bn term loan tranche A, a NT$2.4bn revolving credit tranche B and a NT$2.4bn guarantee tranche C. Tranches B and C cannot exceed NT$2.4bn combined, up from NT$1.6bn initially.

The loan offers interest margins of 67.5bp and 72.5bp over Taibor for tranches A and B, with a pre-tax interest rate floor

Top bookrunners of all Taiwan dollar bonds1/1/20 – 31/5/20

Amount

Name Issues NT$(m) %

1 Yuanta Financial 11 55,528.0 24.6

2 Masterlink Sec 7 37,241.7 16.5

3 Capital Sec 8 36,458.3 16.2

4 KGI Financial 6 24,550.0 10.9

5 Taishin Financial 4 21,633.3 9.6

6 HSBC 2 20,000.0 8.9

7 Fubon Financial 3 11,333.3 5.0

8 Sinopac Holdings 3 4,688.0 2.1

9 E Sun Financial 2 4,000.0 1.8

10 Mega Financial 1 3,000.0 1.3

Total 44 225,676.0

*Market volume

Proportional credit


Top bookrunners of Taiwan syndicated loans1/1/20 – 31/5/20

Amount

Name Deals US$(m) %


2 MUFG 2 1,336.1 11.1

3 First Financial 12 1,255.8 10.4

4 Taiwan Financial 7 1,160.7 9.6

5 SMFG 1 969.5 8.0

6 Chang Hwa Commercial 5 919.5 7.6

7 Taiwan Cooperative Finl 13 896.3 7.4

8 Mega Financial 7 622.1 5.2

9 Land Bank of Taiwan 5 519.8 4.3

10 Credit Agricole 1 430.0 3.6

Total 53 12,073.6


Proportional credit


Taiwan global equity and equity-related1/1/20 – 31/5/20

Amount


1 UBS 3 564.9 41.7

2 Citigroup 2 414.9 30.6


4 Yuanta Financial 4 80.0 5.9

5 Core Pacific Group 1 64.6 4.8

6 Concord Sec 1 15.2 1.1

7 Fubon Financial 2 10.9 0.8

8 Sinopac Holdings 2 10.1 0.7

9 Mega Financial 2 9.5 0.7

10 Grand Fortune Sec 3 6.8 0.5

Total 31 1,356.3



set at 1.7%. Tranche C offers an annual guarantee fee of 67bp.

Signing is slated for June 5.Funds are for refinancing a NT$4.2bn

five-year term loan completed in January 2016, as well as working capital purposes.

The borrower’s land and factory serve as security.

The borrowing marks Long Chen Paper’s second visit to the loan markets within a year.

Last October, Long Chen Paper tapped a NT$2.93bn seven-year loan from Bank of Taiwan, First Commercial Bank, Land Bank of Taiwan and Taiwan Cooperative Commercial Bank, according to Refinitiv LPC data. That deal pays 15bp over the two-year post office savings rate.


› UNISON SEEKS NT$3.5BN REFI

Cemetery developer and operator UNISON

DEVELOPING CO is seeking a NT$3.49bn five-year refinancing, returning with a smaller borrowing after more than 3.5 years.

Cathay United Bank is the sole mandated lead arranger and bookrunner of the loan, which comprises a NT$3.49bn tranche A and a NT$500m tranche B.

The latter tranche is targeted at bills finance firms.

The two tranches cannot exceed a combined NT$3.49bn.

The deal pays an interest margin of 265bp over three-month Taibor, with an after-tax interest rate floor set at 3%.

Lenders were invited to join at four ticket levels.

MLAs with commitments of NT$700m or more earn an upfront fee of 100bp, while managers with NT$500m–$699m receive 80bp. Participants taking NT$300m–$499m earn 50bp, while those with NT$200m–$299m receive 30bp.

Responses are due by July 3.Land belonging to the borrower will

serve as security.Funds are to refinance a NT$4.33bn five-

year borrowing signed in September 2016 and to expand a cemetery in Keelung, a city in northern Taiwan. Cathay also led that deal, which pays an identical margin as the latest deal despite having a lower interest rate floor of 2.75%.

Unison was established in 1999 and is headquartered in Taipei.

› MOTECH RETURNS WITH NT$2.5BN REFI

Solar cell maker MOTECH INDUSTRIES has launched a NT$2.5bn-equivalent three-year refinancing into general syndication, returning to the loan markets after more than two years.

