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JANUARY 11 2020 ISSUE 1121 www.ifre.com

EQUITIES

Pakistan restarts privatisation push with OGDC, PPL share sales07

BONDS

Laos makes surprise debut in dollar bond market with 18-month ‘bridge’07

EQUITIES

China’s second-biggest IPO in 10 years pays tiny 0.06% fee08

PEOPLE & MARKETS

Asian IB fees edge to record in 2019 as Chinese deals dominate14

Bharti Airtel dials up equity, CB buyersto pay fines after shock court ruling

China property sector resumes offshore bond rush in busy new year window

Australian bushfires set to stoke demand for green investments

PLUS: ANNUAL LEAGUE TABLES

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International Financing Review Asia January 11 2020 1

Upfront OPINION INTERNATIONAL FINANCING REVIEW ASIA

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Aboitiz Equity Ventures 49Activation Group 34Adira Dinamika Multi Finance 45Aditya Birla Finance 40Aeon Credit Service Malaysia 47Air Water 47Alibaba Health Information Technology 37Alipay (Hong Kong) Holding 31Allahabad Bank 40Allgreen Properties 50AMA Group 23AMVIG Holdings 39Apeejay Surrendra Park Hotels 43Australia and New Zealand Banking Group 22Avation 51AZRB Capital 48Bank of Baroda 40Bank of Ceylon 52Bank of China 4, 24Bank of Communications Financial Asset Investment 30Bank of New Zealand 48Bank Tabungan Negara 44Bayan Resources 44Beijing Energy Holdings 26Beijing Enterprises Urban Resources Group 34Beijing-Shanghai High Speed Railway 8Bharti Airtel 5Birla Carbon 42Blackstone Group 22BNP Paribas 21Cagamas 47Caida Securities 36Cal-Comp Electronics (Thailand) 54Central Plaza Development 26Cheng Loong 53Chengdu Kanghong Pharmaceutical Group 38China Bohai Bank 30China Development Bank 25China Fortune Land Development 4, 26China Merchants Energy Shipping 34China Merchants Holdings (Hong Kong) 27China Merchants Securities 27China Minsheng Bank 37China SCE Group Holdings 27China Yangtze Power 31China ZhengTong Auto Services Holdings 27Chow Tai Fook Enterprises 22CIFI Holdings 27CitiusTech 43Commonwealth Bank of Australia 20Country Garden Holdings 4, 24CSM Corporatama 45Dada-JD Daojia 34Daimler 31Edelweiss Finance & Investments 42

ESR Cayman 52Export-Import Bank of India 40Export-Import Bank of Korea 52Export-Import Bank of Thailand 54Fantasia Holdings Group 5, 27Far East Consortium International 22Fina Finance & Trading 53Financial Products Group 46Flat Glass Group 37Food Corporation of India 41Frasers Commercial Trust 50Frasers Property Thailand 54FTLife Insurance 38Fujian Yango Group 27Future Retail 40Geely Glory Investment 32Gloria Material Technology Corp 53Golden Wheel Tiandi Holdings 27Gongniu Group 34Hang Lung Properties 38Health and Happiness (H&H) International Holdings 38Hindustan Petroleum 43Hong Leong Group 48Hongda Xingye 38Housing Development Finance Corp 41Huachen Energy 27Huijing Holdings 35Hydoo International Holding 28Hydra RL BidCo 23Hyflux 51Indiabulls Infraestate 41Indian Railway Finance Corp 41Industrial Securities (Hong Kong) Financial Holdings 28Itochu Advance Logistics Investment 46, 47Japan Display 46Japan Excellent 47JD.com 4, 24Jiangxi Copper 32Jiangxi Jovo Energy 36Jiangxiaobai 33Jiaozuo Investment Group 28Jinan Shengquan Group Share Holding 36Jiumaojiu International 35Joint Stock Commercial Bank for Investment & Development of Vietnam 55Jollibee 5, 49Kaisa Group Holdings 5, 28Kathmandu Holdings 49Kilcoy Global Foods 24Kingsoft Cloud 35KWG Group 28Lalitpur Power Generation 40Lao People’s Democratic Republic 7Lendlease Group 23LIC Housing Finance 43Lizhi 35

Logan Property Holdings 28Logistar International Holding 54Longfor Group Holdings 28, 39Lvji Technology Holdings 34Manappuram Finance 4, 40, 41MBK 54Medco Energi Internasional 44MicroPort CardioFlow 35MicroPort Scientific 35Mindspace Business Parks REIT 43Mining Industry Indonesia 45Mitsui Fudosan Logistics Park 47Mizuho Financial Group 46Mr DIY 48Muthoot Fincorp 41Muthoot Mini Financiers 42Nankang Rubber Tire Corp 52National Australia Bank 20National Bank For Agriculture and Rural Development 41National Highways Authority of India 41New Hope Liuhe 37New World Development 38NHPC 41Nomura Holdings 46NTPC 42Oil & Gas Development 7ONGC Videsh 42Oriental Energy (Singapore) International Trading 51Oversea-Chinese Banking Corp 21Pakistan Petroleum 7Panda Green Energy Group 26Parc Eolien de Taza 46Phoenix Tree 35Piramal Enterprises 41Postal Savings Bank of China 35Power Finance Corp 40, 41Power Grid Corporation of India 41PTT Exploration and Production 53Punjab National Bank 41Qinghai Salt Lake Industry 31Radiance Group 29REC 41Reliance Retail 43Republic of Indonesia 44Republic of the Philippines 8Route Mobile 44Royole Corporation 35Sai Gon Ha Noi Commercial Joint Stock Bank 55Sealand Securities 36Seek 23Shaanxi Beiyuan Chemical Industry Group 36Shandong Iron & Steel Group 29Shandong Weigao Group Medical Polymer 37Shandong Weigao Orthopaedic Device 37Shanghai Construction Group 37Shanghai Electric Group 37

Shangrao Investment Holding Group 25

Shanxi Meijin Energy 38

Shengzhou Investment Holdings 29

Shenzhen Expressway 38

Shimao Property 36

Shriram Transport Finance 4, 40

Siamgas and Petrochemicals 54

Sino-Ocean Group 29

Sinopharm Holding (China) Finance Leasing 32

SK Biopharmaceuticals 52

SMC Global Power Holdings 49

Smoore International 36

Star Entertainment Group 22

Starhill Global REIT 50

State Railway of Thailand 54

Sumitomo Mitsui Financial Group 46

Sunac China Holdings 29, 33

Suzhou Zelgen Biopharmaceuticals 33

TAC Leasing 33

Tata Steel 42

Thaifoods Group 54

Tianneng Battery Group 36

Tianqi Lithium 36

Tokai Carbon 46

Tom Group 39

Tower Bersama Infrastructure 45

TPI Polene 54

Treasury Corporation of Victoria 22

UCloud Technology 33

Union Bank of the Philippines 49

Unique Engineering and Construction 54

Vinfast Trading and Production 55

Vingroup 55

VPBank Finance 55

Wanda Film Holding 38

Westpac 4, 20

Wing Tai Holdings 50

Wuhan Dangdai Science & Technology

Industries (Group) 29

WuXi Biologics (Cayman) 34

XacBank 48

Xiamen Bank 31

Xinnneng (Hong Kong) Energy Investment 32

Xinyi Solar 36

Yango Group 29

Yuzhou Properties 4, 30

Zhejiang Provincial New Energy

Investment Group 36

Zhengzhou Urban Construction

Investment Group 30

Zhenro Properties 30

Zhenro Services Group 37

Zhongguancun Development Group 30

Zhongrui Industrial Group 30

COMPANY INDEX


ContentsINTERNATIONAL FINANCING REVIEW ASIA

JANUARY 11 2020 ISSUE 1121

COVER STORIES

BONDS

04 China developers lead bond rushThe Asian bond markets exploded into life last week with a US$24.1bn rush of new issues, as more than 30 borrowers capitalised on strong market sentiment.

EQUITIES/STRUCTURED EQUITY

05 Bharti taps market to pay finesBharti Airtel returned to the capital markets for a further US$3bn from a share sale and convertible bond, raising funds to help pay a massive penalty.

BONDS

06 Australia seeks greener futureThe devastating bushfires in Australia are an acute reminder, if one was needed, of the need for additional investment to tackle climate change.

NEWS

07 Pakistan restarts privatisationsPakistan plans to resume sales of shares in state-owned companies after a five-year hiatus, hoping recent economic and capital market reforms will prove a draw.

07 Laos makes surprise debut Laos has printed a US dollar debt issue in a

club deal to tide it over before it targets a wider group of investors.

08 Tiny fee for big China IPO Beijing-Shanghai High Speed Railway is

paying a sponsor and underwriting fee of just 0.06% on its IPO.

08 Philippine tender baffles market Applied Alpha LP surprised many with

an offer on long-dated Philippine sovereign bonds well below market price.

PEOPLE & MARKETS

14 Asian IB fees climb to record highAsian investment banking fees climbed to a record high in 2019 after a blowout year in credit and a strong end to the year in equities.

15 China suspends London Stock Connect scheme China has temporarily

blocked planned cross-border listings between the two stock exchanges.

16 Singapore gets 21 digital banking bids Singapore has drawn huge

interest from tech companies looking to shake up the banking landscape.

14 Who’s moving where Bi Mingjian, chief executive officer of China

International Capital Corporation, has resigned.

16 In brief Fugitive Malaysian financier Jho Low has said he only acted as an

intermediary for deals involving 1MDB.

ASIA DATA

56 This week’s figures

20 AUSTRALIA

National Australia Bank

kicked off its 2020 issuance

programme with a tightly priced

US$1.75bn two-part senior

unsecured short three-year note.

24 CHINA

E-commerce company JD.com

has raised US$1bn from dual-

tranche SEC-registered bonds.

A US$700m 3.375% 10-year

tranche priced inside guidance.

38 HONG KONG

Property developer and investor

New World Development on

December 24 sold HK$1.5bn

30-year senior unsecured bonds

to FTLife Insurance.

40 INDIA

Manappuram Finance last

Monday sold US$300m of

three-year bonds priced at

par to yield 5.9%, inside initial

guidance of 6.25% area.

44 INDONESIA

Bank Tabungan Negara has

hired banks for a proposed

offering of US dollar-

denominated subordinated

Basel III-compliant Tier 2

capital securities.

46 JAPAN

Nomura Holdings priced

US$3bn of five and 10-year

SEC-registered bonds at

Treasuries plus 100bp and

125bp, respectively.

47 MALAYSIA

National mortgage agency

Cagamas has printed M$1.2bn

of conventional and Islamic

commercial and MTN notes.

48 MONGOLIA

XacBank has agreed a US$100m

five-year syndicated loan,

strengthening the bank’s long-

term funding base and allowing

it to further expand.

48 NEW ZEALAND

Bank of New Zealand priced a

SFr300m 0.111% 8.5-year bond

at the tight end of mid-swaps

plus 37bp–40bp guidance for a

zero new issue concession.

49 PHILIPPINES

Philippines-based electric

power distributor SMC Global

Power Holdings is arranging

investor meetings.

50 SINGAPORE

Singapore-listed Starhill

Global REIT has set up a S$2bn

multi-currency debt issuance

programme.

52 SOUTH KOREA

Export-Import Bank of Korea has

sold €150m of five-year notes in

a private placement. The Reg S

bond priced with a fixed coupon

of 0.137%.

52 SRI LANKA

State-owned Bank of Ceylon

has raised US$130m from a

one-year loan with four banks

participating, marking its return

to the offshore loan markets

after less than two years.

52 TAIWAN

Units of Taiwan-listed Nankang

Rubber Tire Corp have raised a

NT$30bn five-year loan for land

development purposes.

53 THAILAND

PTT Exploration and Production,

rated Baa1/BBB+/BBB+,

returned to the US dollar market

after less than two months with

a US$350m 10-year 144A/Reg

S bond.

55 VIETNAM

Sai Gon Ha Noi Commercial

Joint Stock Bank has mandated

Citigroup and HSBC as joint

global coordinators and joint

bookrunners for a proposed Reg

S offering of US dollar bonds.

COUNTRY REPORT

News

China developers lead bond rush Bonds G3 issuance gets off to roaring start across Asia Pacific

BY CAROL CHAN, JIHYE HWANG

The Asian bond markets exploded into life last week with a US$24.1bn rush of new issues, as more than 30 borrowers capitalised on strong market sentiment and ample liquidity at the start of the new year.

Issuers from India to Indonesia and the Philippines to Australia enjoyed an enthusiastic response from investors, with final pricing coming well inside guidance on all new issues.

“The liquidity generally exists across the board,” said a syndicate banker who was involved in several deals last week. “Fund flows to emerging markets-type investors are looking strong.”

Excluding Japanese deals, 31 Asian issuers sold bonds in G3 currencies last week. The biggest deals came from financial institutions, with

WESTPAC raising US$4bn and BANK OF CHINA taking in US$2.5bn-equivalent in a dual-currency deal, but Indian non-bank lenders MANAPPURAM FINANCE and

SHRIRAM TRANSPORT also made their mark. Chinese online retailer JD.COM also came out with a US$1bn dual-trancher.

More than half of the new issues so far this year have come from the Chinese property sector. A total of 18 real estate companies sold bonds totalling US$8.4bn, with CHINA FORTUNE LAND

DEVELOPMENT raising the most with a US$1.2bn dual-trancher,

followed by COUNTRY GARDEN’s US$1bn two-tranche bond and a US$645m 2026 from YUZHOU

PROPERTIES.The rush to print at the

very start of the year comes as property developers race to stay ahead of the game while the market is in good shape.

“Developers are keen to grab the short window ahead of the Chinese New Year to secure part of their funding needs this year, as sentiment in the Asian credit market remains constructive despite rising geopolitical concerns around a Middle East conflict,” said Li

Chao, head of global markets at China Citic Bank International.

TIGHT PRICING

Last week’s new issues from the Chinese property sector attracted huge order books and priced, on average, around 40bp tighter than initial guidance.

“It is quite substantial as US dollar deals normally price around 25bp inside initial guidance,” said another banker who was involved in several of the deals. “Anything beyond 30bp is definitely a signal of a strong market.”

YUZHOU PROPERTIES, for example, tightened by as much as 62bp after receiving orders of over US$4.1bn.

“The pricing seems quite tight but most of them have performed well in the secondary market, especially the high quality names such as Country Garden, which has

Australia’s bushfires 06 Privatisations in Pakistan 07 Laos dollar debut 07


“Developers are keen to grab the short window ahead of the Chinese New Year to secure part of their funding needs this year, as sentiment in the Asian credit market remains constructive despite rising geopolitical concerns around a Middle East conflict.”

Large IPO, tiny fee 08 Philippine mystery 08 India’s Operation Twist 09

a credit upside theme,” said a Hong Kong-based investor from a Chinese brokerage. Country Garden is rated Ba1/BB+ by Moody’s/S&P but has a BBB– rating from Fitch.

The investor added that even new issues from Single B rated names like KAISA GROUP HOLDINGS and FANTASIA HOLDINGS GROUP had traded up more than a point against the risk-on backdrop.

“Tightening is not abnormal because the margin is still juicy especially for the Single B rated names, while companies are always in need of funding – it’s like early last year,” said a third DCM banker.

Fantasia priced a US$450m 10.875% three-year non-call two bond at 99.191 to yield 11.2%, inside initial guidance of 11.625% area. Kaisa priced a US$500m five-year non-call three at par to yield 10.5%, more than 37bp inside initial guidance.

The glut of offerings comes after supply from the Chinese property sector had cooled in the second half of last year after regulation changes.

Li said dollar bond funding costs were likely to trend lower for Chinese developers this year as supply from the market should moderate going forward due to the new rules.

The National Development and Reform Commission in July said developers would only be allowed to issue offshore bonds to refinance medium or long-term offshore borrowings due to mature within a year, effectively blocking debut issuers and those reliant on short-dated bonds.

This week is set to be busy again with more than a dozen mandates announced, including unusual deals such as a perpetual bond for Philippine fast-food retailer JOLLIBEE. High-grade names from China are also said to be lining up to print new paper after the Lunar New Year break, but only if geopolitical risks remain contained.

Bharti taps market to pay fines Equities/Structured Equity Telco issues equity, CB after contentious court ruling

BY S ANURADHA

BHARTI AIRTEL returned to the capital markets last week for a further US$3bn from a share sale and convertible bond, raising funds to help pay a massive penalty following a contentious court ruling in October.

The company’s Rs144bn (US$2bn) qualified institutional placement ranks among India’s biggest overnight share sales, coming within a whisker of State Bank of India’s Rs150bn QIP in 2017. Bharti’s upsized US$1bn convertible bond is also the first CB from India since 2016 and matches Reliance Communications’ US$1bn record in 2007.

Despite the jumbo size, and coming soon after a Rs250bn rights issue last May, both portions were easily absorbed as investors took the view that Bharti has put the worst behind it.

“The success of the deals show that Bharti Airtel is better prepared to weather the storm in India’s terrifying telecom sector,” a Mumbai-based analyst said. “It’s effectively a two-horse race [Bharti Airtel and Reliance Jio] in India’s telecom sector and investors are putting their money on the management’s credibility.”

Sunil Mittal and his

family own 27% of the company and Singapore Telecommunications 35%.

The sector has been shaken by the 2016 launch of Reliance Jio, funded by India’s biggest company, Reliance Industries. A Supreme Court judgment last year dealt a further blow to incumbents

Bharti Airtel and Vodafone Idea, which are required to pay around Rs920bn in total to the department of telecommunications in overdue fees and penalties by February. Both companies have sought a limited review of the order from the Supreme Court.

Bharti said it would use the proceeds to meet any necessary payments in the case. If it manages to overturn the ruling, the funds will help strengthen its balance sheet, replenishing a war chest for the ongoing battle with Jio.

IMPROVEMENTS SEEN

Although Bharti Airtel is not expected to return to profit anytime soon, after reporting a net loss of Rs230bn in the three months to September 30, the operating conditions are expected to improve as rival Reliance Jio is slowly increasing tariffs, indicating that it not willing to burn cash endlessly to gain market share, an ECM banker close to the transaction said.

Bharti Airtel also managed

to bring down its net debt to Rs881bn in the September quarter compared to Rs1.18trn in the same period a year earlier, thanks to last year’s rights offer and the listing of its African subsidiary. The company also plans to monetise its optic fibre network, but has yet to reveal details of its approach.

The share price has risen around 50% over the past year, in a sign that investors take an optimistic view. The shares currently trade at a 2022 EV/Ebitda multiple of 8 compared with 5x-6x for regional players. The QIP price of Rs445 came at a 3% discount to the pre-deal close of Rs458.85 but above the indicative price of Rs435. Bharti Airtel shares were in the green after the share sale having closed up 0.3% higher at Rs460.10 last Thursday. The CB was also up at 103 versus the issue price of 100.

The 2025 1.5% five-year CB was priced at an annual yield to maturity of 2%. The initial conversion premium has been fixed at the bottom of the 20%–25% range. There is no investor put option.

The CB comprised a base deal of US$750m with an upsize option of US$250m.

Around 150 accounts participated in the QIP and 100 in the CB. Long-only institutions bought 80% of the QIP.

Axis, Citigroup, JP Morgan were global coordinators on the QIP and bookrunners with BNP Paribas, BofA Securities, Goldman Sachs, HDFC Securities and HSBC.

BNP Paribas, Barclays, Citigroup, Goldman Sachs and JP Morgan were bookrunners on the CB. DBS was the co-bookrunner.


For daily news stories visit www.ifre.com

“The success of the deals show that Bharti Airtel is better prepared to weather the storm in India’s terrifying telecom sector. It’s effectively a two-horse race [Bharti Airtel and Reliance Jio] in India’s telecom sector and investors are putting their money on the management’s credibility.”

Australia seeks greener future Bonds Bushfires set to increase awareness of climate-aligned investments

BY JOHN WEAVERS

The devastating bushfires in Australia are an acute reminder, if one was needed, of the need for additional investment to tackle climate change.

Australia has been battling wildfires on an unprecedented scale for months, due to above-average temperatures and a prolonged drought that has turned the lush countryside in the country’s South-East into dry tinder. The weather bureau said last week 2019 had been the hottest and driest year on record and warned of more high temperatures to come in the next few months.

Local bankers and investors expect the wildfires to drive further demand for green assets as more savers witness the impact of climate change first-hand.

One Sydney-based fund manager expects more capital to be allocated to renewable energy in particular.

“This is primarily a development in the equity space, which is the first port of call to put green money to work, especially among grassroots retail investors who are on the lookout for more responsible opportunities,” he said.

“In the fixed-income market the obvious impact of global warming will push us further along the road to higher ESG [environmental, social and governance] bond issuance and the possibility that these instruments consistently price inside standard bonds.”

Responsible investments under management are already growing fast in Australia, including a 13% increase in 2018 to A$980bn (US$673bn) for a 44% share of the A$2.24trn total assets professionally managed in the country.

Another substantial rise is assured when the next annual Responsible Investment Benchmark Report Australia

is released later this year, even before further growth in response to the catastrophic bushfires.

RETAIL DEMAND

Much of the rapid expansion comes from retail investors, who represent a large chunk of Australia’s giant buyside base and are becoming increasingly focused on environmental issues.

Self-managed superannuation funds (SMSFs) made up around one-third of Australia’s near-US$1.9trn national pension pot in 2018, the world’s fourth largest, according to the Towers Watson Global Pension Assets Study. Australian pension assets rose 10.2% per annum between 1998 and 2018, almost double the 5.3% average of the 22 major pension markets covered by Towers Watson, thanks largely to government-mandated superannuation payments, currently set at 9.5% of personal income.

After a slow start by international standards, soaring demand has underpinned a impressive expansion in

ESG bond and securitisation issuance.

Overall supply reached around A$12bn last year, well above the previous annual record of A$8.4bn in 2018 and a huge pick-up from A$5.2bn in 2017 and just A$1.1bn in 2016.

Continued investment in renewable energy is also likely to drive issuance.

Australia’s Liberal government is facing demands to accelerate the shift to clean energy amid criticism of its defence of the coal industry, which accounts for the majority of Australian electricity generation and is its most important export.

Australia has pledged to reduce emissions by 26%-28% from 2005 to 2030.

RELATIVE VALUE

Thus far Australian dollar ESG bohave tended to print in line with issuers’ standard notes but to perform more steadily in the secondary market thanks to their higher allocations to buy-and-hold investors.

There are signs that tighter pricing may become more

commonplace, however. New South Wales Treasury Corp’s A$1.8bn long five-year sustainability bond last November – equalling the biggest deal so far in the ESG sector – priced flat to or slightly inside its secondary curve.

In New Zealand, Auckland Council became the first domestic green bond issuer in June 2018 with a NZ$200m five-year, before selling a NZ$150m six-year note in July 2019, both of which printed 2bp inside the municipality’s standard curve.

In addition to industry and company screenings, Sweden’s Riksbank last year established a broader interpretation of “good” and “bad” assets by boycotting bonds from Australia’s two major coal-producing states, Western Australia and Queensland.

The Swedish central bank sold its bonds issued by these states, along with its exposure to Canada’s Alberta province, to give greater consideration to sustainability issues in the way it invests the country’s foreign exchange reserves.

News


Laos makes surprise debut Bonds Asian sovereign sells short-dated dollar bond to restore FX reserves

BY DANIEL STANTON

The LAO PEOPLE’S DEMOCRATIC REPUBLIC has printed a US dollar debt issue in a club deal to tide it over before it targets a wider group of investors.

Laos sold a US$150m 18-month bond in mid-December to a small group of investors, according to multiple sources.

The bond pays a coupon of 6.875% and was priced at 97.75589 to yield 8.5%. Oppenheimer was sole bookrunner.

The sovereign does not have international credit ratings, but investors in the deal were told it was expecting ratings of B3 and B– from Moody’s and S&P, respectively.

Laos has a rating of BBB with a stable outlook from Thailand’s Tris Rating. Tris in

June downgraded the sovereign’s rating from BBB+, citing deteriorating foreign exchange reserves, but the dollar bond issue should help.

By way of comparison, Pakistan has a US dollar sukuk due October 2021 and rated B3/B– (Moody’s/Fitch) that was bid in mid-December at a yield of 4.3%, according to Tradeweb. Mongolia, which has ratings of B3/B/B, has a US dollar bond due April 2021 which was bid at 3.6%.

Papua New Guinea was the last sovereign in Asia Pacific to debut in the US dollar bond market. Its US$500m bond due 2028, sold in November 2018, was bid around 7.5% at the time of the Laos issue.

Laos’s issue came after many fund managers had already closed their books for the year, or were unwilling to take the

risk of buying an unrated bond from a first-time issuer.

“The short tenor, the small amount and the circumstances of the new issue led to a higher, more attractive yield in the pricing,” said Alexander Zeeh, CEO of S.E.A. Asset Management, which manages an Asian high-yield bond fund and subscribed to the deal. “The issue went largely unnoticed and really wasn’t on people’s radar. I expect the yield to tighten significantly in the months ahead.”

Laos held a roadshow in Hong Kong ahead of the transaction and a teleconference for Singaporean investors, but the sub-benchmark size and short tenor meant that some fund managers were not interested or not able to participate.

“This is more like a bridging loan than a bond,” said another

buyside source. “I think they are working on something else.”

The country’s gross international reserves declined 14% to US$873m, or 1.2 months of imports, in 2018 and were projected to recover to just above US$1bn last year, according to the International Monetary Fund.

Laos previously sold US$182m of dollar bonds in two tranches in December 2015 to institutional investors in Thailand and regularly issues sovereign bonds denominated in Thai baht, but recently hired banks to arrange its first deal to be widely marketed to international investors.

Credit Suisse, JP Morgan and Standard Chartered are understood to be working on the proposed US dollar bond offering.

A banker said he did not expect the yield of the private deal to push pricing higher in the proposed dollar offering, but said the December transaction had come as a surprise.

Pakistan restarts privatisations Equities Government to sell stakes in OGDC and Pakistan Petroleum

BY S ANURADHA

Pakistan plans to resume sales of shares in state-owned companies after a five-year hiatus, with the hope that recent economic and capital market reforms will prove a draw for investors.

The country’s Privatisation Commission is set to hire banks to manage share sales totalling Rs83bn (US$535m) in PAKISTAN PETROLEUM and OIL & GAS

DEVELOPMENT this month. Both sell-downs are likely to take place in the first half and will be the first sales of state-owned shares since 2015 when the state sold its residual 41.5% stake in Habib Bank for Rs102bn.

Since then, the privatisation programme was dogged by political and economic uncertainty. The country’s inclusion into the MSCI Emerging Market Index in June 2017 did not help much in attracting foreign investors

because of an extremely low weighting of 0.15% initially, which has now fallen to 0.03%.

In contrast Pakistan enjoyed a 63% weighting in the MSCI Frontier Markets Asia Index and around 9% weighting in the MSCI Frontier Market Index in December 2016.

“Frontier market investors allocated a large portion of their funds to Pakistan but we have disappeared in the emerging markets universe. It will be a relief if we are downgraded,” a Karachi-based ECM banker said.

IMPROVING FUNDAMENTALS

Some market participants, though, have not given up hope.

Ruchir Desai, fund manager at Asia Frontier Capital, said investors are likely to view Pakistan favourably as the country has started work on reforms after a much-needed IMF loan programme that began in the second half of 2019.

“The economic story is improving and foreign investors will possibly look at Pakistan more actively now,” Desai said.

The current account deficit has fallen to around 1.5% of GDP in the first five months of the fiscal year that ends on June 30 2020 versus 6% in 2019.

The improvement follows a 40% depreciation of the rupee against the US dollar since the start of 2018.

With interest rates set to fall from the second half of the year, market sentiment will pick up, according to Desai.

More importantly, Desai says valuations are very attractive compared to other frontier markets. Pakistan trades at a 2020 P/E multiple of seven while Vietnam trades at 15.8, Sri Lanka at 11.1 and Bangladesh at 9.8. This is despite a 44% rise in the benchmark KSE 100 index from its 52-week low of 28,674 touched on August 16 2019.

In addition, Pakistan last week also eased rules for loss-making companies and greenfield projects to access the capital markets. (See People and Markets.)

Still the PP and OGDC sales may not be blowout deals given that both of them are from the defensive energy sector.

“Stocks in the automobile and cement sectors look attractive as they have corrected significantly over the past two years making valuations very attractive with a 2-3 year investment horizon,” Desai said.

Two groups comprising local and international arrangers are vying for the PP and OGDC mandates. A consortium of Credit Suisse, Arif Habib and AKD Securities is competing for the PP mandate against CLSA and Alfalah Securities, while the OGDC job is contested by CS/Arif/AKD and Citigroup, HBL and Next Capital. The government plans to sell a 10% stake in PP, worth up to Rs38bn at current prices. Around 7% of OGDC, currently valued at Rs45bn, will be sold.

The government owns 67.5% of PP and 74.97% of OGDC.



Philippine tender baffles market Bonds US firm offers to buy dollar bonds below current market price

BY DANIEL STANTON

A little-known investment firm in New York has surprised the credit market by offering to buy long-dated Philippine sovereign bonds well below the market price.

Applied Alpha LP has proposed to buy up to US$410m in principal amount of the REPUBLIC OF THE PHILIPPINES’ long-dated US dollar bonds, namely its 9.5% senior notes due 2030, 3.95% bonds due 2040, 3.7% bonds due 2041 and 3.7% bonds due 2042.

Neither the offeror nor tender agent Idexis wanted to discuss specific details of the offer, but a banker said the tender price was about five points below where the bonds were trading in the secondary market. The tender prices drop in the last 10 business days of the offer to encourage bondholders to submit early.

When the tender offer opened on December 5 the 2030, 2040, 2041 and 2042 bonds were bid at high cash prices of 159, 114, 113 and

113, respectively, according to Tradeweb, and the offer prices for all four were above face value.

“The offer is meant to accommodate those holders who have little access to liquidity and whose ability to receive a cash payment would be seriously impaired by fees and expenses imposed on them by intermediaries,” said Applied Alpha in an email when asked about the tender. “We understand that there exist many holders with small, odd-lot position which would like to take advantage of such an offer at a significant premium to par.”

Even accounting for intermediary fees, it is likely holders would achieve a higher price by selling in the open market. If bondholders tendered US$410m of paper at a five-point discount, they would face mark-to-market losses, while Applied Alpha would be able to sell the bonds in the market for a quick US$20m profit.

“It didn’t make any sense,”

said a fund manager who saw the offer. “We were all just speculating it was a US legal manoeuvre to prove there are no bonds at some specific price.”

The offer expired on January 8, which was unusual timing, given that so many fund managers are away during the Christmas and New Year period and are unlikely to be willing to start the new year with an avoidable mark-to-market loss. The final result of the tender was not known.

A company called Applied Alpha LP was incorporated in September 2018 and is registered at 4th Avenue in Brooklyn, according to New York Department of State filings. Google Maps data and property website listings show the registered address is a one-bedroom apartment behind a taco restaurant on the ground floor of a four-storey building.

In an email response, Applied Alpha said it was not based at that address, but in Manhattan. It did not say where exactly, and the website associated with

its email address is blank. Applied Alpha is understood

to have conducted similar transactions before in other markets.

Picking these bonds for a tender offer struck some market watchers as a strange choice, as the Philippines makes the most effort of any Asian sovereign to keep its curve liquid. The Philippines frequently undertakes switch tender offers to allow bondholders to swap its less liquid dollar or peso bonds for new paper.

For instance, in 2017 it sold US dollar 25-year bonds and invited holders of 14 of its outstanding bonds to switch into the new issue, having carried out a similar exercise in 2015. That led some to speculate that the offeror was trying to buy up bonds in the hope that the sovereign would announce another tender offer.

These frequent opportunities to switch to newer bonds, combined with the low offer price, made it hard to see why anyone would want to sell their bonds in the tender.

“The only people who are going to sell at that price are people who do it by accident,” said the banker.

Tiny fee for big China IPO Equities High-speed rail company benefits from competition among banks

BY KAREN TIAN, FIONA LAU

BEIJING-SHANGHAI HIGH SPEED

RAILWAY is paying a sponsor and underwriting fee of just 0.06% on China’s second-largest IPO in 10 years, in a stark example of the intense competition for high-profile deals in the country’s growing equity market.

The state-owned company last Wednesday wrapped up its Shanghai IPO to raise Rmb30.7bn (US$4.4bn), just shy of the Rmb32.7bn Shanghai IPO of Postal Savings Bank of China in December. PSBC’s A-share listing is China’s biggest float

since Agricultural Bank of China raised Rmb68.5bn from the Shanghai portion of its A and H-share IPO in 2010.

The sponsor and underwriting fee comes to just US$2.6m, split between three underwriters, which bankers close to the IPO put down to the keen competition among banks.

“Large state-owned enterprises such as Beijing-Shanghai High Speed Railway have strong pricing power on the fee, and the fee is one of the key components when they consider an IPO mandate,” said one of the bankers close to the deal.

“The giant deal can help boost league table rankings and add to the credentials of the bank, which in turn can help the bank win more business in future.”

A second banker said it was meaningless to talk about underwriting fees alone. “Deals like Beijing-Shanghai High Speed Railway will never fail to pass the IPO hearing or win final approval. No matter how much the issuers pay as the sponsor fee, there is always someone waiting to provide the service.”

The IPO fee is paltry by both local and international standards. PSBC paid a sponsor and underwriting fee of

Rmb463m, or about 1.4% of the IPO size.

In Hong Kong, Budweiser Brewing Company APAC paid underwriting fees and discretionary incentives totalling up to 1.5% for its HK$45bn (US$5.74bn) IPO in September.

China Securities, the sponsor of the Beijing-Shanghai High Speed Rail deal, is expected to take the biggest slice of the fee, while bookrunners CICC and Citic Securities will share the rest.

POLICY-MOTIVATED IPOThe company sold 6.29bn

A-shares or 12.8% of the enlarged capital at Rmb4.88 each, less than the proposed

News


15% of the enlarged capital mentioned in the preliminary prospectus.

The high-speed rail operator allotted 48.9% of the IPO to strategic investors, and split the remaining shares 70.6%/29.4% between institutional and retail investors.

As the retail part was oversubscribed 315 times, the company clawed back 1.5bn shares from the institutional part to the retail tranche.

Strategic investors will face lock-ups of 12 months, and institutional buyers will be barred from selling 70% of their allocation for six months.

The issuer itself is profitable, but plans to use the proceeds from the listing to acquire a majority stake in a loss-making bullet-train railway from the

Shanghai bureau of China State Railway Group and two other shareholders.

It will spend Rmb50bn to purchase a 65.1% stake in Jingfu

Railway Passenger Dedicated Line Anhui, which manages 45 train stations on four dedicated

railway lines between seven cities mainly in Anhui and Henan provinces. It posted a net loss of Rmb884m in the first nine months of 2019 on revenue of Rmb1.37bn, against a loss of Rmb1.2bn on revenue of Rmb1.77bn in full-year 2018.

The rest of the acquisition cost will be covered through internal funding. The issuer says in the IPO filing that it plans to expand and optimise the bullet train network under its management.

It took just 18 days for Beijing-Shanghai High Speed Railway to pass its IPO hearing after it filed its proposal on October 25, and people close to the deal told IFR the rapid review was policy-motivated. This was despite the regulator having questions about the business,

including the fact that it employs only 67 people, leading it to ask whether it is “an asset management company and not a railway transportation service company”.

Beijing-Shanghai High Speed Railway has also unveiled financial data for the first time. It earned a net profit of Rmb9.5bn on revenue of Rmb25bn in the first nine months of 2019, compared to a net profit of Rmb10.2bn on revenue of Rmb31.2bn in full-year 2018.

China Railway Construction Investment Company, a unit of China Railway Group, held a 49.76% stake in the bullet-train company before the IPO, and will remain the biggest shareholder in the company with a 43.39% stake after the deal.

RBI twist reopens rupee market Bonds State-owned issuers raise funds after central bank lowers long-term yields

BY KRISHNA MERCHANT

Indian public sector companies are rushing to issue onshore bonds after three successive central bank operations pushed down yields at the long end of the curve.

India’s central bank has bought back Rs300bn (US$4.2bn) of long-term bonds since mid-December in an unprecedented series of special open market operations, similar to ‘Operation Twist’ in the US in 2011.

The Reserve Bank of India’s intervention is effectively a debt-to-money market swap, in which the RBI sucks out long-duration government bonds and pumps in short-duration paper to flatten the yield curve.

Since mid-December, Food Corporation of India, REC, National Highways Authority of India, Indian Railway Finance Corp, National Bank For Agriculture and Rural Development, NHPC, and Power Finance Corp have raised a total of Rs199bn from 10-year to 30-year domestic bonds.

State-owned banks including

Bank of Baroda, Allahabad Bank and Punjab National have printed a total of Rs39.2bn from 10-year Basel III-compliant Tier 2 bonds during the same period.

On January 6, the RBI

purchased Rs100bn of five to 10-year government bonds and sold the same amount of short-term bonds maturing in 2020. RBI conducted a similar operation on December 30 and December 23, each time buying Rs100bn of 10-year bonds and selling the same amount of 2020 debt.

The moves have helped reverse a 30bp spike in India’s 10-year government benchmark in early December, after the central bank unexpectedly left its key repo rate unchanged on December 6 even as it slashed its forecast for economic growth to its lowest in over a decade.

Lower long-term yields

will help all borrowers, but are especially welcome for state-owned companies that need to meet their borrowing requirements in the current fiscal year.

The 10-year benchmark yield for Triple A rated public sector borrowers has fallen 24bp from a near six-month high of 7.79% on December 13, and the spread between the two-year and 10-year PSU benchmarks narrowed 25bp since mid-December.

