IFRASIA

INTERNATIONAL FINANCING REVIEW ASIA

OCTOBER 27 2018 ISSUE 1064 www.ifrasia.com

Chinese flood market with Tier 2 bonds as fundraising channels narrow

Australian banks’ market share shrinks as competition and regulation bite

AMP’s roadshow for US dollar bonds overshadowed by plunge in share price

BONDS/EQUITIES LOANS EQUITIES PEOPLE & MARKETS Bangladesh agency Calsonic shifts into Infrastructure trust StanChart readies to issue bonds as it high gear with launches Thailand’s another round of prepares to prop up Asia’s largest LBO largest IPO despite job cuts as drive to stock market for Magneti buyout snub by foreigners cut costs stalls 06 07 08 12 NOW AVAILABLE IN THOMSON REUTERS EIKON

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Scrip doctors money in the country’s equity market crash of late 2010. Equity is supposed to be the riskiest layer of capital, ever mind Adam Smith’s invisible hand, state-owned where bad decisions and poor luck can cause investors to entities in China and Bangladesh are proposing lose it all. In parts of Asia, though, the house considers it N to deliver a helping hand to ease the pressure on easier in the long run if everyone wins. investors facing losses in their troubled equity markets. Not only that, but they are planning to issue bonds to fund the exercises. Better late than never Chinese media cut to the heart of the matter and branded Shenzhen Investment Holdings’ planned issue a “bailout HEû+OREAû(OUSINGû&INANCEû#ORPûHASûlNALLYûACHIEVEDû bond”. Proceeds will provide funds to private sector a long-held goal to issue covered bonds in the euro companies facing temporary liquidity problems as a result T market. It is, perhaps, a surprise that it didn’t come of owners pledging their shares against loans. sooner. US interest rates are rising, and it’s no secret that Meanwhile, the Investment Corporation of Bangladesh is Europe has a much more liquid covered bond market than planning to issue subordinated bonds and use most of the the US, which is where KHFC has issued all of its previous proceeds to invest directly in the stock market to prop up deals. prices following a sharp decline. ,ASTûWEEKSûõMûlVE YEARûCOVEREDûBONDûSUCCESSûHASû The carry trade might work for Shenzhen Investment if it underlined for KHFC and other prospective Asian issuers charges higher rates for loans than it pays on its bond issue, that, indeed, Europe is still the best market for this type of transaction. It is nonetheless understandable that it has taken so long FORûTHEû+OREANûHOMEûlNANCINGûCOMPANYûTOûCHANGEûCOURSE Chinese media cut to the heart +(&#ûlRSTûBUILTûAûRAPPORTûWITHû53ûINVESTORS ûWHOûWEREû of the matter and branded already familiar with the jurisdiction, and South Korean issuers continue to be frequent visitors to the Yankee Shenzhen Investment Holdings’ market. The US was the comfort zone, even though the issuer said it knew it would have to make it to Europe. planned issue a “bailout bond”. Now, future Asian issuers have a better shot at this market, as there is a growing set of comparables to help establish themselves. but ICB has no certainty that Bangladeshi shares will deliver KHFC’s transaction was over three times subscribed, the 9% annual return needed to cover its coupon, making WHICHûWASûPARTICULARLYûIMPRESSIVEûCONSIDERINGûlNANCIALû the business rationale hard to fathom. markets were whipsawing during the bookbuild. It helped In Western markets, governments generally only prop up that the deal was paying a generous premium over higher- struggling equity markets indirectly, through policy easing rated Triple A Singaporean euro covered notes, and that the or injecting liquidity into the system. Close to a decade of bonds had a “Social” tag, which certainly draws attention in rock-bottom policy rates in the US and Europe certainly Europe. boosted stocks, but this happened across the board, and The basis swap is also much more conducive than last SPECIlCûCOMPANIESûWEREûNOTûTARGETEDûFORûSUPPORTûMERELYû year, which makes funding in euros cheaper than the US because their share prices had sagged a little. DOLLARûMARKETûBYûABOUTûBPnBP In Asia, where sovereign wealth funds are big equity That’s not to say that there are no issues for European investors, it is perhaps less taboo for governments to investors to consider. Korean household debt is a major intervene directly in the stock markets, but picking ONEûnûITûHITûûOFû'$0ûINûTHEûlRSTûQUARTERûOFûTHISûYEAR ûDATAû individual companies to support will require some from the for International Settlements show, far above JUSTIlCATIONûTOûAVOIDûACCUSATIONSûOFûFAVOURITISMûnûUNLESSû THEû'ûAVERAGEûOFûû4HEûGOVERNMENTûCERTAINLYûNEEDSû they are at immediate risk of collapse. to take a grip on the situation and to do so it is hoping to Unspoken is that the stock markets in parts of Asia act as ADJUSTûMORTGAGEûSTRUCTURESûTOûlXEDûRATESûFROMûmOATERSûTOû THEûUNOFlCIALûRETIREMENTûFUNDûFORûMANYûINDIVIDUALS ûTAKINGû promote economic stability. some burden off the state, as long as they trend up. 3OUTHû+OREAûHASûAûTARGETûTOûINCREASEûlXED RATEûLOANSû That also means that when shares slump the effect is felt to 47.5% of the total mortgage pool by year-end. KHFC is across a much wider segment of society than in the US or optimistic that, with the help of more covered issuance, the Europe. ICB even paid compensation to investors who lost country can reach that target.