Chang Hwa Commercial Bank is the sole mandated lead arranger and bookrunner of the transaction, which can be drawn in either NT or US dollars.

The facility comprises a NT$700m term loan tranche A, a NT$1.8bn term loan tranche B and a NT$400m-equivalent revolving credit facility tranche C. The three tranches cannot exceed NT$2.5bn.

Tranche A is secured by the borrower’s land and factory, while tranches B and C are unsecured.

The financing offers a two-year extension option at the end of the third year.

The NT dollar portion pays an interest margin ranging from 112bp to 142bp over Taibor, with a pre-tax interest rate floor set at 1.75%–1.9%.

The US dollar portion offers a margin from 135bp to 145bp over Libor. The borrower will pay any excess interest rate beyond a 30bp difference between TAIFX and Libor.

Banks are being invited to join as MLAs with commitments of NT$300m or more

for an upfront fee of 30bp, as arrangers with NT$200m–$299m tickets for a 25bp fee, or as participants with NT$100m–$199m tickets for a 20bp fee.

Responses are due on July 17.Funds are to refinance a NT$4.8bn-

equivalent five-year loan signed in January 2018. Bank of Taiwan, Chang Hwa and Mega International Commercial Bank were the MLABs on that deal, which pays identical margins as the latest deal.

Taiwan-listed Motech reported a net loss of NT$1.3 billion in 2019, compared with a loss of NT$6.8 billion a year earlier.

THAILAND


› PEA GOES LONG-DATED

PROVINCIAL ELECTRICITY AUTHORITY, rated AAA by Tris, has raised Bt5bn (US$157.7m) from the sale of 10 and 15-year bonds.

The Thai state-owned agency priced Bt1bn 10-year notes at par to yield 2.27% and Bt4bn 15-year notes at 2.71%.

Settlement was on May 29. CIMB Thai Bank and Krungthai Bank were joint lead managers and underwriters.

› KIATNAKIN BANK PRINTS SHORT

KIATNAKIN BANK has raised Bt2bn in its first bond offering of the year with one-year notes priced at par to yield 1.15%.

The notes were settled last Thursday via sole lead manager and underwriter Phatra Securities.

Kiatnakin Bank, rated A by Tris, has about Bt3.5bn of short-term bonds that will mature for the rest of June and an outstanding Bt4bn 1.93% bond due in August. Top bookrunners of all Thai baht bonds

1/1/20 – 31/5/20

Amount

Name Issues Bt(m) %

1 Kasikornbank 22 42,605.0 17.0

2 Bangkok Bank 21 40,594.4 16.2

3 Siam Commercial 8 25,036.7 10.0

4 UOB 15 20,554.2 8.2

5 Krung Thai 8 20,550.0 8.2

6 MUFG 7 18,416.7 7.3

7 CIMB Group 12 17,686.7 7.1

8 KTB Investment & Sec 8 9,446.0 3.8

9 Phatra Sec 7 9,192.3 3.7

10 Thanachart Capital 7 8,526.0 3.4

Total 74 250,786.2

*Market volume

Proportional credit


Top bookrunners of Thailand syndicated loans1/1/20 – 31/5/20

Amount

Name Deals US$(m) %

1* Siam Commercial 1 719.0 9.8

1* UOB 1 719.0 9.8

1* BNP Paribas 1 719.0 9.8

1* CCB 1 719.0 9.8

1* OCBC 1 719.0 9.8


1* Maybank 1 719.0 9.8

1* UBS 1 719.0 9.8

1* Mizuho 1 719.0 9.8

1* JP Morgan 1 719.0 9.8

Total 2 7,360.0


Proportional credit


Thailand global equity and equity-related1/1/20 – 31/5/20

Amount


1* Bualuang Sec 1 539.7 19.4

1* Phatra Sec 1 539.7 19.4



5 UBS 2 368.2 13.3


7 Gayang Sec 1 1.8 0.1

8 Hoodless Brennan & Partners 1 0.3 0.0

Total 5 2,778.1



COUNTRY REPORT VIETNAM

› SANSIRI PICKS PERPETUAL OPTION

SANSIRI has set pricing on a perpetual non-call five bond at par to yield 8.5% to raise up to Bt3bn.

The Thai property developer has strong incentives to exercise the call option as otherwise the distribution rate will reset to the prevailing Thai government bond yield plus the initial credit spread of 7.76% and a fee of 25bp for years six to 25. The charge increases to 100bp from years 26 to 50 and to 200bp from year 51 onwards.