Before Operation Twist, the term spreads (the difference between the 10-year yield and one-year Treasury bills) was the highest since 2010.

“Owing to rising term spreads, the fall in government bond yields hasn’t kept pace with falling nominal GDP growth rates,” said Suyash Choudhary, head of fixed income at IDFC AMC, in a note last month. This

made the effective borrowing rate very high even for the sovereign, let alone the private corporate sector.

The RBI operations will help spur lending as the cost of long-term financing for setting up new projects becomes attractive.

“Mark-to-market valuations of long-term bond portfolios will increase, this will improve the balance sheet of banks, debt mutual fund schemes and other financial sector investors,” said debt capital markets consultancy Mavuca in a note on January 3.

However, market participants expect a limited impact on private sector issuance, given the slowdown in the economy and ongoing liquidity problems in the non-banking sector.

Mavuca said interest rate twists may not be enough to convince private sector companies to set up new projects.

“Most companies in the private sector are concerned about servicing their current debt amid weakening consumption expenditure and low capacity utilisation. Even mega-sized business groups have announced plans to go debt-free in a few years,” the consultancy said.



“Deals like Beijing-Shanghai High Speed Railway will never fail to pass the IPO hearing or win final approval. No matter how much the issuers pay as the sponsor fee, there is always someone waiting to provide the service.”

“Mark-to-market valuations of long-term bond portfolios will increase, this will improve the balance sheet of banks, debt mutual fund schemes and other financial sector investors.”

Asia G3 enjoys record year Bonds League Tables High-grade issuers test longer tenors, as high yield booms

BY DANIEL STANTON

Asian G3 bond issuance enjoyed a record year in 2019, as the US Federal Reserve changed course and began cutting rates again, sending dollar yields lower and creating supportive market conditions for issuers.

Total G3 bond sales from Asia, excluding Australia and Japan reached US$349.2bn in 2019, up 22% from 2018 and beating the previous high of US$334.1bn in 2017, according to Refinitiv data. Including Australia, the total reached US$395.5bn, just shy of 2017’s US$413bn record.

HSBC extended its lead as the top underwriter in 2019, while Credit Suisse and Standard Chartered were the biggest gainers by market share.

Tencent Holdings’ US$6bn five-tranche bond offering in April was the year’s biggest deal from an Asian issuer, and the success of the US$500m 30-year tranche paved the way for other high-grade issuers to push out to longer tenors. The likes of Indonesia’s PLN and Pertamina joined the sovereign in selling 30-year bonds, as did energy companies Sinopec, CNOOC and Thai Oil.

In November, Thailand’s PTT Exploration and Production pushed out to 40 years with a US$650m deal priced at a slim spread of Treasuries plus 172.5bp.

Perpetual bonds also regained popularity with investors thanks to the low rates environment, with China Huadian in May selling the first perp of the year from a Chinese central state-owned enterprise and drawing a US$9bn order book. The strong reception for perps encouraged Bharti Airtel to bring a rare Indian hybrid deal in October, as part of its plans to cut gearing.

Fixed-for-life perpetuals, which dealt investors paper losses of as much as 20 points in 2018, also returned. Hong Kong’s New World Development revived interest with a private placement in March, then tapped the issue in July with a more widely marketed offering. The Philippines’ Ayala and AC Energy also used the structure last year.

FEWER BANK PERPS

One area that saw less supply was perpetual bank capital:

Chinese banks had been expected to drive volumes, as call dates on their old Additional Tier 1 notes neared, but onshore financing proved more attractive.

Korea’s Kookmin Bank and Woori Bank came to market alongside some mid-sized banks from Greater China to sell AT1 bonds, but it was Thai banks that benefited most from this unexpected lull in bank capital issuance. TMB Bank sold the country’s first Basel III Additional Tier 1 bonds in November, following strong responses to US dollar Tier 2 issues from Bangkok Bank and Kasikornbank. In September the two sold 15-year non-call 10 and 12-year non-call seven bonds, respectively, which were longer tenors than usual for the Asian Tier 2 market.

Chinese property companies drove the high-yield market to a record volume of US$70.7bn, eclipsing the 2017 total of US$48.8bn. Deal sizes were smaller and issuers came to market more frequently than usual, to take advantage of good issuance windows and avoid overwhelming investors.

Zhenro Properties came

to the dollar market nine times in 2019, raising a total of US$2.1bn. The Single B rated developer started the year with a US$200m 363-day note in January, priced at a yield of 10.75%, but as market conditions improved it achieved longer tenors at lower yields. In June, it printed a US$200m perpetual non-call 2.6 note at par to yield 10.25%.

Debut issuers from China had an incentive to press ahead last year, as new guidelines introduced by the National Development and Reform Commission are expected to make it more difficult for first-time issuers to win approval to sell offshore bonds. By having dollar bonds outstanding, they will be able to demonstrate a need for refinancing, which might help with offshore quota approval.

Local government funding vehicles like Kunming Rail Transit Group and Shuifa Group sold first-time dollar issues, while tech company Weibo and private school operator Bright Scholar Education Holdings added some diversity to the market with their debut offerings.

League tables


Top bookrunners of Asian fixed and

floating-rate bonds for G3 currencies

ex-Japan, inc-Australia

(inc-Samurais and Yankees)1/1/19 – 31/12/19 Amount

Name Issues US$(m) %

1 HSBC 310 35,341.8 8.9

2 Citigroup 174 23,992.7 6.1

3 Standard Chartered 194 18,214.5 4.6

4 JP Morgan 118 17,056.7 4.3

5 Bank of China 207 14,988.1 3.8

6 Bank of America 107 14,306.5 3.6

7 Goldman Sachs 75 13,142.8 3.3

8 Credit Agricole 88 13,034.2 3.3

9 BNP Paribas 118 12,897.5 3.3

10 UBS 132 12,879.7 3.3

Total 875 395,496.3

*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)1/1/19 – 31/12/19 Amount


1 HSBC 283 30,120.0 8.6

2 Citigroup 151 18,816.8 5.4


4 Bank of China 207 14,988.1 4.3

5 JP Morgan 103 12,943.5 3.7


7 Credit Suisse 114 11,065.7 3.2

8 Bank of America 95 11,008.9 3.2

9 UBS 122 10,586.4 3.0

10 Goldman Sachs 66 10,514.4 3.0

Total 797 349,236.3

*Market volume

Proportional credit

Source: Refinitiv data SDC Code: AR2

Top bookrunners of

all Asian currencies

(excluding Japan and Australia)

(inc-certificates of deposit)1/1/19 – 31/12/19 Amount


1 Bank of China 1,486 154,614.6 7.5

2 ICBC 1,409 136,354.5 6.7

3 CCB 1,428 120,079.9 5.9

4 BoCom 1,206 105,072.8 5.1

5 Citic 1,086 102,933.8 5.0

6 ABC 1,012 90,155.8 4.4

7 CSC Financial 736 78,232.9 3.8

8 Industrial Bank 818 60,035.7 2.9

9 China Merchants Bank 583 49,574.7 2.4

10 Guotai Junan Sec 458 45,896.8 2.2

Total 11,748 2,049,293.2

*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)1/1/19 – 31/12/19 Amount


1 KB Financial 617 25,546.1 7.3

2 NH Inv & Sec 385 21,952.7 6.3

3 Korea Investment 541 18,298.0 5.2

4 Kyobo Life 384 14,673.6 4.2

5 Mirae Asset Daewoo 292 11,839.8 3.4

6 Axis 174 11,823.1 3.4

7 ICICI Bank 169 11,251.4 3.2

8 Kiwoom Sec 247 11,104.4 3.2

9 HSBC 168 10,312.1 2.9

10 DB Financial Invest 192 9,688.7 2.8

Total 6,494 350,750.9

*Market volume

Proportional credit

Source: Refinitiv data SDC Code: AS1a

APAC lending resumes downtrend Loans League Tables Slower global growth weighs on syndication activity

BY CHIEN MI WONG

Syndicated lending in Asia Pacific, excluding Japan, fell 4.2% in 2019 as the global economy stuttered from the protracted US-China trade tensions, resuming a multi-year downtrend that was only briefly interrupted the previous year.

Loan volumes dropped to US$464.24bn from US$484.82bn despite a 10.3% increase in deal flow to 1,327 loans against 1,203 a year before. With last year’s decline, syndicated loans have now fallen for four of the past five years in the region.

Declining interest rates encouraged borrowers to lock in cheap fixed-rate funding and G3 currency bond issuance from Asia Pacific surged to a two-year high of US$394.88bn in 2019 as a result, according to Refinitiv data.

“There has been volume leakage from the loan to bond markets in 2019,” said Ashish Sharma, head of loan syndications in Asia Pacific at HSBC. “Bond markets have seen strong issuance, and it’s not just the volumes, but borrowers have got access to more diversified structures, tenors and currencies in Asia.”

M&A REBOUND

Hong Kong, despite taking an economic hit during six months of anti-government protests, stood out with a 24.3% jump in lending activity to a record US$137.48bn in 2019, grabbing a 30% share of APAC (ex-Japan) loan volumes.

That performance was largely due to jumbo loans and

event-driven financings, such as a HK$25.2bn (US$3.23bn) loan backing the take-private of Hopewell Holdings and a €4.56bn (US$5bn) takeout financing for CK Hutchison’s European, Hong Kong and Macau telecom operations.

M&A lending in APAC (ex-Japan) rose 20.8% last year to US$42.59bn. Hong Kong accounted for 35% of the total and Australia, China and Indonesia were the only other growing regional markets in that segment.

Notwithstanding strong event-

driven financings, Australian syndicated loan volumes still tumbled 20.5% to US$75.95bn in 2019 from US$95.53bn in 2018.

Elsewhere, Singapore suffered a 11.7% year-on-year decline to US$45.62bn despite a mammoth S$8bn (US$5.86bn) financing for casino operator Marina Bay Sands in August.

Loan volumes in China fell 16% to US$93.5bn because of muted deal flow and a slowing domestic economy. India and Indonesia also underperformed, slumping 24.5% and 11.6% respectively to US$18.2bn and US$12bn.

Vietnam and the Philippines were among the few strongly growing markets. Both countries have been steadily increasing loan volumes in recent years and in 2019 doubled their 2018 tallies to respectively US$7.71bn and US$5.62bn.

“ASEAN doesn’t see a lot of pain as a result of the ongoing trade war tensions, because the region has been supported by trade diversion, rising foreign direct investment and tourism,” said Aditya Agarwal, head of loan syndicate and sales at Maybank. “Vietnam continues to be a smaller but growing market. First-time issuers and even private sector [borrowers]

are looking at the offshore loans market.”

Alternative sources of liquidity such as the growing institutional investor market in Australia and the Samurai loan market in Japan gave borrowers more options to extend tenors and squeeze pricing. High-grade credits, in particular, made the most of these dynamics and pressured relationship banks for tightly priced loans.

“We will continue to see longer-tenor transactions with the main driver for this from investors given the potentially better returns and how low pricing is at the shorter end,” said Gavin Chappell, head of syndications, Australia at ANZ.

The prospects for 2020, particularly financial sponsor and M&A-related lending, are looking strong.

“In 2020, we expect the level of LBO activity to increase as private equity clients remain hungry to deploy capital and the fundamentals are strong,” said James Horsburgh, head of leveraged and acquisition finance in Asia Pacific at HSBC. “We are also helping Chinese clients acquire within Asia and Europe, and the take-private scene is coming back into focus.”



Top bookrunners of Asia Pacific

syndicated loans G3 currencies

(ex-Japan, inc-Australia)1/1/19 – 31/12/19 Amount

Name Deals US$(m) %

1 Bank of China 43 11,989.1 8.3

2 HSBC 58 10,394.0 7.2


4 Mizuho 40 6,914.9 4.8

5 SMFG 40 6,569.3 4.5

6 DBS 42 5,235.3 3.6

7 ANZ 31 5,180.4 3.6

8 CCB 18 4,814.0 3.3

9 MUFG 36 4,342.8 3.0

10 Deutsche 21 4,200.2 2.9

Total 297 145,396.5

*Market volume

Proportional credit

Source: Refinitiv data SDC Code: S3k


syndicated loans All currencies

(ex-Japan, inc-Australia)1/1/19 – 31/12/19 Amount

Name Deals US$(m) %

1 Bank of China 259 44,186.7 12.4

2 HSBC 98 18,067.5 5.1

3 BoCom 80 16,484.5 4.6

4 ANZ 91 16,404.1 4.6


6 CCB 38 12,180.6 3.4

7 State Bank of India 11 11,598.0 3.3

8 Mizuho 65 11,458.3 3.2

9 SMFG 62 10,688.8 3.0

10 MUFG 60 9,238.2 2.6

Total 1,091 357,064.0

*Market volume

Proportional credit

Source: Refinitiv data SDC Code: S3


syndicated loans Int’l currencies, Rmb

and NT$ (ex-Japan, inc-Australia)1/1/19 – 31/12/19 Amount

Name Deals US$(m) %

1 Bank of China 475 62,414.3 13.4

2 BoCom 142 21,576.7 4.6

3 HSBC 195 19,836.2 4.3

4 ANZ 168 18,187.1 3.9

5 DBS 171 16,950.2 3.7

6 ICBC 130 16,770.0 3.6

7 SMBC 159 14,312.2 3.1

8 MUFG Bank 151 13,699.5 3.0

9 CCB 118 13,422.6 2.9

10 Mizuho Bank 136 13,255.3 2.9

Total 1326 464,140.0 0.0

*Market volume

Proportional credit

Source: Refinitiv data LPC


syndicated loans All currencies

(ex-Japan and Australia)1/1/19 – 31/12/19 Amount

Name Deals US$(m) %

1 Bank of China 249 42,042.9 14.2

2 BoCom 80 16,484.5 5.6


4 HSBC 79 12,879.8 4.3

5 CCB 36 11,776.0 4.0


7 ABC 28 9,114.1 3.1

8 Mizuho 54 9,095.7 3.1

9 DBS 67 9,087.7 3.1

10 SMFG 48 7,866.9 2.7

Total 929 297,048.4

*Market volume

Proportional credit

Source: Refinitiv data SDC Code: S5c

“There has been volume leakage from the loan to bond markets in 2019.”

Asia ECM set for busy first half Equities League Tables Issuers set to front-load deals ahead of US presidential election

BY IFR EQUITIES REPORTERS

Equity capital markets bankers are expecting a busy first half in Asia-Pacific before the US presidential election in November is likely to bring uncertainty to the markets.

Total equity issuance rose 6.8% in 2019 to US$235bn after sizable Chinese listings in the fourth quarter reversed a declining trend in the first nine months of the year.

In the fourth quarter, Alibaba Group Holding raised HK$101bn (US$12.9bn) from a secondary listing in Hong Kong and Postal Savings Bank of China raised Rmb32.7bn (US$4.7bn) from a Shanghai IPO.

Looking ahead, there is not much visibility about large Chinese IPOs yet. The biggest live deal in the pipeline is the US$3bn Hong Kong IPO of China Bohai Bank, but bankers are hoping tech giants such as ByteDance and Ant Financial could also come to market this year.

However, follow-on offerings from Chinese issuers are likely to be a major volume driver this year.

“We are expecting to see more US-listed Chinese companies seek a secondary listing in Hong

Kong and more Chinese issuers selling GDRs in London,” said Peihao Huang, head of Asia ECM at UBS.

US-listed Chinese technology companies Trip.com, Netease and Baidu are all considering share sales in Hong Kong, while SDIC Power and China Pacific Insurance (Group) are

both planning to sell global depositary receipts in London.

Bankers are expecting deals to hit the market before the US presidential election. Despite sabre-rattling between the US and Iran, issuers from China to India last week sealed big transactions, including a US$3bn share placement and convertible bond from Bharti Airtel, a HK$8bn primary follow-on from Sunac China and US$980m follow-on and CB from Luckin Coffee.

MORE DIVERSITY

In a break from recent China-dominated years, a more diverse crop of Asian IPOs is on the cards in 2020. India’s SBI Cards is set to raise US$1.35bn in the first quarter while Thai Beverage is planning an up to US$2bn SGX IPO of its regional brewery business in the first half. SK Biopharmaceuticals may also come to market in the first half with an up to US$1bn

KRX listing. Other upcoming large non-

Chinese IPOs include Thailand’s Central Retail (US$2.7bn), PTT Oil and Retail (US$2bn) and SCG Packaging (US$1bn).

In India, bankers anticipate more IPOs and QIPs in 2020 and forecast issuance volume of up to US$30bn, compared to US$21bn in 2019.

“The good news is that most IPOs and QIPs made money for investors in 2019 and if pricing remains realistic they will continue to buy,” a Mumbai-based ECM banker said.

Australian ECM activity is expected to be dominated by secondary offerings with strong deal flow driven by M&A transactions. Jun Bei Liu, portfolio manager at Tribeca Investment Partners, expects more activity particularly in sectors such as industrials, resources and energy that offer attractive valuations.

A-SHARE BOOM

China’s A-share market is set for a busy year, after regulators made it easier for domestic companies to raise capital with a series of rule changes, such as the follow-on rules announced in the second half of 2019.

“Previous reforms in China’s capital markets normally only targeted specific areas. The reform last year, however, was across the board and this could help drive activity,” said Wei Shanwei, deputy general manager at Huajing Securities.

Another significant development is ChiNext’s plan to adopt the registration-based IPO system, raising hopes that the Nasdaq-style board of the Shenzhen Stock Exchange may replicate the success of the Shanghai Star market.

“There will be more A-share IPOs this year and we expect around 70% of them to come from Star board and ChiNext,” said Wang Feng, partner at law firm Jingtian & Gongcheng.

League tables


Top bookrunners of global common

stock Asia Pacific (ex-Japan)1/1/19 – 31/12/19 Amount


1 Morgan Stanley 68 13,218.3 7.1

2 CICC 63 10,958.4 5.9

3 UBS 76 10,698.5 5.8

4 JP Morgan 56 10,655.7 5.7

5 Goldman Sachs 55 10,333.0 5.6

6 Citic 61 9,390.3 5.1

7 Citigroup 62 9,029.8 4.9

8 Credit Suisse 54 6,549.1 3.5

9 HSBC 25 5,661.4 3.1

10 Bank of America 28 5,480.8 3.0

11 China Sec 38 3,906.9 2.1

12 China Merchants Sec 25 3,351.2 1.8

13 Deutsche 26 2,913.4 1.6

14 Haitong Sec 60 2,853.7 1.5

15 Guotai Junan Sec 43 2,823.0 1.5

16 ICBC 20 2,623.3 1.4

17 DBS 23 2,589.2 1.4

18 Huatai Sec 24 2,549.9 1.4

19 Macquarie 29 2,489.5 1.3

20 GF Sec 26 2,236.0 1.2

Total 2,023 185,716.0

Market volume

Proportional credit

Source: Refinitiv data SDC Code: C4a2

Top bookrunners of global convertible

offering Asia Pacific (ex-Japan)1/1/19 – 31/12/19 Amount


1 Citic 18 6,519.8 11.9

2 Goldman Sachs 12 5,046.1 9.2

3 CICC 7 3,980.8 7.3

4 Huatai Sec 13 3,811.4 7.0

5 China Sec 18 3,537.3 6.5


7 Bank of China 4 2,442.7 4.5

8 Haitong Sec 8 2,388.0 4.4


10 Citigroup 10 1,697.7 3.1

11 UBS 6 1,651.4 3.0

12 Ping An Sec 4 1,592.3 2.9

13 Bank of America 7 1,574.8 2.9

14 JP Morgan 9 1,305.7 2.4



17 GF Sec 8 944.4 1.7

18 Huarong Sec 5 747.1 1.4

19 Everbright Sec 2 651.7 1.2

20 Shenwan Hongyuan Sec 4 621.8 1.1

Total 185 54,660.4

*Market volume

Proportional credit

Source: Refinitiv data SDC Code: C9b1

Global equity and equity-related

Asia Pacific incl Australasia, ex Japan1/1/19 – 31/12/19 Amount


1 Citic 79 15,910.1 6.8

2 Goldman Sachs 66 15,303.7 6.5

3 CICC 70 14,939.2 6.4


5 JP Morgan 59 11,197.3 4.8

6 UBS 74 11,158.9 4.8

7 Citigroup 71 10,031.8 4.3


9 China Sec 56 7,444.2 3.2

10 Bank of America 35 7,055.5 3.0

11 Huatai Sec 37 6,361.3 2.7

12 HSBC 29 6,162.3 2.6


14 Haitong Sec 68 5,241.7 2.2


16 GF Sec 34 3,180.4 1.4

17 Deutsche 28 3,158.7 1.4

18 Bank of China 21 3,147.9 1.3

19 DBS 24 2,724.2 1.2

20 ICBC 20 2,623.3 1.1

Total 1,805 234,687.9

Source: Refinitiv data

“We are expecting to see more US-listed Chinese companies seek a secondary listing in Hong Kong and more Chinese issuers selling GDRs in London.”

SMARTER DATA INSIGHTS.THE DIFFERENCE BETWEEN A DECISION AND AN EDUCATED GUESS.Refinitiv’s trusted model and tools enable financial professionals to pursue new opportunities with confidence.

refinitiv.com

People&Markets

Asian IB fees climb to record highChinese banks gobble up market share after bumper 2019Asian investment banking fees climbed to a record high in 2019 after a blowout year in credit and a strong end to the year in equities, belying concerns about the impact of slowing global growth and a protracted US-China trade dispute.

Overall investment banking fees in

increase of 10% year on year and slightly ahead of the previous record of US$21.92bn in 2017.

China, unsurprisingly, accounted for the lion’s share of the fees in the region,

on year, as a slowing of the country’s deleveraging campaign and reforms to its listing regime increased deal opportunities.

rankings with Chinese banks and brokerage

positions for overall fees compared with three in the previous year.

BANK OF CHINA, which tends to dominate the league tables on the back of its strong syndicated lending business, remained

investment banking fees for a 5.6% share of wallet. The data capture revenues from equity and debt underwriting, syndicated lending and M&A advisory.

CITIC, which includes China Citic Bank, Citic Securities and CLSA, retained its second spot, closing the gap on Bank of China following a particularly strong year in equity capital markets, where it jumped

HSBC was the only international bank among the top seven, rising three places to fourth, as it dominated G3 bond underwriting with a 7.3% wallet share.

UBS fell two places to eighth, while GOLDMAN SACHS and CITIGROUP – both falling

– were the only other international banks among the top 10 for overall fees.

RISING TIDEDespite losing ground to their Chinese competitors in the investment banking

from a strong year in credit, which accounted for almost half of investment banking fees in the region last year.

Overall DCM fees came in at US$10.52bn, an increase of almost 40% year on year, as the combination of a more dovish US Federal Reserve and the impact of China’s slowing deleveraging campaign helped raise overall deal volumes, particularly in the lucrative high-yield sector.

Fees from G3 bonds reached US$2.71bn last year, an increase of 38% year on year. This even surpassed the record US$2.41bn set in 2017 as high-yield issuance boomed, particularly from China’s real estate sector.

“Despite the trade war crosswinds having a dampening effect on the overall economy and keeping a lid on investment-grade funding, 2019 will go down as a vintage year for Asian credit, especially for high yield,” said Haitham Ghattas, head of


TOP STORY LEAGUE TABLES

Who’s moving where...

Bi Mingjian, chief

executive officer of

CHINA INTERNATIONAL

CAPITAL CORPORATION,

has resigned.

According to an

announcement from

CICC, Bi resigned for

career reasons.

Huang Zhaohui, head

of CICC’s investment

banking division,

replaces Bi as CEO.

Bi, who helped set

up CICC in 1995,

returned to the

country’s oldest

investment bank in

2015 as CEO.

He is credited for

having helped shift

the bank’s strategy

towards retail

brokerage following

the acquisition of

China Investment

Securities in 2016.

Former HSBC Greater

China chief executive

Helen Wong is joining

OCBC BANK as deputy

president and head

of global wholesale

banking.

Wong, whose

appointment is

effective February 3,

will have oversight

of the transaction

banking business

including cash

management and

trade as well as

investment banking.

She reports to CEO

Samuel Tsien.

Wong, who started

her career at OCBC

Bank in 1984, stood

down from HSBC in

July last year. She

had been with the

emerging markets

lender for over 25

years.

Full Year 2019 IB Fee League TableASIA PACIFIC (EX-JAPAN)

Values fees

Name (US$m) %

1 Bank of China 1,237.28 5.59

2 Citic 1,006.93 4.55

3 ICBC 806.02 3.64

4 HSBC 609.22 2.75

5 BoCom 589.34 2.66

6 CCB 573.43 2.59

7 CICC 547.48 2.47

8 UBS 541.05 2.45

9 Goldman Sachs 531.77 2.40

10 Citigroup 529.27 2.39

11 Morgan Stanley 487.93 2.21

12 ABC 481.33 2.18

13 JP Morgan 474.22 2.14

14 Credit Suisse 469.89 2.12

15 Guotai Junan Sec 413.17 1.87

Grand Total 12,157.62 54.94

Total 22,127.61 100.00

Source: Refinitiv

ASIA PACIFIC IB FEES (EXCLUDING JAPAN) (US$BN)

Source: Refinitiv

0

5

10

15

20

25

2014 2015 2016 2017 2018 2019

BONDS EQUITY LOANS M&A



China suspends London Stock Connect schemeChina has temporarily blocked planned cross-border listings between the

because of political tensions with the UK,

The sources, who include public

Shanghai-London deals, all said that politics was behind the suspension.

Two of them highlighted the UK’s stance over the Hong Kong protests and one pointed to remarks over the detention of a now former staff member at its consulate in Hong Kong.

to Reuters on condition of anonymity because they are not authorised to speak about the matter publicly.

The China Securities Regulatory Commission subsequently denied that the Connect scheme had been halted.

“Media reports on (the) postponement of Shanghai-London Stock Connect do not match facts,” Chang Depeng, a spokesman for the CSRC, said at a news

“From the opening of the Shanghai-London Stock Connect to now, it has been operating normally.”

A spokesperson for the London Stock

comment.Shanghai-London Stock Connect, which

began operating last year, was devised as a way of improving the UK’s relationship

with the world’s second biggest economy and was seen as a major step by China to open up its capital markets as well as linking them globally.

CHINA CHILLHUATAI SECURITIES

company to use the scheme in May, with SDIC POWER set to become the second in December with a listing of global depositary receipts in London representing 10% of its share capital.

However, the alternative energy operator’s deal was postponed at an advanced stage, with SDIC Power citing market conditions as the main reason.

Five sources told Reuters SDIC Power’s deal was halted because of Beijing’s suspension of Stock Connect.

Other hopefuls such as CHINA PACIFIC

INSURANCE, which one of the sources said could have launched a deal as early as the

to put their cross-border listing plans on ice, they added.

did not respond to requests for comment.“It’s not only a big blow to the

companies looking to broaden the investor base via listings in London, but also to China’s links with global markets,” one source, who has worked on one of the GDR deals, told Reuters.

Trouble with the scheme comes at a bad time for the UK, which is keen to build ties with non-EU countries as it prepares to leave the bloc, and the LSE.

worst year in terms of new listings in

data showed, with political volatility and concerns over the UK’s EU divorce crimping stock market fundraisings.ABHINAV RAMNARAYAN, JULIE ZHU

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

capital markets for APAC at Deutsche Bank.International banks took three of the top

four positions in the G3 fee league tables. In addition to HSBC, CREDIT SUISSE ranked third with a 4.5% share of wallet, while Citigroup was fourth with a 4.4% market share.

ECM REVIVALECM was the only other asset class where fees rose for the full year, up 3% to US$5.18bn, as IPO activity rebounded during the second half and equity-linked business remained robust throughout the year.

Overall fees from IPOs jumped 65% to US$1.62bn during the second half on

Hong Kong including Alibaba’s HK$101bn (US$13bn) secondary listing, the HK$45bn spin-off of Anheuser-Busch InBev’s APAC unit and Topsports International’s HK$7.9bn IPO.

“While the IPO market last year was a bit softer overall than the previous year, we started to see a lot more deals get done during the second half as valuations became more realistic,” said Gaetano Bassolino, head of global banking for APAC at UBS. “When you compare the second half of last year with the second half of

Fees from equity-linked deals edged up to US$611m from US$610m a year earlier following a number of big deals during

China, such as the Rmb40bn (US$$5.75bn) convertible bond from China Citic Bank and the Rmb26bn CB of Ping An Bank.

Fees from loan underwriting fell 13% to US$3.61bn as borrowers opted to tap the debt markets instead due to lower interest rates, while M&A fees fell 18% to US$2.82bn as stalling growth and the US-China trade war led to a dearth of sizeable, strategic deals.THOMAS BLOTT

NATIXIS has hired

Bianca Law (pictured)

as head of sponsor

finance for Asia in

its corporate and

investment bank.

Based in Hong Kong,

she reports to Jean-

Thomas Haller, head

of acquisition and

strategic finance in

Asia Pacific.

Law previously led

the loan syndications

team at Standard

Chartered in Hong

Kong.

Natixis has also hired

Miranda Zhao as head

of M&A in APAC.

Based in Hong Kong,

she reports to Raghu

Narain, head of APAC

investment banking.

She was most

recently head of M&A

at China Everbright.

Former Mizuho

Securities debt

capital markets

banker Pramod Shenoi has joined research

firm CREDITSIGHTS as

head of Asia Pacific

financial institutions

research.

Shenoi was previously

head of DCM for the

financial institutions

group in Asia ex-

Japan at Mizuho, a

position he held for

two-and-a-half years

before leaving in May

last year.

Prior to that, he

worked at Standard

Chartered and also

worked at Nomura

having joined the

bank following its

acquisition of Lehman

Brothers’ European

and Asian businesses

in 2008.


People&Markets

Singapore gets 21 digital banking bidsSingapore has drawn huge interest from technology companies looking to shake up the city-state’s banking landscape,

bank licences on offer.Among the bidders are Alibaba Group

ANT FINANCIAL, a venture between SINGAPORE TELECOMMUNICATIONS and South-East Asian ride-hailer GRAB, and a consortium led

RAZER.SEA, a

group led by Singapore tycoon Ron Sim’s V3

GROUP, and a consortium led by Hong Kong AMTD, which also

XIAOMI, have applied as well.

Roughly 50 companies are involved in the bidding, sources told Reuters.

Singapore’s banking liberalisation is its biggest in two decades and follows similar moves in Hong Kong, which issued eight online banking licences last year.

The Monetary Authority of Singapore said it received strong interest from a

diverse group of applicants but did not name them. Seven bidders are for retail banks and the rest are for wholesale banks.

technology and telecommunications

platforms and payment services providers)

Tuesday.

operate at lower costs and offer services that differ from local incumbents such as DBS Group and Oversea-Chinese Banking Corp.

Licensing requirements are generally stricter than other markets such as Hong

will need S$1.5bn (US$1.1bn) in paid-up capital.

Singapore is issuing up to two retail and three wholesale bank licences.

Accredited retail digital banks will be able to accept deposits from and offer services to both retail and non-retail customers, although they must be headquartered in Singapore and controlled by Singaporeans.

Wholesale banks will mostly serve small and medium-sized enterprises and will not be subject to local control restrictions.

Singapore will announce the winners

operations from mid-2021 onwards.ANSHUMAN DAGA

Who’s moving where...

MUFG BANK has

appointed Johnson Yuan to lead its China

corporate banking

business.

Yuan, who was

most recently head

of China corporate

banking at Citigroup,

reports to Liu Lihong,

deputy president of

MUFG China, and

Tony Lee, MUFG’s

head of global

corporate and

investment banking

for East Asia, in his

new role.

Yuan started his

banking career in

1993 with Sanwa

Bank, one of MUFG’s

predecessor banks.

He worked at

Citigroup between

2005 and 2018.

CREDIT SUISSE has

strengthened

its China prime

brokerage team with

two hires.

Michelle Lim has

joined as head

of China prime

sales and business

development, while

Henry Lam has been

appointed director in

the prime sales team.

Lim was most

recently head

of China prime

brokerage sales at

Deutsche Bank, while

Lam was a director

at the German

investment bank.

Last year, Deutsche

exited equities

trading and

underwriting in the

region as part of a

larger retrenchment

globally.

Singapore’s banking liberalisation is its biggest in two decades and follows similar moves in Hong Kong, which issued eight online banking licences last year.


Goldman revamps business structureGOLDMAN SACHS has realigned its banking business segments to more closely match its rivals and allow analysts and investors more insight into how it makes money.

major revamp of the investment bank as

The changes should also make it easy for investors to understand and appreciate the business, potentially reviving the stock price which has underperformed relative to peers.

The new business segments are: investment banking, global markets, asset management, and consumer and wealth management.

The changes eliminate an all-encompassing “investing and lending” segment that frustrated analysts who argued the unit was opaque.

Goldman said the realignment “will

now managed, but also help drive greater

strategy.” Wells Fargo bank analyst Mike Mayo

applauded the “intensity” of the revamp. “The new business segments are being

with more logic,” Mayo said. “This attitude shows that management is aware of an underperforming stock price.”

“I think transparency has improved as a result of the changes,” said Keefe, Bruyette & Woods analyst Brian Kleinhanzl.

“At the end of the day, we believe that a

discounted multiple was put on Goldman’s more stable revenues in the investing and lending business, but it will likely take time for that discount to reverse after the segment reporting changes.”

SHIFTING SEGMENTSThe results previously included in the investing and lending segment will now be spread across the four segments.

Investment banking will now include the results from lending to corporate clients, including middle-market lending, relationship lending and acquisition

and lending. Institutional client services has been

renamed global markets. The new group

and equity trading as well as items previously reported in investing and lending, including results from warehouse

institutional clients. The results from transactions in derivatives

related to client advisory and underwriting assignments, which were previously reported in investment banking, will also now be reported in global markets.

Investment management has been renamed asset management. It incorporates results from investments in equity securities and lending activities related to Goldman’s asset management businesses, including investments in debt securities and loans backed by real estate, both previously reported in investing and lending.

Consumer and wealth management is a new segment that includes management and other fees. It also comprises results from loans through Goldman’s private bank, and unsecured loans and deposits through its Marcus digital bank.PHILIP SCIPIO


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

CREDIT SUISSE has

launched a new

equity research team

in Asia Pacific focused

on quantitative

strategy.

The new APAC

quantitative and

systematic strategy

team will be led by

Will Stephens, who

was most recently

head of Delta One

strategy and regional

head of equity

strategy at Deutsche

Bank.

He is joined by

two other former

Deutsche colleagues,

Elita Lai and Dave Yin,

who have assumed

the roles of equity

quantitative strategist

and quantitative

analyst respectively.

All three are based in

Hong Kong.

HONG KONG EXCHANGES

AND CLEARING’s head

of strategy James Fok

has joined the London

Metal Exchange

on secondment as

strategic adviser.

Till Rosar, until

recently senior vice

president of group

strategy and head

of investor relations,

replaces him.

A former Citigroup

investment banker

and fluent Mandarin

speaker, Fok led

HKEx’s £31.6bn

(US$41.28bn) bid for

the London Stock

Exchange Group

last year, which was

rejected by LSE and

called off after failing

to garner enough

investor support.

HKEx acquired LME in

2012 for £1.4bn.

IN BRIEFJho LowSays it ain’t so

Fugitive Malaysian financier Jho Low has said he

only acted as an intermediary for deals involving

1MDB, denying in an interview with a Singaporean

newspaper that he had set the stage for the theft

of billions of dollars from the Malaysian state fund.

Low faces charges in the US and Malaysia for his

alleged central role in defrauding up to US$4.5bn

from 1MDB, founded by former Malaysian Prime

Minister Najib Razak and the subject of the

US Department of Justice’s largest ever anti-

kleptocracy case.

“People and companies act as introducers or

intermediaries all the time,” Low said in an

interview with Singapore’s Straits Times.

“This is not a unique situation. I was requested

to assist because of my good relationships with

influential foreign businessmen and decision-

makers.”

A spokesman for Low did not immediately respond

to a request for additional comments.

To a question on why he has remained on the run,

Low said the Malaysian government has victimised

him and his family, ignoring “basic human rights

and fair judicial processes” by branding him as the

mastermind behind the scandal.

Malaysia’s prime minister’s office did not

immediately respond to a request for comment.

Low said his “professional connections” had

helped Malaysia build strong ties with key allies,

particularly Saudi Arabia, boosting Haj pilgrimage

quotas for Malaysian Muslims and investments

in financial, real estate and other sectors in the

South-East Asian country.

Low declined to divulge his current location but

confirmed he was offered asylum in August last

year. He did not name the country offering asylum.

Low, who said he has had “multiple brushes with

cancer”, said he now plans to focus on investing in

cutting-edge cancer research.


People&MarketsPeople’s Bank of China

Reserve requirement cut again

China’s central bank cut the amount of cash that

banks must hold as reserves, releasing around

Rmb800bn (US$114.91bn) in funds to shore up

growth.

The PEOPLE’S BANK OF CHINA said on January 1 the

cut would lower banks’ reserve requirement ratio

by 50bp. The move brings the level for big banks

down to 12.5%. The reduction came into effect last

Monday.

The move sparked a rally in global equities, with

the Nasdaq Composite hitting a record high,

although some of those gains were later reversed

as US-Iran tensions escalated following the killing

of Iranian military commander Qassem Soleimani.

Many investors had expected Beijing to announce

more support measures. While recent data have

shown signs of improvement and Beijing and

Washington have agreed to de-escalate their long

trade war, analysts are unsure if either will prove

sustainable and forecast growth will cool further

this year.