International Financing Review Asia October 27 2018 1 INTERNATIONAL FINANCING REVIEW ASIA CONTACTS

EDITOR EDITOR, IFR COMPANY INDEX LG Display 36 Steve Garton Matthew Davies LIC Housing Finance 28 Aditya Birla Finance 28 +852 2912 6670 +44 (0)20 7542 7504 Magneti Marelli 7 Affin Islamic Bank 33 Manappuram Finance 28 steve.garton@refinitiv.com DESK EDITOR African Export-Import Bank 32 Marui Group 9 Al Dream 3 (Cayman) 22 HEAD OF ASIAN CREDIT Vincent Baby Medco Energi Internasional 32 Alphamab 25 Metrobank Card 34 Daniel Stanton SUB-EDITOR AmBank Group 34 Metropolitan Bank Trust Company 8 +65 6417 4548 David Holland AMP 5 Metropolitan of Tokyo 9 ANA Holdings 9 Milway Development 26 ASIA EQUITIES EDITOR HEAD OF PRODUCTION Asset World Corporation 9 MNC Sky Vision 31 Fiona Lau Victor Ng AVIC International Leasing 21 Mobvista 25 +852 2912 6673 Babytree Group 24 Muangthai Capital 38 PRODUCTION ASSISTANT 5 National Bank for Agriculture and DEPUTY HEAD OF ASIAN CREDIT Mike Tsui Bank of the Philippine Islands 8 Rural Development 28 Frances Yoon HEAD OF GLOBAL ADVERTISING AND BDO Unibank 8 NBCC India 30 Bestway Global Holding 26 Nederlandse Waterschapsbank 19 +852 2841 5783 SPONSORSHIP Bestway (Hong Kong) International 26 NTPC 30 DEPUTY EQUITIES EDITOR, ASIA Shahid Hamid Bharat Oman Refineries 29 Nufarm 20 +65 9755 5031 Bharat Petroleum 29 S. Anuradha Obayashi 9 Calsonic Kansei 7 ONFEM Finance 26 +65 6417 4547 IFR ASIA AWARDS MANAGER Capitaland Mall Trust 36 Orsted 38 Paul Holliday Celltrion 37 SENIOR CREDIT CORRESPONDENT, ASIA Oxley Holdings 36 +44 (0)20 7542 8018 Chailease International Finance 24 Pamapersada Nusantara 32 Kit Yin Boey Chiahui Power 37 GLOBAL ADVERTISING Pan Brothers 31 +65 6417 4549 China Banking Corporation 8 Panjit Asia International 37 PRODUCTION MANAGER China Citic Bank 4 Panjit International 37 ASIA PACIFIC BUREAU CHIEF, LOANS Gloria Balbastro China Gas Holdings 22 Pertamina 31 Prakash Chakravarti +44 (0)20 7542 4348 China National Bluestar (Group) 21 8 +852 2912 6671 China Petrochemical Corporation 22 Pintec Technology 24 SUBSCRIPTION SALES ENQUIRIES Citic Envirotech 35 Property Exchange Australia 10 SENIOR REPORTERS: HONG KONG China, Hong Kong, Taiwan, Korea, Japan CloudMinds Technology 24 PTT Oil and Retail 9 Thomas Blott Alan Wong CMBC International Holdings 23 Qingdao Haier 25 +852 2841 5878 +852 2912 6606 CMB Financial Leasing 23 Qingdao Haier Biomedical 25 Coronado Global Resources 10, 20 REC Limited 28 Carol Chan India, , , Thailand, Country Garden Holdings 23 REDS EHP 2018-1 ABS 19 +852 2912 6604 Indonesia and Australia Daewoo Engineering & Rural Electrification Corp 28 Samantha Harris Construction 36 Sands China 34 SENIOR REPORTER: SYDNEY +612 9373 1749 Daio Paper 9 San