Investors can subscribe from June 22 to 25.

Bangkok Bank, CIMB Thai Bank, Finansia Syrus Securities, Kasikornbank, Krungthai Bank and Siam Commercial Bank are joint lead managers.

The subordinated bonds are rated BBB– by Tris, two notches below Sansiri’s corporate rating of BBB+.

RESTRUCTURING

› THAI AIRWAYS PLANS MEETING

Beleaguered THAI AIRWAYS INTERNATIONAL will hold a meeting on June 8 to update shareholders, stakeholders and creditors on the progress of its corporate rehabilitation and debt restructuring plans.

Thailand’s Central Bankruptcy Court accepted the national carrier’s petition for a court-supervised rehabilitation on May 27, triggering an automatic standstill on its debt.

The start of the rehabilitation process constitutes an event of default under the terms of its outstanding bonds. Investors holding Bt8.788bn (US$277m) of bonds due 2020, 2021, 2023, 2029 and 2034 sent a letter of demand for immediate repayment subsequent to the court’s acceptance of the petition.

Due to the standstill, Thai Airways will not be able to meet the repayment obligations. This may in turn trigger a cross-default on the other outstanding bonds, which amount to Bt62.82bn, the airline said last Monday.

Thai Airways lost its status as a state-owned enterprise after Thailand’s Ministry of Finance sold a 3.17% stake to Vayupak Fund 1 on May 22. The MOF holds 47.86% of the airline after the sale.

The company had earlier said its rehabilitation plan would be managed

by a committee comprising EY Corporate Advisory Services, its chairman Chaiyapruk Didyasarin, acting president Chakkrit Parapuntakul and three newly appointed board members, including former CEO Piyasvasti Amranand.


› MINOR INTL GIVES RIGHTS ISSUE DETAILS

MINOR INTERNATIONAL has set the entitlement ratio for a rights issue of up to Bt10bn (US$314m) at 1-for-6.45.

The offer price will be announced later but the company said the discount will not be more than 15% of the then prevailing price.

The offer will comprise around 716m shares, or 13% of the post-issue capital, and will close by August 14. Shareholders on the register as of June 29 will be eligible.

The hospitality company will also sell Bt5bn of three-year warrants. One warrant will be offered for 17 existing shares. Each warrant will be converted into a share at a premium of not more than 10% to the share price early in the third quarter.

The warrant issue will be launched after the completion of the rights offer and the record date will be disclosed later.

The company is raising the funds to strengthen its balance sheet because of the Covid-19 pandemic.

It will seek shareholder approval for the rights issue on June 19.

Minor has three businesses – hospitality, restaurants and lifestyle brands. It has a portfolio of 529 hotels under the Anantara, Avani, Oaks, Tivoli, NH Collection, NH Hotels, nhow, Elewana, Marriott, Four Seasons, St Regis, Radisson Blu and Minor International brands in 56 countries.

VIETNAM

SYNDICATED LOANS

› VINGROUP UNIT CHECKS IN FOR DEBUT

Vietnamese conglomerate Vingroup’s hospitality subsidiary, VINPEARL, is sounding the market for a US$200m debut offshore loan.

Credit Suisse and Deutsche Bank are the mandated lead arrangers and bookrunners of the new-money loan, which has a maturity of 42 months and is backed by a standby letter of credit from Vietinbank.

The facility pays an interest margin of 325bp over Libor and has an average life of three years.

MLABs committing US$50m and above receive a top-level all-in pricing of 358.33bp based on a participation fee of 100bp, while MLAs with US$30m–$49m earn an all-in of 351.67bp via a fee of 80bp.

Lead arrangers joining with tickets of US$20m–$29m are offered an all-in of 345bp via a fee of 60bp, while arrangers with US$10m–$19m receive 338.33bp via a fee of 40bp.

Banks committing before June 24 receive an additional early-bird fee of 20bp. The final deadline is June 30.

Proceeds are for general corporate purposes.

Last December, Vinfast Trading and Production, another unit of Vingroup, raised a US$575m five-year financing after attracting 14 lenders in general syndication.

Deutsche, HSBC, Maybank and Taipei Fubon Commercial Bank were the original MLABs of the loan, which comprises a US$310m facility A and US$265m facility B.