Premier Li Keqiang raised expectations of an

imminent RRR cut in a speech in late December,

saying authorities were considering more

measures to lower financing costs for smaller

companies, including broad-based and “targeted”

RRR reductions.

“The RRR cut will help boost investor confidence

and support the economy, which is gradually

steadying,” said Wen Bin, an economist at

Minsheng Bank in Beijing, who also expects

another cut in China’s new loan prime rate this

month.

Freeing up more liquidity also reduces the risk of a

credit crunch ahead of the Lunar New Year holiday

later this month when demand for cash surges.

MUFG Bank

US$2bn Danamon write-down

The banking unit of Japan’s MITSUBISHI UFJ FINANCIAL

GROUP said it would book a one-off charge of

about ¥207.4bn (US$1.9bn) for the quarter ended

December 31 due to a drop in the share price of its

Indonesian subsidiary, BANK DANAMON INDONESIA.

Danamon, of which MUFG Bank owns 94.1%,

closed at Rp3,950 on December 30, the Indonesia

Stock Exchange’s last trading day of 2019.

Under accounting rules, if Danamon’s shares close

below 50% of the average price MUFG paid for its

stake, the Japanese bank is required to reassess

the value of the holding and book a one-time

charge.

MUFG did not disclose the price level where

it would be required to book an extraordinary

charge. It has built up its stake through a series

of acquisitions. In April, it more than doubled its

holding to 94% from 40%, paying Rp9,590 a

share, according to a filing.

But shares of Danamon have tumbled since and

last month hit their lowest level in nearly three

years, at Rp3,640. The shares were down by nearly

half last year and were hit particularly hard in May

after index provider MSCI removed the bank from

its Global Standard index due to low liquidity.

Anbang

Chengdu RCB stake up for sale

China’s ANBANG INSURANCE GROUP, which was taken

over by the government last year, said it has put

its 35% stake in CHENGDU RURAL COMMERCIAL BANK

up for sale for Rmb16.5bn (US$2.4bn), its second

attempt to offload the lender.

The planned sale, revealed in a filing with

the Beijing Financial Assets Exchange on

December 31, comes as the previously acquisitive

conglomerate has been selling off assets following

a government takeover in February 2018.

The government stepped in as part of a campaign

to curb financial risk in the aftermath of a massive

asset-buying spree by a handful of private sector

conglomerates. Anbang’s previous chairman, Wu

Xiaohui, has since been sentenced to prison for 18

years for embezzlement.

Anbang previously tried to sell Chengdu RCB for

Rmb16.8bn in December 2018, only to withdraw

the offer in January last year without explanation.

Anbang is the biggest shareholder of state-backed

Chengdu RCB.

In the event of multiple bids for Anbang’s stake in

the bank, the Beijing Financial Assets Exchange

will conduct an auction that will conclude on

February 1, the filing said.

Chengdu RCB was one of four banks flagged by

former UBS analyst Jason Bedford in a 2017 report

on the build-up of trust beneficiary rights and

directional asset management plans, effectively

loans disguised as investment products.

The three others – Baoshang Bank, Bank of

Jinzhou and Hengfeng Bank – have all since been

the subject of government rescues in one guise or

another.

Securities and Investment Board of India

Tightening of credit rating rules

India’s market regulator has again tightened

rules around credit ratings, this time blocking

investment-grade ratings for companies that fail

to cooperate with rating agencies.The SECURITIES

AND EXCHANGE BOARD OF INDIA said that rating

agencies must downgrade any outstanding ratings

to non-investment grade if an issuer has failed to

cooperate for more than six months. If the issuer

fails to cooperate for another six months, the

agency will not assign any new ratings to such an

issuer until it cooperates.

On November 21, Sebi ordered all listed companies

to disclose on the stock exchanges any default on

payment of interest on non-convertible debentures

and non-convertible redeemable preference

shares within 24 hours. Listed companies must

also disclose any default on loans and cash credit

facilities from financial institutions that continue

beyond 30 days.

Rating agencies are obliged to downgrade an

issuer to default as soon as any debt is overdue,

but analysts argue they often do not have

sufficient access to information to make those

calls.

The latest rule changes come after rating agencies

failed to raise red flags ahead of defaults by

shadow lenders, notably Infrastructure Leasing

and Financial Services in September 2018.

Separately, on December 26, Sebi fined Icra,

the Indian arm of Moody’s, and Care Rs2.5m

(US$35,100) each for failing to “to exercise proper

skill, care and due diligence” when assigning

ratings to IL&FS.

SFC

RHB fined over conflicts of interest

The Securities and Futures Commission of

Hong Kong has fined RHB SECURITIES HK$6.4m

(US$820,000) for failing to comply with regulatory

requirements over conflicts of interest.

The securities regulator said that RHB failed to

properly implement its policy for avoiding conflicts

of interest between its research reports and

investment banking relationships.

It also failed to adequately disclose its investment

banking relationship with a listed company in a

research report published in November 2015.

Further, the SFC said that RHB failed to adequatly

monitor the trading activities of its research

analysts.

RHB’s fine comes less than a year after the SFC

publicly censured Nomura for failing to comply

with restrictions on the issuance of research

reports on a company it was advising.

Fidelity

Fine for unlicensed futures trading

Hong Kong’s market watchdog fined a local unit

of Fidelity HK$3.5m (US$450,000) for trading

nearly US$40bn of futures contracts without an

appropriate licence.

The trades took place from 2007 to 2018 and while

the asset manager identified the incident itself, it

did not report it to the regulator for two months,

rather than immediately as required.

The unit, FIL INVESTMENT MANAGEMENT (HONG KONG),

has multiple other licences from the Securities

and Futures Commission, but it did not, at that

time, have a licence to deal in futures contracts,

and relied on exemptions to carry out the activity.

“We have taken all steps necessary to improve our

internal controls,” said a Fidelity spokeswoman,

adding that the company regretted that the

incident took place.



Singapore to scrutinise retail bond salesSingapore dollar retail bond offerings are set to come under tighter scrutiny

A working group of industry professionals set up by SGX REGCO, the

review the current retail bond framework, particularly admission criteria for retail bond listings, the continuing obligations of bond issuers and ways to protect bondholder interests in the event of a default or restructuring.

The working group comprises banks,

Representatives from Perpetual Asia, Allen & Gledhill, Allen & Overy, Clifford Chance, DBS Bank, OCBC Bank, UOB Bank and the Securities Investors Association Singapore will present their recommendations and views to SGX RegCo by mid-2020. A public consultation will take place by the end of the year.

“The possibility of tightening the admission criteria including requiring

a minimum level of subscription by institutional investors and a credit rating are among matters to be discussed,” said Michael Tang, head of listing policy and product admission.

“The working group will also provide views on how individual investors can be

better served when bonds they hold are in distress. We want to hear suggestions on how to fund trustees acting for bondholders and ways to help bondholders organise themselves.”

A framework was introduced in 2016 to streamline the issuance of retail bonds, subject to criteria such as a minimum

listed securities. Since then, issuers such as

Temasek Holdings, Singapore Airlines and Astrea Capital have sold debt securities to retail investors.

“The framework would have been very useful but the timing of the introduction was just not right and the retail market has not really taken off since,” said one debt capital markets banker.

Singaporean marine services companies, hit by a protracted downturn in the oil and gas industry, began defaulting in 2016 when Swiber Holdings defaulted on some US$868m of debt, half of which was in Singapore dollar-denominated bonds. The majority of the defaulted bonds from the oil and gas sector were sold mainly to high-net-worth individuals, who failed in their attempts to push bond trustees to act on their behalf.

Bond restructurings came to a critical

(US$2.07bn) worth of debt. Retail investors held around S$200m of the water treatment company’s 8% preference shares and over S$300m of its 6% perpetual notes.

The defaults have soured retail investor interest in Singapore dollar bonds.

“My view is the review is not meant to tighten the framework but to clarify what additional safeguards and scrutiny are needed,” said the DCM banker. KIT YIN BOEY

“The working group will also provide views on how individual investors can be better served when bonds they hold are in distress. We want to hear suggestions on how to fund trustees acting for bondholders and ways to help bondholders organise themselves.”

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COUNTRY REPORT Australia 20 China 24 Hong Kong 38 India 40 Indonesia 44 Japan 46 Malaysia 47 Mongolia 48

New Zealand 48 Philippines 49 Singapore 50 South Korea 52 Sri Lanka 52 Taiwan 52 Thailand 53 Vietnam 55

AUSTRALIA

DEBT CAPITAL MARKETS

› NAB PRINTS TIGHT YANKEE THREE-YEAR

NATIONAL AUSTRALIA BANK (Aa3/AA–/AA–) kicked off its 2020 issuance programme last Monday with a tightly priced US$1.75bn two-part senior unsecured short three-year note offering.

A US$750m 1.875% 3(a)2 December 13 2022 bond drew an order book of US$1.5bn as joint bookrunners Bank of America, Citigroup, NAB and RBC Capital Markets priced well inside high 50s IPTs at Treasuries plus 43bp, flat to NAB’s 3.7% November 2021s.

A US$1bn 144A/Reg S floating-rate note secured US$2.3bn of demand before pricing 41bp wide of three-month US Libor.

NAB overcame strong competition as one of 16 transactions in the US high-grade market last Monday which raised a combined US$24.15bn.

› WESTPAC RAISES BUMPER US$4BN

WESTPAC (Aa3/AA–/AA–) followed in NAB’s slipstream last Thursday by taking a combined US$4bn from highly receptive US bond markets.

A US$2.25bn multi-tranche SEC-registered senior unsecured Global sale comprising three US$750m offerings attracted a whopping US$8.8bn of combined orders, including US$3.7bn for the longer-dated note.

Such demand enabled joint bookrunners Citigroup, HSBC, JP Morgan, RBC Capital Markets, TD Securities and Westpac to price

the 2.0% three-year and 2.65% 10-year notes well inside 60bp area and 100bp area IPTs at Treasuries plus 42bp and 80bp.

This translated into respective negative Top lead managers of Australian dollar-

denominated domestic securitisation,

inc-self-funded transactions ex-CDOs1/1/19 – 31/12/19

Amount

Name Issues A$(m) %

1 NAB 37 7,542.8 20.2

2 Westpac 25 7,445.1 20.0

3 ANZ 16 5,197.6 13.9

4 CBA 20 4,855.4 13.0

5 Macquarie 15 3,051.9 8.2

6 Deutsche 9 1,509.4 4.1



9 UOB 5 974.8 2.6

10 MUFG 3 806.4 2.2

Total 51 37,309.5

*Market volume and including Kangaroo bonds

Proportional credit

Source: Refinitiv data SDC Code: AJ5

Top lead managers of all Australian debt, inc-

ABS, MBS (ex-self-funded transactions)1/1/19 – 31/12/19

Amount

Name Issues A$(m) %

1 ANZ 95 22,566.7 17.1

2 Westpac 91 19,872.1 15.0

3 NAB 107 19,660.4 14.9

4 CBA 73 14,090.8 10.6

5 UBS 26 6,694.8 5.1

6 Deutsche 36 5,982.9 4.5

7 TD Sec 55 5,691.0 4.3

8 Nomura 53 5,284.9 4.0

9 RBC Capital 34 3,875.9 2.9

10 Macquarie 19 3,740.5 2.8

Total 328 132,375.8


Proportional credit

Source: Refinitiv data SDC Code: AJ3a

Top lead managers of all Australian securitisation,

inc-self-funded transactions ex-CDOs1/1/19 – 31/12/19

Amount

Name Issues A$(m) %

1 NAB 38 7,921.7 20.3

2 Westpac 26 7,590.8 19.4

3 ANZ 16 5,197.6 13.3

4 CBA 21 5,001.2 12.8

5 Macquarie 15 3,051.9 7.8

6 Deutsche 9 1,509.4 3.9


8 Citigroup 5 1,241.0 3.2


10 UOB 5 974.8 2.5

Total 52 39,061.0


Proportional credit


CBA prints tight sterling Bonds Rare Sonia-linked Aussie major bank sale prices flat to UK comps

COMMONWEALTH BANK OF AUSTRALIA (Aa3/AA–/

AA–) took advantage of a hot post-UK

election sterling market with last Tuesday's

debut Sonia-linked covered bond sale, only

the second such issuance from an Australian

lender.

The £1bn (US$1.31bn) five-year covered

floating-rate note attracted an order book

in excess of £1.7bn which enabled joint

bookrunners Barclays, CBA, Deutsche Bank

and HSBC to price inside 60bp area initial

guidance at Sonia plus 55bp.

The note came flat to a £1bn five-year from

the UK's Nationwide Building Society that

priced at 55bp last Friday, implying CBA paid

no new issue concession.

"Sterling covereds are the gift that keep on

giving," said a banker at one of the leads.

Relative pricing compares favourably to

Australia and New Zealand Banking Group's

Sonia-linked covered bond on January 11 2019,

the first by a non-UK issuer, a £750m three-

year FRN which priced with a 68bp margin.

This represented a generous 8bp pick-up

over UK bank Lloyds which paid 60bp over

Sonia for a £750m three-year covered four

days earlier. At that time Aussie bank covered

bonds typically priced 2bp–3bp back of UK

names in Libor-linked format.

Sonia was established in 2018 to replace

the London interbank offered rate that will be

discontinued next year.

CBA, which previously accessed the Sonia

market on December 3 2018 with a £125m

senior unsecured one-year note, has been a

leader in the establishment of an Australian

risk-free reference rate, through the Reserve

Bank of Australia's overnight cash rate or Aonia.

In December CBA sold the first Aonia-

linked securitisation, the A$1.5bn (US$1.04bn)

Medallion Trust Series 2019-1 prime RMBS,

and plans to use Aonia for all its future RMBS.

The use of Aonia reference rates is

supported by the RBA as an alternative to the

domestic Bank Bill Swap Rate (BBSW), the

conventional reference point for Australian

dollar floating-rate notes that includes a

counterparty risk premium.

Unlike Libor there are no plans to

discontinue BBSW, which suggests BBSW

and Aonia could co-exist as alternative,

complementary interest rate reference points

for capital market issuers.

TOM REVELL, JOHN WEAVERS


COUNTRY REPORT AUSTRALIA

new issue concessions of 2bp and 4bp versus Westpac’s outstanding 2.75% January 2023 and 3.4% January 2028 lines.

A three-year floating-rate priced at three-month Libor plus 39bp.

Westpac also accessed the 144A/Reg S covered bond market, using the same bookrunners minus JP Morgan, with a chunky US$1.75bn 2.0% five-year print, rated Aaa/AAA (Moody’s/Fitch), at Treasuries plus 39.3bp, versus 45bp area initial guidance.

One participating bookrunner said such strong results, following on from NAB’s

trailblazing trade three days earlier, reflected a red hot US dollar market, record weekly fund inflows of US$8.2bn, according to Lipper, and some scarcity value due to Australian banks’ lower annual issuance targets.

› BNP PARIBAS SNP NETS A$300M

BNP PARIBAS (Aa3/A+/AA–) raised A$300m last Friday from a dual-tranche 7.5-year senior non-preferred EMTN sale.

A A$200m 2.5% fixed-rate note priced at par, inside initial 140bp–145bp area and revised 145bp area guidance at asset swaps plus 135bp.

A A$100m floating-rate note priced 135bp wide of three-month BBSW.

ANZ, BNP Paribas, Nomura and Westpac were active bookrunners and CBA and NAB passive bookrunners for the Reg S notes, which have expected ratings of Baa1/A–/A+.

› OCBC SYDNEY TAPS FOR A$150M

OVERSEA-CHINESE BANKING CORP (Aa1/AA–/AA–), Sydney branch, priced a A$150m increase to its May 23 2022 senior unsecured floating-rate note last Wednesday, taking the outstanding amount up to A$700m.

Top lead managers of Australian dollar-

denominated domestic bonds, inc-Kangaroo bonds,

ex-self-funded transactions, ABS, MBS1/1/19 – 31/12/19

Amount

Name Issues A$(m) %

1 ANZ 79 17,369.1 18.3

2 Westpac 66 12,386.7 13.1

3 NAB 70 12,077.3 12.7

4 CBA 53 9,195.0 9.7

5 UBS 26 6,694.8 7.1

6 TD Sec 55 5,691.0 6.0

7 Nomura 53 5,284.9 5.6

8 Deutsche 27 4,473.5 4.7

9 RBC Capital 32 3,283.3 3.5

10 HSBC 18 2,722.1 2.9

Total 277 94,904.9


Proportional credit


Top bookrunners of Australia syndicated loans1/1/19 – 31/12/19

Amount

Name Deals US$(m) %

1 ANZ 39 7,509.2 15.0

2 NAB 27 5,696.8 11.4

3 CBA 27 5,239.6 10.5

4 HSBC 19 5,187.7 10.4

5 MUFG 19 4,189.4 8.4

6 Westpac 18 4,097.4 8.2

7 SMFG 14 2,821.8 5.6

8 Mizuho 11 2,362.6 4.7

9 Bank of China 10 2,143.8 4.3

10 BNP Paribas 7 1,412.5 2.8

Total 122 50,101.3

* Based on market of syndication and market total

Proportional credit

Source: Refinitiv data SDC Code: S7

Top bookrunners of Australian equity and

convertible offerings1/1/19 – 31/12/19

Amount


1 UBS 40 8,424.8 25.1

2 JP Morgan 26 4,269.8 12.7

3 Macquarie 26 3,440.7 10.3

4 Citigroup 12 3,149.7 9.4

5 Bell Financial 76 1,770.4 5.3



8 Canaccord Financial Inc 93 1,112.2 3.3

9 Bank of America 4 807.7 2.4

10 RBC Capital 7 761.2 2.3

Total 749 33,536.3

*Market volume

“Standard Exclusion not applicable”

Proportional credit

Source: Refinitiv data SDC Code: AK1

ANZ heads 2019 Aussie bond table Bonds NAB is number one ABS house again while Citigroup leads offshore

Australia and New Zealand Banking Group

retained top spot in the 2019 league table for

Australian dollar bond issuance, according

to Refinitiv data, having secured an 18.3%

share of the A$94.9bn (US$66.1bn) market,

excluding securitisations.

ANZ was a lead manager on 79 of the 277

trades last year, ahead of Westpac, whose

participation in 66 deals gave it a 13.1%

market share.

The other two domestic major banks,

National Australia Bank and Commonwealth

Bank of Australia, took third and fourth

places with 12.7% and 9.7% shares from 70

and 53 tickets, respectively.

UBS was the best-placed international

bank with 26 trades and a 7.1% market share

with SSA Kangaroo-focused TD Securities,

Nomura, Deutsche Bank, RBC Capital

Markets and HSBC rounding off Australia's

top 10.

NAB HEADS ABS MARKET

Perennial frontrunner NAB topped the

Australian domestic securitisation league

table again having been on 37 of the market's

51 trades for A$7.5bn, amounting to a 20.2%

share of A$37.3bn ABS issuance.

Westpac came a close second with

A$7.4bn from 25 tickets and a 20.0% share,

a large proportion of which came from its

self-led A$3bn WST 2019-1 Trust RMBS in

February.

Similarly, ANZ's self-led A$1.5bn

Kingfisher RMBS elevated it to third spot in

the securitisation arena with a 13.9% share

from 16 trades.

CBA was fourth with a 13% market share

from 20 trades, including the inaugural

A$1.5bn AONIA-linked Medallion RMBS,

while fellow Aussie bookrunner Macquarie

was fifth with an 8.2% share from 15

transactions.

The best-placed international

bookrunners were Deutsche Bank,

Standard Chartered, Bank of America,

United Overseas Bank and Mitsubishi in

that order.

CITIGROUP TOPS OFFSHORE TABLE

Citigroup headed the offshore league table

having been on 26 of 96 foreign currency

tickets for a 11.2% share of last year's

US$45.3bn market.

HSBC helped 29 Australian issuers access

public overseas markets for a 10.7% share

and second place.

Next came JP Morgan, Bank of America

and Goldman Sachs with 8.0%, 7.3% and

5.8% of 2019 bond business, respectively.

UBS, RBC Capital Markets, BNP Paribas,

Westpac and CBA held the 6th to 10th

positions.

JOHN WEAVERS


The reopening via sole lead manager Westpac priced at 100.105, 57.5bp wide of three-month BBSW.

OCBC Sydney raised A$550m from the initial three-year sale on May 15 2019. This priced at three-month BBSW plus 62bp, in line with the then clearing rate for Australian major bank three-year notes.

› VICTORIA READIES 2023 BOND LINE

TREASURY CORPORATION OF VICTORIA, rated Aaa/AAA (Moody’s/S&P), has mandated Bank of America and NAB as joint lead managers for

a new November 20 2023 bond offering with an indicative coupon of 1.0%.

SYNDICATED LOANS

› BLACKSTONE PREPS FEBRUARY REFI

BLACKSTONE GROUP is preparing to launch in February a financing of around A$1.8bn (US$1.23bn) that will refinance loans it raised in 2016 and 2017 for property acquisitions.

The new facility will have a five-year tenor and will offer an interest margin of around 175bp over BBSY.

HSBC, National Australia Bank and United Overseas Bank are arranging the new facility.

Proceeds will refinance a A$432m four-year loan and A$569m four-year facility, both completed in 2016, and a A$715m four-year loan signed in November 2017.

The 2016 loans financed the acquisition of portfolios of industrial properties, while the 2017 borrowing funded the purchase of logistic property assets from Goodman Group.

Gallant Finance is the borrower on the A$432m loan, which is split into a A$416m term loan and a A$16m revolver, and offered a top-level all-in of 213.8bp based on an interest margin of 200bp over BBSY. ANZ and HSBC were the underwriters.

Gallop Finance is the borrower on the

A$569m borrowing, which comprises a A$524m term loan and a A$45m revolver, according to Refinitiv LPC data. HSBC, NAB and UOB were the underwriters.

Deutsche Bank and UOB were underwriters of the A$715m loan, which comprises term loans of A$326m and A$239m, and multi-option revolving credit facilities of A$100m and A$50m. The term loan tranches paid opening margins of 200bp over BBSY, while the revolver portions offered 100bp over BBSY with a line fee.

(A Blackstone-led consortium owns 55% of Refinitiv, the parent company of LPC and IFR.)

› BANKS PILE INTO QUEEN’S WHARF LOAN

Fifteen banks have joined a A$1.6bn 5.5-year loan backing Queen’s Wharf Brisbane’s integrated resort project.

Australia’s STAR ENTERTAINMENT GROUP, FAR

EAST CONSORTIUM INTERNATIONAL and Hong Kong’s CHOW TAI FOOK ENTERPRISES are the borrowers of the financing, which is split into a A$363m tranche A, A$437m tranche B, and A$800m tranche C.

The term facility offers an interest margin of around 200bp over BBSY during the construction period and around 180bp over BBSY afterwards.

Macquarie is the adviser on the financing.

Top bookrunners of Australian equity 1/1/19 – 31/12/19

Amount


1 UBS 40 8,424.8 25.5

2 JP Morgan 25 4,128.1 12.5

3 Macquarie 26 3,440.7 10.4

4 Citigroup 11 3,008.0 9.1

5 Bell Financial 76 1,770.4 5.4



8 Canaccord Financial Inc 92 1,096.8 3.3

9 RBC Capital 7 761.2 2.3

10 Moelis & Co 16 735.4 2.2

Total 735 33,008.0

*Market volume


Proportional credit

Source: Refinitiv data SDC Code: AK2

ANZ confirms flatter Aussie curve Bonds Demand deepens for longer-dated bonds that offer more yield

AUSTRALIA AND NEW ZEALAND BANKING GROUP

(Aa3/AA–/AA–) reopened the local bond

market last Tuesday with a self-led A$3.5bn

(US$2.42bn) three-part MTN issue that

underlined the flattening of the domestic

curve.

A A$1.1bn three-year floating-rate note

priced 1bp inside 63bp area guidance at

three-month BBSW plus 62bp.

A A$1.9bn five-year FRN printed at three-

month BBSW plus 76bp, a full 4bp tighter

than 80bp area guidance, while a A$500m

1.65% fixed-rate five-year note priced at

99.833 to yield 1.685%, 76bp wide of asset

swaps.

In comparison ANZ issued a A$1.2bn

three-year FRN at three-month BBSW plus

58bp on August 22, alongside a A$1.35bn

five-year floater and a A$450m five-year

fixed-rate MTN at 77bp over three-month

BBSW and asset swaps.

Further back, on January 30 last year,

the Aussie major sold a A$1.5bn three-year

FRN at 88bp plus three-month BBSW with a

A$2.2bn five-year FRN and a A$400m fixed-

rate five-year at clearing margins of 110bp.

“Historically low yields and credit spreads

have led investors to increasingly look for

opportunities for higher returns which has in

turn prompted flatter yield curves,” said Paul

White, global head of syndication at ANZ.

This flattening is reflected in the major

bank three to five-year domestic credit

spread which has fallen from 22bp last

January to 19bp in August and just 14bp with

the latest trade.

White emphasised the higher-than-normal

demand for the fixed five-year note, in excess

of A$625m, as real money accounts lock in

these yield levels.

The prospect of any near-term spike in

yields seems remote with the Reserve Bank

of Australia expected to cut its official cash

rate to a new all-time low next month while

it considers adding quantitative easing to its

policy tool box.

Overall demand for the latest ANZ three-

trancher exceeded A$4.5bn at reoffer pricing

levels.

Australian and New Zealand investors

bought 94% of the three-year with Asia

taking 6%. Banks were allotted 52%, asset

managers and insurance companies 39%,

official institutions 8% and others 1%.

Antipodean accounts took 69% of the

five-year FRN and 86% of the fixed-rate

offering with Asia allocated 31% and 14%,

respectively.

Banks, asset managers/insurance

companies, official institutions and others

picked up 54%, 41%, 3% and 2% of the

five-year floater, while asset managers and

insurance dominated the fixed-rate note with

a 81% share. Banks took 15% and official

institutions and others 2% each.

JOHN WEAVERS


COUNTRY REPORT AUSTRALIA

Destination Brisbane Consortium is developing the A$3.6bn project, which will cover more than 26 hectares across land and water in Brisbane, Queensland. It is slated to open in 2022.

The non-heritage buildings that once occupied the space have been demolished. A shoring system has been installed around the future integrated resort development basement, and all excavation materials have been removed.

In addition, maritime work has now commenced in the Brisbane River for the construction of the piled suspended concrete slab, which will eventually provide 6,500 square metres of new public space.

For full allocations, see www.ifre.com.

› LENDLEASE SIGNS CIRCULAR QUAY LBO

LENDLEASE GROUP has raised a A$990m self-arranged five-year club loan from 10 banks to back the development of an office tower in Sydney.Bank of China, Commonwealth Bank of Australia, DBS Bank, HSBC, ICBC, MUFG Bank, Mizuho Bank, OCBC Bank, Sumitomo Mitsui Banking Corp and United Overseas Bank provided the loan.

The 53-storey Circular Quay Tower at

180 George Street forms part of the broader renewal project at Circular Quay, which Lendlease is developing in partnership with China’s Ping An Real Estate and Japan’s Mitsubishi Estate Asia.

In May, Lendlease closed a A$960m five-year loan that was increased from A$500m following commitments from 14 banks in syndication. HSBC, National Australia Bank, Mizuho Bank and SMBC were the mandated lead arrangers, bookrunners and underwriters of the new-money deal comprising a A$725m five-year term loan and a A$235m five-year revolving facility paying interest margins of 160bp and 165bp over BBSY, respectively.

Last month, Singapore-listed Lendlease Global Commercial REIT closed a US$383m-equivalent bullet facility after attracting five lenders in syndication.

Citigroup, CBA and DBS Bank were the MLABs of the loan, which comprises a S$99m (US$72m) three-year tranche and a €285m (US$312m) four-year piece.

Lendlease Corp, part of Australia-listed Lendlease Group, is the sponsor of the REIT, which comprises two assets – 313 Somerset in Singapore (retail) and the Sky Complex (office) in Milan, Italy.

› AMA LOAN SET FOR SUNCORP UNITS BUY

AMA GROUP has obtained a A$375m multi-tranche facility backing its acquisition of units of Suncorp Group.

ANZ and National Australia Bank have underwritten the facility, which is split into a A$142.5m three-year bullet term loan (tranche A), a A$147.5m five-year bullet term loan (tranche B), a A$50m three-year revolving credit facility for capital expenditure and acquisition (tranche C) and a A$35m five-year multi-option working capital facility available in Australian and US dollars (tranche D).

Bank of China, Bendigo and Adelaide Bank, First Commercial Bank, Metrics Credit Partners and Westpac Banking Corp joined in syndication.

The interest margin is based on the following net leverage ratio grid.

AMA signed a binding agreement to acquire 90% of Suncorp’s smash repair business, Capital Smart Repairs Australia, based on an implied enterprise value of A$420m, and 100% of auto parts business ACM Parts for A$20m.

Capital Smart specialises in low to medium severity repairs in metropolitan areas in Australia and New Zealand, while ACM is an automotive parts supplier to the motor repair industry and general public.

In an October 31 filing, AMA announced the completion of the acquisition. Earlier the same month, it said it planned to draw down A$199m of the new senior loan of around A$375m to fund the acquisition and a further A$91m to refinance existing debt at the time of completion.

AMA also said it has planned a fully underwritten equity raising of around A$216m to finance the acquisition.

ASX-listed AMA is a leading provider of automotive aftercare services and accessories market, according to its website.


› SEEK COMPLETES A&E OF 2018 LOAN

Australian recruitment firm SEEK has completed an amendment and extension of a multi-tranche dual-currency facility from 2018.

The new borrowing comprises revolving credit facilities of A$362.5m due 2022 (tranche A), A$250m due 2023 (tranche B), US$252.5m due 2024 (tranche C), as well as term loans of US$100m due 2023 (tranche D) and US$200m due 2024 (tranche E).

HSBC and National Australia Bank were the mandated lead arrangers and bookrunners. The interest margins on the latest financing, which are based on a net leverage grid, are 5bp–10bp tighter than the 2018 facility.

Brookfield aims wide for LBO Loans Borrowing adds one more ticket level after attracting eight banks

Brookfield Property Group is targeting a wider

group of lenders for a A$1.0415bn (US$730m)

loan backing its acquisition of Australian

retirement village operator Aveo Group after

attracting eight lenders in the first phase of

general syndication.

The second phase of syndication for the

five-year senior secured loan has added a

ticket level of less than A$50m from banks

joining as arrangers for 37.5bp in fees.

Lead arrangers committing A$75m–$100m

earn 75bp, while co-arrangers taking

A$50m–$75m are offered 50bp. These two

ticket levels were also sought in the first

phase.

Bank presentations are scheduled in Taipei

on January 15 and Seoul on January 16.

Bank of Baroda, Bank of Queensland,

China Everbright Bank, Commonwealth Bank of Australia, Eastspring Investments, First Commercial Bank, Metrics Credit Partners and

National Australia Bank joined in the first

phase of syndication, which was launched in

October at three levels.

Mandated lead arrangers committing

A$100m and above were offered a top-level

fee of 100bp.

ANZ, Bank of China and Barclays are MLAs,

bookrunners and underwriters of the deal,

which comprises a A$787.5m term loan cash

advance facility (Facility A), A$154m revolving

facility (Facility B) and a A$100m revolving

working capital facility (Facility C).

Only facilities A and B are being syndicated

and offer interest margins of 250bp over

BBSY.

Facility A will be used for funding the

acquisition and associated costs and for

refinancing Aveo's existing debt. Facility B

will go towards current construction projects

and, along with Facility C, may also be made

available to certain units of Aveo.

HYDRA RL BIDCO, an entity controlled by

Canadian investment firm Brookfield Asset

Management on behalf of its managed funds,

implemented a scheme of arrangement on

November 28 relating to the acquisition of

Aveo.

The retirement village operator was delisted

from the Australian Securities Exchange at the

close of trading on December 2.

MARIKO ISHIKAWA


Agricultural Bank of China, ANZ Bank, BNP Paribas, Bank of China Sydney and Hong Kong branches, Bank of Taiwan, China Merchants Bank, Commonwealth Bank of Australia, DBS Bank, First Commercial Bank, Mega International Commercial Bank, MUFG Bank, Sumitomo Mitsui Banking Corp, Taipei Fubon Commercial Bank, Taiwan Business Bank, Taiwan Cooperative Bank, United Overseas Bank, and Westpac Banking Corp participated in the latest A&E exercise.

The original 2018 facility was split into a A$375m three-year revolver (tranche A), a A$250m four-year revolver (tranche B), a US$275m five-year revolver (tranche C), a US$100m four-year term loan (tranche D) and a US$200m five-year term loan (tranche E). The facilities offered margins of 140bp and 155bp over BBSY for tranches A and B, and 165bp, 155bp and 165bp over Libor for tranches C, D and E, respectively.

In June 2017, the company closed a A$917m dual-currency refinancing split into a A$190m 25-month tranche, a A$360m 37-month piece and a US$275m 49-month portion paying margins of 190bp and 205bp over BBSY, and 220bp over Libor, respectively.

The company in December issued a A$150m 6.5-year non-call 3.5-year note, its second unrated bond, which priced inside 375bp area guidance at three-month BBSW plus 370bp. The bond includes a 200bp margin step-up if not called on June 20 2023.

EQUITY CAPITAL MARKETS

› KILCOY GLOBAL FOODS PREPARES HK IPO

Australian meat processor and exporter KILCOY GLOBAL FOODS is preparing an IPO of about US$300m in Hong Kong, people close to the deal have said.

The company, controlled by Chinese conglomerate New Hope Group, filed to the Stock Exchange of Hong Kong on January 2.

It specialises in premium beef and other protein products, including cooked lamb, pork and poultry. Some of its major markets are China, Japan, the US and South Korea.

In 2013, New Hope paid nearly US$100m for a controlling stake in the then Kilcoy Pastoral Company through its investment arm Hosen Capital. Kilcoy has since expanded by acquiring processing business Ruprecht in the US and Weidao Food in China and renamed the business in 2015 as Kilcoy Global Foods.

Its Queensland-based facility has a

production capacity of 230,000 tonnes of beef annually.

For the nine months ended September 30, the company posted a profit of US$25.4m, up from US$2m the year before. It had an annual profit of US$11.6m in 2018.

Citigroup and CMB International are the joint sponsors.

CHINA


› JD.COM GOES LONG ON REVERSE ENQUIRY

Chinese e-commerce company JD.COM has raised US$1bn from dual-tranche SEC-registered bonds.

A US$700m 3.375% 10-year tranche was priced at 99.68 to yield 3.413% on January 7, or Treasuries plus 160bp, inside initial guidance of 195bp area.

A US$300m 4.125% 30-year tranche was priced at 98.98 to yield 4.185%, in line with final price guidance.

The 30-year tranche was added on the back of reverse enquiries after the initial 10-year deal was announced.

The 10-year tranche attracted orders of over US$4bn at final pricing from 201 accounts.

Asia took 52% of the bonds, EMEA 20% and the US 28%. By investor type, asset managers took 70%, public institutions 5%, private banks and banks 10% and insurance companies 15%.

The 30-year tranche received orders of over US$1.3bn at final pricing from 90 accounts.

Investors from the US took the largest share at 47%, followed by Asia at 33% and EMEA at 20%. By investor type, asset

managers took 60%, insurance companies 37% and private banks and banks 3%.

The senior notes have expected ratings of Baa2/BBB (Moody’s/S&P), on par with the issuer.

Proceeds will be used for general corporate purposes and refinancing.

Bank of America and UBS were joint lead managers and bookrunners, with HSBC as joint lead manager.

› COGARD REACHES A BILLION DOLLARS

COUNTRY GARDEN HOLDINGS raised US$1bn from a two-tranche bond on January 7.

China’s largest residential property developer priced a US$550m seven-year non-call four at 5.125% and a US$450m 10-year non-call five at 5.625%, both 50bp inside initial guidance. Both tranches priced at par.

Yeung Kwok Keung, Country Garden’s chairman, bought US$80m of thebonds. Chief executive Mo Bin also subscribed for US$2m of each tranche, according to stock exchange filings.

The Reg S deal is rated BBB– by Fitch, on par with the issuer. The Chinese property developer is also rated Ba1/BB+ by Moody’s and S&P.

Proceeds will be used for refinancing existing medium to long-term offshore debt due within the next 12 months.

Morgan Stanley and Goldman Sachs were joint global coordinators as well as lead managers and bookrunners with Standard Chartered Bank.

› BANK OF CHINA SEES TRIPLE

BANK OF CHINA, rated A1/A/A, last Thursday raised US$2.49bn-equivalent in US dollars and euros from a triple-tranche Reg S offering that priced at the tight ends of final guidance.

Top bookrunners of Dim Sum bonds

(Rmb issued and settled offshore bonds)1/1/19 – 31/12/19

Amount

Name Issues Rmb(m) %

1 BoCom 9 26,179.1 27.6

2 HSBC 78 20,481.6 21.6

3 Bank of China 9 11,981.1 12.6



6 KGI Financial 6 1,631.1 1.7

7 CCB 6 1,564.4 1.7

8 Citic 4 1,211.1 1.3

9 SPDB 4 1,088.2 1.2

10 CTBC Financial 5 1,073.1 1.1

Total 131 94,805.3

*Market volume

Proportional credit


Top bookrunners of all renminbi bonds,

ex-self-funded transactions1/1/19 – 31/12/19

Amount

Name Issues Rmb(m) %

1 Bank of China 1,477 1,060,210.1 9.1

2 ICBC 1,405 936,560.9 8.0

3 CCB 1,428 825,420.6 7.1

4 Citic 1,085 710,364.8 6.1

5 BoCom 1,187 696,445.4 6.0

6 ABC 1,010 620,290.5 5.3

7 CSC Financial 736 540,164.5 4.6

8 Industrial Bank 818 413,244.5 3.5


10 Guotai Junan Sec 456 316,777.8 2.7

Total 5,254 11,706,359.8

*Market volume

Proportional credit



COUNTRY REPORT CHINA

A US$1bn two-year floating-rate note was set at three-month Libor plus 58bp and a US$600m five-year fixed-rate bond at Treasuries plus 78bp. Final price guidance was at three-month Libor plus 58bp–60bp and Treasuries plus 78bp–80bp, respectively, tightened from initial guidance of 85bp area and 110bp area.