Miguel Food and Beverage 34 John Weavers DanaInfra Nasional 33 Sarana Multi Infrastruktur 32 SUBSCRIPTION ACCOUNT MANAGER Eco World International 33 Shanghai Pudong +61 2 9373 1655 Pia Batuan Export-Import Bank of China 5 Development Bank 4 SENIOR ANALYST: TOKYO +65 6403 5542 Export-Import Bank of Korea 19 Shanxi Qingxu Rural Formosa II OWF 38 Commercial Bank 4 Takahiro Okamoto CLIENT SERVICES Fujian Changle Rural Shenzhen Investment Holdings 22 +813 6441 1773 [email protected] Commercial Bank 4 Shriram Properties 31 Fuyo General Lease 9 Shui On Development (Holding) 23 ASIAN CREDIT CORRESPONDENT WEBSITE Gansu Provincial Highway Aviation Sichuan Transportation Investment Krishna Merchant www.ifrasia.com Tourism Investment Group 21 Group Corporation 21 +65 6417 4544 Hainan Airlines Holding 20 Sinopec Century Bright Capital EMAIL ADDRESSES Hainan Airlines (Hong Kong) 20 Investment 22 REPORTER: HONG KONG lRSTNAMELASTNAME RElNITIVCOM Hanergy Thin Film Power Group 25 Small Industries Candy Chan HDB 28 Development Bank 29 +852 2912 6672 HNA Group 26 State 29, 30 Hong Kong International Construction State Power Investment Corp 21 Group 26 Suncorp-Metway 19 Housing and Urban Development Ta-Ho Maritime 38 Company 30 Taizhou Infrastructure Housing Development Finance Corp 28 Construction Investment Group 21 Hunan Xiangjiang New Area Tata Power 29 HONG KONG (HEAD OFFICE) SINGAPORE Development Group 22 Telekom Malaysia 34 &û#ITYPLAZAû û û3CIENCEû0ARKû$RIVE û Hyflux 35 Temasek Holdings 35 û4AIKOOû7ANû2OAD û 3INGAPOREû û3INGAPORE 28 Tenaga Nasional 11 Indian Oil Corp 30 Taikoo Shing, ûû Thailand Future Fund 8 Indonesia Asahan Aluminium 31 Think Tank Group 19 (ONGû+ONG LONDON Infrastructure Leasing & Tokyo Century 9 ûû û3OUTHû#OLONNADE û#ANARYû7HARF Financial Services 30 Tokyu Fudosan Holdings 32 Innovent Biologics 25 TOKYO ,ONDONû%û%0 Tongcheng-Elong 24 International Finance Corporation 28 Treasury Corporation of Victoria 19 &û!KASAKAû"IZû4OWER û û ûû Investment Corporation of Bangladesh 6 TuanChe 25   û!KASAKA û NEW YORK Jaguar Land Rover Automotive 29 UEM Sunrise 33 Minato-ku, Tokyo, û4IMESû3QUARE ûTHû&LOOR Japan Real Estate Investment 9 Union Bank of the Philippines 8 *APANû  Jawa Satu Power 32 Vicinity Centres 19 .EWû9ORK û.9 ûû Jawa Satu Regas 32 Wanka Online 25 ûûûû Jilin Jiutai Rural Commercial Bank 21 World Peace Industrial 38 Joint Stock Commercial Bank for WorleyParsons 20 Investment & Development of Vietnam 33 Wpd 38 JSW Steel 31 Wuxin Yongsheng Real Estate 24 IFR Asia is a sister publication of International Financing Review. 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2 International Financing Review Asia October 27 2018 INTERNATIONAL FINANCING REVIEW ASIA Contents OCTOBER 27 2018 ISSUE 1064