That transaction paid top-level all-in pricing of 369bp and 334bp based on margins of 335bp and 305bp over Libor for facilities A and B respectively. The average margin across the loans for both borrowers is 325bp over Libor, while the average life is 4.1 years.

Vinpearl is a leading hospitality group, with hotels, resorts, golf courses as well as amusement, water and wildlife parks across Vietnam.

Top bookrunners of all Vietnamese dong bonds1/1/20 – 31/5/20

Amount

Name Issues Vnd(m) %

1 Techcombank 8 2,133,735.0 73.6


3 Vietcombank 1 300,000.0 10.4

Total 10 2,898,735.0

*Market volume

Proportional credit


www.ifre.com


ASIA DATA

LAST WEEK’S ECM DEALS

Stock Country Date Amount Price Deal type Bookrunner(s)

Dada Nexus China 05/06/2020 US$336m US$16 IPO (primary) Goldman Sachs, Bank of America, Jefferies

China Vanke China 04/06/2020 HK$7.9bn HK$25 IPO (primary) Citic Securities, CICC, UBS

Ever Sunshine Lifestyle Services China 04/06/2020 HK$1.58bn HK$12.66 Follow-on (primary) Credit Suisse, Haitong International, Morgan Stanley

Minsheng Education China 04/06/2020 HK$244m HK$1.22 Follow-on (primary) CICC

Greentown Service Group China 03/06/2020 HK$2.7bn HK$10.18 Follow-on (primary) CICC, Citigroup, CLSA

China Meidong Auto China 03/06/2020 HK$1.28bn HK$15.84 Follow-on (primary) Bank of America, Goldman Sachs

Arena REIT Australia 03/06/2020 A$50m A$2.28 Follow-on (primary) Morgan Stanley

Vicinity Centres Australia 02/06/2020 A$1.2bn A$1.48 Follow-on (primary) Credit Suisse, Macquarie

Iress Australia 02/06/2020 A$150m A$10.42 Follow-on (primary) Goldman Sachs

Kotak Mahindra Bank India 01/06/2020 Rs69bn Rs1,240 Follow-on (secondary) Kotak, Goldman Sachs, Morgan Stanley

HDFC Life Insurance India 03/06/2020 Rs20bn Rs496.40 Follow-on (secondary) Bank of America

Source: IFR Asia

MERRILL LYNCH ASIAN DOLLAR INDEX

Index Description Index level 1 week total return 1 month total return 3 months total return OAS

ADIG Asian-dollar high-grade index 447.388 0.335 2.259 –1.369 217

ADHY Asian-dollar high-yield index 654.240 2.468 6.667 –4.718 945

AGIG Asian-dollar government high-grade index 424.669 0.361 2.752 –0.820 181

AGHY Asian-dollar government high-yield index 651.431 7.209 8.871 –20.225 1280

ACIG Asian-dollar corporate high-grade index 473.478 0.326 2.092 –1.574 231

ACHY Asian-dollar corporate high-yield index 549.087 1.948 6.417 –2.561 906

Source: Merrill Lynch

ARE YOUR COLLEAGUES AS WELL-INFORMED AS YOU?

COMPANY- OR DEPARTMENT-WIDE SUBSCRIPTIONS TO IFR Asia

As a subscriber to IFR Asia, you will already be aware of its standing as the world’s

leading source of Asian capital markets coverage. But are your colleagues?

If there are other people in your team, department or company who, you think, would

benefit from the authoritative and independent content that IFR Asia offers, you

should know that considerable discounts are available to companies with multiple

subscriptions.

To discuss your requirements, please email to [email protected] or

contact:

Asia-Pacific and Japan: +852 291 26606

EMEA: +44 (0)20 7542 4569

Americas: +1 (646) 223 5543

IFR’s ESG Financing Briefing

IFR’s ESG Financing Briefing is a subscription

service offering daily news, data and analysis

on green and ESG financing from across the

Refinitiv Capital Markets Insight Team.

To subscribe or learn more, e-mail

[email protected]

BEFORE THE MARKETS MOVE, MAKE YOURS.Stay ahead of the commodities markets with real-time news, data and analytics in Eikon.

refinitiv.com

Documents

dl.magazinedl.comdl.magazinedl.com/magazinedl/IFR Asia/2020/IFR Asia... · 2020. 6. 7. · IFR ASIA INTERNATIONAL FINANCING REVIEW ASIA JUNE 6 2020 1141 Easy does it: NetEase recalls