The two-year FRN received orders of over US$3.6bn from 94 accounts. Banks bought 83% of the deal, asset managers 9% and central banks, sovereigns and others 8%. Asia accounted for 85%, Europe 14% and offshore US 1%.

The five-year bond received over US$1.9bn of orders from 58 accounts. Banks took 88%, asset managers 6% and central

banks, sovereigns and others 6%. Asia accounted for 92% and Europe 8%.

An €800m (US$889m) three-year bond priced at mid-swaps plus 47bp, inside final guidance of 50bp and initial guidance of 70bp–75bp area.

Bank of China’s Luxembourg branch is the issuer of the euro tranche, which will pay a coupon of 0.125%.

No distribution details were released yet but orders were over €2.35bn.

Settlement for all the notes will be on January 16. Proceeds will be used for general corporate purposes.

Bank of China, Credit Agricole and JP Morgan were joint global coordinators as well as lead managers and bookrunners

with Scotiabank, Commonwealth Bank of Australia, MUFG, Bank of Communications, China Everbright Bank Hong Kong branch and ABC International for the US dollar deals issued through the bank’s Hong Kong branch.

Bank of China, Credit Agricole and BNP Paribas were the joint global coordinators as well as lead managers and bookrunners with Commerzbank, ING and DZ Bank for the euro issue.

› CDB PLANS GBP BONDS

CHINA DEVELOPMENT BANK, rated A1/A+ (Moody’s/S&P), has hired banks for a proposed offering of GBP-denominated benchmark

Shangrao LGFV revives dollar bond Bonds Higher yield and better timing overcome December setback

SHANGRAO INVESTMENT HOLDING GROUP, a Chinese

local government financing vehicle rated

BBB– by Fitch, has successfully revived a

US dollar bond offering following a failed

attempt last month, returning with a more

generous yield and strong anchor orders in a

better issuance window.

Shangrao Investment on January 9 priced

a US$500m three-year bond at par to yield

4.30%, inside initial 4.70% area guidance.

Having failed to print a US$200m deal at

3.98% last month, the revamped offer came

with a yield 32bp higher and a bigger size.

"The timing is much better this time as

money available for investment is much more

abundant than at year-end," a banker on

the deal said. "Of course, the issuer's solid

credit fundamentals also helped to garner

significant anchor support."

Orders reached over US$1.5bn after

two hours of bookbuilding, and exceeded

US$2.5bn by the time final guidance was

released.

The final book stood at over US$2.3bn

from 73 accounts, including US$495m from

the leads.

STRONG ANCHORS

The leads did not disclose allocations by

region, but the banker said significant

orders came from foreign investors based in

Singapore and Hong Kong, while some came

from European investors. Banks took 48% of

the deal, fund managers 43%, and 9% went

to private banks and others.

"The issuer is keen to bring in overseas

investors, and not make it a deal bought just

by domestic investors. I think it has achieved

this target," the banker said.

Shangrao Investment was forced to

postpone a three-year US dollar bond

offering last month after the pricing

was considered too tight, with investors

conservative towards both new investments

at the year-end and LGFVs because of

negative news stories on the sector.

The marketing of the Reg S deal began

on December 10 at 4.25% area before

final guidance of 4.00% area (+/-2bp) was

announced that evening, when orders were

said to be over US$1.25bn, including US$1bn

from the leads. However, market orders

and even orders from the leads dropped off

because of the pricing. The leads tried to

launch a US$200m deal at 3.98% but the

remaining books could not fully cover it.

Shangrao Investment Holdings

International is the issuer and the state-

owned parent group is the guarantor. The

senior unsecured Reg S notes have an

expected BBB– rating from Fitch, on par with

the guarantor.

The deal had 14 bookrunners, down from

18 at the last attempt.

Proceeds will be used to finance existing

projects, repay bank borrowings and for

general corporate purposes.

Shangrao Investment is a primary

investment and financing entity for the

Shangrao municipal government in Jiangxi

province. It invests in and operates key

business segments and assets, including

urban development and infrastructure

construction, water supply and sewage, toll

roads, public transportation and airport

operation, and tourism and financial services,

according to Fitch.

The group is not a first-time issuer in the

offshore market, having issued a US$200m

5.70% three-year at 98.116 to yield 6.40% in

February 2018.

Those bonds were quoted at

99.50/100.00 ahead the announcement of

the new issue, according to Refinitiv prices.

The bonds are not liquid and the leads did

not use them as a comparable.

The leads instead used similarly rated

Jiangxi Provincial Water Conservancy

Investment's 3.4% 2022s, rated Baa3/BBB

(Moody's/Fitch), and Qingdao West Coast

Development Group's 3.9% 2022s, rated

Baa3/BBB– (Moody's/Fitch), as comparables.

They were bid at 3.5% and 3.95% before the

release of IPG, respectively.

The banker, however, said the pricing

of Shangrao Investment's new issue was

not particularly generous and was in a

reasonable range based on the market

response.

"There are many BBB– rated LGFV bonds

trading in the 4.2%–4.3% range, but I think

the choice of comparables that make a new

issue seem more attractive is a common

tactic," he said.

China Citic Bank International, CNCB Capital, GF Securities and Central Wealth Securities Investment were joint global

coordinators on the transaction. They

were also joint bookrunners and joint lead

managers with China Securities International, Guotai Junan International, Standard Chartered Bank, China Everbright Bank Hong Kong branch, Industrial Bank Hong Kong branch, Orient Securities (Hong Kong), Haitong Bank, ABC International, Zhongtai International and CMBC Capital.CAROL CHAN


Reg S senior unsecured notes due in 2023, subject to market conditions.

Agricultural Bank of China Hong Kong branch, Bank of China, Bank of Communications, Barclays, CCB (Europe), Credit Agricole, Deutsche Bank, HSBC, ICBC and Mizuho Securities are joint lead managers and joint bookrunners.

The Chinese policy bank started holding investor calls on January 9.

The notes will be issued off its US$30bn debt issuance programme and are expected to be rated A1 by Moody’s.

Industrial and Commercial Bank London branch in July issued three-year GBP600m senior unsecured bonds, which marked the first GBP-denominated public bond offering by a Chinese bank.

› CENTRAL PLAZA DEVELOPMENT PRINTS

CENTRAL PLAZA DEVELOPMENT priced a US$450m 5.5-year bond at par to yield 3.85% on January 7.

The Reg S deal priced inside initial guidance of 4.25% area after receiving orders of over US$2.8bn, including US$727.5m from the lead managers.

Asian investors took 96% of the deal and the rest went to Europe. By investor type, fund managers took 55%, banks 33%, corporations and others 6% and private banks 6%.

International Financial Center Property,

a subsidiary of Beijing Capital Land, is the guarantor of the senior unsecured notes. Beijing Capital Group is providing a keepwell and equity interest purchase undertaking.

Beijing Capital Group is rated Baa3/BBB–/BBB, while the bond has an expected rating of BBB from Fitch.

Proceeds will be used for refinancing mid-term or long-term offshore debt, which is due within one year.

China Citic Bank International, Guotai Junan International and HSBC were joint global coordinators as well as lead managers and bookrunners with Haitong International, CMB International, China International Capital Corporation, ICBC International, Bank of Communications, CLSA, Nomura, China Securities International and Silk Road International.

› CHINA FORTUNE LAND REFINANCES

CHINA FORTUNE LAND DEVELOPMENT has raised US$1.2bn from a dual-tranche offering of Reg S senior bonds.

A US$500m three-year note priced at par on January 8 to yield 6.9%, inside initial guidance of 7.25% area.

The issue received orders of over US$2.8bn from 133 accounts, including US$585m from lead managers.

Asian investors took 87% and the rest

went to Europe. Banks took 42%, followed by asset managers and hedge funds at 39%, private banks 11% and others 8%.

A US$700m five-year note priced at par to yield 8.05%, inside initial guidance of 8.50% area.

The issue received orders of over US$2.5bn from 109 accounts, including US$685m from lead managers.

Asian investors took 94% of the bonds, with the remainder going to Europe. Asset managers and hedge funds took 37%, banks 33%, private banks 19% and others 11%.

Both tranches have an expected rating of Ba3 by Moody’s.

There is a change of control put option at 101%.

CFLD (Cayman) Investment is the issuer and China Fortune Land Development is the guarantor of the notes.

Proceeds will be used to refinance offshore debt due within a year.

Haitong International, JP Morgan, China Citic Bank International, Guotai Junan International, CMB International,ICBC International and UBS were joint global coordinators as well as bookrunners and lead managers with Bank of China, Barclays, BOC International, CCB International, Central Wealth Securities Investment, China International Capital Corporation, China Investment Securities International, CLSA, Credit Suisse, HSBC, Orient

Panda Green extends deadline Bonds Company buys time to complete rescue investment

Chinese solar power company PANDA GREEN

ENERGY GROUP has extended the deadline

for an exchange offer for its outstanding

US$350m 8.25% senior bonds due January

25 2020.

The offer is a back-up plan in case a

proposed investment by state-owned BEIJING

ENERGY HOLDINGS, which would become the

company's largest shareholder, does not

happen in time to repay the bonds.

Panda Green announced a par-for-par

exchange offer for its US dollar bonds,

inviting holders to swap for new notes with a

coupon of 8% and a tenor of two years.

The deadline was originally December 27,

but it has been extended to January 14.

CMB International is dealer manager and

CLSA is financial adviser, while DF King is

information and exchange agent.

Panda Green said the exchange offer

would improve its debt structure and

extend its debt maturity profile, strengthen

its balance sheet and improve cashflow

management.

The Hong Kong-listed company on

November 19 entered into an agreement

to sell 7.2bn new shares to a subsidiary of

Beijing Energy for HK$1.8bn (US$230m) in

cash. On completion, Beijing Energy would

own 32% of the company's enlarged share

capital and become the largest shareholder.

Moreover, Beijing Energy will also provide

a Rmb8bn–Rmb10bn credit enhancement

guarantee to Panda Green to help the

company reduce its financing costs.

The investment, which had been expected

to close by January 6 2020, is subject to

approval from Panda Green's independent

shareholders and various regulators, including

the Beijing State-Owned Assets Supervision

and Administration Commission and Beijing

Development and Reform Commission.

Rating agencies expect the introduction of

Beijing Energy to strengthen Panda Green's

credit profile and support its ability to repay

the maturing 8.25% 2020s. The company

also has Rmb1.8bn of onshore notes due in

the second half of 2020.

S&P on December 18 cut Panda Green's

rating to CC from CCC+, and lowered the

bonds to CC from CCC. It said the bond

exchange would constitute a distressed

exchange even though there is no haircut

because holders will face a deferred

maturity and lower interest rate for the new

notes.

If Panda Green fails to complete the

agreement with Beijing Energy by March 31

2020, it will be obligated to redeem the new

notes at par value before the first coupon

date in July, wrote S&P.

Moody's rates Panda Green Caa1 and the

8.25% 2020s Caa2. It affirmed its ratings

on December 18, but said they remain under

review and could be raised or lowered. The

rating agency said Panda Green's ratings

could improve if the exchange offer went

through and the Beijing Energy investment

proceeded, but also said the exchange offer

constituted a distressed debt exchange,

which it considers a default event.

DANIEL STANTON



Securities (Hong Kong) and Zhongtai International.

› CHINA MERCHANTS HK SETS UP MTN

CHINA MERCHANTS HOLDINGS (HONG KONG) has set up a US$5bn medium-term note programme with Standard Chartered Bank as arranger.

Future Days is the issuer under the programme and China Merchants Holdings is the guarantor.

The dealers are Bank of China (Hong Kong), Barclays, BNP Paribas, Bank of America, DBS Bank, Deutsche Bank, Citigroup, Goldman Sachs, HSBC, ING, JP Morgan, Standard Chartered and UBS.

The programme is listed on the Stock Exchange of Hong Kong.

› CHINA SCE GROUP TAPS 2024S

CHINA SCE GROUP HOLDINGS reopened its 7.375% bond due April 2024 for a further US$150m on January 7, taking the total outstanding to US$500m.

The tap was capped at US$150m and priced at 103.181 to yield 6.5%, inside initial guidance of 6.875% area. The bonds are rated B2/B (Moody’s/S&P).

The new notes will settle on January 14. HSBC and UBS were joint global

coordinators, bookrunners and lead managers.

› CHINA ZHENGTONG AUTO MARKETS DEAL

CHINA ZHENGTONG AUTO SERVICES HOLDINGS last Friday was marketing two-year US dollar senior bonds at final price guidance of 12%.

The bonds have an expected B2 rating from Moody’s, on par with the issuer.

The Reg S issue has not been priced at the time of writing.

The Chinese luxury car dealership group plans to use proceeds for debt refinancing, general corporate purposes and working capital.

JP Morgan is the sole global coordinator, lead manager and bookrunner.

› CIFI HOLDINGS REFINANCES

CIFI HOLDINGS, rated Ba3/BB/BB, priced US$400m 5.5-year non-call three bonds on January 7 at par to yield 6%.

The Reg S deal priced well inside initial guidance of 6.5% area after attracting orders of over US$1.4bn, including US$520m from the lead managers. Over 70 investors participated.

Asian investors took 86% of the deal, with the remainder going to Europe. Funds and asset managers took 45%, bank treasury 28%, private banks 24% and others 3%.

The senior fixed-rate notes come with

expected ratings of BB–/BB (S&P/Fitch).CIFI’s first call option is on January 16

2023 and the final maturity is July 16 2025. Proceeds will be used for debt

refinancing.HSBC, Barclays, BoCom International,

BOSC International, China Citic Bank International, Credit Suisse, Goldman Sachs, Haitong International, JP Morgan and Standard Chartered Bank were joint global coordinators, bookrunners and lead managers.

› CMS MULLS THREE-YEAR DOLLAR ISSUE

CHINA MERCHANTS SECURITIES is considering launching a benchmark-sized Reg S three-year US dollar senior unsecured notes offering as early as Monday, according an investor update.

The Chinese brokerage concluded investor meetings in Hong Kong last week.

China Merchants Securities (HK), CMB International, CMB Wing Lung Bank, DBS Bank, HSBC and ICBC International are joint global coordinators, joint lead managers and joint bookrunners on the deal.

The proposed notes are expected to be rated Baa1 by Moody’s, on par with the issuer.

› FANTASIA RAISES MONEY FOR TENDER

Chinese property developer FANTASIA

HOLDINGS GROUP, rated B2/B/B+, has raised US$450m from a new bond issue to fund a concurrent tender offer.

The 10.875% three-year non-call two notes were priced at 99.191 to yield 11.2% on January 6, inside initial guidance of 11.625% area.

The Reg S senior notes have expected ratings of B/B+ (S&P/Fitch).

The deal drew final orders of over US$3.5bn from 217 accounts. Asia took 95% of the notes while Europe and Middle East got the rest. Fund managers and insurers got 82%, private banks 17% and banks 1%.

Proceeds from the bond offering will be used to refinance certain debt, including the concurrent offer to purchase for cash of its US$600m 8.375% senior notes due 2021.

Under the tender offer, Fantasia is offering to pay US$1,012 in cash per US$1,000 in principal amount.

Deadline for the tender offer is January 14. The company plans to announce on January 15 the maximum amount it will accept under the tender offer.

UBS, Barclays, BNP Paribas, Deutsche Bank, Morgan Stanley and Nomura are joint global coordinators, joint lead managers and joint bookrunners on the new bond issuance.

UBS and Barclays are dealer managers on

the tender offer. DF King is tender agent.

› FUJIAN YANGO RAISES AN EXTRA US$26M

FUJIAN YANGO GROUP reopened its 12.5% September 24 2021 senior bonds for US$26m, bringing the total outstanding to US$310m.

The additional bonds were sold at 99.197 to yield 13%, in line with price guidance.

Yango (Cayman) Investment is the issuer and Fujian Yango Group, rated B/BB– (S&P/Lianhe Global), is the parent guarantor.

The bonds are rated B–/BB– (S&P/Lianhe).Haitong International and CCB International

were joint global coordinators and bookrunners.

Fujian Yango Group has businesses in property development, education services, commodities trading and environmental services, and also has investments in financial services companies.

› GOLDEN WHEEL ROLLS OUT 13% YIELD

GOLDEN WHEEL TIANDI HOLDINGS, rated B2/B (Moody’s/Fitch), last Monday raised US$200m from two-year two-month bonds priced at 99.943 to yield 13%, inside initial guidance of 13.25% area.

The notes, rated B2 by Moody’s, pay a coupon of 12.95% and will settle on January 14. There will be a change of control put option at 101%.

BOC International, Guotai Junan International, Haitong International, HSBC and CLSA were joint global coordinators for the new Reg S issue. They were also joint bookrunners alongside HeungKong Financial and Orient Securities (Hong Kong).

Proceeds will be used to refinance debt, including payments to be made under a tender offer for existing notes of the Chinese commercial and residential property developer.

Golden Wheel also announced that the maximum acceptance amount in the tender offer for the outstanding US$400m 7% 2021s is US$140m. It is offering to pay US$967.50 in cash per US$1,000 in principal amount for the senior notes due January 18 2021. The tender deadline is January 15. BOCI is dealer manager.

› HUACHEN FACES CHALLENGES

Moody’s expects HUACHEN ENERGY will encounter more challenges in meeting its debt obligations over the coming months following its failure to make a coupon payment on US$500m 6.625% 2020 bonds after the grace period.

The default on the interest payment is credit negative, the rating agency said in a press release on December 24.


The coupon was due November 18 with a 30-day grace period.

In June, the privately owned Chinese power producer paid a coupon within two days of the expiry of the grace period.

Moody’s said its Ca corporate family rating on Huachen reflects its expectation that holders of the dollar bonds may take legal action against the company following the default, including a demand for the immediate repayment of the principal and interest.

The outlook on Huachen’s ratings remains negative because of the high level of uncertainty around the company’s ability to meet its short-term debt obligations.

A default by Shanghai-listed parent company Wintime Energy in July 2018 has put significant stress on Huachen’s liquidity.

Huachen said it is working on obtaining the funds necessary to make the dollar bond coupon payment “as soon as possible”.

› HYDOO INTL PLANS TAP OF 2021S

HYDOO INTERNATIONAL HOLDING plans to reopen its 14% senior unsecured notes due December 2021 for a tap of US$50m, bringing the total outstanding to US$243.5m.

The new bonds will be consolidated and form a single class with the earlier US$193.5m offering and have the same terms and conditions, but a different issue date and price, according to a public filing on December 27.

The Chinese property developer completed a two-part bond offering comprising a new money issue and an exchange offer on December 19.

The company sold US$81.827m of bonds in a new money offering of two-year senior unsecured notes alongside US$111.673m of new 2021s to be issued under its exchange offer.

The exchange offer was open to holders of Hydoo’s US$157m 12% senior notes due May 9 2020.

Both parts of the earlier issue were priced at par with a 14% coupon to yield 15% since the bonds will be redeemed at maturity at a cash price of 102.236.

Proceeds of the newly proposed bonds will be used for debt repayment, financing an acquisition or development of assets or property and general corporate purposes.

› INDUSTRIAL SEC HK GETS ICBC BACKING

INDUSTRIAL SECURITIES (HONG KONG) FINANCIAL

HOLDINGS has priced US$295m three-year credit-enhanced senior unsecured bonds at par to yield 2.9%, inside initial guidance of 3.1% area.

Wholly owned subsidiary IS (Hong Kong) Investment is the issuer and Industrial Securities (Hong Kong) Financial is the keepwell provider. The notes are supported by an irrevocable standby letter of credit from Industrial and Commercial Bank of China, Fujian provincial branch.

The Reg S issue has an expected A1 rating from Moody’s.

Proceeds will be used for general corporate purposes.

China Industrial Securities International and ICBC were joint global coordinators as well as joint lead managers and joint bookrunners with China Citic Bank International, China Minsheng Banking Corp Hong Kong branch, CMB Wing Lung Bank and Shanghai Pudong Development Bank Hong Kong branch.

› JIAOZUO MAKES 363-DAY FORAY

JIAOZUO INVESTMENT GROUP on January 3 priced US$100m 363-day senior unsecured notes at par to yield 6.5%, in line with price guidance.

Proceeds from the unrated Reg S issue are for general corporate purposes, including project construction, debt repayment and working capital.

Central Wealth Securities Investment was the sole global coordinator as well as joint bookrunner and lead manager with Haitong International, Zhongtai International, CMBC Capital and Po Tai Securities (Hong Kong).

Jiaozuo Investment Group is a state-owned investment and financing entity which is involved in the infrastructure construction and municipal development of the city of Jiaozuo in Henan province.

› KAISA GROUP ISSUES CALLABLE BOND

KAISA GROUP, rated B1/B/B, has priced a US$500m five-year non-call three bond at par on January 8 to yield 10.5%, in line with final price guidance.

Initial guidance was 10.875% area for the fixed-rate Reg S senior notes.

The deal received orders of over US$2.8bn from 156 accounts at final pricing, including US$500m from lead managers.

Asian investors took 73% of the bonds and the rest went to Europe. Fund managers took 91%, followed by banks at 6% and private banks and others at 3%.

The expected issue ratings are B2/B (Moody’s/Fitch).

The bond is callable at 103 in January 2023 and at 101 in January 2024.

Proceeds will be used to refinance medium to long-term offshore debt, which will become due within one year.

Credit Suisse, Deutsche Bank and Haitong International were joint global coordinators

as well as joint bookrunners and joint lead managers with BOC International, Barclays, China Citic Bank International, Guotai Junan International, Kaisa Financial Group, Fulbright Securities and HeungKong Financial.

› KWG TACKLES SEVENS

Chinese property company KWG GROUP last Monday sold US$300m seven-year non-call four bonds at par to yield 7.4%.

The Reg S deal, rated BB– by Fitch, received orders of over US$900m at final pricing from 74 accounts.

Asian investors took 99% of the bonds, and the rest went to EMEA. Fund managers, asset managers and hedge funds together took 88% of the deal, while banks and financial institutions took 5% and the remaining 7% went to private banks.

Haitong International was sole global coordinator, lead manager and bookrunner.

Proceeds will be used to refinance a portion of the company’s debt.

KWG Group will have the rights to early partial redemption of the notes in 2024 at 103%, in 2025 at 101% and in 2026 at par.

› LOGAN PROPERTY REFINANCES

LOGAN PROPERTY HOLDINGS priced US$300m of five-year non-call three senior unsecured bonds on January 7 to yield 5.75%, well inside initial guidance of 6.25% area.

The Chinese property developer is rated Ba3/BB/BB/BB+ (Moody’s/S&P/Fitch/Lianhe Global), while the Reg S deal has an expected rating of BB/BB+ (Fitch/Lianhe).

The fixed-rate notes priced at par and are callable from January 14 2023 at 102.

Logan, which describes itself as China’s 23rd biggest property developer by comprehensive strength, intends to use the proceeds to refinance debt.

Deutsche Bank, China Citic Bank International, Credit Suisse, Haitong International and UBS were joint global coordinators and lead managers as well as bookrunners.

› LONGFOR SELLS DUAL-TRANCHER

Property developer LONGFOR GROUP HOLDINGS (Baa3/BBB/BBB) raised US$650m on January 6 from two tranches of US dollar bonds.

A US$250m 3.375% 7.25-year bond priced at 99.940 to yield 3.385%, or Treasuries plus 168bp, inside initial guidance of Treasuries plus 200bp area.

A US$400m 3.850% 12-year bond priced at 99.857 to yield 3.865%, or Treasuries plus 208bp, inside initial guidance of Treasuries plus 245bp area.

The Reg S senior unsecured notes have expected ratings of Baa3/BBB–/BBB.

Citigroup, Goldman Sachs, Haitong



International, HSBC and Morgan Stanley were joint global coordinators. They were also joint bookrunners and lead managers with CICC and Credit Suisse.

Proceeds are for debt refinancing and general corporate purposes.

› RADIANCE SELLS US$300M BOND

Chinese property developer RADIANCE GROUP has raised US$300m from a bond offering that will be mainly used to refinance onshore debt.

The 10.50% two-year senior unsecured bonds were priced at 98.473 to yield 11.375%, inside initial guidance of 11.875% area.

Final statistics were not available at the time of writing but orders were said have been over US$3.3bn at the time of releasing final guidance, including US$1.5bn from the leads.

Subsidiary Radiance Capital Investments is the issuer and Radiance Group is the parent guarantor.

The Reg S notes have an expected B rating from Fitch, while the parent guarantor is rated B/B/BB– (S&P/Fitch)/Lianhe Global).

Haitong International, Guotai Junan International, Zhongrong PT Securities, HeungKong Financial and Standard Chartered Bank were joint global coordinators. They were also joint lead managers and joint bookrunners with Admiralty Harbour, Barclays, Central Wealth Securities Investment, China Investment Securities International, China International Capital Corp, CMB International, CMBC Capital, Morgan Fuel Go Securities, Orient Securities (Hong Kong), TF International Securities and Zhongtai International.

› SHANDONG IRON SELLS SHORT-DATED

SHANDONG IRON & STEEL GROUP has priced 330-day €62m credit-enhanced notes at par to yield 2%, in line with price guidance.

The unrated senior unsecured notes have a standby letter of credit from China Zheshang Bank Jinan branch.

The Reg S issue also has a change of control put option at 101%, raising the level of investor comfort.

Proceeds will be used for the repayment of debt of the issuer and its subsidiaries.

Zhongtai International is the sole global coordinator as well as the joint bookrunner and joint lead manager with Central Wealth Securities Investment Limited and Fosun Hani.

› SHENGZHOU INVESTMENT GOES SMALL

Chinese local government financing vehicle SHENGZHOU INVESTMENT HOLDINGS has priced a US$100m three-year bond offering at par

to yield 6%, inside initial guidance of mid 6% area.

The issuer and the Reg S senior unsecured bonds are unrated.

Proceeds will be used for onshore project construction, refinancing and business development.

Guosen Securities (HK), CMBC Capital, China Industrial Securities International and Industrial Bank Hong Kong branch were joint global coordinators as well as joint lead managers and joint bookrunners with China International Capital Corp and Goldbridge Securities.

The issuer handles primary land development and consolidation, urban infrastructure construction, hotel services and waterworks in Shengzhou, a city in Zhejiang province.

› SINO-OCEAN PRICES 10-YEAR

SINO-OCEAN GROUP has priced a US$400m 4.75% 10-year bond at Treasuries plus 315bp, inside initial guidance of Treasuries plus 340bp.

The bonds priced on January 8 at 98.352 to yield 4.961%.

The Reg S deal received orders of over US$2.4bn, including US$665m from the lead managers.

Asian investors took 96% of the senior unsecured notes and the rest went to Europe. Fund managers took 53%, banks 42% and the rest was taken by private banks, sovereign institutions and others.

Wholly owned subsidiary Sino-Ocean Land Treasure IV is the issuer and Sino-Ocean Group is the guarantor.

The deal is rated Baa3/BBB– (Moody’s/Fitch), in line with the guarantor.

Proceeds will be used primarily for debt refinancing.

HSBC, Goldman Sachs and China Citic Bank International were joint global coordinators as well as lead managers and bookrunners with China International Capital Corporation, UBS, BOC International, CMB Wing Lung Bank, China Everbright Bank Hong Kong Branch, Haitong International, Credit Suisse and CLSA.

› SUNAC CHINA RAISES US$540M

SUNAC CHINA HOLDINGS priced a US$540m five-year non-call three bond on January 7 at 6.5%, inside initial guidance of 7% area.

The Chinese property developer is rated Ba3/BB–/BB, while the Reg S issue has expected ratings of B1/B+/BB.

The bonds priced at par and have a first call date at 103 on January 10 2023.

Proceeds will be used mainly to refinance debt.

HSBC, Morgan Stanley, Barclays, China Citic

Bank International, Credit Suisse, Deutsche Bank, Guotai Junan International and Nomura were joint global coordinators, bookrunners and lead managers.

› WUHAN DANGDAI OFFERS EXCHANGE

WUHAN DANGDAI SCIENCE & TECHNOLOGY INDUSTRIES

(GROUP) has launched an exchange offer for its outstanding US$289.4m 7.25% senior guaranteed bonds due 2020, according to a stock exchange filing.

Under the offer, every US$1,000 in principal amount of the 2020s can be exchanged for new US dollar notes at par plus accrued interest and a US$15 additional cash incentive.

The new three-year notes will carry a minimum yield of 10.5% per annum. The Chinese pharmaceutical company expects to announce the final interest rate on the new notes on or about January 13.

The deadline for the exchange offer is January 10 and the settlement date is expected to be on or about January 16.

The 2020s were issued by Dangdai International Investments in November 2017 and are guaranteed by Wuhan Dangdai Science.

The guarantor and its affiliates hold approximately 3% of the 2020s.

Wuhan Dangdai Science said the purpose of the exchange offer is to extend the maturity profile of its foreign currency-denominated debt and improve its debt structure.

CLSA, Haitong International, China Everbright Bank Hong Kong branch and CMBC Securities are dealer managers for the exchange offer and DF King is the information and exchange agent.

› YANGO PRINTS WELL INSIDE GUIDANCE

YANGO GROUP, rated B2/B/B+/BB– (Moody’s/S&P/Fitch/Lianhe Global), has raised US$300m from a 9.25% 3.25-year non-call two bond.

The Reg S bond priced at 98.318 on January 8 to yield 9.875%, in line with final guidance and inside initial guidance of 10.375% area.

The senior unsecured notes have expected ratings of B/BB– (Fitch/Lianhe Global).

The issue received orders of over US$2.7bn from 148 accounts at final pricing, including US$420m from lead managers.

Asian investors took 95% of the bonds and the rest went to EMEA. Asset managers and fund managers took 91%, banks and financial institutions 5% and private banks 4%.

Yango Justice International is the issuer and Yango Group is the guarantor.


The bond is callable at 103 in January 2022.

Proceeds will be used for refinancing offshore debt.

Guotai Junan International, Haitong International, UBS, CMB International, Admiralty Harbour, Orient Securities and CLSA are joint global coordinators, lead managers and bookrunners.

› YUZHOU SCORES TIGHT PRINT

YUZHOU PROPERTIES, rated Ba3/BB–/BB–/BB (Moody’s/S&P/Fitch/Lianhe Global), last Monday sold US$645m six-year non-call four bonds after tightening pricing to 7.375%, well inside initial price guidance of 8% area.

The fixed-rate senior notes, rated B1/BB–/BB (Moody’s/Fitch/Lianhe), were priced at par.

Strong demand helped the issuer tighten pricing sharply. The deal received over US$4.1bn of orders, including US$725m from lead banks, from over 200 accounts. Asset and fund managers bought 83% of the deal, with banks and financial institutions taking 9%, private banks 4% and corporate and sovereign investors taking 4%. Asia accounted for 87% with EMEA making up 11% and offshore US 2% of the deal.

The pricing came below Nomura’s fair value for the new issue at 7.6%–7.7%, which had used the company’s outstanding 2024s and 2025s as references. The 2024s and 2025s were yesterday quoted at 7.1% and 7.3%, respectively. Another reference point was the US dollar 2024s of KWG Group Holdings and China SCE Group Holdings, which were quoted yesterday at 6.4% and 6.8%, respectively.

Proceeds will be used primarily to refinance medium to long-term offshore debt that will become due within a year.

BOC International, HSBC, JP Morgan, Goldman Sachs, Morgan Stanley, Deutsche Bank, Credit Suisse, Haitong International, CMB International and Yuzhou Financial were joint global coordinators as well as bookrunners and lead managers.

› ZGC GROUP PLANS DEBUT BOND ISSUE

ZHONGGUANCUN DEVELOPMENT GROUP, rated A (stable) by Fitch, kicked off investor meetings on January 9 in London, Singapore and Hong Kong for a debut US dollar bond offering.

HSBC, DBS Bank, GF Securities and Silk Road International are joint global coordinators on the Reg S issue as well as joint bookrunners and joint lead managers with ICBC International.

The proposed senior unsecured bonds will be issued by wholly owned subsidiary

ZGC International Investment and will benefit from a keepwell deed and a deed of equity interest purchase undertaking from the parent company.

ZGC Group is majority-owned by Zhongguancun Science Park Administrative Committee on behalf of the Beijing municipal government. It is responsible for infrastructure investment and the daily operations of the Zhongguancun Science Park.

The proposed bonds have an expected A rating from Fitch, in line with ZGC Group.

Proceeds from the bond issue will be used for overseas investments, overseas refinancing and general corporate purposes.

› ZHENGZHOU LGFV SELLS FIVE-YEAR

ZHENGZHOU URBAN CONSTRUCTION INVESTMENT GROUP has priced a US$200m five-year senior unsecured bond offering at par to yield 3.8%, inside initial 4.3% area guidance.

Final statistics were not available at the time of writing but orders were said to be over US$1.9bn at the time of final guidance, including US$600m from the leads.

The Reg S bonds have expected ratings of BBB+/A– (Fitch/Lianhe Global), on par with the issuer.

The local government financing vehicle of Zhengzhou city in China’s central Henan province plans to use the proceeds to fund the development and construction of operational projects and for debt refinancing.

China International Capital Corp and China Citic Bank International were joint global coordinators as well as joint bookrunners and joint lead managers with Bank of China, BoCom International, China Minsheng Banking Corp Hong Kong branch, CMB International, Orient Securities (Hong Kong) and China Merchants Securities (HK).

ZUCI has responsibility for municipal roads and infrastructure, resettlement housing developments, and the construction and operation of public assets and community facilities.

It printed its debut dollar bond in November last year, a US$300m 3.8% three-year senior unsecured note which drew final orders of over US$2.4bn.

› ZHENRO PROPERTIES PRINTS 2024 NOTES

ZHENRO PROPERTIES, rated B1/B/B+, has raised US$290m from an offering of 7.875% senior notes due April 2024.

The Reg S notes priced on January 7 at 99.945 to yield 7.875% and have expected ratings of B2/B+ (Moody’s/Fitch). Initial guidance was at 8.4% area.

Asian investors bought 83% of the notes, with the remainder going to Europe. Fund managers and banks took 94%, and private banks 6%.

Zhenro has a call option at 103 from January 14 2023, and the notes will mature on April 14 2024.

Proceeds will be used for refinancing debt.

Deutsche Bank, HSBC, BNP Paribas, CCB International, CLSA, CMB International, Goldman Sachs, Haitong International, Standard Chartered Bank and Zhenro Securities were joint global coordinators, bookrunners and lead managers.

› ZHONGRUI INDUSTRIAL BORROWS SHORT

ZHONGRUI INDUSTRIAL GROUP has priced US$70m two-year Reg S senior notes at par to yield 12%, in line with price guidance.

Zhengzhou Zhongrui Industrial Group is the parent guarantor and China Coal Solution and Hechang Real Estate Group are subsidiary guarantors.

Moody’s on December 20 cut the parent group’s issuer rating to B3 from B2 and changed the outlook to stable from negative in anticipation that the property developer and coal producer’s credit metrics will weaken over the next 12-18 months.

The rating agency forecast that the parent group’s net debt/Ebitda will weaken to around 8.5 times over the next 12-18 months from 8.2 times for the 12 months ended June 30 2019.

The new bond issue has an expected Caa1 rating from Moody’s.

Proceeds will be used for refinancing and general corporate purposes.

Haitong International was the sole global coordinator, bookrunner and lead manager.

› BOCOM FINANCIAL EYES THREE-YEAR

BANK OF COMMUNICATIONS FINANCIAL ASSET

INVESTMENT, a subsidiary of Bank of Communications, plans to raise up to Rmb5bn from three-year financial bonds, according to market sources.

Books will open later this month. The issuer has received an expected

rating of AAA from China Chengxin.

› BOHAI BANK TO ISSUE FINANCIAL BONDS

CHINA BOHAI BANK plans to issue Rmb10bn three-year financial bonds, according to a public filing.

Books open on January 13 and the settlement will be on January 15.

Citic Securities is the lead underwriter and



ICBC, Bank of China and China Zheshang Bank are joint underwriters on the deal.

Proceeds will be used to replenish the bank’s capital and support local infrastructure projects.

› DAIMLER ISSUES PANDA BONDS

German carmaker DAIMLER, rated AAA/A2/A (China Bond/Moody’s/S&P), has issued Rmb3bn two-year Panda bonds via a private placement at 3.5%, in the middle of initial guidance of 3.3%–3.7%.

The issue was 1.33 times oversubscribed. Bank of China was lead underwriter

and bookrunner and ICBC was joint underwriter.

This is the issuer’s first Panda bond offering under a new issuance programme approved by Chinese financial regulators.

Daimler last issued Rmb5bn dual-tranche private Panda bonds in November. A Rmb2bn two-year tranche was priced at 3.68% and a Rmb3bn three-year tranche at 4.04%.

› TROUBLED QINGHAI SOE PROPOSES

State-owned QINGHAI SALT LAKE INDUSTRY, a potash producer based in China’s heavily indebted Qinghai province, has tabled a debt restructuring plan that comes with steep haircuts for onshore bondholders.