COVER STORIES COUNTRY REPORT

BONDS 04 Chinese banks heed Tier 2 call 19 AUSTRALIA 33 MALAYSIA Chinese banks are accelerating their issuance of Treasury Corporation of Victoria State-owned funding vehicle targeted the short end of the DanaInfra Nasional has onshore Tier 2 bonds to replenish capital, as many domestic bond market with last mandated five banks to lead notes they issued in 2014–2015 turn callable in 2019. Tuesday’s A$2bn syndicated an offering of Islamic bonds to BONDS three-year sale. raise up to M$4bn. 04 Aussie banks lose market share 20 CHINA 34 NEW ZEALAND Australian bank issuance is about to pick up briefly, but Hainan Airlines priced a Kiwi Property Group has the longer-term supply trend is down, with a housing US$100m two-year non-put mandated three joint lead slump, tighter regulations and non-bank competition. bond at 13.17% yield to maturity. managers for a seven-year The coupon is 12%. Notes were fixed-rate senior secured retail BONDS issued at a discount price of 98. note offer, opening October 29. 05 AMP plans sub-notes after share bloodbath 26 HONG KONG 34 PHILIPPINES Scandal-hit financial group AMP picked a bad day to Chinese automobile glass Metrobank Card has launched a announce a roadshow for a potential Australian dollar- maker Xinyi Glass Holdings US$100m three-year term loan. denominated 10-year non-call five subordinated note. seeks to amend the covenant The bullet deal pays an interest on September’s HK$750m margin of 100bp over Libor and three-year bullet deal. has an unspecified greenshoe.

NEWS 28 INDIA 35 SINGAPORE 06 Dhaka stocks to get bond fillip World Bank affiliate IFC has Wastewater treatment Bangladesh’s state-owned investment agency is issued Rs7.4bn three-year company Citic Envirotech will Masala notes at a yield of 7.46%. redeem its US$355m 5.45% planning to take the unusual step of issuing bonds to Indicative guidance was 7.5% senior perpetual notes on the use the proceeds to support the local stock market. levels for the offshore issue. first call date of November 27.

07 Calsonic gears up for Magneti LBO Japanese auto parts maker Calsonic 31 INDONESIA 36 SOUTH KOREA Kansei is raising €5bn to acquire high-tech parts maker Magneti Marelli. Pertamina has postponed a Korea Southern Power has 08 Locals buy into Thailand Future Thailand Future Fund completed the proposed new US dollar bond mandated BNP Paribas kingdom’s largest IPO in three years due to support from local institutions. issue and called off a tender Suisse and UBS as lead 08 Metrobank leads bond charge Philippine banks are about to issue their offer for some of its existing managers for a Zurich first bonds since authorities stopped requiring prior approval for debt sales. paper. roadshow on October 30.

32 JAPAN 37 TAIWAN PEOPLE & MARKETS Afreximbank is holding a non- Panjit International and its unit 12 deal roadshow arranged by Panjit Asia International have StanChart mulls job cuts again MUFG in Tokyo this week ahead increased two five-year loans to is preparing fresh job cuts during of the maturity of a debut Ninja US$227m-equivalent from the the fourth quarter as its chief financial officer conceded loan it completed last year. US$191m-equivalent target. that the bank’s cost-cutting drive had stalled. 33 LAOS 38 THAILAND 13 Goldman Sachs changing Asia IB leadership Goldman Sachs veteran Lao Viet Bank launched a Muangthai Capital will invite banker Todd Leland will become Asia investment banking head. three-year term loan of up to institutional and high-net- 13 Sebi urges monitoring of end use of funds India’s regulator urged proper US$100m, returning to loan worth investors to subscribe to monitoring of the end use of funds after a series of defaults. market after an absence of three and four-year bonds from 12 Who’s moving where CIMB Group has appointed Mohd Nasir Ahmad as more than a year. October 30 to November 1. its new chairman, effective October 20. 15 In brief Singaporean Fintech startup Covalent Capital is planning on 34 MACAU launching its bond issuance platform OMAS next month. Sands China is self-arranging an unsecured US$2bn revolving credit facility to replace an ASIA DATA outstanding portion of a 2016 US$6.385bn loan. 39 This week’s figures

International Financing Review Asia October 27 2018 3 News Bangladesh stock support 06 Record Asian LBO loan 07 Philippine FIG 08 Chinese banks heed Tier 2 call