Non-bank creditors can choose to either convert debt into equity at a discount or accept an extension of up to five years, according to people familiar with the matter.

Bondholders who choose to extend for two years will face a 40% haircut on principal repayments, while a three-year extension will come with 32% losses, four years with 20% and five years at full face value. Interest will be paid at the lower of 150bp below the one-year benchmark lending rate or the original interest rate.

Qinghai Salt Lake plans to discuss the proposal during an investor meeting on January 17. No public announcement has been made by the company.

The company has outstanding debts of Rmb6.17bn, according to Refinitiv data.

Qinghai Salt Lake is China’s largest potash producer with an annual production capacity of around 5 million tonnes. The company shocked the bond market last year after it entered a restructuring process following a missed payment.

Golmud Mountain Industrial Company claimed Qinghai Salt Lake owed it Rmb439m, equivalent to US$62m, for labour, and its claim was later accepted by the local court.

› XIAMEN BANK EYES AT1 BONDS

XIAMEN BANK plans to issue up to Rmb4bn perpetual bonds to replenish the bank’s Additional Tier 1 capital, according to market sources.

Books will open later this month, subject to market conditions.

China Chengxin has assigned a AA+ rating to the issuer and AA to the bonds.

SYNDICATED LOANS

› YANGTZE POWER BRIDGE FOR PERUVIAN

State-owned utilities company CHINA YANGTZE

POWER has completed a US$4bn bridge loan backing its proposed acquisition of New York-listed Sempra Energy’s South American power assets.

Bank of China Luxembourg branch, Industrial and Commercial Bank of China, Banco Santander Hong Kong branch and MUFG Bank were the lenders of the one-year facility, which closed as a club. The former two banks

came in with US$1.5bn each, while the latter two committed US$500m each.

China Yangtze Power International (Hong Kong) is the borrower of the US$4bn loan, while parent CYP is the guarantor.

CYP has agreed to purchase Sempra Energy’s Peruvian businesses for US$3.59bn in cash, the company said in an October 1 filing to the Shanghai Stock Exchange.

The acquisition includes Sempra’s 83.6% stake in Peru’s largest electricity distributor Luz del Sur, as well as its interest in Tecsur, a provider of electric construction and infrastructure services to Luz del Sur and third parties, plus Luz del Sur’s generation business Inland Energy, Sempra said in a September 30 press release.

The transaction is expected to close in the first quarter of 2020, subject to approval from the Peruvian anti-trust authority and the Bermuda Monetary Authority.

Separately, Sempra announced the sale of its businesses in Chile to another Chinese state-owned enterprise.

State Grid Corp of China is in discussions with lenders for a loan of over US$2bn to back its proposed acquisition of the Chilean businesses, including 100% stakes in Chilquinta Energía and Tecnored, for a cash consideration of US$2.23bn, subject to adjustments for working capital, net debt and other adjustments.

The financing is expected to comprise a one-year bridge and a two-year term loan, offering double-digit all-in pricing.

› ANT FINANCIAL INCREASES LOAN

Ant Financial Services Group has exercised part of a greenshoe on its three-year new-money loan to increase the borrowing to US$3bn after attracting nine lenders in general syndication.

ANZ, China Construction Bank (Asia), Citigroup, Credit Suisse, HSBC, ING Bank, JP Morgan, Morgan Stanley and Standard Chartered were the original mandated lead arrangers and bookrunners of the borrowing, while Banco Bilbao Vizcaya Argentaria, Bank of China, Bank of Communications, Barclays, DBS Bank, Goldman Sachs and Mizuho Bank joined as MLABs.

The loan had a base size of US$2.5bn and a greenshoe option of US$1bn.

Banks joining as MLABs were offered a top-level all-in pricing of 125bp via an interest margin of 95bp over Libor.

ALIPAY (HONG KONG) HOLDING is the borrower on the deal. Funds are for general corporate purposes. Signing was on December 23.

In November, the borrower, an affiliate of Chinese e-commerce giant

Top bookrunners of China syndicated loans1/1/19 – 31/12/19

Amount

Name Deals US$(m) %

1 Bank of China 193 28,461.0 36.4

2 BoCom 59 12,789.0 16.3

3 ABC 15 7,501.3 9.6

4 CCB 14 6,203.6 7.9

5 SAICFC 1 2,895.5 3.7


7 ICBC 7 2,669.5 3.4

8 Citic 5 2,189.9 2.8

9 Bank of Shanghai 2 2,076.5 2.7

10 SMFG 4 1,275.0 1.6

Total 330 78,257.4


Proportional credit

Source: Refinitiv data SDC Code: S8b

Top bookrunners of China equity and

convertible offerings1/1/19 – 31/12/19

Amount


1 Citic 69 15,259.6 10.4

2 CICC 62 13,682.2 9.3



5 China Sec 56 7,444.2 5.1

6 Huatai Sec 36 6,311.3 4.3



9 Citigroup 36 5,162.2 3.5

10 Haitong Sec 59 5,117.2 3.5

Total 631 146,554.0

*Market volume


Proportional credit

Source: Refinitiv data SDC Code: C1m


Alibaba Group Holding, completed the amendment and extension of an existing US$3.5bn loan it obtained in May 2017.

Citigroup was the coordinator of the A&E exercise, which lowered the interest margin from 135bp to 95bp over Libor. Lenders earned a 30bp consent fee for agreeing to the amendment.


› ENN ECOLOGICAL BACK FOR US$200M

Shanghai-listed ENN Ecological Holdings has launched a US$200m three-year term loan, returning to the loan market after an absence of more than two years.

Standard Chartered is the sole mandated lead arranger and bookrunner of the bullet transaction, which offers an interest margin of 195bp over Libor.

MLAs committing US$40m or more receive an all-in pricing of 215bp based on a 60bp management fee, while lead arrangers joining with US$20m–$39m are offered an all-in pricing of 208bp via a 39bp fee. Arrangers coming in for US$10m–$19m earn an all-in pricing of 202bp via a 21bp fee.

XINNNENG (HONG KONG) ENERGY INVESTMENT is the borrower, while ENN Ecological Holdings is

the guarantor.Funds are for general corporate purposes.A site visit is scheduled for January 15-16

in Hebei province’s Langfang city.The borrower last tapped the markets

for a same-sized two-year bullet loan in September 2017. Standard Chartered also led that deal, which offered a top-level all-in pricing of 300bp based on an interest margin of 262.5bp over Libor and a 75bp management fee.

ENN Ecological, which is mainly engaged in the coal and chemical businesses, owns and operates a coal-to-chemical plant, a coal mine and small-scale LNG plants in China.

› GEELY UNIT LAPS UP €400M BORROWING

GEELY GLORY INVESTMENT, a unit of Chinese automobile manufacturer Zhejiang Geely Holding Group, has raised €400m (US$446m) from a three-year loan.

Bank of America was the original mandated lead arranger and bookrunner of the unsecured loan, which was pre-funded last year and signed in mid-December.

The bullet loan paid a top level all-in of 200bp based on an interest margin of 175bp over Euribor and 75bp upfront fees.

The borrowing carries a guarantee from Proper Glory Holdings, which owns a 28.9% stake in Hong Kong-listed Geely Automobile Holdings. The loan also has a keepwell agreement from Zhejiang Geely.

Hong Kong-incorporated Geely Glory and British Virgin Islands entity Proper Glory are units of Zhejiang Geely.

Proceeds are for general corporate purposes.

Geely Group last raised a Rmb1.4bn (US$198m) two-year offshore borrowing in August for Genius Auto Finance, a subsidiary of Geely Automobile Holdings. The self-arranged deal had seven banks participating.

Lenders were offered top-level all-in pricing of 111% and 110% of the PBoC rates, respectively, based on upfront fees of 25bp and 20bp for tranches A and B.

Geely Automobile Holdings owns 80% of Genius Auto Finance, while BNP Paribas Personal Finance SA holds the remainder.


› SINOPHARM LEASING UNIT RETURNS

SINOPHARM HOLDING (CHINA) FINANCE LEASING is returning to the loan market for a US$250m three-year dual-currency term loan, five months after obtaining a similar facility.

ANZ, BNP Paribas and Mizuho Bank are the mandated lead arrangers and bookrunners of the latest financing, which will be used for general corporate purposes.

The loan pays an interest margin of 180bp over Hibor or Libor, and has an average life of 2.675 years.

Banks have been invited to join as MLAs with commitments of US$30m or more for a top-level all-in pricing of 203bp through an upfront fee of 61.5bp.

Lead arrangers taking US$20m–$29m earn an all-in of 200bp based on a 53.5bp fee, and arrangers with tickets of US$10m–$19m receive an all-in of 197bp through a 45.5bp fee.

Commitments are due by February 21, with signing slated for March 6.

Pricing on the latest borrowing is marginally lower than a US$200m three-year facility the company completed last August. Standard Chartered was the sole MLAB of that financing, which offered a top-level all-in pricing of 205bp based on a margin of 180bp over Hibor or Libor and an average life of 2.675 years.

The borrower was set up in Shanghai’s free trade zone as a wholly owned subsidiary of Sinopharm Group to focus on financial leasing and factoring.

Sinopharm Group, a major

Jiangxi Copper digs into FQM Loans Miner to become largest shareholder in Canadian copper producer

JIANGXI COPPER has raised a syndicated loan of

Rmb4.9bn (US$705m) to back its proposed

acquisition of a stake in Toronto-listed copper

producer First Quantum Minerals.

China Development Bank Jiangxi branch,

China Construction Bank Jiangxi branch, and

Citic Bank Nanchang branch are the lenders

on the facility, and committed Rmb2.45bn,

Rmb1.225bn and Rmb1.225bn, respectively.

On December 9 Jiangxi Copper announced

that wholly owned subsidiary Jiangxi Copper

(Hong Kong) Investment had agreed to

purchase Cupric Holdings from Canadian

investment company Pangaea Investment

Management for US$1.1bn. Cupric held

around 18% of FQM's issued share capital as

of that date.

The transaction is subject to, among others,

the results of the due diligence conducted

on the target company and its assets and

liabilities, Jiangxi Copper's internal approvals

for the acquisition, and the acquisition

financing being put in place.

It would make Jiangxi Copper the largest

shareholder in FQM.

The Canadian copper producer adopted

a poison pill defence through a rights plan

adding a potential barrier to any takeover

proposal, Reuters reported on January 6.

FQM said its rights plan is triggered in the

event any person becomes a beneficial holder

of 20% or more of the outstanding shares.

It said the plan is subject to ratification by

shareholders within six months of its adoption.

Last September FQM said it was in talks

with Jiangxi for a potential sale of a minority

interest in its Zambian copper assets,

Kansanshi and Sentinel. However, Jiangxi

is prevented from buying more than a 20%

interest in FQM under a standstill agreement

the companies reached in October, the

Reuters report said.

FQM owns nine copper mine development

projects in eight countries including Zambia,

Panama and Peru totalling approximately

49.25 million tons of copper resources. It

also has two large-scale nickel ore resources

in Australia and Zambia totalling 2.38

million tons. The company's actual copper

production in 2018 was approximately

606,000 tons.

CHIEN MI WONG



pharmaceutical firm, is in turn a unit of state-owned China National Pharmaceutical Group.

› TAC LEASING BACK FOR RMB875M LOAN

TAC LEASING is returning to the loan markets after nearly a year for a Rmb875m-equivalent (US$126m) three-year borrowing.

KGI Bank is the mandated lead arranger and bookrunner of the transaction, which is available in either renminbi or US dollars.

The interest margin on the renminbi portion is 110% of the PBoC rate, which stands at 4.75% for tenors from one to five years. The US dollar portion offers a margin of 160bp over Libor.

MLAs joining with Rmb150m or more will receive a flat participation fee of 10bp, while co-arrangers committing Rmb100m–Rmb149m are offered a 7.5bp fee. Participants with Rmb50m–Rmb99m will earn a 5bp fee.

Commitments are due by February 21.Funds are for refinancing and general

corporate purposes.

Taiwan Acceptance, the borrower’s direct parent, is the guarantor.

Both companies are units of automobiles and textile manufacturer Yulong Group.


› JIANGXIAOBAI GETS INTO IPO SPIRIT

Chinese liquor maker JIANGXIAOBAI is planning an IPO which could raise US$500m–$1bn, according to people with knowledge of the matter.

The manufacturer and seller of baijiu (white spirit) has invited potential advisers to pitch for the transaction which could come as early as this year, said the people.

The company has not decided where to list as yet but the people said Hong Kong seems a more likely venue than the US.

The company counts Hillihouse Capital, IDG Capital, Tiantu Capital and BA Capital among its investors, according to its website.

Founded in 2011, Chongqing-based Jiangxiaobai targets younger drinkers than its traditional rivals for spirits with a less spicy taste. Its products are sold in more than 20 countries including China, India, Germany and the UK.

Jiangxiaobai did not respond to emails seeking comment.

› SUNAC CHINA BUILDS WAR CHEST

SUNAC CHINA has raised HK$8bn (US$1bn) from an upsized share placement.

The Chinese property developer sold 186.9m primary shares, or about 4% of the enlarged share capital, at HK$42.80 per share. The deal was launched with 164m primary shares in an indicative price range of HK$42.70–$43.70 each.

The issue price represents a discount of 8.3% to the company’s close of HK$46.65 last Thursday.

The books were multiple times oversubscribed with more than 100 investors participating in the transaction. The top 10 investors took about 70% of the deal.

Star rises on China’s first dual-class IPO Equities Landmark UCloud float comes ahead of first pre-profit listing

China's new tech board is set for two

landmark listings that will confirm significant

reforms in the A-share capital market.

UCLOUD TECHNOLOGY is the first company

with weighted voting rights to go public in

China's domestic market, while SUZHOU ZELGEN

BIOPHARMACEUTICALS will be the first loss-

making company to complete an IPO. Both

are set to list on the Shanghai Star market,

and are sponsored by CICC.

China's Nasdaq-style Star board allows

unprofitable companies, companies with

weighted voting rights or variable interest

entity structures to list, opening up the

domestic equity market for more homegrown

technology companies looking to raise

capital.

UCloud Technology, a Chinese cloud

services provider, wrapped up its Rmb1.94bn

(US$279m) IPO last Friday.

It sold 58.5m Class B shares, or 13.9% of

its enlarged capital, at Rmb33.23 per share.

UCloud's three founders hold Class A

shares that carry five times the voting rights

of its Class B shares, according to its filings.

Post-IPO, the three founders will hold a

combined 23.1% stake while controlling

60.1% of the voting rights.

The P/E ratio based on 2018 earnings is

181.85, which is nearly five times the industry

average ratio of 36.65 in the past month.

However, the deal was downsized from an

original target of 100m–121m A-shares to

raise up to Rmb4.75bn.

The company allotted 20% of the IPO to

strategic investors and planned to split the

remainder 80%/20% between institutional

and retail tranches.

As the retail tranche was subscribed 2,958

times, the company clawed back 4.68m

shares from the institutional part to the retail

tranche. Institutional investors ended up with

56% of the IPO shares, while the remaining

24% went to retail.

UCloud plans to use the proceeds for

three projects related to a multimedia cloud

platform, cloud security technology and an

AI platform, and to build a new data centre in

Inner Mongolia.

As the sole sponsor of the deal, CICC is

working with lead mangers Guotai Junan Securities and Citi Orient Securities.

NO PROFIT TEST

Meanwhile, Zelgen will run bookbuilding for

a single day on January 14 for a Rmb2.38bn

(US$342m) Star float.

The IPO marks another important reform

in the Chinese A-share market, where the

listings of unprofitable companies were

prohibited until the launch of the Shanghai

tech board last year.

Founded in 2009, Zelgen specialises

in innovative treatments for cancer, blood

disorders and other diseases. It posted a net

loss of Rmb442m in 2018, and a net loss of

Rmb323m in the first half of 2019.

The company is offering 60m A-shares for

a free float of at least 25%. It plans to allot

5% of the IPO to strategic investors and split

the remainder 80/20 between institutional

and retail investors.

Zelgen is the first tech board candidate to

take advantage of listing criteria that do not

include revenue or profit tests for companies

with a minimum market capitalisation

of Rmb4bn. To qualify, an issuer's main

business or products need to be approved by

the relevant state departments and it has to

outline its accomplishments in its sector and

have several niche markets. Companies in the

pharmaceutical industry must have at least

one core product under Phase II clinical trials.

Zelgen will spend Rmb1.45bn of the

proceeds on drug research, and use the rest

to build a research and production base and

replenish working capital.

CICC is working with the joint bookrunner

Soochow Securities.

KAREN TIAN, FIONA LAU


As of last Thursday, Sunac China’s shares had risen 44% in the past three months.

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

Proceeds will be used for general working capital.

Morgan Stanley was the sole bookrunner.

› WUXI BIOLOGICS SELLS MORE

WuXi Biologics Holdings has raised HK$5.8bn from an upsized sell-down in WUXI

BIOLOGICS (CAYMAN).The deal, which was upsized from 53.8m

to 60.8m shares, was priced at HK$96.05 per share compared to the HK$95–$97 range.

The final price represents a discount of 6.9% to the company’s close of HK$103.20 last Thursday.

The books were multiple times covered with strong participation from existing shareholders. More than 130 investors joined the deal with the top 10 investors taking about two-thirds of the transaction. Demand mainly came from Asia and there was also participation from Europe and the US.

There is a three-month lock-up.After the sale, WuXi Biologics Holdings

remains the controlling shareholder in WuXi Biologics (Cayman) with a 35.5% stake.

Morgan Stanley was the sole bookrunner.

› ACTIVATION PRICES HK IPO AT MIDPOINT

ACTIVATION GROUP, a marketing services provider in China, has raised HK$404m from a Hong Kong IPO after pricing the deal at the midpoint of the range, a person close to the deal said.

The company sold 200m shares, or 25% of the enlarged share capital, at HK$2.02 each, versus an indicative price range of HK$1.71–$2.34. The issue price gives the company a market capitalisation of HK$1.61bn.

There is an overallotment option of 15% of the base size.

Activation’s clients include luxury fashion and car brands such as Chanel, Burberry and BMW.

The shares are set to start trading on January 16.

Dongxing Securities is the sole sponsor, and also joint bookrunner with CMB International and Haitong Securities.

› BOOKS COVERED FOR LVJI TECH’S IPO

The books are covered for Chinese online tour guide service provider LVJI TECHNOLOGY

HOLDINGS’ Hong Kong IPO of up to HK$748m.The base deal of 353m shares (88%

primary/12% secondary), or 25% of the enlarged share capital, is being marketed

at HK$1.50–$2.12 apiece, representing a forecast 2020 P/E of 7.5 times –10.6 times and a potential market capitalisation of US$271m–$384m.

There is an overallotment option of 15% of the base size.

Half of the proceeds will be used to produce online tour guides to cover more tourist attractions in China and overseas. The remainder will be used to recruit R&D staff and promote the brand as well as for strategic investments and working capital and general corporate purposes.

The shares will start trading on January 17. The company recorded revenues of

Rmb183m (US$26.2m) in the six months to June 2019, against Rmb63.7m a year earlier. Net profit rose to Rmb51.9m from Rmb15.4m over the same period.

CCB International is the sole sponsor.

› CMES COMPLETES PRIVATE PLACEMENT

Shanghai-listed CHINA MERCHANTS ENERGY

SHIPPING has raised Rmb3.6bn from a private A-share placement.

CMES sold 674m A-shares at Rmb5.36 each to eight investors including majority shareholder China Merchants Steam Navigation, which has committed to buy up to Rmb2bn of the placement, and JP Morgan Securities. China Merchants Steam Navigation will face a 36-month lock-up and the other seven investors lock-ups of 12 months.

China Merchants Steam Navigation owned a 41.4% stake in the company before the deal.

The proceeds will be used to buy ultra large crude carriers, bulk carriers, roll-on roll-off ships and VLCC gas desulfurisation scrubbers, and to repay debt to China Merchants Steam Navigation, which will cost Rmb5.54bn in total.

Its A-shares closed at Rmb7.4 on January 10, down 2.6%.

Citic Securities and China Merchants Securities are joint sponsors on the deal, and joint bookrunner with CICC.

› DADA-JD DAOJIA FILES FOR IPO

Chinese online grocery and delivery firm DADA-JD DAOJIA has filed confidentially for a US IPO of about US$700m–$800m, said people familiar with the situation.

The company, backed by JD.com and Walmart, is planning to list in the first half of the year, said the people.

Bank of America, Goldman Sachs and Jefferies are leading the float.

A spokesperson from Dada-JD Daojia declined to comment.

In 2016, JD.com, one of China’s largest e-commerce companies, merged its online-

to-offline business JD Daojia with Dada Nexus, China’s largest crowdsourcing delivery platform, to form Dada-JD Daojia.

In August 2018, Dada-JD Daojia announced it had raised US$500m from global retail giant Walmart and JD.com in its latest round of financing.

Walmart holds a 10% stake in Dada-JD Daojia, while JD.com owns an about a 47.5% equity interest on a fully diluted basis.

Dada currently serves more than 1.4 million merchants and over 70 million individual users, according to the company’s website. JD Daojia also has more than 74 million registered users and over 30 million monthly active users.

› ENTERPRISES RESOURCES LAUNCHES IPO

BEIJING ENTERPRISES URBAN RESOURCES GROUP has launched a Hong Kong IPO of up to HK$720m, according to a term-sheet.

A total of 900m primary shares, or 25% of the enlarged share capital, are on offer in an indicative price range of HK$0.69–$0.80, representing a forecast P/E of 9.2x–10.6x for 2019 and 6.4x–7.5x for 2020.

The IPO will give the company a potential market capitalisation of HK$2.48bn–$2.88bn.

There is an overallotment option of 15% of the base deal.

A cornerstone investor, ZGC International, has indicated a US$10m interest in the deal.

The integrated waste management company has nine hazardous waste treatment projects in China, serving clients like local government agencies.

About half of the proceeds will be used for the development of hazardous waste treatment projects and the rest will be used for purchasing motor vehicles for environmental hygiene projects, repaying debt and working capital and general corporate purposes.

DBS and Haitong International are the joint sponsors.

› GONGNIU TO LAUNCH SHANGHAI IPO

GONGNIU GROUP will open the books on a proposed Rmb3.51bn Shanghai IPO for a day on Thursday, a day after it is set to price the deal.

Gongniu Group, a manufacturer of electrical and electronic products, plans to offer 60m A-shares or 10% of its enlarged capital. It downsized the target from Rmb4.89bn in its pre-prospectus.

Proceeds will be used on an R&D centre, IT services, three factories for wall switches, power converters and LED lighting, sales channels and marketing.

Sinolink Securities is the sponsor.



› HUIJING PRICES HK IPO AT BOTTOM

Chinese property developer HUIJING HOLDINGS has raised HK$1.52bn from a Hong Kong IPO, a person close to the deal said.

The company sold 788m shares, or 15% of the enlarged share capital, at the bottom of the HK$1.93–$2.39 indicative range.

The shares will start trading on January 16.

China Galaxy International is the sponsor. It is also joint bookrunner with CCB International, CMB International and Guotai Junan International.

Huijing develops residential and commercial properties in the PRC with a focus on Guangdong and Hunan provinces. It posted a net profit of Rmb213m for the first half of 2019, down 11% over the same period of 2018.

› JIUMAOJIU PRICES HK IPO AT TOP

JIUMAOJIU INTERNATIONAL has raised HK$2.2bn from a Hong Kong IPO after pricing the deal at the top of a HK$5.50–$6.60 price range, a person close to the deal said.

The Chinese restaurant chain sold 333m shares, or 25% of the enlarged share capital, at HK$6.60 each, representing a 2020 P/E of 23.2.

Four cornerstone investors are in the deal with a total investment of US$55m – BlackRock (US$20m), China Alpha (US$15m), WT Investment Management (US$15m) and Orient Asset Management (US$5m).

The shares will start trading on January 15.CMB International is the sponsor, and

global coordinator and bookrunner with CICC.

Jiumaojiu operates 269 restaurants and manages 41 franchised restaurants in the PRC. It has five brands – Jiu Mao Jiu, Tai Er, Double Eggs, Cooking Spicy Kebab and Uncle Chef.

The company posted a net profit of Rmb102m for the first half of 2019, up 88% over the same period of 2018.

› KINGSOFT CLOUD PLANS US$500M IPO

KINGSOFT CLOUD could raise about US$300m–$500m from a US IPO in the first half of next year, said people close to the deal.

Credit Suisse, JP Morgan and UBS are leading the transaction.

Hong Kong-listed Kingsoft announced earlier that its subsidiary Kingsoft Cloud made a confidential filing for a US IPO on December 20.

According to the announcement, Kingsoft Cloud will cease to be a subsidiary of the company after the listing.

Founded in 2012, Kingsoft Cloud provides

cloud storage and cloud computation services.

It earned revenue of Rmb976m for the first three quarters of 2019, a 62% increase year on year. It accounted for 48% of Kingsoft’s revenue in Q1-Q3.

› LIZHI TUNES IN FOR US$53M NASDAQ IPO

Audio streaming company LIZHI has started bookbuilding for a Nasdaq IPO of up to US$53m.

The Guangzhou-based podcast app operator is selling 4.1m primary ADSs in an indicative range of US$11–$13 per share, representing a 2020 forecast P/S of 1.9 times–2.3 times.

The deal will price on January 16. Citigroup, Haitong International, AMTD,

Needham & Company and Tiger Brokers are the joint bookrunners. Credit Suisse, which led the deal with Citigroup according to a public filing in October, is no longer on the transaction.

WB Online Investment, an affiliate of Weibo, and Green Better, an affiliate of Xiaomi, and two other investors have indicated interest in investing up to a combined US$36m in the IPO.

The company enables users to set up their own radio programmes and create and upload audio clips. It has 46.6 million average active monthly users.

It posted a net loss of Rmb104m for the nine months ended September 30 2019, compared with Rmb11.3m over the same period in 2018.

Lizhi FM has completed several rounds of fundraising since it was established in 2013. Its investors include Orchid Asia Group Management, Xiaomi, Shunwei Capital and Matrix Partners China.

› MICROPORT TO SPIN OFF CARDIOFLOW

Hong Kong-listed MICROPORT SCIENTIFIC plans to spin off its MICROPORT CARDIOFLOW subsidiary through a stock exchange listing.

The parent company did not specify when or where the listing might take place.

MicroPort CardioFlow develops devices used in the treatment of heart diseases, principally heart valve diseases.

Last July, MicroPort Scientific spun off another subsidiary, Shanghai MicroPort Endovascular MedTech, on the Shanghai tech board in a Rmb832m IPO. It was among the first batch of companies listing on the new board.

› PHOENIX TREE LAUNCHES NYSE IPO

Chinese apartment leasing service PHOENIX

TREE has started bookbuilding for a NYSE IPO of up to US$175m.

The company, which operates in the long-term rental market under the names Danke Apartment and Dream Apartment, is selling 10.6m primary ADSs in an indicative range of US$14.50–$16.50 per share, representing a 2020 forecast EV/Sales of 1.09 to 1.20 times or a post-shoe market capitalisation of US$2.96bn–$3.37bn.

Some shareholders have indicated interest to purchase up to US$55m of the shares on offer, and a strategic investor has committed to US$60m in the deal.

The deal will price on January 16. Founded in 2015, Phoenix Tree sealed a

US$500m private financing round in March 2019 at a valuation of about US$2bn.

Ant Financial, Alibaba’s financial services affiliate, led the latest financing round together with existing investor Tiger Global Management. Other investors include Primavera Capital, CMC Capital and Gaorong Venture Capital.

As of September 30, Phoenix Tree managed more than 400,000 apartments in 13 cities.

The company posted a net loss of Rmb2.5bn for the nine months ended September 2019, compared with a loss of Rmb813m over the same period in 2018.

Citigroup, Credit Suisse and JP Morgan are the joint bookrunners.

› PSBC FULLY EXERCISES GREENSHOE

POSTAL SAVINGS BANK OF CHINA has raised an additional Rmb4.27bn from its Shanghai IPO after fully exercising the greenshoe.

The company sold an additional 776m A-shares at the issue price of Rmb5.5 each, representing 15% of the base deal of 5.17bn shares.

Including the greenshoe, PSBC raised Rmb32.7bn from the largest equity offering in the A-share market since Agricultural Bank of China’s Rmb68.5bn Shanghai IPO in 2010.

The shares have been trading above the issue price since they were listed in China on December 10 and touched a high of Rmb5.98 on January 3.

The A-shares changed hands at Rmb5.82 last Friday morning, down 0.9%, while its H-shares were down 1% at HK$5.22, giving the company a market capitalisation of Rmb738bn.

CICC and China Post Securities were sponsors of the deal, and bookrunners with UBS Securities and Citic Securities.

› ROYOLE PLANS US IPO

Flexible display maker ROYOLE CORPORATION is planning a US IPO that could raise US$500m–$1bn this year, said people close to the deal.


The Chinese company has started preparatory work for the IPO with financial advisers, said the people.

Founded in 2012, the Shenzhen-based company produces bendable screens for smart devices such as smartphones.

Its investors include IDG Capital Partners, Poly Capital and Citic Capital, according to the company’s website. A private financing round in August 2018 valued the company at about US$5bn. In March, the company was reported to be looking to raise about US$1bn in a pre-IPO round at a valuation of about US$8bn.

The company did not respond to emails seeking comment.

› SELL-DOWN IN XINYI SOLAR

A group of shareholders have raised HK$1.79bn from the sale of their stakes in XINYI SOLAR �

The deal, comprising 350m secondary shares or 4.3% of existing capital, was marketed at HK$5.10–$5.25 per share. It was priced at HK$5.125 or at a discount of 8.5% to the pre-deal close.

The books were multiple times covered. Demand mainly came from Asia with participation from Europe and the US. The deal saw solid support from long-only investors and the top five investors took about 85% of the deal.

The vendors were a group of individuals including current or former directors or senior management of the company. They will be subject to a 90-day lock-up.

HSBC �

› SHIMAO TO SPIN OFF UNIT

SHIMAO PROPERTY is considering spinning off its property management service unit in a Hong Kong IPO to raise about US$500m–$600m this year, according to people close to the deal.

The Hong Kong-listed Chinese property developer is in advanced discussions with potential advisers on the transaction, said the people.

According to Shimao’s 2019 first-half financial report, for the six months ended June 30, revenue from property management and other income amounted to Rmb1.6bn, up 207% from a year earlier.

Shimao did not respond to emails seeking comment.

› SIX COMPANIES FILE FOR IPOS

SHAANXI BEIYUAN CHEMICAL INDUSTRY GROUP, a chemical products manufacturer based in northwest China, has filed to the China Securities Regulatory Commission for a

proposed Rmb3.44bn Shanghai IPO.It plans to offer up to 361m A-shares, or

10% of its enlarged capital.Proceeds will be used for four chemical

products projects, to research an intellectual IT platform, build an R&D centre, replenish working capital and repay loans from banks.

Huatai United Securities is the sponsor.JIANGXI JOVO ENERGY, ZHEJIANG PROVINCIAL

NEW ENERGY INVESTMENT GROUP, and JINAN

SHENGQUAN GROUP SHARE HOLDING have also filed for Shanghai IPOs to raise Rmb2.12bn, Rmb1.91bn, and Rmb1.21bn. CICC, Caitong Securities and Great Wall Securities are the respective sponsors.

Meanwhile CAIDA SECURITIES has filed for a Shanghai IPO but it did not disclose the fundraising target.

The local brokerage, owned by the Hebei bureau of the State-owned Assets Supervision and Administration Commission of the State Council, will sell up to 500m A-shares, or 15.4% of the enlarged capital.

Proceeds will be used to replenish working capital.

The company posted a net profit of Rmb73.7m in 2018 on revenue of Rmb1.46bn. Its main source of revenue is from stock trading commissions, which are showing a downward trend year by year.

Stock trading commissions accounted for 58.8%, 53.3% and 38% of revenue from 2016-2018.

China Securities is the sponsor.Separately, TIANNENG BATTERY GROUP, a spin-

off of Hong Kong-listed Tianneng Power International, has filed to the Shanghai Stock Exchange for a proposed Rmb3.6bn Star IPO.

The deal is set to be the third largest IPO on the Star market if it comes to fruition, after China Railway Signal and Communication (Rmb10.5bn) and Cathay Biotech (Rmb4.7bn).

The company plans to offer between 85.6m shares (10% of current capital) and 116.6m shares.

The battery manufacturer for e-riders will use the proceeds for four battery manufacturing and technical upgrade projects, to create a new database, and replenish working capital.

It posted a net profit of Rmb475m for the first six months of 2019 on revenue of Rmb20.8bn.

Citic Securities is the sponsor.

› SMOORE FILES FOR HK IPO

SMOORE INTERNATIONAL, one of the world’s largest e-cigarette makers, has filed for a Hong Kong IPO.

CLSA is the sponsor. IFR reported in August the company

planned to raise about US$400m from the float in the first half of 2020.

Smoore was listed on the China National Equities Exchange and Quotations and delisted from the over-the-counter exchange in June.

Smoore posted profit and total comprehensive income of Rmb921m for the first half of 2019, more than five times the Rmb181m earned from the same period of 2018.

Smoore’s clients include Japan Tobacco, Reynolds Asia-Pacific, British American Tobacco, RELX and NJOY.

› TIANQI LITHIUM CLOSES RIGHTS ISSUE

Shenzhen-listed TIANQI LITHIUM has raised Rmb2.93bn from a rights offering, lower than the Rmb7bn it was targeting.

The company sold 335m A-shares, or 97.8% of the offering, on a 2.9-for-10 basis at Rmb8.75 each, compared with its Rmb29.06 share price on December 18 when trading was halted. It had planned to offer 343m shares on a 3-for-10 basis.

The company’s biggest shareholder, Chengdu Tianqi Industry Group, and the other two existing shareholders bought 41% of the offering.

Proceeds will be used to repay part of a loan for the purchase of a 23.77% stake in NYSE-listed Sociedad Quimica y Minera de Chile for US$4.1bn.

The company posted a net profit of Rmb87m for the first nine months of 2019, an 83% decrease year on year, on revenue of Rmb1.2bn.

Morgan Stanley Huaxin Securities was the sponsor and joint bookrunner with Huatai United Securities.

The company is also planning a Hong Kong listing, with the majority of the proceeds to be used to refinance loans related to the acquisition, but there has been little progress on the float since it was given Chinese regulatory approval in November 2018. Based on the company’s A-share close of Rmb31.94 on January 8, the Hong Kong float of up to 328.3m H-shares could raise Rmb10.5bn.

Morgan Stanley is working on the IPO with CLSA.

Separately, Shenzhen-listed SEALAND

SECURITIES is set to raise up to Rmb5bn from a 3-for-10 rights issue at Rmb3.25 each.

Proceeds will be used to supplement the company’s capital base to expand its intermediary and asset management businesses.

Guotai Junan Securities is the sponsor and joint bookrunner with Industrial Securities.



› TWO SPIN-OFFS SET FOR STAR BOARD

Hong Kong and Shanghai-listed SHANGHAI

ELECTRIC GROUP plans to spin off its unit Shanghai Electric Windpower Equipment as a separately listed company on the Shanghai Star market.

The proposed spin-off’s performance has been mixed in recent years. It posted a net loss of Rmb52m in 2018 against a net profit of Rmb21m in 2017. It then made a net profit of Rmb101m in the first nine months of 2019.

The spin-off proposal still needs approval from shareholders and regulators in Hong Kong and China.

SHANGHAI CONSTRUCTION GROUP plans to spin off subsidiary Shanghai Construction Material on the Star market.

SCG said it meets the regulatory requirement for divesting spin-offs of having made profits in the last three years, with those cumulative profits exceeding the Rmb600m threshold set by the China Securities Regulatory Commission more than tenfold.

The proposal still needs approval from shareholders and regulators.

› WEIGAO ORTHO PLANS A-SHARE IPO

SHANDONG WEIGAO ORTHOPAEDIC DEVICE has started preparation work for an A-share IPO, according to Hong Kong listed parent company Shandong Weigao Group Medical Polymer.

An announcement from Weigao Polymer said a financial adviser of Weigao Ortho made a submission on December 30 to the Shandong Regulatory Bureau of the China Securities Regulatory Commission regarding the application for the pre-listing tutoring process.

The announcement does not mention which mainland stock exchange Weigao Ortho is planning to list on.

Weigao Polymer has been trying to spin off Weigao Ortho for years. Weigao Ortho applied for a Hong Kong IPO in 2015 but the deal did not happen. Then in 2016, the company was looking at a backdoor listing in the A-share market through Shenzhen-listed Zhuhai Winbase International Chemical Tank Terminal but that deal also did not materialise.

Weigao Ortho is a non-wholly owned subsidiary of Weigao Polymer and mainly engages in the production and sale of spine, trauma and joint orthopaedic implants.

› YUNFENG TRIMS ALIBABA HEALTH STAKE

Yunfeng Capital, a venture firm backed by Alibaba founder Jack Ma, has raised HK$791m through the sale of part of its

37% holding in ALIBABA HEALTH INFORMATION

TECHNOLOGY.The deal, comprising 84m secondary

shares or 0.7% of existing capital, was priced at the bottom of a HK$9.42–$9.52 range or at a discount of 4.6% to the company’s closing price of HK$9.87 last Wednesday.

Yunfeng indirectly holds 10.95% of Alibaba Health through its fully owned subsidiary Innovare Tech, which acts in concert with Perfect Advance Holding (holding 25.82% of the company).

In this transaction, the seller sold through Innovare Tech.

There is a 45-day lock-up on the vendor. Goldman Sachs was the bookrunner.

› ZHENRO SERVICES PLANS HK IPO

Chinese property management company ZHENRO SERVICES GROUP is looking to raise around US$100m–$150m from a Hong Kong IPO, according to people with knowledge of the matter.

The company, which provides property management services to Hong Kong-listed Zhenro Properties Group, filed for an IPO to the Stock Exchange of Hong Kong on January 2.

Headquartered in Shanghai, Zhenro Services has 136 projects under management in 34 cities in China, including residential properties, government and public facilities, office buildings, industrial parks and schools.

Pre-IPO, Zonrong Ou, the controlling shareholder of Zhenro Properties Group, ultimately owns 87.3% of Zhenro Services Group.

For the nine months ended September 30 2019, Zhenro Services made a profit of Rmb74.2m, up from Rmb28.5m a year earlier. It posted net profit of Rmb39.5m in 2018 on revenue of Rmb456m.

CCB International is the sole sponsor.

› POLYMER EB BRINGS INNOVATION

Weigao Holding has taken advantage of a pilot share convertibility scheme to raise US$150m from the sale of an exchangeable bond with shares of SHANDONG WEIGAO GROUP

MEDICAL POLYMER as the underlying.The five-year put-three EB was marketed

at a coupon of 1%–2%, a yield to maturity of 1%–2% and an exchange premium of 25%–35%. It was priced at a coupon/yield to maturity of 2% and an exchange premium of 25%.

Weigao Polymer is one of five companies approved by the China Securities Regulatory Commission in the H-share full circulation pilot scheme allowing major shareholders of Hong Kong-listed mainland

companies to turn their domestic shares, which unlike A-shares are not normally tradable, into ordinary tradable shares.

As such, the EBs will be initially secured by the net proceeds of the deal and eventually be replaced by the H-shares of Weigao Polymer by February 21 2020. Weigao will transfer its Polymer shares from onshore to offshore during this period.

About 70% of the deal went to hedge funds and the remaining 30% to long-only investors. The top 10 investors took about two-thirds of the deal. Demand mainly came from Asia and there was also participation from Europe.

Proceeds will be used for business expansion, working capital needs and general corporate purposes.

Credit spread was assumed at 375bp, implied volatility at 19.3%, stock slippage at 7% and bond floor at 90.96.

Credit Suisse was the bookrunner.

› FLAT GLASS GROUP CLEARS CB HEARING

Hong Kong and Shanghai-listed FLAT GLASS

GROUP has cleared a China Securities Regulatory Commission hearing for a proposed Rmb1.45bn six-year A-share convertible bond.

Proceeds will be used to help fund a photovoltaic glass project in Anhui province at a cost of Rmb1.75bn.

The company raised Rmb300m from a Shanghai IPO in February 2019.

Guotai Junan Securities is the sponsor.

› MINSHENG BANK GETS CBIRC NOD FOR CB

Hong Kong and Shanghai-listed CHINA

MINSHENG BANK has won approval for a proposed Rmb50bn six-year convertible bond from the China Banking and Insurance Regulatory Commission.

Proceeds will be used to replenish core Tier 1 capital.

The CB is still waiting for approval from the China Securities Regulatory Commission.

Shenzhen-listed NEW HOPE LIUHE, which makes animal feed and meat products and also breeds livestock, has raised Rmb4bn from a six-year convertible bond.

It sets the initial convertible price at Rmb19.78 each on the CB, which has received a AAA rating from United Rating.

The CB pays an initial coupon of 0.2% in year one, stepping up each year to 2% in year six.

The proceeds will fund eight pig breeding projects in seven Chinese cities.

The company posted a net profit of Rmb2.72bn on revenue of Rmb69.1bn in 2018.

China Merchants Securities is the sponsor,


and joint bookrunner with China Securities and Huatai United Securities.

Separately, Shenzhen-listed WANDA FILM

HOLDING, a subsidiary of Wanda Group, has withdrawn a proposed Rmb3.82bn CB offering because of an adjustment in the company’s fundraising plans and changes in the Chinese capital market environment. CICC was the sponsor.

At the same time, Shenzhen-listed SHANXI

MEIJIN ENERGY plans to raise Rmb3.2bn from a proposed six-year CB.

The CB will pay an initial coupon of up to 0.2% each year.

Proceeds will be used to manufacture new chemical materials.

Shenzhen-listed HONGDA XINGYE has raised Rmb2.43bn from a six-year CB which began trading on January 8. First Capital Investment Banking is the sponsor.

Hong Kong and Shanghai-listed SHENZHEN

EXPRESSWAY has withdrawn a proposed Rmb2.2bn six-year convertible bond.

The company extended the validity of the mandate for the issuance in February to December 27 2019, but it said it decided to cancel the offering because of changes in the external environment and the company’s situation. It did not elaborate.

It had planned to use the proceeds to build toll roads.

Its A-shares were up 0.4% at Rmb11.49 this afternoon, while its H-shares were down 0.2% at HK$11.42.

China Merchants Securities is the sole bookrunner of the issue.

Shenzhen-listed CHENGDU KANGHONG

PHARMACEUTICAL GROUP has received the final approval from the China Securities Regulatory Commission for a proposed Rmb1.63bn convertible bond.

Proceeds will be used for two ophthalmic drug and injection projects, to build an R&D centre and upgrade warehouses.

BOC International Securities is the sponsor.

HONG KONG


› NWD SELLS BONDS TO FTLIFE

Property developer and investor NEW WORLD

DEVELOPMENT on December 24 sold HK$1.5bn (US$193m) 30-year senior unsecured bonds to FTLIFE INSURANCE.

The fixed-rate notes pay 4.89% and were sold at par. The issue settled on December 31.

NWD (MTN) is the issuer and NWD the guarantor.

Hong Kong insurer FTLife Insurance is an indirect wholly owned subsidiary of NWS Holdings, in which NWD and its subsidiaries hold a 61% stake.

FTLife considers the notes a good match for the long duration of its insurance contract liabilities, according to a Hong Kong exchange announcement by NWS.

SYNDICATED LOANS

› H&H’S US$675M LOAN ATTRACTS 13

Thirteen lenders have joined a US$675m-equivalent loan for paediatric nutritional products maker HEALTH AND HAPPINESS (H&H)

INTERNATIONAL HOLDINGS that complements a US dollar bond issued last October.

Goldman Sachs, HSBC and JP Morgan were the mandated lead arrangers and bookrunners of the four-year financing, which comprises a US$625m-equivalent term loan and a US$50m revolving credit facility.

The loan, which was available in US and Australian dollars, paid a top-level all-in pricing of 179.86bp based on an opening interest margin of 160bp over Libor/BBSY and an average life of 3.775 years.

Proceeds from the loan and the US$300m five-year non-call two bond refinance existing debt, including a US$425m bond due June 21 2021.

The three leads on the loan also led the October bond which priced at par to yield 5.625%. The Reg S offering attracted orders for over US$2.8bn from 158 accounts.

In September 2018, the company raised a US$450m-equivalent three-year senior secured loan via an indirect unit, Biostime Healthy Australia Investment. That loan paid a top-level all-in of 233.33bp via an initial margin of 200bp over Libor/BBSY that was tied to ratings from Moody’s and S&P.


› HANG LUNG DEBUTS GREEN LOAN

Hong Kong-listed developer HANG LUNG

PROPERTIES has obtained a maiden HK$1bn (US$128m) green loan facility, according to a company announcement on December 23.

OCBC Bank Hong Kong branch provided the financing, of which the proceeds will be used to finance commercial property development projects in Mainland China.

Top bookrunners of Hong Kong dollar bonds,

inc certificates of deposit, commercial paper1/1/19 – 31/12/19

Amount

Name Issues HK$(m) %

1 HSBC 113 49,836.1 33.7

2 BoCom 18 28,891.6 19.5


4 Citigroup 10 5,968.6 4.0


6 CBA 12 5,445.8 3.7

7 Bank of China 8 4,138.0 2.8

8 BNP Paribas 20 3,438.0 2.3

9 Mizuho 4 3,061.1 2.1

10 ANZ 5 2,089.9 1.4

Total 267 148,029.9

*Market volume

Proportional credit


Top bookrunners of Hong Kong dollar bonds,

ex-certificates of deposit, commercial paper1/1/19 – 31/12/19

Amount

Name Issues HK$(m) %

1 HSBC 49 30,705.1 37.3


3 BoCom 6 6,291.6 7.7


5 Citigroup 8 3,468.6 4.2

6 Bank of China 6 3,308.3 4.0

7 CBA 4 2,718.3 3.3

8 BNP Paribas 12 2,288.0 2.8

9 ICBC 3 1,990.5 2.4

10 OCBC 3 1,638.3 2.0

Total 128 82,287.9

*Market volume

Proportional credit


Top bookrunners of Hong Kong syndicated loans1/1/19 – 31/12/19

Amount

Name Deals US$(m) %

1 Bank of China 37 10,195.1 11.3

2 HSBC 48 9,647.6 10.6


4 CCB 20 4,297.7 4.7


6 Mizuho 20 3,771.1 4.2

7 DBS 17 3,645.4 4.0

8 BoCom 18 3,472.0 3.8

9 ICBC 15 2,941.3 3.2

10 Deutsche 9 2,789.4 3.1

Total 137 90,642.9


Proportional credit


Hong Kong global equity and equity-related1/1/19 – 31/12/19

Amount



2 HSBC 5 1,431.1 8.8


4 CICC 7 1,162.4 7.2

5 Citigroup 5 1,107.5 6.8

6 JP Morgan 3 983.5 6.1

7 BNP Paribas 3 912.0 5.6

8 Deutsche 2 868.2 5.4

9 Credit Suisse 5 759.3 4.7


Total 119 16,232.9



COUNTRY REPORT HONG KONG

“We are proud to support Hang Lung’s ambition of spearheading green developments in Hong Kong and Mainland China,” said Tan Wing Ming, regional general manager for North-East Asia of OCBC Bank. “This green loan is the latest sustainable finance transaction to come out of OCBC Hong Kong branch and positions the bank well to capture the growing green finance opportunity in the Greater Bay Area.”

The assets have received gold certifications or pre-certifications from the US Green Building Council of Leadership in Energy and Environmental Design.

The green loan is issued under Hang Lung’s green finance framework, which outlines the criteria and guidelines that will be used in the allocation of the proceeds in line with the 2018 Green Bond Principles and 2018 Green Loan Principles.

› LONGFOR SIGNS SELF-ARRANGED CLUB

Chinese developer LONGFOR GROUP HOLDINGS has obtained a HK$8.75bn five-year club loan from nine lenders.

Agricultural Bank of China Hong Kong branch, Bank of China (Hong Kong), Bank of East Asia, China Citic Bank International, China Construction Bank (Asia), China Everbright Bank, CMB Wing Lung Bank, Hang Seng Bank and HSBC are the lenders of the self-arranged facility, which offers an interest margin of 195bp over Hibor.

Proceeds are for refinancing and general corporate purposes.

The Hong Kong-listed developer’s previous visit to the market was in January last year when it obtained a HK$15.3bn five-year bullet term loan from 12 banks.

That self-arranged facility offered an all-in pricing of 205bp based on an interest margin of 172bp over Hibor.

Longfor Group changed its name from Longfor Properties in June 2018.

The company has projects in 40 cities in China and is rated Baa3/BBB/BBB.

› TOM GROUP SIGNS HK$3.7BN CLUB

Media company TOM GROUP has obtained a HK$3.7bn three-year facility, returning to the market after a two-year hiatus.

Bank of America, Bank of China Hong Kong branch, Citigroup, DBS Bank, Hang Seng Bank, HSBC, Industrial and Commercial Bank of China and United Overseas Bank are the lenders on the deal, which closed as a club.

The financing comprises a HK$2.5bn term loan and HK$1.2bn revolving credit facility.

Proceeds raised are for refinancing and general corporate purposes.

The borrower last raised a HK$3.2bn three-year loan in December 2017, according to LPC data. Bank of China Hong Kong branch, Citigroup, DBS Bank, HSBC, ICBC and UOB were lenders of that club deal, which comprised a HK$2.5bn term

loan and HK$700m revolver. A subsidiary of CK Hutchison Holdings,

Tom Group is a technology and media company that is listed on the Hong Kong Stock Exchange.


› AMVIG HOLDINGS SIGNS HK$1.15BN REFI

Hong Kong-listed cigarette packaging maker AMVIG HOLDINGS has closed a HK$1.15bn one-year loan with 10 other lenders joining in syndication.

ANZ was the mandated lead arranger and bookrunner for the facility, while Bank Sinopac Hong Kong branch, China Citic Bank International, Chong Hing Bank, Commonwealth Bank of Australia Hong Kong branch, CTBC Bank, Fubon Bank Hong Kong branch, MUFG, Sumitomo Mitsui Banking Corp, Taipei Fubon Commercial Bank and United Overseas Bank joined as lead arrangers.

The deal paid an all-in pricing of 170bp based on an interest margin of 150bp.

Proceeds refinance a HK$1.6bn three-year bullet loan completed in January 2017.

ANZ underwrote that loan, which attracted 13 lenders in senior syndication. The borrowing is split into a HK$1.03bn term loan, a HK$450m revolving credit facility and a HK$120m-equivalent CNH term loan paying margins of 150bp over Hibor for the Hong Kong dollar portions and a fixed interest rate of 5% for the CNH tranche.

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INDIA


› MANAPPURAM SELLS MAIDEN BOND

MANAPPURAM FINANCE last Monday sold US$300m of three-year bonds priced at par to yield 5.9%, inside initial guidance of 6.25% area.

The deal attracted over US$1.15bn of orders from 116 accounts. Asset and fund managers were allocated 87%, private banks 8% and banks 5%. Asia accounted for 76% with EMEA making up the balance of 24%.

The Reg S senior unsecured bonds have expected ratings of BB–/BB– (S&P/Fitch), in line with the issuer.

UBS was sole global coordinator and joint bookrunner with Barclays.

The Indian finance company will issue the debut dollar bonds off a US$750m EMTN programme.

› SHRIRAM TRANSPORT PRINTS SOCIAL

Indian non-bank lender SHRIRAM TRANSPORT

FINANCE drew final orders of over US$2bn from 172 accounts for its US$500m social bond issue.

The 3.5-year US dollar 144A/Reg S senior secured social bond was priced at par to yield 5.10%, inside initial guidance of 5.375% area.

The US took 50%, Asia 37% and EMEA 13% of the deal. Fund managers took 85%, insurers 5%, private banks 5%, and banks and others 5%.

The proposed bonds are expected to be rated BB+/BB+ (S&P/Fitch), in line with the issuer.

Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Emirates NBD Capital, HSBC, ING, JP Morgan and Standard Chartered were joint bookrunners and lead managers.

› POWER FINANCE MULLS 144A/REG S BOND

Indian state-owned POWER FINANCE CORP, rated Baa3/BBB– (Moody’s/Fitch), began fixed income investor meetings and conference calls in Asia, Europe and the US on January 9 for a proposed benchmark-sized 144A/Reg S US dollar bond offering.

It plans to issue bonds with an up to 10.5-year bullet maturity and/or a 10-year amortizing bond with an average maturity of 8.0 years.

The bonds will be issued off the company’s US$5bn global MTN programme.

Barclays, MUFG and Standard Chartered

Bank are joint lead managers and joint bookrunners.

› LALITPUR POWER EYES DOLLAR BOND

LALITPUR POWER GENERATION, which is owned by Indian conglomerate Bajaj Group, has mandated banks to arrange investor meetings for a proposed US dollar benchmark Reg S/144A amortising bond offering with a 10-year door-to-door tenor and weighted average life of 7.37 years.

Barclays is the sole global coordinator and bookrunner, while Emirates NBD Capital and SBICAP are joint lead managers of the senior secured notes.

The bond has expected ratings of Ba3/BB+ (Moody’s/Fitch).

Investor meetings took place in Asia, Europe and the US from January 8.

› INDIA EXIM BANK RAISES US$1BN

EXPORT-IMPORT BANK OF INDIA (Baa2/BBB–/BBB–) priced US$1bn of 3.25% 10-year bonds on January 6 at Treasuries plus 150bp, inside initial guidance of Treasuries plus 175bp area.

The 144A/Reg S bond priced at 99.543 to yield 3.304%.

The deal received orders of over US$2.7bn from 184 accounts.

Asia took 44% of the notes, followed by the US with 36% and EMEA with 20%. By investor type, fund managers took 58%, banks 18%, insurance and pension firms 13%, central banks and official institutions 10% and private banks 1%.

There is a change of control put option if the Indian government owns less than 51% of the issuer.

Proceeds will be used for funding export credit and foreign currency loans.

Barclays, Citigroup, HSBC, JP Morgan, MUFG and Standard Chartered were lead managers.

› FUTURE RETAIL MEETS INVESTORS

Indian retailer FUTURE RETAIL, rated BB–/BB (S&P/Fitch), has mandated banks to meet investors on a proposed US dollar benchmark Reg S/144A offering of senior secured notes.

Deutsche Bank, Standard Chartered Bank, Barclays, JP Morgan and UBS are joint global coordinators as well as joint lead managers and bookrunners with SBICAP, Credit Suisse, Emirates NBD Capital and Rabobank.

The banks arranged investor meetings in Asia, the US and Europe from January 7.

› ADITYA BIRLA FINANCE FILES SHELF

ADITYA BIRLA FINANCE has filed a draft shelf prospectus with the market regulator to

raise up to Rs50bn (US$701m) from a public issue of bonds, according to a filing on BSE.

The non-banking financial company will issue the secured and unsecured bonds in one or more tranches. The unsecured bonds will be issued as subordinated debt and will be eligible for inclusion as Tier 2 capital.

Icra and India Ratings have assigned a AAA (stable) rating to the bonds.

Edelweiss Financial Services and AK Capital Financial Services are the lead arrangers.

› ALLAHABAD BANK ISSUES TIER 2 BONDS

ALLAHABAD BANK has raised Rs15bn (US$211m) from 10-year Basel III-compliant Tier 2 bonds at 9.53%, according to a filing on National Securities Depository Limited.

The bonds have a call option after five years.

Crisil and India Ratings have assigned ratings of AA– with positive implications to the notes.

On September 16, the board of Allahabad Bank approved a merger proposal with Indian Bank.

AK Capital, ICICI Securities Primary Dealership, Pioneer Investcorp, Tipsons Consultancy Services and Trust Investment Advisors are the lead arrangers for the bond issue.

› BANK OF BARODA RAISES TIER 2 CAPITAL

BANK OF BARODA has raised Rs9.2bn from 10-year non-call five Basel III-compliant Tier 2 bonds at 7.44%.

The bonds have a call option at the end of five years and every year after that. It was eyeing Rs2.5bn plus a greenshoe option of Rs7.5bn.

Care and India Ratings have assigned AAA ratings to the bonds.

On December 16, Bank of Baroda raised Rs17.47bn from non-call five AT1 bonds at 8.99%.

Top lead managers of Indian rupee bonds1/1/19 – 31/12/19 Amount

Name Issues Rs(m) %

1 Axis 174 829,068.6 17.6

2 ICICI Bank 169 788,363.0 16.7

3 Trust Group 168 434,766.4 9.2

4 HDFC 141 424,519.3 9.0

5 AK Capital 130 381,879.5 8.1

6 Yes Bank 107 330,262.7 7.0

7 Kotak Mahindra 94 253,563.0 5.4

8 Tipsons 88 225,411.3 4.8

9 Edelweiss Financial 47 203,479.4 4.3

10 Punjab National Bank 60 152,835.6 3.2

Total 319 4,725,084.1

*Market volume

Proportional credit



COUNTRY REPORT INDIA

› FCI ISSUES 10-YEAR BONDS AT 7.6%

FOOD CORPORATION OF INDIA has raised Rs52.62bn from 10-year bonds at 7.6%, according to market sources.

It was eyeing Rs10bn, plus a greenshoe option of Rs42.62bn.

Crisil and Care have assigned a AAA (credit enhancement) rating to the bonds on the back of a government of India guarantee.

FCI is yet to make an official announcement on the planned bond sale.

› HDFC TARGETS FIVE-YEAR BONDS AT 7.5%

HOUSING DEVELOPMENT FINANCE CORP is targeting up to Rs50bn from five-year bonds at 7.5%, according to a filing on BSE.

It is eyeing Rs30bn, plus a greenshoe option of Rs20bn.

Axis Bank is the arranger for the deal.Crisil and Icra have assigned AAA ratings

to the bonds.On December 27, HDFC raised Rs25.5bn

from three-year bonds at 7.21%.

› INDIABULLS INFRAESTATE PAYS 10.85%

INDIABULLS INFRAESTATE has raised Rs3.5bn from three-year bonds at 10.85%.

The notes are rated AA– (credit enhancement) by Infomerics Valuation and Rating.

› IRFC ISSUES APRIL 2030 BONDS

INDIAN RAILWAY FINANCE CORP has issued Rs15.8bn bonds maturing on April 12 2030 at 7.55%.

Crisil, Icra and Care have assigned AAA ratings to the secured bonds.

› MANAPPURAM PRICES TWO-YEAR NOTE

MANAPPURAM FINANCE has raised Rs3.5bn from two-year notes at 9.75%.

The bonds of the non-bank finance company, which mainly lends against gold jewellery and ornaments, are rated AA by Crisil.

The board approved the issuance of non-convertible debentures via a private placement on December 26.

› MUTHOOT FINCORP EYES RETAIL BONDS

MUTHOOT FINCORP has filed a draft shelf prospectus with the market regulator to raise up to Rs4.8bn from a public issue of bonds.

It is eyeing Rs2.5bn with an option to retain oversubscription up to Rs2.3bn.

Brickwork and Crisil have assigned respective A+ and A ratings to the bonds.

SMC Capitals is the lead manager.

› NABARD SEALS 15-YEAR DEAL AT 7.57%

NATIONAL BANK FOR AGRICULTURE AND RURAL

DEVELOPMENT has raised Rs7.09bn from 15-year bonds at 7.57%.

Crisil and India Ratings assigned a AAA rating to the bonds.

On December 26, Nabard raised Rs10.08bn from 15-year government of India-serviced bonds at 7.46%, payable semi-annually.

› NHAI ISSUES 30-YEAR BONDS AT 7.98%

NATIONAL HIGHWAYS AUTHORITY OF INDIA has raised Rs50bn from 30-year bonds at 7.98%.

The state-owned issuer was eyeing Rs50bn plus a greenshoe amount of Rs5bn.

Crisil, India Ratings and Care have assigned a AAA rating to the bonds.

On December 9, it raised Rs30bn from 15-year bonds at 7.87%.

› NHPC PRINTS 10-YEAR PAPER AT 7.38%

NHPC has raised Rs5bn from 10-year bonds in separately transferable redeemable principal part (STRPP) format at 7.38%, according to a market source.

The bonds are redeemable from the sixth to 10th year.

The Indian hydropower company was targeting Rs2.5bn plus a greenshoe amount of Rs2.5bn.

The secured bonds are rated AAA by Icra and India Ratings.

› PFC RAISES RS14BN

POWER FINANCE CORP has raised Rs14bn from three-year three-month and seven-day bonds at 7.04%.

It has raised Rs3.6bn plus a greenshoe of Rs10.4bn which is reserved for inclusion in the Bharat Bond ETF, India’s first exchange traded fund that started trading on the BSE and NSE today.

The bonds mature on April 14 2023.Crisil, Icra and Care have assigned a AAA

rating to the bonds.On December 31, PFC raised Rs47.11bn

from 10yr bonds at 7.93%.

› PGC ISSUES RS7BN TWO-PART BONDS

POWER GRID CORPORATION OF INDIA has raised Rs7bn from two-tranche bonds, according to a market source.

It printed Rs2bn April 14 2023 notes at 6.35% and Rs5bn April 12 2030 bonds at 7.38%.

Crisil, Icra and Care have assigned a AAA rating to the bonds.

PGC is yet to make an official announcement.

› PIRAMAL STRENGTHENS BALANCE SHEET

PIRAMAL ENTERPRISES has received board approval to raise up to Rs27.5bn from bonds in one or more tranches.

On December 19, the Indian pharmaceutical and financial services company raised Rs17.5bn via a preferential allotment of compulsory convertible debentures to Caisse de Dépôt et Placement du Québec (CDPQ).

Ivanhoe Cambridge, a unit of the Canadian institutional investor, also committed US$250m towards a co-investment vehicle with Piramal to provide long-term equity to residential developers.

“This infusion of funds will strengthen our balance sheet and also enable us to tap both organic and inorganic growth opportunities that continue to emerge in the current market dynamics across the sectors and the markets that we operate in,” said Ajay Piramal, chairman of Piramal Enterprises in a release.

The company will also raise Rs36.5bn from a rights issue at Rs1,300 per share, which will be 90% underwritten by the controlling shareholders. The record date is December 31.

In April, Icra revised the outlook for Piramal Enterprises to negative due to high debt levels associated with financial services assets and related subsidiaries such as Piramal Capital and Housing Finance.

The rating revision factored in funding challenges for non-banking financial companies. Piramal’s predominantly wholesale book, with large exposures in real estate and infrastructure segment, was concerning, Icra said.

› PNB PRINTS 10-YEAR T2 BONDS AT 8.15%

PUNJAB NATIONAL BANK has raised Rs15bn from 10-year Basel III-compliant Tier 2 bonds at 8.15%, according to a filing on National Securities Depository Limited.

It was eyeing Rs7.5bn plus a greenshoe option of the same amount.

Crisil has assigned an AA+ rating to the bonds with developing implications because the merger of PNB with Oriental Bank of Commerce and United Bank of India is yet to be completed.

› REC TAPS ONSHORE MARKET TWICE

REC, formerly known as Rural Electrification Corp, raised Rs25bn from two-part bonds in early January, according to market sources.

The state-owned issuer sold Rs14bn of


bonds maturing on March 31 2023 at 7.12% and Rs11bn of notes due on March 31 2030 at 7.89%.

Crisil, Icra and Care have assigned AAA ratings to the unsecured bonds.

On December 26, REC raised Rs20.9bn from three-year five-day bonds at 7.24%.

It was eyeing Rs5bn plus a greenshoe amount of Rs25bn.

REC is yet to make an official announcement on the bond sales.

› TWO NBFCS EYE PUBLIC BONDS

EDELWEISS FINANCE & INVESTMENTS and MUTHOOT

MINI FINANCIERS have filed draft shelf prospectuses with the market regulator to raise a total of Rs4.5bn from public issues of bonds.

Edelweiss Finance is eyeing up to Rs2.5bn from retail bonds rated AA– by Care and Crisil. IDBI Capital and Edelweiss Financial are the lead managers.

Muthoot Mini Financiers is targeting Rs2bn from a public issue of bonds rated BBB– by Care. Vivro Financial is the lead arranger.

› SYNDICATED LOANS

› TATA STEEL MANDATES 18 BANKS

TATA STEEL has mandated 18 banks on a €1.75bn (US$1.95bn) dual-tranche facility which is expected to launch into limited syndication this month.

The mandated banks are: ANZ, Axis Bank, Bank of America, Barclays, Bank of Baroda, BNP Paribas, Credit Agricole CIB, First Abu Dhabi Bank, HSBC, IndusInd Bank, ING Bank, Kotak Mahindra Bank, Mashreqbank, MUFG, Standard Chartered Bank, State Bank of India, Syndicate Bank and Union Bank of India.

Tata Steel Netherlands Holding is the borrower on the bullet loan, which is split into five and six-year tranches and will carry a letter of comfort from Tata Steel.

Proceeds will be used to refinance debt raised in 2014.

The Dutch subsidiary, along with Singapore-incorporated Tata Steel Global Holdings, raised a US$3.095bn-equivalent multi-tranche loan in October 2014. Sixteen banks were the MLABs of that borrowing, while another 18 joined in syndication.

The borrowings for the Dutch subsidiary included a €370m (US$470m then) five-year bullet term tranche A1, a £700m (US$1.125bn then) six-year bullet revolver tranche B1 and a separate €1.88bn seven-year loan from six Indian lenders.

Tranches A1 and B1 paid top-level all-in pricing of 358bp based on interest margins

of 315bp over Euribor and 343bp over sterling Libor, respectively.

The Singapore unit had raised a US$1.5bn dual-tranche financing, split into a US$700m five-year tranche A and an US$800m seven-year tranche B, and paid a top-level all-in of 327bp based on margins of 280bp and 315bp over Libor, respectively.

Tata Steel signed a US$525m six-year club loan last year with nine lenders for capital expenditure purposes.

› BIRLA CARBON PICKS 16 ON BORROWING

BIRLA CARBON has mandated 16 banks on a US$1.5bn multi-tranche loan for refinancing.

The mandated banks are: ANZ, Axis Bank, Bank of America, Bank of Baroda, BNP Paribas, Citigroup, Credit Agricole CIB, DBS Bank, Export Development Canada, First Abu Dhabi Bank, ICICI Bank, ING Bank, JP Morgan, Mizuho Bank, Standard Chartered Bank and Union Bank of India.

The financing – slated to launch in January – comprises a US$400m three-year term loan (tranche A), a US$250m five-year piece (tranche B1), a US$100m five-year revolving credit facility (tranche B2) and a US$750m seven-year portion (tranche C).

The borrower, a unit of conglomerate Aditya Birla Group, had sent out a term-sheet to over 20 banks in October requesting proposals for the financing.

Proceeds will refinance a US$1.2bn dual-tranche loan completed in July 2018.

Nine banks had first been mandated on that borrowing, which started at a US$600m size in early March last year. The nine banks were ANZ, Axis, BNP, CA CIB, Citi, DBS, ICICI, Mizuho and StanChart. JP Morgan and SG Asia joined subsequently.

Six other banks joined later and the loan was closed without being launched into senior and general syndication.

At the time Birla Carbon had also eyed a US$600m bond to complement the loan, but scrapped it and doubled the size of the loan following unfavourable bond market conditions.

The 2018 loan comprised a US$1.05bn 30-month term loan and a US$150m 30-month revolving credit, each paying interest margins of 135bp over Libor.

› ONGC VIDESH SEEKS UP TO US$1BN REFI

State-owned ONGC VIDESH is looking to raise up to US$1bn for refinancing.

The overseas unit of Oil and Natural Gas Corp has sent a request for proposals for a US$500m five-year bullet loan with a greenshoe of up to US$500m.

The deadline for responses is January 15.

Proceeds will be used to refinance a US$ 1.775bn five-year facility completed in March 2016. That deal paid a top-level all-in pricing of 111.06bp based on a margin of 95bp over Libor and a remaining life of 4.67 years.

Last September the company raised a US$500m five-year term loan that paid a top-level all-in pricing of 105bp via an interest margin of 100bp over Libor and an average life of 4.75 years. Parent ONGC provided a guarantee.

ANZ, Bank of India and Westpac Banking Corp were the mandated lead arrangers and bookrunners, while nine others joined.

› NTPC PICKS THREE FOR INCREASED LOAN

India’s largest power utility, NTPC, has mandated three banks for a dual-tranche loan of up to US$750m-equivalent, nearly double the previously flagged size.

Bank of India, State Bank of India and Sumitomo Mitsui Banking Corp will provide the equivalent of US$100m, US$375m and US$275m respectively.

The borrowing will be split into a seven-year tranche for 75% of the total size and a 10-year portion for the remainder.

The utility’s request for proposals in October was initially for an unsecured term loan denominated in yen with a base size of US$100m-equivalent and a greenshoe option of up to US$300m.

Proceeds from the loan will finance capital expenditure for new coal-fired stations as well as operating power plants and repayment of Indian rupee loans borrowed onshore previously for the existing projects.

In April last year, the borrower closed a US$300m-equivalent 10-year Samurai loan to a poor response with only Aozora Bank joining the financing in general syndication.

Mizuho Bank, MUFG and SMBC were the

Top bookrunners of India syndicated loans1/1/19 – 31/12/19 Amount

Name Deals US$(m) %


2 Axis 18 3,949.6 12.1

3 Yes Bank 50 2,886.0 8.8


5 Indusind-Bank 15 1,384.0 4.2

6 ICICI Bank 9 1,344.7 4.1

7 Westpac 4 1,163.7 3.6

8 L&T Financial Services 11 1,099.2 3.4

9 First Abu Dhabi Bank 8 678.5 2.1

10 MUFG 6 624.1 1.9

Total 139 32,676.9


Proportional credit



COUNTRY REPORT INDIA

mandated lead arrangers and bookrunners of that financing, which offered a top-level all-in pricing of 114.5bp based on an interest margin of 102bp over Tibor and weighted average remaining life of 10 years.

The poor response was despite the loan paying richer pricing than a ¥39.42bn (then US$370m) financing completed in April 2018.

That loan offered a top-level all-in pricing of 105bp based on a margin of 95bp over Tibor and a weighted average remaining life of 10 years. Mizuho, MUFG and SMBC were the MLABs of the loan, which attracted eight lenders in general syndication.

› LIC HOUSING VENTURES OFFSHORE

LIC HOUSING FINANCE has picked four banks for a US$200m three-year loan, marking its return to the offshore loan market after 16 years.

The Indian non-bank financial company has signed a facility agreement with DBS Bank, MUFG, Standard Chartered Bank and Sumitomo Mitsui Banking Corp for the borrowing.

LIC Housing Finance last tapped the offshore market in June 2003 for a US$50m five-year loan that paid a top-level all-in of 107bp. ABN AMRO Bank, DBS and State Bank of India were the arrangers on the transaction that paid a top-level all-in of 107bp based on an interest margin of 95bp over six-month Libor.

› HPCL RETURNS FOR US$500M LOAN

HINDUSTAN PETROLEUM has sent out a request for proposals for a five-year financing of up to US$500m, returning to the offshore loan markets after 18 months.

Proceeds from the new money financing, which includes a greenshoe option of US$200m, will be used for general corporate purposes.

HPCL closed a US$300m three-year bullet loan in June 2018 as a four-bank club. DBS Bank, Mizuho Bank, MUFG and State Bank of India ended up with equal commitments after pre-funding the deal. That loan pays an interest margin of 60bp–65bp over Libor.

› NINE BANKS JOIN CITIUSTECH LBO LOAN

Nine banks have joined in senior syndication a US$265m five-year loan supporting Baring Private Equity Asia’s leveraged buyout of healthcare-focused IT services provider CITIUSTECH.

DBS Bank, Goldman Sachs, ING Bank and Nomura were the mandated lead arrangers, bookrunners and equal underwriters of the amortising loan, which pays an interest margin of 400bp over Libor.

The loan has an average life of around 4.7 years and represents an opening leverage of low five times based on the Ebitda for the last 12 months.

The gearing is expected to reduce to around 4.5 times by the end of March 2020 given the company’s strong Ebitda margins of high 20% and the niche sector it operates in.

BPEA has completed the acquisition of the nearly 80% stake in CitiusTech for around US$757m.

CitiusTech has six offices each in the US and India. It provides services including healthcare software development, regulatory compliance, analytics and population health management, among others, to medical technology companies and life sciences organisations, according to its website.



› MINDSPACE REIT FILES FOR IPO

MINDSPACE BUSINESS PARKS REIT, owned by real estate developer K Raheja (85%) and Blackstone (15%), has filed the draft prospectus for an IPO of Rs40bn (US$560m) and is targeting a launch in March.

The offer will comprise primary shares for Rs10bn and an undisclosed number of secondary shares, according to the draft prospectus. K Raheja and Blackstone are the vendors of the secondary shares.

The REIT has commercial properties with a total leasable area of 29.5 million square feet. As of June 30, this consisted of 19.8 million square feet of completed area, 6.1 million square feet of under construction area and 3.6 million square feet of future development area. The properties are located in the Indian cities of Mumbai, Pune, Hyderabad and Chennai.

The REIT reported revenue of Rs16.7bn in the financial year to March 31 2019 compared to Rs15bn in the previous fiscal year. Net profit rose to Rs5.1bn from Rs1.6bn during the same period.

The deal would be India’s second REIT listing after Embassy Office Parks REIT.

Axis, Ambit, Bank of America, Citigroup, CLSA, HDFC Bank, ICICI Securities, IDFC Bank, JM Financial, Kotak, Morgan Stanley, Nomura and UBS are the lead managers.

› PARK HOTELS FILES IPO PROSPECTUS

APEEJAY SURRENDRA PARK HOTELS has filed the draft prospectus for an IPO of up to Rs10bn and is targeting a launch by March.

The offer will comprise primary shares

for Rs4bn and Rs6bn of secondary shares.Controlling shareholders Apeejay

Surrendra Trust, Apeejay House and Apeejay Private are among the vendors.

The Park Hotels is part of the Apeejay Surrendra Group which has interests in tea, hospitality, shipping, real estate, retail and financial services.The company runs hotels under the brands “The Park” and “Zone by The Park”

In the financial year to March 31 2019, the company’s total income was Rs4.31bn compared to Rs3.88bn in 2018. Operating profit rose to Rs927m from Rs791m during the same period.

Axis, JM Financial and ICICI Securities are the banks on the transaction.

› RELIANCE RETAIL PROPOSES SHARE SWAP

RELIANCE RETAIL has proposed allowing minority shareholders to exchange shares for those of its parent as it has no current plan to list on local stock exchanges.

Earlier last year, Mukesh Ambani, chairman of parent company Reliance Industries, had told shareholders at the company’s annual general meeting that he planned to list the subsidiary in the next five years.

Shareholders will get one Reliance Industries share for every four Reliance Retail shares.

In a notice, Reliance Retail said it had received requests from employees holding its shares to give them options to exit and liquidate their stock.