„ Bonds Supply rocketed in the interbank market in September – with more to come

BY CAROL CHAN the near term as banks need to issuance,” said Zhu. “The market expects these T2 replenish capital given tighter The analyst said a large amount bonds will be called. If issuers Chinese banks are accelerating controls on investment in of T2 paper issued in 2014 and decided not to call, that would their issuance of onshore Tier shadow banking products and a 2015 will start to turn callable in frustrate market expectations, 2 bonds to replenish capital, as potential rise of bad loans as the 2019 and issuers need to line up which I think issuers and a large amount of notes they economy slows down. funds to redeem these securities. regulators would not want to see. issued in 2014 and 2015 will start “Raising extra capital through According to CCDC data, Moreover, some T2 bonds have to turn callable in 2019. the stock market is very difficult Chinese lenders issued coupon step-up features if not According to data from now as the A-share market Rmb356.8bn and Rmb269.8bn called,” he said. China Central Depository & underperforms, whereas the T2 bonds in 2014 and 2015, Zhu noted that core Tier 1 Clearing, T2 bond issuance in bond market, in comparison, respectively, and most of these capital – mainly equity – for China’s interbank bond market still has room for more bank are 10-year non-call five notes. most publicly listed banks is increased 224% year on year quite adequate, but that they in September to Rmb199.8bn still need to beef up other capital (US$28.8bn), bringing the total buckets through offerings of for the first nine months to Additional Tier 1 and T2 notes. Rmb300.8bn, up 12% from the T2 issuers in September and same period in 2017. October included the big five The jump is all the more state-owned banks, national dramatic when compared with joint-stock commercial lenders China’s broader bond market. like CHINA CITIC BANK and SHANGHAI Total bond issuance in the PUDONG DEVELOPMENT BANK, city interbank market rose 37% in commercial lenders like September to Rmb1.6trn and ZHONGYUAN BANK and ZHEJIANG 1.7% to Rmb10.6trn in the first CHOUZHOU COMMERCIAL BANK, and nine months, according to CCDC. rural commercial lenders like Nicholas Zhu, a Moody’s vice FUJIAN CHANGLE RURAL COMMERCIAL president and senior analyst, BANK and SHANXI QINGXU RURAL expects the flood of onshore T2 COMMERCIAL BANK. bond supply will continue in The most striking name was

Rising interest rates, falling Aussie banks lose market share property values and an ageing population theoretically require „ Bonds Increased competition and lending slowdown reduce funding needs super funds to allocate more to fixed-income products, including BY JOHN WEAVERS the country’s embattled banks. Gradwell. corporate debt. Non-banks recorded year- Open banking, which kicks in In a groundbreaking deal Australian bank issuance is about on-year housing credit growth next year in Australia, requires last year AustralianSuper, the to pick up with three majors of 13% in August, against 4.8% banks to share the data they country’s biggest industry super coming out of blackout and for banks, according to ANZ hold about customers through fund, and fund manager IFM several subordinated notes due Research, while the Australian an application programming Investors lent A$150m over 10 to be refinanced, but longer- Bureau of Statistics reported interface (API). This will make years to private manufacturing term supply is on a downward non-banks’ share of housing loan it much easier for customers giant Visy Industries to refinance path as the sector grapples approvals climbing to 8.18% from to switch their savings and/or senior debt. with a housing market slump, 6.85% in August 2017. mortgages from current banks There was further growth last tighter regulations and non-bank “Non-banks have taken to cheaper and more efficient week when AustralianSuper and competition. advantage of tighter bank financial service competitors. property super fund Cbus backed Non-bank lenders, which are lending rules over the last couple Banks are also facing a 10-year A$100m facility by IFM not subject to the Australian of years and we expect them to competition in the corporate Investors for Essendon Fields, an Prudential Regulation Authority continue taking market shares lending market from airport and business park. standards, have benefited from as open banking, comprehensive the country’s immense “There has been a significant outrage over a series of domestic credit reporting and debt- superannuation industry, which increase in the number of banking scandals and stricter to-income limits come into had A$2.7trn (US$1.9trn) of super funds involved in loan lending regulations that target force,” said ANZ analyst Daniel assets as of June. transactions and the volumes

4 International Financing Review Asia October 27 2018 For daily news stories visit www.ifrasia.com Green Japan 09 KHFC euro covered debut 10 Aussie IPO window closed 10

the EXPORT-IMPORT BANK OF CHINA, term, bank capital securities are which became the only policy likely to remain one of the major AMP plans sub-notes bank to issue T2 notes. instruments for banks to boost It printed Rmb30bn 10-year their capital,” said Lam. after share bloodbath non-call five T2 notes at 4.83% on The China banking system’s September 27 and subsequently common equity Tier 1 ratio „ Bonds Stock plunge overshadows Aussie financial’s issued another Rmb30bn tranche stood at 10.65% as of end-June, Tier 2 roadshow at 4.71% on October 17. compared with a regulatory The big five and national joint- requirement of 8.5%–9.0% for BY JOHN WEAVERS Brenner resigned after AMP stock commercial lenders issued systemically important banks executives admitted in substantial amounts. BANK OF CHINA and 7.5% for other banks, Scandal-hit financial group testimony that the company had raised Rmb80bn from T2 bonds according to Moody’s. AMP could hardly have picked lied to the corporate watchdog in two tranches, while China Moody’s said the full phase-in a worse day to announce an for almost a decade to cover a Citic Bank priced Rmb50bn T2 of a capital conservation buffer Asian and Australian roadshow practice of charging customers bonds in two tranches in the past by end-2018 will result in higher for a potential Australian dollar- for services it did not provide. two months. capital requirements. At the denominated 10-year non-call S&P subsequently placed For rural commercial lenders, same time, risk-weighted assets five subordinated note offering. AMP on credit watch negative sizes have been as small as growth will remain higher than Last Thursday’s mandate, as it assesses the reputational Rmb300m, like the offering total asset growth as a result of awarded to ANZ, CBA, NAB and damage to AMP’s brand, from Shanxi Qingxu Rural the migration of some previous UBS, coincided with a 24.5% while Moody’s declared “AMP Commercial Bank, which priced shadow banking assets back to plunge in the 169-year-old governance failures alleged a 10-year non-call five at 5.80%. loans on bank balance sheets. company’s share price after it at the Royal Commission into Banny Lam, head of research “Banks that experience revealed investors had shifted the financial sector are putting at CEB International, said fast growth in RWAs could be A$1.5bn (US$1.06bn) out of its additional pressure on its Chinese banks’ capital needs challenged in their management business in rating”. will remain huge due to stricter of capitalisation without external the three months to September. In June, investors appeared capital rules and deteriorating capital injections because the The latest decline, following to push back on AMP Group’s asset quality, as China grapples internal generation of capital A$243m of withdrawals in debut Swiss bond offering, a with an escalating trade war from retained earnings alone the second quarter, took SFr110m (US$112m) 0.75% 4.5- with the US, Fed monetary might not be able to support the division’s total assets year note which priced 85bp tightening and weak emerging rapid growth in RWAs,” the under management down to wide of mid-swaps, well outside market currencies. rating agency said. “These A$132.6bn, with more client initial 65bp–70bp soundings. “With China’s A-share market developments will continue to exits in the pipeline. In September, AMP Bank sold expected to continue to fluctuate drive banks’ capital raising in the Anglican National Super said a A$400m three-year floating- and face pressure in the short next 12-18 months.” „ it will move its A$250m pension rate note which paid a premium fund to pastures new, while for parent AMP Group’s Australia Post has dropped AMP prominent role in Australia’s committed as they look to put a natural preference for cheaper as its default manager. financial scandals. more money to Australian onshore issuance it is overseas Investors were also alarmed AMP may have little choice businesses, especially for longer- markets which should bear by AMP’s announcement that but to proceed with the term lending,” said Gavin the brunt of the overall supply it would sell its life insurance upcoming roadshow given that Chappell, head of syndications contraction,” he said. and wealth protection business its outstanding A$325m Tier 2 Australia at ANZ. Indeed major bank US dollar to British Resolution Life for note is expected to be called on “In addition we are seeing issuance has fallen to US$11.7bn A$3.3bn, which is almost a fifth December 18. greater participation from so far this year from US$20.25bn below book value. The 10-year non-call five AMP international banks which have in the same period in 2017 while The company also plans to Notes 2, rated BBB+ (S&P), were returned to the loan market en euro issuance is slightly higher divest its New Zealand wealth issued in December 2013 and masse over the last three years, at €8.25bn versus €7.75bn, management and advice pay a coupon of 265bp over 90- having withdrawn or scaled according to Refinitiv data. business through an IPO in 2019 day BBSW. down their Australian presence Such a slowdown is helpful to release capital to the group. On August 29 this year, during the global crisis.” from a pricing perspective as AMP, which provides Suncorp Group sold a A$600m A Sydney-based DCM manager scarcity value generates tighter superannuation and investment 10.25-year non-call 5.25-year predicts a decline in bond outcomes in the primary and products, insurance, financial Tier 2 note, rated BBB+/A– (S&P/ issuance from Australia’s four secondary markets for the advice and banking products Fitch), in Australia’s wholesale dominant banks as lending still well-regarded (by bond in Australia and New Zealand, market at three-month BBSW growth slows to around A$95bn– investors, at least) Double A rated is perhaps the biggest casualty plus 215bp. $100bn in fiscal year 2019, Australian major banks. of the widespread homegrown AMP’s investor meetings largely for refinancing, which Reduced supply also soothes scandals that have ravaged its begin in Hong Kong on October would be almost A$20bn below these banks’ perceived Achilles previously positive reputation. 30 and continue in Singapore, recent annual levels. heel – an over-reliance on In April, chief executive Craig Melbourne and Sydney over the “Since Australian banks have offshore funding. „ Meller and chairman Catherine next three days. „