Reliance Retail Ventures, a subsidiary of Reliance Industries, owns 4.99bn shares or 99.95% of Reliance Retail’s capital, while employees own 2.5m shares or 0.05%.

Reliance Industries’ current market capitalisation is Rs9.8trn and the swap ratio values Reliance Retail at Rs2.45trn.

“This scheme enables the specified shareholders to continue to participate in the growth of the retail business, as

India equity and equity-related1/1/19 – 31/12/19

Amount




3 JP Morgan 6 1,848.7 8.7

4 ICICI Bank 13 1,708.1 8.0

5 Axis 15 1,539.7 7.2

6 Kotak Mahindra 10 1,382.9 6.5


8 Citigroup 9 1,284.8 6.0

9 HSBC 6 1,195.9 5.6


Total 131 21,359.2

Source: Refinitiv data SDC Code: C1L


hitherto, since the company is an indirect subsidiary of Reliance Industries,” Reliance Retail said.

Founded in 2006, Reliance Retail operates India’s largest chain of neighbourhood stores, Reliance Fresh, as well as supermarkets, wholesale cash and carry, and specialty stores. It has over 10,000 points of sale.

The company’s gross sales were Rs412bn in the second quarter of the financial year that ends on March 31 2020, up from Rs324bn in the same quarter of 2018. Operating profit rose to Rs23bn from Rs14bn during the same period.

› ROUTE MOBILE TARGETS FEBRUARY IPO

Cloud communications provider ROUTE

MOBILE plans to launch an up to Rs6bn IPO as early as February, people with knowledge of the transaction said.

According to the company’s draft prospectus, the offer will comprise Rs2.4bn of primary shares and Rs3.6bn of secondary shares.

Controlling shareholders Sandip Kumar Gupta, a non-executive director, and Rajdip Kumar Gupta, managing director and group CEO, are the vendors of the secondary shares.

The company’s revenue rose to Rs8.5bn in the financial year to March 31 2019 from Rs5.1bn in 2018. Net profit climbed to Rs557m from Rs473m during the same period.

Founded in 2004 in Mumbai, Route Mobile provides cloud communication services to clients in the banking, financial services, retail and aviation industries.

Axis, Edelweiss and ICICI Securities are the banks on the transaction.

INDONESIA


› BANK TABUNGAN NEGARA PLANS T2 BOND

BANK TABUNGAN NEGARA, rated Baa2 (stable) by Moody’s, has hired banks for a proposed offering of US dollar-denominated subordinated Basel III-compliant Tier 2 capital securities, subject to market conditions.

Citigroup, HSBC and Standard Chartered Bank are joint bookrunners and joint lead managers on the Reg S issue.

The Indonesian lender will meet investors in Singapore and Hong Kong and hold investor calls with London starting on Monday.

The proposed bonds are expected to be rated Ba3 by Moody’s.

› BAYAN RESOURCES HIRES FOR BOND

Coal miner BAYAN RESOURCES has mandated Deutsche Bank and Morgan Stanley as joint global coordinators, lead managers and bookrunners for a proposed US dollar 144A/Reg S senior bond offering.

The notes have expected ratings of Ba3/BB– (Moody’s/Fitch).

The bookrunners arranged investor meetings and calls in Hong Kong, Singapore, London, New York and Boston from January 9.

Bayan is the fourth-largest coal producer in Indonesia, according to a company presentation.

› MEDCO ENERGI KICKS OFF MEETINGS

MEDCO ENERGI INTERNASIONAL, rated B1/B+/B+, has hired banks for a proposed 144A/Reg S offering of US dollar-denominated senior fixed-rate notes, subject to market conditions.

Morgan Stanley, Standard Chartered Bank, Societe Generale, Credit Suisse, DBS Bank and Mandiri Securities are joint lead managers and joint bookrunners.

The Indonesian integrated energy and

Indonesia makes swift return Bonds Sovereign’s US$3.1bn-equivalent deal finds warm reception

The REPUBLIC OF INDONESIA took advantage of

robust new year appetite from investors to

replenish its depleted coffers with its second

global bond in little over two months.

The US$3.1bn-equivalent deal, comprising

a euro seven-year and two US dollar tranches

of 10 and 30 years, follows a similar offering

in late October, when it raised US$2.1bn from

dollar and euro bonds.

“They are either very lucky or they had it

perfectly timed,” one regional syndication

banker not on the deal said last Wednesday.

“Seriously, the timing could not have been

better as market sentiment has dipped today

following this morning’s missile strikes by Iran

on US air bases in Iraq.”

The sovereign on Tuesday sold US$1.2bn

10-year SEC-registered senior unsecured

bonds at 2.88% and US$800m 30-year notes

at 3.55%, both well inside respective initial

price guidance of 3.125% area and 3.75%

area.

Demand was robust with over US$5.9bn

of orders across both tranches, underscoring

the popularity of the Indonesian credit. The

10-year tranche attracted over US$3.6bn of

orders from 142 accounts, dominated by real

money accounts. Asset and fund managers

took 60% of the deal, banks 31%, central

banks, pension funds and sovereign wealth

funds 5%, insurance companies 3% and

private banks and others the remaining 1%.

The note was well distributed geographically

with Asia accounting for 42%, EMEA 23% and

the US 35%.

The 30-year tranche drew more than

US$2.3bn of orders from 124 accounts, with

asset and fund managers allocated 59%,

banks 21%, insurers 11%, central banks,

pension funds and sovereign wealth funds

8% and private banks and others 1%. Asia

accounted for 40%, EMEA 36% and the US

24%.

“The two US dollar tranches yielded

zero new issue concession based on the

sovereign’s own curve,” said one banker close

to the deal.

Indonesia’s 3.4% September 2029s were

quoted at 2.864% while the 3.7% October

2049s were seen at 3.543%. Taking the

slightly longer maturity into account, the new

bonds paid negligible premiums.

The new notes traded up in cash price

with the 2030s indicated at 99.75/99.875

on Wednesday, just a touch up from the

issue price of 99.73, while the 2050s were

at 100.10/100.25, up from the issue price of

99.077.

A €1bn (US$1.1bn) 0.9% long seven-year

tranche was priced at 103bp over mid-swaps,

tightening from initial price guidance of

130bp. The tranche came about 1bp through

fair value, which was seen at 104 based on

the outstanding bonds due 2026 which were

quoted at 103.

“Despite geopolitical tensions, the euro

deal was well received,” said a European

banker. “There’s a lot of liquidity now - if you

are an IG or well-known issuer, now is the

time to do an opportunistic issuance.”

The fundraising will ease the government’s

budget deficit burden. It recently announced

a revenue shortfall of nearly US$15bn last

year as a slowdown in the economy began to

hit fiscal revenues.

The new notes settle on January 14.

Citigroup, Deutsche Bank, Goldman Sachs,

Mandiri Securities and Societe Generale were

joint bookrunners. Danareksa Sekuritas

and Trimegah Sekuritas Indonesia were co-

managers.

KIT YIN BOEY


COUNTRY REPORT INDONESIA

natural resources company will hold investor meetings in Asia, Europe and the United States, starting on Monday.

The proposed notes have expected ratings of B1/B+/B+, on par with the issuer.

Meanwhile, Medco also announced consent solicitations on its US$400m 8.50% 2022s and US$500m 6.75% 2025s.

It is seeking amendments to certain provisions of the indentures to align with the terms of the US$650m 7.375% 2026s it issued in last May, which will give it more financial flexibility.

It will pay US$1.00 per US$1,000 in principal amount of the 2022s and US$2.00 per US$1,000 in principal amount of the 2025s as consent fee.

January 24 is the deadline for the consent solicitation.

Morgan Stanley and Standard Chartered are solicitation agents while Lucid Issuer Services is information and tabulation agent.

› TOWER BERSAMA HIRES FOR SENIOR BOND

TOWER BERSAMA INFRASTRUCTURE, rated BB/BB– (S&P/Fitch), has hired banks for investor meetings from January 7 on a proposed offering of five-year non-call three US dollar unrated senior unsecured notes.

Barclays, BNP Paribas, Credit Agricole, DBS, HSBC and OCBC are joint global coordinators and bookrunners for the meetings in Singapore, Hong Kong and London on the Reg S deal. ANZ, CIMB, Mizuho Securities, MUFG, SMBC Nikko and UOB are joint lead managers and bookrunners.

SYNDICATED LOANS

› STATE MINER OPTS FOR SHORTER TENOR

State-owned MINING INDUSTRY INDONESIA is looking to raise US$500m from a 1.5-year revolving credit facility for its acquisition

of a stake in Vale Indonesia after scrapping plans for a longer-tenor loan.

MII, formerly known as Indonesia Asahan Aluminum (Inalum), is expected to mandate banks on the deal shortly.

It is also mulling a bond takeout for the revolver.

The company had sent out a request for proposals for the loan in early December with a deadline for responses later that month.

That marked a change from an earlier plan under which MII had mandated Bank Mandiri, MUFG and Sumitomo Mitsui Banking Corp in November on a US$500m seven-year loan.

That borrowing was also intended to fund the Indonesian mining holding company’s purchase of a stake in Vale Indonesia.

MII agreed to acquire a 20% stake in nickel company Vale Indonesia for about US$500m to comply with the country’s regulations.

Mining companies in Indonesia are required to reduce their foreign ownership to a maximum of 49% within 10 years of starting operations.

Brazil’s Vale and Japan’s Sumitomo Metal Mining own 59% and 20%, respectively, in Vale Indonesia, which is currently valued at US$2.33bn.

A conditional sales purchase agreement between MII and Vale was expected to be signed around mid-December, with completion targeted by June 2020.

MII controls listed gold miner Antam, listed coal miner Bukit Asam, tin miner Timah and Freeport Indonesia.

› ADIRA DRAWS 30 BANKS INTO LOAN

ADIRA DINAMIKA MULTI FINANCE has closed a US$300m three-year amortising facility after attracting 30 lenders in general syndication.

ANZ, DBS Bank, Maybank, MUFG and United Overseas Bank were the mandated lead

arrangers and bookrunners of the new transaction, which pays the same pricing as its previous loan from April.

The new-money deal offered a top-level all-in pricing of 106bp based an interest margin of 90bp over Libor and has an average life of 1.625 years.

Funds are for general corporate purposes.The borrower’s previous loan was an

increased US$350m three-year financing, which attracted 20 lenders in general syndication. BNP Paribas, DBS, Maybank, MUFG and UOB were the MLABs of the loan, which offered a top-level all-in pricing of 106bp based on a margin of 90bp over Libor and an average life of 1.625 years.

The borrower is a consumer finance unit of Bank Danamon Indonesia.


› INDORENT INCREASES LOAN TO US$175M

Car rental company CSM CORPORATAMA, known as Indorent, has increased its four-year term loan to US$175m from US$129m after attracting six banks in general syndication.

Bank of China Hong Kong, CIMB Bank, CTBC Bank, DBS Bank, OCBC, Sumitomo Mitsui Banking Corp and Taishin International Bank were the mandated lead arrangers and bookrunners of the facility. SMBC was the coordinator.

The transaction offered top-level all-in pricings of 200bp (onshore) or 180bp (offshore) based on interest margins of 175bp (onshore) or 155bp (offshore) over Libor, respectively, and has an average life of 2.8 years.

Proceeds will be used for refinancing purposes, the purchase of vehicles in relation to business activities and working capital purposes.

The borrower’s last visit to the loan market was in May 2018 for an increased US$156m four-year financing. ANZ, CIMB, CTBC, DBS, Standard Chartered and SMBC were the MLABs on the deal, which paid a top-level

Top bookrunners of Indonesian rupiah bonds1/1/19 – 31/12/19

Amount

Name Issues Rp(m) %

1 Indo Premier Sec 71 20,160,353.6 13.8

2 Bank Mandiri 68 19,520,221.4 13.4

3 Danareksa 46 13,602,848.4 9.3

4 Pt Cgs-Cimb Sekuritas 42 12,601,044.8 8.6

5 Trimegah Sec 40 11,640,072.3 8.0

6 BCA Sekuritas 46 11,559,910.6 7.9

7 Bank Negara Indonesia 42 11,341,265.1 7.8

8 DBS 33 7,764,010.2 5.3

9 Bahana Sec 22 6,139,693.2 4.2

10 Sinar Mas Group 14 5,050,750.0 3.5

Total 194 146,253,154.2

*Market volume

Proportional credit


Top bookrunners of Indonesia syndicated loans1/1/19 – 31/12/19

Amount

Name Deals US$(m) %


2 SMFG 9 932.3 13.0

3 MUFG 8 829.8 11.6

4 DBS 7 485.8 6.8

5 Mizuho 5 426.2 6.0

6 UOB 5 407.3 5.7

7 OCBC 6 315.5 4.4

8* BNP Paribas 2 277.4 3.9

8* Maybank 2 277.4 3.9

10 ANZ 5 263.3 3.7

Total 20 7,153.3

Based on market of syndication and market total

Proportional credit


Indonesia global equity and equity-related

1/1/19 – 31/12/19

Amount


1 Sinar Mas Group 6 563.7 30.6

2 Amantara Sec 1 169.1 9.2

3 Morgan Stanley 2 120.3 6.5

4 UOB 13 99.2 5.4

5 Indo Premier Sec 3 95.9 5.2

6 Kresna Sekuritas 3 89.9 4.9

7 Danareksa 1 85.1 4.6

8* Deutsche 1 74.8 4.1

8* UBS 1 74.8 4.1

8* Credit Suisse 1 74.8 4.1

Total 56 1,842.2



all-in pricing of 211.43bp (onshore) and 191.43bp (offshore) based on interest margins of 190bp (onshore) and 170bp (offshore) over Libor and a 2.8-year average life.

Indorent, an affiliate of Indomobil Finance Indonesia, provides vehicle and heavy-duty equipment financing services. Indorent and Indomobil Finance are units of Indomobil Multi Jasa, which is controlled by conglomerate Salim Group.


JAPAN


› NOMURA PRICES DUAL-TRANCHER

NOMURA HOLDINGS last Thursday priced US$3bn of five and 10-year SEC-registered bonds at Treasuries plus 100bp and 125bp, respectively.

Pricing came below initial price guidance shown for the US$1.5bn five-year and the US$1.5bn 10-year US dollar bonds at Treasuries plus 120bp area and Treasuries plus 145bp area, respectively.

The five-year tranche priced at par for a yield of 2.648% and the 10-year notes priced at par for 3.103%. The notes, with expected ratings of Baa1/BBB+ (Moody’s/S&P), will settle on January 16.

Proceeds will be used for loans to subsidiaries, including Nomura Securities.

Nomura and Citigroup were joint bookrunners.

› SMFG SELLS US$2.5BN DUAL-TRANCHE

SUMITOMO MITSUI FINANCIAL GROUP has priced a US$2.5bn dual-tranche SEC-registered senior unsecured bond offering.

A US$1.25bn 2.348% five-year tranche was priced at Treasuries plus 75bp and a US$1.25bn 2.75% 10-year tranche was priced at Treasuries plus 95bp.

Initial thoughts for the two tranches were at the 95bp area and 115bp area wide of Treasuries, and then revised to 80bp area (+/-5bp) and 100bp area (+/-5bp), respectively.

The notes have expected ratings of A1/A– (Moody’s/S&P).

Citigroup, SMBC, Goldman Sachs and Barclays were active bookrunners.

› MIZUHO FG SELLS EURO BOND

MIZUHO FINANCIAL GROUP has priced €750m (US$833m) 10.25-year euro-denominated bonds at par to yield 0.797%, or mid-swaps plus 67bp.

Initial price thoughts on the deal were at mid-swaps plus 85bp area and then revised to 70bp area (+/-3bp).

The Reg S senior unsecured notes have expected ratings of A1/A– (Moody’s/S&P).

Mizuho, Barclays, HSBC, Natixis and Societe Generale were bookrunners.

SYNDICATED LOANS

› TAZA WIND POWER PROJECT RAISES LOAN

Japan Bank for International Cooperation and three commercial banks signed a €113m (US$125m) loan on December 20 for a 87.21MW Taza onshore wind power plant in Morocco, JBIC said in a statement.

JBIC is funding €44m, while two Japanese banks MUFG and Sumitomo Mitsui Banking Corp are jointly providing €44m. Local bank Banque Marocaine du Commerce Exterieur is funding the remainder.

Nippon Export and Investment Insurance have agreed to provide 100% political and 90% commercial risk coverage to the €44m 20-year loan provided by the two Japanese banks.

PARC EOLIEN DE TAZA, established by Japan’s Mitsui & Co and France’s EDF Renouvelables, is the borrower and will use the funds to develop the plant located in Taza in the northern area of Morocco.

Electricity will be sold to Morocco’s public electricity and water company Office National de l’Electricite et de l’Eau Potable for 20 years following the completion of construction.

The deal marks JBIC’s first financing for a renewable energy project in Morocco.

› TOKAI CARBON RAISES HYBRID

TOKAI CARBON signed a ¥25bn (US$229m) 30-year subordinated loan on December 24 to partially take out the bridge loan it raised earlier this year to back its ¥100bn acquisition of its German peer Cobex, the Japanese carbon black manufacturer said in a statement on the same day.

A total of 15 lenders joined mandated lead arranger MUFG in syndication.

The loan, which can be repaid after five years, is rated BBB by Rating and Investment Information and is treated as 50% equity.

In July the borrower completed the acquisition of the German developer, manufacturer and distributor of graphite and carbon products from private equity firm Triton Investments Advisers.

On December 10, Tokai Carbon issued a ¥25bn 30-year subordinated bond to partially take out the bridge. The bond carries a coupon of 0.82% for the first five years.

› ITOCHU ADVANCE RAISING ¥12BN

Sumitomo Mitsui Banking Corp is arranging a ¥12.113bn loan for ITOCHU ADVANCE

LOGISTICS INVESTMENT to back its real estate acquisitions, the Tokyo-listed real estate investment trust said in a statement on January 6.

The bullet term loan is split into four tranches: a ¥1.513bn one-year piece, a ¥2.65bn three-year portion, a ¥3.95bn five-year part and a ¥4bn eight-year piece with interest margins of 15bp over one-month Tibor, and 10bp, 24bp and 39bp over one or three-month Tibor, respectively.

Signing is slated for January 30, while the funds will be partially drawn down on February 3. The remainder will be drawn down on March 31.

Separately, the borrower is also raising a ¥1bn 10-year bullet term loan with a 0.7% fixed interest rate from Nippon Life Insurance as a bilateral.

The REIT invests primarily in logistics facilities in Kanto and Kansai areas.

› JAPAN DISPLAY EXTENDS LINE

JAPAN DISPLAY was set to extend the maturity of its ¥107bn one-year commitment line to March 31 from December 30, the Tokyo Stock Exchange-listed liquid-crystal display maker said in a statement on December 20.

Signing was slated for December 25.Mizuho Bank and Sumitomo Mitsui Banking

Corp are the mandated lead arrangers, while Sumitomo Mitsui Trust Bank came in as co-arranger.

This follows an initial extension exercise from August, when the borrower extended the maturity of the facility for three months with the same lenders.

The facility, which was originally signed in November 2018, carries a guarantee from the Innovation Network Corp of Japan, a state-backed fund and the borrower’s top shareholder.

The borrower is expected to refinance the loan, which is used for working capital purposes, without INCJ’s guarantee and preferred shares next year.

The LCD maker for smartphones has been suffering financially for the past five years. The company reported its 11th consecutive quarterly net loss last month on sluggish display sales and restructuring costs.

› FPG RENEWS ¥15BN COMMITMENT LINE

FINANCIAL PRODUCTS GROUP signed a ¥15bn one-year commitment line on December 23 to renew its existing facility of the same size, the Tokyo Stock Exchange-listed financial services firm said in a statement on the same day.


COUNTRY REPORT MALAYSIA

Sumitomo Mitsui Banking Corp was the arranger, while Sumitomo Mitsui Trust Bank joined as co-arranger.

Funds are for FPG’s tax leasing arrangement business.

In December 2018, the borrower completed the ¥15bn one-year facility with the same two banks.


› AIR WATER EXERCISES OVERALLOTMENT

TSE-listed AIR WATER has fully exercised the overallotment option on its recent follow-on offering, lifting the deal size to ¥49.2bn (US$449m).

It sold 4.05m additional primary shares at ¥1,585, raising ¥6.4bn.

The base deal consisted of 27m primary shares at the same price.

The books were more than five times covered overall. The retail tranche was about five times covered and the institutional tranche more than 10 times covered.

Air Water is a producer of industrial gases for industries ranging from chemicals and energy to healthcare, agriculture and logistics.

SMBC Nikko was the sole lead manager and bookrunner.

› ITOCHU LOGISTICS SET FOR FOLLOW-ON

ITOCHU ADVANCE LOGISTICS INVESTMENT is set to open books for a follow-on offering of units to raise up to ¥14bn, based on a minimum discount of 2.5% to January 6’s close of ¥118,900.

The base size of 123,357 primary units is being marketed in an indicative discount range of 2.5%–5% to the market close on the pricing day. The issue price will be set after deducting ¥2,366 of expected dividend for the period ending January 31.

There is an overallotment option of 5,500 primary units.

International investors will take about 20% of the deal, domestic institutional investors 25% and retail buyers 55%.

Proceeds will be partly used to acquire interests in two logistics assets respectively located in Inzai City and Kashiwa City in Japan at a combined cost of ¥25bn.

The books opened on January 10 and the deal will price in between January 15–20.

Daiwa and SMBC Nikko are the joint lead managers and bookrunners.

› JAPAN EXCELLENT IN FOLLOW-ON

JAPAN EXCELLENT is planning a follow-on offering of units to raise up to ¥7.39bn, based on a minimum 2.5% discount to

January 6’s market close of ¥176,300.The commercial real estate trust is

offering 43,000 units in the base deal in an indicative 2.5%–5% discount range to the market close on the pricing day. There is an overallotment option of 4,300 units.

The total offering of units, including the overallotment, represents 3.6% of the total outstanding units.

About 25% of the deal will be set aside for international investors while domestic institutions and retail buyers will take up 35% and 40% respectively.

Proceeds will be used to acquire an interest in Grand Front Osaka, an urban complex comprising office buildings, commercial facilities and a hotel, for ¥8.8bn from Nippon Steel Kowa Real Estate.

The book opened on January 10. The deal will price between January 15 and 20.

Mizuho is the lead manager and sole bookrunner.

› MITSUI FUDOSAN PLANS FOLLOW-ON

MITSUI FUDOSAN LOGISTICS PARK is planning a follow-on offering of units to raise up to ¥27.3bn, based on a minimum 2.5% discount to January 8’s market close of ¥481,000.

The base size of 59,000 units is being marketed in an indicative discount range of 2.5%–5% to the market close on the pricing day. The issue price will be set after deducting ¥6,541 of expected dividend.

There is an overallotment option of 3,000 units, or 5.1% of the base size.

About 38% of the deal will be set aside for international investors, while domestic institutions and retail buyers will split the remainder 42%/58%.

The Japanese REIT will use the proceeds to fund three acquisitions in conjunction with debt.

Books will open on January 20–21. The

deal will price in between January 22–28.Daiwa, Nomura and SMBC Nikko are the

joint global coordinators.

MALAYSIA


› CAGAMAS PRINTS LAST ISSUE OF 2019

National mortgage agency CAGAMAS has printed M$1.2bn (US$294.5m) of conventional and Islamic commercial and MTN notes.

It priced M$600m six-month Islamic CP and M$200m conventional CP at par to yield 3.25% with respective spreads of 17bp over Islamic treasury bills and 20bp over conventional treasury bills.

Cagamas also priced M$400m one-year Islamic MTNs at 3.29% with a spread of 26bp over Islamic government bonds.

The notes settled on December 23 in Cagamas’s 26th issuance for the year, bringing its total 2019 bond sales to M$10.2bn.

› AEON READIES SUKUK SALE

AEON CREDIT SERVICE MALAYSIA plans to kick off an offering of senior Islamic bonds in the week of January 20 to raise M$500m.

CIMB and Hong Leong Investment Bank are joint lead managers for the deal, rated AA3 by RAM.

The consumer finance company is expected to offer tenors of five and/or seven and/or eight years. The sukuk will be drawn from a M$2bn sukuk wakala programme.

Top bookrunners of all Malaysian ringgit bonds1/1/19 – 31/12/19

Amount

Name Issues M$(m) %

1 CIMB Group 73 21,443.8 25.9

2 Maybank 70 18,736.3 22.7

3 RHB 46 11,861.7 14.3

4 AMMB 39 11,316.2 13.7

5 K&N Kenanga 52 3,369.3 4.1

6 Affin 13 2,946.7 3.6

7 Bank Islam Malaysia 4 2,651.7 3.2

8 Public Bank 13 2,353.2 2.9

9 HSBC 17 2,252.9 2.7

10 Hong Leong Financial 11 1,917.8 2.3

Total 240 82,711.4

*Market volume

Proportional credit


Top bookrunners of Malaysia syndicated loans1/1/19 – 31/12/19

Amount

Name Deals US$(m) %

1 CIMB Group 7 2,536.3 21.8

2 OCBC 5 1,888.6 16.3

3 Maybank 6 1,468.8 12.7

4* UOB 1 1,126.4 9.7

4* CCB 1 1,126.4 9.7

4* Bank of China 1 1,126.4 9.7

7 DBS 2 523.2 4.5

8 Standard Chartered 3 415.3 3.6

9 MUFG 2 342.0 2.9

10 BNP Paribas 2 249.5 2.2

Total 14 11,612.9


Proportional credit



Aeon Credit Service, ultimately owned by Japan’s Aeon, has a strong credit profile given its established position in the Malaysian consumer finance market, its strong profitability and manageable gearing level, said RAM. Its loan portfolio has grown at an annual average of 19% over the past five years, while its return on assets and return on equity are at a respective annualised 4% and 23.8% for the first half of the fiscal year ending February 2020, among the highest for domestic non-bank financial institutions.

The issuer has senior bonds of just over M$1bn that will mature in 2020, of which M$600m matures in January, and about M$190m of subordinated perpetual bonds that will be callable next year.

› AZRB CAPITAL PRINTS SUKUK

AZRB CAPITAL, a funding vehicle of Malaysian engineering and construction company Ahmad Zaki Resources, printed M$535m of Islamic bonds on December 26.

A M$100m three-year tranche will pay 4.7%, a M$85m five-year tranche will pay 4.85%, a M$95m seven-year tranche will pay 5.00%, a M$50m eight-year tranche will pay 5.05%, a M$50m nine-year tranche will pay 5.10%, a M$55m 10-year tranche will pay 5.15%, a M$55m 11-year tranche will pay 5.25% and a M$45m 12-year tranche will pay 5.35%.

Proceeds from the bonds, rated AA– by Marc, will be used by the parent to subscribe to about M$344m of redeemable convertible preference shares that will be issued by Peninsular Medical (PMSB), with the balance to fund general working capital needs. PMSB will use the funds from the RCPS facility to repay debt.

PMSB, owned by Ahmad Zaki, holds the concession for a 300-bed teaching hospital at the International Islamic University of Malaysia. The facility was completed in 2016 and PMSB has been receiving concession receivables from the Malaysian government, as stipulated in the concession agreement. The concession receivables, which will be assigned to the sukukholders via the security agent, are projected to amount to M$1.768bn during the life of the sukuk.

Maybank Investment Bank was lead manager for the deal.

SYNDICATED LOANS

› HONG LEONG RAISES US$385M LOAN

Malaysian conglomerate HONG LEONG GROUP has raised a US$385m five-year loan to fund its portion of the consideration for the acquisition of Columbia Asia Hospitals’s assets in South-East Asia.

Maybank and MUFG were the mandated lead arrangers and bookrunners of the club deal, while OCBC Bank and Sumitomo Mitsui Banking Corp joined as MLAs.

Hong Leong Healthcare Group is the borrower.

In September, Hong Leong Group and US private equity firm TPG Capital announced they had agreed to buy Columbia Asia’s 17 hospitals and one clinic in Malaysia, Indonesia and Vietnam for about US$1.2bn.

TPG is said to be funding the deal via a combination of internally generated funds, equity and debt.

The buyers will each own 50% of the acquired assets. The transaction was expected to close at the end of 2019.



› MR DIY TO FILE FOR US$500M IPO

Home improvement retailer MR DIY plans to file the draft prospectus for an IPO of up to US$500m some time this month and launch the deal in the first half, according to a person with knowledge of the transaction.

Mr DIY, which is backed by private equity firm Creador, has more than 500 outlets in Malaysia and also runs stores in Thailand, Brunei and Indonesia. The company is likely to list its Malaysian assets in the Bursa Malaysia IPO.

CIMB, Credit Suisse, JP Morgan, Maybank and RHB are the joint global coordinators and bookrunners with UBS.

MONGOLIA

SYNDICATED LOANS

› XACBANK OBTAINS SYNDICATED LOAN

Mongolia’s XACBANK has agreed a US$100m five-year syndicated loan, strengthening the bank’s long-term funding base and allowing it to further expand into its focus areas of retail, micro and small and medium enterprises and green finance.

Dutch development bank FMO arranged the financing and committed US$65m.

The OPEC Fund for International Development committed US$25m, while the International Bank for Economic Cooperation committed US$10m.

XacBank was established in 2001 and originally focused on providing microfinance loans in both rural and urban Mongolia. Over the past decade the bank has moved its focus to the MSME segment, retail lending and green finance.

The funding contributes to the United Nations’ Sustainable Development Goals 8, 10 and 17, dealing with decent work and economic growth, reduced inequalities, and partnerships for goals, respectively.

XacBank provides integrated banking and financial services to consumer and MSMEs through 80 branches. It has around 800,000 customers.

NEW ZEALAND


› BNZ TAPS SWISS MARKET

BANK OF NEW ZEALAND (A1/AA–/AA–) priced a SFr300m (US$309m) 0.111% 8.5-year bond at

Malaysia global equity and equity-related

1/1/19 – 31/12/19

Amount


1 CIMB Group 14 2,274.0 52.3

2 JP Morgan 3 406.6 9.3

3 RHB 11 292.8 6.7

4 Maybank 8 275.1 6.3

5 AMMB 13 172.3 4.0

6 M and A Sec 24 152.0 3.5

7 Hong Leong Financial 7 108.4 2.5

8 K&N Kenanga 11 80.4 1.9

9 UOB 16 77.6 1.8

10* BNP Paribas 1 66.7 1.5

10* Citigroup 1 66.7 1.5

Total 148 4,352.2


Top bookrunners of New Zealand syndicated loans1/1/19 – 31/12/19

Amount

Name Deals US$(m) %

1 ANZ 22 4,476.4 45.2

2 NAB 7 1,804.4 18.2

3 CBA 6 1,502.7 15.2

4 Westpac 6 1,048.7 10.6

5 Citigroup 3 667.4 6.7


7 MUFG 1 158.2 1.6

Total 40 9,914.2


Proportional credit



COUNTRY REPORT PHILIPPINES

the tight end of mid-swaps plus 37bp–40bp guidance last Thursday for a zero new issue concession.

UBS was sole lead manager for the transaction which attracted orders from 52 Swiss accounts.

Asset managers bought 39% of the bond, banks and private banks 37%, insurance companies 12%, bank treasuries 10% and pension funds 3% to the nearest percentage point.

SYNDICATED LOANS

› KATHMANDU WRAPS UP LOAN

Outdoor apparel and equipment retailer KATHMANDU HOLDINGS has closed syndication of a A$375m (US$258m) three-year loan backing the acquisition of Rip Curl Group to a strong response with a dozen banks joining.

ANZ Bank, Bank of China, National Australia Bank and Westpac Banking Corp joined as mandated lead arrangers, while Bank of New Zealand and Commonwealth Bank of Australia joined as lead arrangers. First Commercial Bank, Hua Nan Commercial Bank, Mega International Commercial Bank, State Bank of India, Taishin International Bank and Taiwan Cooperative Bank participated as arrangers.

The facility was oversubscribed and commitments were scaled back as a result.

Credit Suisse was the sole MLA, underwriter and bookrunner of the senior secured borrowing, which comprises a A$220m loan and a A$155m multi-option facility with a pricing grid.

The loan offered a top-level interest margin of 105bp over BBSY and a line fee of 90bp as well as a participation fee of 55bp.

Kathmandu completed the acquisition of Rip Curl on October 31. Earlier that month, the company raised NZ$145m (US$92m)

through a fully underwritten 1-for-4 entitlement offer.

The acquisition will create a NZ$1bn global outdoor and action sports company.

Rip Curl is a manufacturer of surfing equipment and apparel and has a presence in Australia, New Zealand, North America, Europe, South-East Asia and Brazil.

PHILIPPINES


› SMC GLOBAL POWER MANDATES

Philippines-based electric power distributor SMC GLOBAL POWER HOLDINGS mandated Credit Suisse, DBS, JP Morgan, Mizuho Securities, Standard Chartered Bank and UBS as joint lead managers as well as joint bookrunners to arrange investor meetings and conference calls in Hong Kong, Singapore, Zurich and London from January 7.

A Reg S-only US dollar senior perpetual bond may follow subject to market conditions.

The issuer, part of the San Miguel group, is unrated.

› JOLLIBEE ADDS DOLLAR PERP TO MENU

Jollibee Worldwide, a subsidiary of the Philippines’ JOLLIBEE FOODS, has hired banks for a proposed offering of US dollar guaranteed senior perpetual capital securities, subject to market conditions.

Citigroup and JP Morgan are joint global coordinators as well as joint lead managers and joint bookrunners with Credit Suisse and Mizuho Securities on the Reg S issue.

The fast-food company will meet investors in Hong Kong, Singapore and London, starting on Monday.

› ABOITIZ SELLS LONG-DATED BONDS

ABOITIZ EQUITY VENTURES has priced a US$400m 10-year non-call five senior unsecured bond offering at par to yield 4.20%, the tight end of final guidance of 4.25% area (+/-5bp) and inside initial guidance of 4.50% area.

The unrated Reg S issue drew final orders of over US$1bn, including US$90m from the leads.

Asia (ex-Philippines) took 55% of the bonds, the Philippines 33%, and EMEA 12%. Fund managers, asset managers and insurers took 57%, bank treasury 24%, private banks 18%, and corporates and others 1%.

Wholly owned subsidiary AEV International is the issuer and Aboitiz Equity Ventures is the guarantor.

Proceeds will be used to reimburse the funding AEV International received for the Gold Coin Group acquisition, and for proposed offshore investments and general corporate purposes.

HSBC and Standard Chartered were joint global coordinators. They were also joint bookrunners with DBS Bank, Mizuho and MUFG.

BDO Capital, BPI Capital and China Bank Capital were co-managers.

› UBP GETS NOD TO ISSUE TIER 2 BONDS

UNION BANK OF THE PHILIPPINES has received approval from Bangko Sentral ng Pilipinas to issue up to Ps20bn (US$394m) unsecured Basel III-compliant Tier 2 bonds, according to a filing on the Philippine Stock Exchange.

The central bank has also authorised UBP to redeem early its outstanding Ps7.2bn unsecured subordinated Tier 2 bonds due in 2025.

Top bookrunners of all Philippine peso bonds1/1/19 – 31/12/19

Amount

Name Issues Ps(m) %


2 HSBC 9 66,829.9 15.8

3 China Bk Capital Corp 13 45,679.2 10.8

4 ING 8 41,045.0 9.7

5 Philippine National 9 37,283.3 8.8

6 BDO Unibank 12 34,783.3 8.2

7 Deutsche 3 31,380.0 7.4

8 BPI 6 19,833.3 4.7

9 Metropolitan B&T 7 18,950.0 4.5

10 Security Bank 4 10,783.3 2.5

Total 46 423,846.4

*Market volume

Proportional credit


Top bookrunners of Philippines syndicated loans1/1/19 – 31/12/19

Amount

Name Deals US$(m) %

1 Mizuho 4 653.7 15.5

2 MUFG 4 570.4 13.6


4 DBS 3 430.6 10.2

5 ANZ 3 425.6 10.1

6 Bank of China 3 414.3 9.8

7 SMFG 2 355.6 8.5

8* ICBC 1 222.2 5.3

8* First Abu Dhabi Bank 1 222.2 5.3

10 Citigroup 2 133.8 3.2

Total 8 4,210.0


Proportional credit


Philippines global equity and equity-related

1/1/19 – 31/12/19

Amount


1 UBS 3 530.0 36.7

2 Metropolitan B&T 3 239.8 16.6

3 Deutsche 2 207.0 14.3

4 JP Morgan 2 180.8 12.5


6* Credit Suisse 1 83.4 5.8

6* Citic 1 83.4 5.8

8 BDO Unibank 2 16.5 1.1

9 SVS Sec 1 0.3 0.0

Total 12 1,442.9



SINGAPORE


› STARHILL REIT SETS UP PROGRAMME

Singapore-listed STARHILL GLOBAL REIT has set up a S$2bn (US$1.48bn) multi-currency debt issuance programme.

HSBC Institutional Trust Services Singapore, in its capacity as the REIT trustee, and Starhill Global REIT MTN will be the issuers under the programme. Bonds sold by the latter will be guaranteed by HSBC Institutional Trust Services.

DBS is sole lead arranger and dealer. A SGX announcement did not mention

any rating for the programme. S&P downgraded Starhill Global REIT to BBB from BBB+ in August on concerns that weaker operating performance and rent reversions would hit its cashflow adequacy ratios. Malaysia’s YTL Corporation is the sponsor of the REIT.

› FCOT INVESTORS GIVE CONSENT

Investors holding S$340m of FRASERS

COMMERCIAL TRUST bonds have agreed to waive any potential event of default that may arise from an impending merger.