International Financing Review Asia October 27 2018 5 News Dhaka stocks to get bond fillip „ Bonds/Equities State-owned agency plans to prop up slumping Bangladesh shares

BY DANIEL STANTON The Dhaka ’s but a lot of insurance chips,” said Hugger. DSE 30 index has dropped 16% companies, leasing companies The equity market is Bangladesh’s state-owned this year and the Chittagong and banks are trading at 6x–7x, dominated by locals. Setting investment agency is planning Stock Exchange’s CASPI index so the financials are dragging up a custody account for stocks to take the unusual step of is down 14%, compared with down the index. Some non- is a lengthy and cumbersome issuing bonds so that it can use drops of 2%, 7% and 9% for financial stocks are trading process, and foreign stock the proceeds to support the indices in Pakistan, Vietnam at 25x–30x. From a valuation investors are subject to a 15% local stock market. and Sri Lanka, but Bangladesh’s point of view, stocks don’t capital gains tax. The INVESTMENT CORPORATION OF “The market is very retail- BANGLADESH is readying a Tk20bn “The index is trading at around 17x price-to- driven, and the other big (US$239m) subordinated earnings, but a lot of insurance companies, market participants are banks,” bond offering to help fund its said Hugger. “A lot of banks’ investments in local stocks, leasing companies and banks are trading at earnings are driven by the stock which, like most emerging and 6x–7x, so the financials are dragging down the market, which is very volatile.” frontier equities, have fallen index. Some non-financial stocks are trading When the Dhaka market this year. at 25x–30x. From a valuation point of view, slumped 40% between the peak The bonds have an initial stocks don’t really need any extra help, with the of December 2010 and February tenor of five years, but the 2011, 18 financial institutions issuer can extend it by a further exception of banks.” were found to have invested two years. The coupon is 9% more than 25% of their total for the first five years, rising valuations are strong compared really need any extra help, with liabilities in the stock market, by a further 2% for the final with other countries. the exception of banks.” and eight of those had invested two years if not called. The “The market in general is Daily trading turnover is more than 50%, according to a offer is open to individuals and pretty expensive, and it is around US$225m–$250m, central bank report cited by the institutions. quite difficult to find value but which is fairly liquid. ICB is World Bank. ICB, which is rated AAA by recently some of the consumer understood to be planning Under the capital market Argus Credit Rating Services, names we like have become to invest around US$180m exposure rule, Bangladesh was established in 1976 with more attractively valued,” said in Bangladeshi stocks, so Bank does not allow banks to the objective of developing the Thomas Hugger, CEO of Asia depending on whether it makes invest more than 25% of their country’s capital markets and Frontier Capital. Bangladesh the stock purchases on one day capital in the stock market. mobilising savings. In the 2016- is the second-biggest holding or over a period of time it could On October 9, Bangladesh 17 financial year, which ended in the firm’s AFC Asia Frontier have a substantial impact on Bank announced that banks’ on June 30, it invested Tk120bn Fund, after Vietnam. prices. investments in the ICB bond in capital markets, up 34% from “The index is trading at “If they invest a lot at once, would not count towards their the same period a year earlier. around 17x price-to-earnings, it could move some of the blue capital market exposure limit. ICB said it tries to address imbalances in the capital market, whether shares are undervalued or have risen too far beyond their fundamentals. “In each case, ICB uses its funds and portfolios responsibly in an effort to stabilise the situation,” it wrote in its annual report. The government of Bangladesh owns a 27% stake in ICB, while state-owned commercial banks and insurance companies held a further 60.72% in aggregate of the shares as of June 30 last year. The public held a 1.63% stake. The proposed ICB bonds offer a healthy pick-up over Bangladesh’s onshore government bonds, which yield 5.48% for five years, according to Refinitiv data.