Bondholders also gave consent to certain amendments of covenants in four series of bonds. The bonds involved are a S$100m 2.835% note due 2021 in series 001, a S$100m 2.625% note due 2020 in series 002, a S$80m floating-rate note due 2022 in series 004 and a S$60m 3.185% note due 2023 in series 005.

All the bonds were issued off a S$1bn MTN programme that is guaranteed by British and Malayan Trustees in its capacity as FCOT trustee.

FCOT is due to merge with Frasers Logistics & Industrial Asset Management to create an enlarged, yet-unnamed real estate investment trust.

Under the consent solicitation launched in mid-December, bondholders were asked to waive any event of default and approve certain amendments, including a new covenant for the guarantor to comply with the aggregate leverage limit.

In the FRNs due 2022, FCOT is seeking to discontinue the use of the Singapore dollar swap offer rate (SOR) benchmark and to introduce the Singapore overnight rate average (SORA) to comply with a regulatory transition to an industry-wide use of SORA.

Bondholders who submitted consent by an early deadline of December 31 will receive 0.25% in principal amount in series 001, 0.03% in series 002, 0.25% in series 004 and 0.30% in series 005. Those who approved after that date will receive, respectively, 0.15%, 0.02%, 0.15% and 0.20%.

OCBC was sole solicitation agent.

› WING TAI GOES LONG-DATED

WING TAI HOLDINGS last Thursday sold a S$100m 10-year non-call five bond at par to yield 3.68% with a spread of 197.2bp over Singapore dollar SOR.

The pricing came inside initial guidance of 4% area.

The unrated transaction drew healthy demand, with S$460m of orders from 40 accounts. Asset managers, insurance companies and hedge funds took up 72% of the deal, with banks and corporate investors allocated 6% and private banks taking the remaining 22%. Singapore accounted for 99% of the deal.

The Singapore property developer can redeem the bonds on the interest payment date on January 16 2025 and every interest due date thereafter at a designated call

price ranging from 101.84 in 2025 to 100.460 in 2029.

Settlement is on January 16. Proceeds from the unrated unsecured and subordinated notes will be used to meet working capital and investment needs as well as to refinance debt.

Private banks will receive a 25-cent concession.

OCBC was sole lead manager and bookrunner.

› ALLGREEN HOUSES SENIORS

ALLGREEN PROPERTIES last Thursday sold S$250m of five-year senior bonds priced at par to yield 3.15% with a spread of 166bp over Singapore dollar SOR.

More than S$350m of orders were received from over 32 accounts. Fund managers bought 31% while private banks took 10% and banks, corporate investors and others took the remaining 59%. Singapore accounted for the entire deal.

The unrated notes will be issued by Allgreen Treasuries and guaranteed by Allgreen Properties. Settlement is on January 16 and will be off a S$2bn debt issuance programme.

Proceeds will be used to refinance borrowings and to fund general corporate needs including financing of potential acquisitions and business expansion plans.

DBS was sole bookrunner.

SYNDICATED LOANS

› ORIENTAL ENERGY UNIT RAISES CLUB

The Singaporean subsidiary of Chinese gas and chemicals company Oriental Energy has raised a US$100m 364-day facility for working capital purposes.

BNP Paribas Singapore branch, ICBC Bank,

Top bookrunners of all Singapore dollar bonds1/1/19 – 31/12/19

Amount

Name Issues S$(m) %

1 DBS 43 7,395.6 31.0

2 OCBC 31 5,821.1 24.4

3 UOB 24 4,059.5 17.0


5 HSBC 12 1,394.0 5.9

6 Maybank 6 748.3 3.1


8 UBS 4 487.5 2.1

9 Societe Generale 2 312.5 1.3

10 ANZ 1 150.0 0.6

Total 75 23,829.8

*Market volume

Proportional credit


Top bookrunners of all Singapore dollar bonds

(non-domestic)1/1/19 – 31/12/19

Amount

Name Issues S$(m) %


2 DBS 8 895.8 18.1

3 UOB 6 722.9 14.6

4 HSBC 6 454.0 9.2

5 OCBC 4 445.8 9.0


7 UBS 3 337.5 6.8

8 Societe Generale 2 312.5 6.3

9 Credit Agricole 1 108.3 2.2


Total 18 4,954.1

*Market volume

Proportional credit


Top bookrunners of all Singapore dollar

bonds (domestic)1/1/19 – 31/12/19

Amount

Name Issues S$(m) %

1 DBS 35 6,499.7 34.4

2 OCBC 27 5,375.2 28.5

3 UOB 18 3,336.7 17.7


5 HSBC 6 940.0 5.0

6 Maybank 6 748.3 4.0


8* ANZ 1 150.0 0.8

8* UBS 1 150.0 0.8

10 Haitong Sec 1 50.0 0.3

Total 57 18,875.7

*Market volume

Proportional credit



COUNTRY REPORT SINGAPORE

ING Bank and Rabobank were the lenders of the financing, with the former two providing US$30m each and the latter two committing US$20m each.

BNP Paribas is the agent and was the coordinator of the club facility, which is said to pay an all-in pricing in the mid-200s.

ORIENTAL ENERGY (SINGAPORE) INTERNATIONAL

TRADING is the borrower, while Oriental Petroleum (Yangtze) and Oriental Energy are the guarantors.

The Shenzhen-listed parent last raised a Rmb2.35bn (US$379m) facility for its

subsidiary Ningbo Fortune Petrochemical from a group of lenders led by Bank of Communications in July 2014.

Founded in 1996, Oriental Energy principally distributes liquefied petroleum gas and chemicals.

› AVATION-BRA TAKE AIRCRAFT DELIVERY

ATR has delivered the world’s first green-financed aircraft to Sweden’s Braathens Regional Airlines, according to a press release from the France-based aircraft manufacturer on December 19.

Deutsche Bank provided a 10-year bilateral green loan of around €20m (US$22m) to fund the purchase of the aircraft for Singapore-headquartered AVATION, which has leased it to BRA.

“We’re hopeful that this leads the way for more sustainable financing activity in aviation, and increased adoption of lower carbon emission aircraft across the industry, to help make flying more eco-responsible,” said Richard Finlayson, Deutsche Bank’s head of global transportation finance, Asia.

Vigeo Eiris, an independent agency providing Environmental, Social and Governance ratings, said that the project of replacing ageing regional jets with new ATR 72-600 aircraft is aligned with the Green Loan Principles established by the Loan Market Association in 2018, according to the release.

The aircraft delivered to BRA forms one of three ATR 72-600 planes that form the security for the loan.

It is also part of a new order for five 72-600s for Avation, all purchased from ATR and leased to BRA.

Upon completion of the order in early 2020, BRA will itself operate an entirely ATR fleet, comprised of 15 ATR 72-600 aircraft, which emit 40% less carbon dioxide than other jets and turbopops. For shorter

Aqua Munda launches Hyflux tender Restructuring Offer to buy senior unsecured debt at a minimum discount of 85%

Aqua Munda, a little known company that

stunned the market by putting itself at the

centre of the HYFLUX restructuring saga, has

launched an offer to buy the Singapore

company’s unsecured debt comprising senior

bonds, contingent liabilities, trade and other

debt at a minimum discount of 85%.

The company launched the offer on

December 30 and it will expire on January 23,

an extension from the previously indicated

January 10.

Under the tender, it will select bids

via a reverse Dutch auction, essentially

picking bids with the highest discounts

first, then working its way to the next

highest offered discount until all available

settlement funds have been used up. The

total settlement amount to be set aside by

Aqua Munda to buy the debt has not been

released yet.

The combined senior unsecured debt is

estimated at S$1.8bn (US$1.33bn) by Aqua

Munda, a newly set up Singaporean company

with business activities in water and waste

treatment and oilfield chemicals.

The company’s announcement last

month that it planned to buy Hyflux’s senior

unsecured debt potentially scuttled a

S$400m rescue investment package from

United Arab Emirates-based Utico.

Aqua Munda is betting that senior

creditors are tired of the prolonged

restructuring of the Singapore water

treatment services provider, which owes

a total of S$2.8bn, including S$900m in

perpetual bonds and preference shares. The

junior bondholders are not included in this

tender.

The tender covers S$100m of 4.25%

bonds due 2018, S$65m 4.6% bonds due

2019 and S$100m 4.2% bonds due 2019, as

well as senior unsecured debt, contingent

debt and/or trade and other debt owed by

Hyflux and subsidiaries Hydrochem, Hyflux

Membrance Manufacturing and/or Hyflux

Engineering.

Aqua Munda said it would hold sole

and absolute discretion to decide which

bids to accept and the tender is subject to

Hyflux chair Olivia Lum entering into and

not breaching a service agreement and a

non-compete agreement, among other

conditions. Corporate advisory firm Duff & Phelps is working with Aqua Munda on the

transaction.

The potential investor is expected

to engage holders of Hyflux’s S$900m

perpetual bonds and preference shares once

its offer to acquire the senior unsecured debt

is completed.

“We would like to assure P&P holders and

shareholders as well as other stakeholders

that we are aware of the tight timelines and

the pressure on Hyflux to undertake and

complete its debt restructuring exercise,”

said Aqua Munda in a statement.

“Our objective in undertaking the

invitation (and if successful) is to facilitate

on an expedited basis a debt restructuring

exercise that is fair and equitable for all

stakeholders.”

KIT YIN BOEY

Top bookrunners of Singapore syndicated loans1/1/19 – 31/12/19

Amount

Name Deals US$(m) %

1 UOB 13 3,631.2 14.4

2 DBS 19 2,450.3 9.7

3 Maybank 13 2,018.6 8.0

4 SMFG 10 1,794.2 7.1

5 OCBC 11 1,644.8 6.5


7 Mizuho 7 1,038.4 4.1

8 MUFG 7 1,019.4 4.0

9 HSBC 10 970.1 3.8

10 Bank of China 8 930.4 3.7

Total 48 25,287.6


Proportional credit


Singapore global equity and equity-related

1/1/19 – 31/12/19

Amount


1 DBS 17 2,129.8 22.1


3 Citigroup 7 852.6 8.8


5 JP Morgan 3 661.5 6.9


7 UBS 5 572.0 5.9

8 OCBC 4 265.2 2.8


10 HSBC 3 229.6 2.4

Total 49 9,641.6



distances, they also accelerate air using less power and therefore burn less fuel.

“We have made a commitment to decrease our environmental impact and the ATR is an essential part of our strategy,” said BRA CEO Geir Stormorken. “By replacing parts of our existing fleet of regional jets with ATR 72-600 aircraft we will emit 7,500 fewer tonnes of CO2 per aircraft, per year.”

SOUTH KOREA


› KEXIM MAKES EURO PRIVATE PLACEMENT

EXPORT-IMPORT BANK OF KOREA (Kexim), rated Aa2/AA/AA–, has sold €150m (US$168m) of five-year notes in a private placement.

The Reg S bond priced on December 16 with a fixed coupon of 0.137% to yield the equivalent of three-month Euribor plus 41bp.

The issue, drawn off the quasi-sovereign’s global medium-term note programme, was its only euro currency private placement in 2019, according to a Kexim funding official. The notes are listed in Singapore.

UBS was lead manager and bookrunner.


› SK BIOPHARMA WINS KRX APPROVAL

SK BIOPHARMACEUTICALS, the drug-making unit of conglomerate SK Group, has received approval from Korea Exchange to list next year, a person close to the transaction said.

IFR previously reported that SK Biopharma is looking to raise W1.0trn–W1.2trn

(US$850m–$1bn) from the IPO, while local media have reported that the deal could value the company at W4trn–W6trn.

The company has mandated Citigroup, Morgan Stanley, Korea Investment & Securities and NH Investment & Securities.

SK Biopharma, which was founded in 2011, last year received regulatory approval from the US Food and Drug Administration for two of its drugs, Sunosi and Xcopri. The former is a treatment for sleep disorders and the latter is an anti-epileptic drug.

› ESR HIRES BANKS FOR K-REIT IPO

Logistics property developer ESR CAYMAN has mandated Citigroup and Morgan Stanley to work on a proposed real estate investment trust IPO of at least US$500m in South Korea, according to people close to the matter.

Local bank Korea Investment & Securities is also part of the syndicate, said one of the people.

Warburg Pincus-backed ESR raised HK$14bn (US$1.8bn) from a Hong Kong IPO in October in its second listing attempt, after pulling its first try in June.

The proposed K-REIT IPO comes after Lotte REIT completed a successful KRX listing in October. The IPO raised W430bn, making Lotte REIT the largest listed REIT in the country.

According to ESR Cayman’s Hong Kong IPO prospectus, it has 25 properties in South Korea valued at US$3.6bn.

SRI LANKA

SYNDICATED LOANS

› BANK OF CEYLON RETURNS

State-owned BANK OF CEYLON has raised US$130m from a one-year loan with four banks participating, marking its return to the offshore loan markets after less than two years.

Mashreqbank was the mandated lead arranger and bookrunner of the financing,

while Commercial Bank of Dubai, Commercial Bank PSQC and National Bank of Ras Al-Khaimah joined as participants. The banks committed US$60m, US$25m, US$25m and US$20m, respectively.

Proceeds raised are for general corporate purposes.

The borrower’s last visit to the loan markets was in July 2018 for a US$150m one-year loan that paid a top-level all-in pricing of 130bp based on an interest margin of 85bp over Libor. HSBC and Standard Chartered were the MLABs of the deal, which attracted four others.

Bank of Ceylon is rated B1/B (Moody’s/Fitch).

TAIWAN

SYNDICATED LOANS

› NANKANG RUBBER CLOSES LOAN

Units of Taiwan-listed NANKANG RUBBER TIRE

CORP have raised a NT$30bn (US$980m) five-year loan for land development purposes.

Hua Nan Commercial Bank was the mandated lead arranger and bookrunner of the transaction, while Bank of Taiwan was the bookrunner.

The deal comprises a NT$8bn tranche A, a NT$10bn tranche B and a NT$12bn tranche C. The interest margin ranges from 88bp to 127bp over Taibor. Lenders were offered a top-level upfront fee of 8bp.

Nanzong Construction Developments, Yuanruei Development and Zhikai Development were the borrowers of the transaction.

Nankang Rubber was established in 1959 in Taiwan and manufactures automobile tyres and other synthetic rubber products.

For full allocations, see www.ifre.com.Top bookrunners of all South Korea Won bonds1/1/19 – 31/12/19

Amount

Name Issues Won(m) %

1 KB Financial 617 29,684,935.3 15.6

2 NH Inv & Sec 385 25,550,000.0 13.4

3 Korea Investment 541 21,265,172.0 11.2

4 Kyobo Life 384 17,051,521.3 8.9

5 Mirae Asset Daewoo 285 13,604,592.0 7.1

6 Kiwoom Sec 247 12,978,530.0 6.8

7 DB Financial Invest 192 11,299,182.1 5.9

8 SK Sec 130 9,214,000.0 4.8

9 Hana Financial 240 8,722,302.6 4.6

10 Hanwha Inv & Sec 56 5,749,415.0 3.0

Total 4,956 190,725,570.6

*Market volume

Proportional credit


Top bookrunners of South Korea syndicated loans1/1/19 – 31/12/19

Amount

Name Deals US$(m) %

1 KDB 3 1,918.7 70.6

2 Mizuho 2 800.0 29.4

Total 5 2,718.7


Proportional credit


South Korea global equity and equity-related

1/1/19 – 31/12/19

Amount


1 NH Inv & Sec 21 998.0 12.5

2 Korea Investment 29 903.4 11.4

3 Goldman Sachs 3 734.4 9.2

4 KB Financial 16 543.0 6.8


6 Shinhan Financial 18 415.3 5.2


8 UBS 1 327.8 4.1

9 Mirae Asset Daewoo 15 320.6 4.0

10 JP Morgan 1 296.2 3.7

Total 134 7,958.2

Source: Refinitiv data SDC Code: C1Q


COUNTRY REPORT THAILAND

› FINA FINANCE RETURNS FOR LOAN

FINA FINANCE & TRADING is returning to the loan market for a NT$5bn three-year deal within eight months of obtaining a smaller facility.

Taiwan Cooperative Bank is the mandated lead arranger and bookrunner of the transaction, which comprises a NT$5bn tranche A and a NT$3bn guarantee tranche B. The two tranches cannot exceed a combined amount of NT$5bn.

Tranche A offers an interest margin of 75bp over Taibor, with a pre-tax interest rate floor set at 1.7%, while tranche B offers an annual guarantee fee of 65bp.

Banks are being invited to join as managers with commitments of NT$600m or more for an upfront fee of 8bp, or as participants with NT$300m–$599m for a 4bp fee.

Commitments are due by January 10.Funds are for working capital purposes.Fina’s previous visit to the loan market

was in May 2019 for a NT$4.3bn three-year borrowing. Land Bank of Taiwan was the MLAB on that transaction, which comprises a NT$2.87bn tranche A and a NT$1.43bn guarantee tranche B. Tranche A offers an interest margin of 75bp over Taibor, with a pre-tax interest rate floor set at 1.7%, while tranche B offers an annual guarantee fee of 65bp.

Fina Finance, a subsidiary of Chailease Finance, provides financing services to small and medium-sized companies in the construction and transportation sectors.

› CHENG LOONG BACK FOR NT$4BN REFI

CHENG LOONG has launched a NT$4bn five-year refinancing, barely four months after obtaining a smaller facility.

First Commercial Bank is the mandated lead arranger and bookrunner of the latest transaction, which comprises a NT$4bn revolving credit tranche A and a NT$3.2bn guarantee tranche B. The two tranches

cannot exceed a combined NT$4bn.Tranche A offers an interest margin of

50bp over Taibor, with a pre-tax interest rate floor set at 1.7%, while tranche B offers an annual guarantee fee of 50bp.

Banks are being invited to join as MLAs with commitments of NT$800m or more for an upfront fee of 8bp, as co-arrangers with NT$600m–$799m for a 5bp fee, or as managers with NT$400m–$599m for a 3bp fee. The deadline for responses is January 17.

Funds are for working capital purposes and to refinance a NT$3bn five-year facility signed in December 2015. Bank of Taiwan, FCB and Land Bank of Taiwan were the MLABs on that deal, which offered a margin of 60bp over Taibor, with a pre-tax interest rate floor of 1.7%, according to LPC data.

The borrower last tapped the loan market in September for a NT$2.6bn three-year senior facility with Credit Agricole as the MLAB, according to LPC data.

› GLORIA MATERIAL RAISES NT$6.2BN REFI

Steel producer GLORIA MATERIAL TECHNOLOGY CORP has raised a NT$6.2bn five-year refinancing.

First Commercial Bank was the mandated lead arranger and bookrunner of the transaction, which comprises a NT$1.16bn tranche A, a NT$3.06bn tranche B and a NT$720m tranche C, a NT$720m guarantee facility tranche D and a NT$540m tranche E.

Tranches A, B, C and E offer interest margins of 35bp over the one-year post office savings rate, with a pre-tax interest rate floor set at 1.7%. Tranche D offers an annual guarantee fee of 58bp.

Banks were offered a top-level upfront fee of 15bp.

Funds are for refinancing and working capital purposes.

The borrower last tapped the market in October 2018 for a NT$4.5bn-equivalent five-year refinancing. Chang Hwa Commercial Bank was the MLAB of that transaction,

which comprised a NT$2.4bn term loan tranche A, a NT$1.6bn revolving credit tranche B and a NT$500m guarantee facility tranche C. Tranches A and B offer margins of 36bp over Taibor, with a pre-tax interest rate floor set at 1.7%. Tranche C offers an annual guarantee fee of 65bp.


THAILAND


› PTTEP MAKES TIGHT RETURN

Thailand’s leading oil and gas producer PTT

EXPLORATION AND PRODUCTION, rated Baa1/BBB+/BBB+, last Thursday returned to the US dollar market after less than two months with a US$350m 10-year 144A/Reg S bond.

The notes, rated Baa1/BBB+ (Moody’s/Fitch), priced at 110bp over Treasuries, at the low end of final price guidance of 115bp area (+/-5bp). Final guidance was tightened sharply from initial guidance of 155bp.

Orders hit US$4.3bn before steep attrition kicked in at the revised number. Final orders came to more than US$1.5bn from 88 accounts. The still healthy reception reflected continuing appetite for the Thai credit, which in late November raised US$650m in 40-year 144A/Reg S bonds priced at par to yield 3.903%.

The new 10-year bonds priced at par to yield 2.993%.

Geographically, the notes were well distributed with Asia taking 62%, EMEA 18% and the US 20%. Asset and fund managers bought 68%, banks 12%, insurance companies 13% and corporate investors, private banks and others 7%.

Settlement is on January 15. PTTEP Treasury Center Company is the issuer and

Top bookrunners of all Taiwan dollar bonds1/1/19 – 31/12/19

Amount

Name Issues NT$(m) %

1 Yuanta Financial 33 111,068.3 29.3

2 Masterlink Sec 20 62,250.0 16.4

3 Capital Sec 9 45,500.0 12.0

4 Hua Nan Financial 3 29,520.0 7.8

5 KGI Financial 12 23,883.3 6.3

6 Taishin Financial 6 20,225.0 5.3

7 HSBC 3 18,550.0 4.9

8 Taiwan Cooperative Finl Hldg 17 15,700.0 4.1

9 Mega Financial 7 12,250.0 3.2

10 Fubon Financial 4 12,100.0 3.2

Total 101 379,680.0

*Market volume

Proportional credit


Top bookrunners of Taiwan syndicated loans1/1/19 – 31/12/19

Amount

Name Deals US$(m) %

1 Taiwan Financial 47 4,613.9 14.9

2 Mega Financial 32 3,683.8 11.9

3 CTBC Financial 27 3,038.9 9.8

4 Taiwan Cooperative Finl Hldg 34 2,619.7 8.4

5 Land Bank of Taiwan 27 2,094.9 6.7

6 First Financial 28 1,976.0 6.4

7 Taishin Financial 21 1,815.0 5.8

8 Fubon Financial 27 1,811.7 5.8


10 Hua Nan Financial 16 789.1 2.5

Total 190 31,069.3


Proportional credit


Taiwan global equity and equity-related

1/1/19 – 31/12/19

Amount


1 Yuanta Financial 17 544.0 32.7

2 Taishin Financial 17 478.3 28.7

3 KGI Financial 17 131.1 7.9

4 Sinopac Holdings 10 81.5 4.9

5 Grand Fortune Sec 7 81.1 4.9

6 CTBC Financial 5 78.0 4.7

7 Masterlink Sec 9 54.6 3.3

8 HSBC 1 50.0 3.0

9 Hua Nan Sec 1 43.7 2.6

10 Mega Financial 5 19.0 1.1

Total 117 1,666.5



PTTEP is the guarantor. Proceeds will be used for general corporate purposes.

Bank of America, Citigroup, HSBC and Societe Generale were joint lead managers and bookrunners.

› UNIQUE ENGINEERS PHASE ONE

UNIQUE ENGINEERING AND CONSTRUCTION will offer three-year bonds in a public offering to retail and institutional investors next month to raise Bt3bn (US$99.3m).

The unsecured notes, rated BBB by Tris, will pay 3.7%. Subscription will be held February 3-5.

This is the first of two offerings expected this year from the Thai engineering and residential property company to raise a total of Bt6bn to repay debt and fund working capital needs. The second bond sale is expected in the third quarter of the year.

Krungthai Bank is sole lead manager and underwriter.

The bonds are rated a notch below Unique’s corporate rating of BBB+ to reflect Tris’ concerns that the company’s total debt is rising faster than expected because of an increase in working capital. Tris said the company’s debt to capitalization ratio rose to 58.1% at end-September, from 40%–50% over the past three years.

The bonds will include a key financial covenant under which Unique will have to keep its net debt to equity ratio below 3.5 times. The company’s current ratio is around 1.4 times.

› TPI POLENE OPENS SUBSCRIPTION

TPI POLENE will open a three-day subscription from January 13 to offer up to B6bn of three-year bonds to the public and institutional investors.

The bonds, rated BBB+ by Tris, was priced last month at par to yield 3.5%.

CIMB Thai is sole lead manager for the deal.

Proceeds will be used to refinance a Bt3bn 5.2% bond that will mature in January as well as to purchase equipment for production expansion and to meet working capital needs.

› THAIFOODS LEANS ON CGIF

THAIFOODS GROUP, rated BBB– by Tris, has priced a five-year guaranteed bond at 2.48% for up to Bt2bn.

Institutional investors were invited to subscribe to the notes, guaranteed by Credit Guarantee and Investment Facility, on January 6-7. The notes will be rated AAA by Tris to reflect the guarantee from CGIF, a unit of Asian Development Bank.

The Thai integrated food processor will use the proceeds to repay an intercompany loan to Thai Foods Feed Mills as well as to refinance a working capital loan and meet working capital needs.

Thaifoods, which raises and processes poultry and pigs and produces animal feed, has an outstanding Bt1.15bn 4.9% three-year note maturing next July.

United Overseas Bank Thai was sole lead manager.

› SRT ON TRACK WITH DUAL-TRANCHER

STATE RAILWAY OF THAILAND has raised Bt11.4bn from the sale of seven and 9.5-year bonds.

The Bt4bn seven-year tranche pays 1.58% while the Bt7.4bn 9.5-year tranche pays 1.75%. The notes, sold on a standalone basis, were settled on December 24.

CIMB Thai and Krungthai Bank were joint lead managers and underwriters for the unrated deal. The government-owned railway company has about Bt5bn of bonds that will mature in the first half of 2020.

This was its fourth issuance for 2019, raising a total of Bt19.5bn.

› MBK DEALS A BOND

Property company MBK, rated A by Tris, has sold Bt3bn nine-year unsecured bonds at par to yield 2.94%.

The bonds were offered to institutional investors. Proceeds will be used to meet working capital, business expansion and refinancing needs.

A filing with Thailand’s Securities and Exchange Commission indicated that MBK acted as debt dealer for the bond.

› FRASERS PROPERTY OFFERS FIVERS

FRASERS PROPERTY THAILAND is offering five tranches of bonds to institutional and high-net-worth investors to raise up to Bt5bn.

A three-year tranche of up to Bt500m is priced at par to yield 2%, a 3.5-year tranche of up to Bt1bn will pay 2.1%, a five-year tranche

of up to Bt1.8bn will pay 2.36%, a seven-year tranche of up to Bt500m pays 2.85% and a 10-year tranche of up to Bt1.2bn pays 3.2%.

Subscription, which launched last Thursday, will close on Monday. The bonds, rated A– by Tris, will be drawn from a Bt50bn MTN programme.

Frasers Property, which owns and manages industrial and logistics warehouses in industrial estates in Thailand, added the 3.5-year tranche and lifted its targeted issue size from Bt3bn following encouraging feedback from investors.

Bangkok Bank and UOB Thailand are joint lead managers for the deal.

› EXIM THAI GOES TRIPLE

EXPORT-IMPORT BANK OF THAILAND settled three, seven and 10-year bonds on December 26 to raise a combined Bt5bn.

The Bt1bn three-year tranche was priced at par to yield 1.74%, the Bt2bn seven-year tranche will pay 2.06% and the Bt2bn 10-year tranche will pay 2.31%.

CIMB Thai and Kasikorbank were joint lead managers for the deal.

› SIAMGAS TAKES TO THE PUBLIC

SIAMGAS AND PETROCHEMICALS has priced four-year bonds at par to yield 3.85%.

A public offering will be held on January 20-22 during which institutional and retail investors can subscribe to the notes, rated BBB+ by Tris.

The Thai liquefied petroleum gas distributor is looking to raise up to Bt4bn and will use the proceeds for refinancing and acquisition purposes.

The pricing came at the low end of a price guidance range of 3.80%–4.00%.

Asia Plus Securities, CIMB Thai Bank and Krungthai Bank are joint lead managers on the sale to institutional and retail investors, while UOB Thai will be joint lead manager on the institutional portion only.

Part of the proceeds will be used to refinance Bt2bn of bonds maturing in January, and the balance will fund the acquisition of a majority stake in Thai Public Port.

SYNDICATED LOANS

› CAL-COMP ELECTRONICS COMPLETES A&E

CAL-COMP ELECTRONICS (THAILAND) and its special-purposes vehicle LOGISTAR INTERNATIONAL

HOLDING have completed an amendment and extension of an existing US$216m from 2017.

The three-year loan, originally signed in October 2017 with 14 lenders, has been

Top bookrunners of all Thai baht bonds1/1/19 – 31/12/19

Amount

Name Issues Bt(m) %

1 Kasikornbank 84 196,300.4 20.3

2 Bangkok Bank 59 163,531.4 16.9

3 Krung Thai 48 119,895.3 12.4

4 CIMB Group 33 94,663.5 9.8

5 Siam Commercial 35 90,961.9 9.4

6 MUFG 16 62,530.7 6.5

7 Thanachart Capital 16 55,440.0 5.7

8 UOB 27 46,360.0 4.8

9 Phatra Sec 23 40,256.6 4.2

10 Asia Plus Sec 27 15,621.2 1.6

Total 224 965,360.5

*Market volume

Proportional credit



COUNTRY REPORT VIETNAM

extended for another three years.Bank Sinopac, E.Sun Commercial Bank, Land

Bank of Taiwan, Mega International Commercial Bank, Taipei Fubon Commercial Bank, Taishin International Bank and Taiwan Cooperative Bank were the mandated lead arrangers and bookrunners of the loan, which had closed that year with seven other lenders participating in general syndication. E.Sun is the facility agent.

All lenders, except Ta Chong Bank, rejoined the A&E exercise for the deal, which comprises a US$108m term loan tranche A and a US$108m revolving credit tranche B. Banks agreeing to the A&E earned an extension fee of 5bp.

The loan pays an interest margin of 105bp over Libor. The borrowers will pay any excess interest rate beyond a 40bp difference between TAIFX and Libor.

Cal-Comp Electronics is a subsidiary of Taiwanese electronics contract manufacturer New Kinpo Group.


VIETNAM


› SAI GON HA NOI EYES DOLLAR DEBUT

SAI GON HA NOI COMMERCIAL JOINT STOCK BANK, rated B2 (stable) by Moody’s, has mandated Citigroup and HSBC as joint global coordinators and joint bookrunners for a proposed Reg S offering of US dollar bonds, subject to market conditions.

The Vietnamese bank, listed on the Hanoi Stock Exchange, will hold investor meetings in Singapore, Hong Kong and London, starting on Monday.

The proposed notes will be issued off the bank’s newly established euro MTN programme and have an expected B2 rating from Moody’s.

The bank has no outstanding foreign-currency bonds, according to Refinitiv data.

SYNDICATED LOANS

› VINFAST CLOSES DOWNSIZED LOAN

VINFAST TRADING AND PRODUCTION, a unit of Vietnamese conglomerate VINGROUP, has closed a smaller-than-planned US$575m five-year financing after attracting 14 lenders in general syndication.

The transaction’s overall size was reduced as Vinfast borrowed US$310m instead of the planned US$400m through Facility A, which carries a guarantee from Vingroup. The proceeds will be used to refinance part of its debt and to fund capital expenditure.

Parent Vingroup, meanwhile, raised US$265m through Facility B, exercising part of a US$100m greenshoe option. The loan originally had a US$200m base size.

Deutsche Bank, HSBC, Maybank and Taipei Fubon Commercial Bank were the original mandated lead arrangers and bookrunners of the loan, while Bank of China and Union Bank of Taiwan joined as MLABs prior to launch into general syndication.

The transaction paid top-level all-in pricing of 369bp and 334bp based on interest 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.

Last May, Vingroup subsidiary and healthcare provider Vinmec International General Hospital closed an increased US$360m three-year senior secured term

loan that offered a top-level all-in of 327.43bp based on an interest margin of 300bp over Libor and an average life of 2.9166 years.

In July 2018, Vinfast wrapped up a US$400m five-year loan that paid a top-level all-in pricing of 370.38bp based on a margin of 350bp over Libor and an average life of 3.925 years.


› VPBANK FINANCE’S LOAN DRAWS SEVEN

The syndication of a US$200m loan for VPBANK

FINANCE has closed with seven banks joining.Maybank was the sole coordinator for

the one-year loan, which had a base size of US$150m and a US$50m greenshoe option that was entirely exercised.

First Abu Dhabi Bank, Taishin International Bank and Taiwan Shin Kong Commercial Bank joined as mandated lead arrangers and bookrunners.

The loan paid a top-level all-in pricing of 320bp based on an interest margin of 260bp over Libor.


› BIDV’S LOAN ATTRACTS TWO

JOINT STOCK COMMERCIAL BANK FOR INVESTMENT &

DEVELOPMENT OF VIETNAM has increased its one-year refinancing to US$120m from US$100m, although the deal attracted only two banks in limited syndication.

United Overseas Bank was the sole mandated lead arranger and bookrunner of the deal and ended up with US$95m.

Taishin International Bank joined as an MLA with US$15m, while DZ Bank came in as a participant with US$10m.

The deal pays an interest margin of 100bp over Libor. Funds are to refinance a similar sized one-year facility that closed in 2018.

In November 2018, BIDV completed a US$300m borrowing with Asian Development Bank as the sole MLAB. That loan comprises a US$200m A loan with ADB as sole lender and a US$100m B loan that attracted 12 banks in general syndication.

The B loan comprises a US$30m three-year tranche B1 and a US$70m five-year tranche B2. The three and five-year pieces paid top-level all-ins of 130bp and 173.3bp based on interest margins of 110bp and 160bp over Libor, respectively, and average lives of 2.5 years and 3.15 years.

Top bookrunners of Thailand syndicated loans1/1/19 – 31/12/19

Amount

Name Deals US$(m) %

1 Siam Commercial 1 3,048.1 70.7

2* Mizuho 1 400.0 9.3

2* Kasikornbank 1 400.0 9.3

4 SMFG 1 395.9 9.2

5 Taiwan Financial 1 69.8 1.6

Total 4 4,313.7


Proportional credit


Thailand global equity and equity-related

1/1/19 – 31/12/19

Amount


1 Trinity Securities Group 1 1,017.7 21.6



4 Bualuang Sec 3 322.5 6.9

5 Siam Commercial 3 303.9 6.5

6 Kasikornbank 3 295.2 6.3

7 Phatra Sec 2 289.0 6.1

8* UBS 1 224.1 4.8

8* Bank of America 1 224.1 4.8

10 Krung Thai 1 140.9 3.0

Total 30 4,704.8


Top bookrunners of all Vietnamese dong bonds1/1/19 – 31/12/19

Amount

Name Issues Vnd(m) %

1 Techcombank 69 32,559,000.0 97.9

2 Vietcombank 3 700,000.0 2.1

Total 72 33,259,000.0

*Market volume

Proportional credit


Vietnam global equity and equity-related

1/1/19 – 31/12/19

Amount


1 Jefferies LLC 1 201.3 61.8


Total 3 325.5



ASIA DATA

LAST WEEK’S ECM DEALS

Stock Country Date Amount Price Deal type Bookrunner(s)

Bharti Airtel India 08/01/2020 Rs144bn Rs445 Follow-on (primary) Axis, Citigroup, JP Morgan, BNP Paribas, BofA,

Goldman Sachs, HDFC,HSBC

Shanghai Gench Education Group China 10/01/2020 HK$605m HK$6.05 IPO (primary) Macquarie, Haitong International

Huijing Holdings China 10/01/2020 HK$1.52bn HK$1.93 IPO (primary) China Galaxy International, CCB International,

CMB International, Guotai Junan International

Activation Group China 10/01/2020 HK$404m HK$2.02 IPO (primary) Dongxing Securities, CMB International and Haitong Sec

WuXi Biologics China 10/01/2020 HK$5.8bn HK$96.05 Follow-on (secondary) Morgan Stanley

Sunac China China 10/01/20 HK$8bn HK$42.80 Follow-on (primary) Morgan Stanley

Alibaba Health Information Technology China 09/01/20 HK$791m HK$9.42 Follow-on (secondary) Goldman Sachs

Jiumaojiu International China 09/01/20 HK$2.2bn HK$6.60 IPO (primary) CMB International, CICC

Beijing Enterprises Urban China 08/01/20 HK$621m HK$0.69 IPO (primary) DBS, Haitong International

Resources Group

Xinyi Solar China 07/01/20 HK$1.79bn HK$5.125 Follow-on (secondary) HSBC

Luckin Coffee China 09/01/20 US$580m US$42 Follow-on Credit Suisse, Morgan Stanley, CICC, Haitong International

(primary+secondary)

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 437.320 0.361 0.686 0.467 122

ADHY Asian-dollar high-yield index 685.824 0.746 2.490 4.220 526

AGIG Asian-dollar government high-grade index 411.725 0.317 0.589 0.185 99

AGHY Asian-dollar government high-yield index 813.455 0.817 2.678 3.281 416

ACIG Asian-dollar corporate high-grade index 464.185 0.379 0.724 0.568 131

ACHY Asian-dollar corporate high-yield index 563.076 0.736 2.463 4.375 542

Source: Merrill Lynch

LAST WEEK’S EQUITY-LINKED ISSUANCE

Issuer Country Date Amount Greenshoe Maturity Coupon/YTM % Premium (%) Bookrunner

Bharti Airtel India 08/01/2020 US$750m US$250m 5 years 1.5%/2% 20% BNP Paribas, Barclays, Citigroup, Goldman Sachs,

JP Morgan, DBS

Shandong Weigao Group China 09/01/2020 US$150m 6 years 2% 25% Credit Suisse

Medical Polymer

Luckin Coffee China 09/01/2020 US$400m US$60m 5 years 0.75% 30% Credit Suisse, Morgan Stanley, CICC,

Haitong International

Source: IFR Asia

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