6 International Financing Review Asia October 27 2018 For daily news stories visit www.ifrasia.com

A recent measure to limit outflows demonstrated some Calsonic gears up for Magneti LBO of the additional risks investors face, perhaps explaining why „ Loans KKR-owned auto parts maker drives in with largest Asian LBO financing the buyside has yet to develop further. BY WAKAKO SATO buyout. The total outstanding led consortium’s A$7.62bn This year, some fund debt for both companies will acquisition of New South Wales managers won government Japanese auto parts maker be around ¥1trn, representing power grid Endeavour Energy. approval to extend by 10 years CALSONIC KANSEI is raising about leverage of less than six times. the maturity of funds with €5bn (US$5.76bn) to support its “The leverage multiple is INTO THE TOP TEN about US$1bn of assets under €6.2bn acquisition of the high- quite modest because of the The acquisition will create management that were to be tech car parts unit of Italy’s Fiat auto parts sector,” one source the world’s seventh-largest wound up or made open-ended Chrysler Automobiles, in what said, pointing to the robust funds by 2023, which would will be Asia’s largest leveraged combined earnings of the two have allowed investors to buyout loan. entities and the synergies the withdraw their money. , MUFG, acquisition will bring. “Extending the mutual funds’ Sumitomo Mitsui Banking Corp The Magneti financing term without the consent of and Sumitomo Mitsui Trust INTERNATIONAL SCOPE the investors sends a negative Bank have underwritten the Shares of Calsonic and Magneti creates a record for signal, damages confidence, €5bn-equivalent seven-year will form the collateral for the largest LBO loan and impedes the development senior financing backing the the new loan, three-quarters from Asia, eclipsing a of the institutional investor buyout of MAGNETI MARELLI, of which will be denominated A$5.9bn (US$4.5bn) base, a much-desired objective,” which specialises in lighting, in yen and the remainder in club loan closed in wrote the World Bank in a powertrain and high-tech euros. June last year to fund a report this month. electronics. That should help widen Economic factors are Calsonic Kansei is following the universe of lenders, with -led expected to be supportive a different syndication strategy existing European lenders to consortium’s A$7.62bn for equities, with incomes compared with its previous Magneti keen to renew their acquisition of New in Bangladesh still low but loan that was agreed 18 months relationships with the target South Wales power growing fast. Official statistics ago. That ¥430bn (US$3.9bn and forge a new one with grid Endeavour Energy. put the country’s GDP growth then) seven-year facility, which Calsonic. International banks in at 7.9% in the 2018 fiscal year, backed its leveraged buyout by Asia have already been sounded and it could benefit from US private equity giant KKR, out on the new loan. tension between the US and However, tight pricing and China. abundant liquidity among the “Bangladesh and Vietnam four Japanese leads could lead independent automotive should be big beneficiaries to limited syndication. The components supplier with of the trade war between the Tight pricing and pricing of the new financing €15.2bn in revenue, Calsonic US and China,” said Hugger. is likely to be similar to the said. “If you are a US company and abundant liquidity previous ¥430bn LBO loan, Calsonic relies on Japanese purchasing Chinese textile among the four which paid around 200bp over carmaker, and former commodities and simple Japanese leads Libor. shareholder, Nissan Motor for apparel, and you are slapped could lead to limited “I am hearing it is a Japanese most of its sales, and KKR has with a tariff, it makes sense syndication. “I am pricing which is probably too said it will help it to expand to buy some products from tight for European banks,” one globally. Vietnam and Bangladesh hearing it is a Japanese of the sources said. Fiat Chrysler said it would instead.” pricing which is Nonetheless, the Magneti enter into a multi-year However, upward probably too tight for loan will give a significant fillip agreement to secure supplies to momentum in the local European banks,” one to LBO volumes in Japan, which its plants and also to maintain stock market is expected to of the sources said. have stalled to a mere US$264m operations and staff in Italy. be weighed back by political from two deals this year after Calsonic is paying 17x concerns in the near term. enjoying a bumper crop last Magneti’s estimated earnings “Until the [general] election year with a tally of US$6.92bn for 2019, according to a Reuters next year we expect the stock from 12 LBO loans. Activity in report on October 22. CK market to be moving sideways 2017 was robust with Calsonic’s Holdings, the borrower and or slightly softer,” said Hugger. was a rare Japanese covenant- ¥430bn LBO loan topping the Calsonic’s holding company, “The two political parties are lite deal. charts – it was the largest LBO will change its name to Magneti fighting very hard, and there Five banks clubbed the from Japan. Marelli CK Holdings once the could be violent strikes (hartals) financing despite the large size The Magneti financing acquisition is completed. in which the whole country is and a somewhat high leverage creates a record for the largest Calsonic’s buyout of paralysed. The stock market of 5.7x. That loan will remain LBO loan from Asia, eclipsing Magneti is expected to be gets very volatile and nervous untouched and will not be a A$5.9bn (US$4.5bn) club completed in the first half two or three months before an refinanced as Calsonic raises loan closed in June last year of 2019 and is subject to election.” „ the new loan for Magneti’s to fund a Macquarie Group- regulatory approvals. „

International Financing Review Asia October 27 2018 7 News Locals buy into Thailand Future

„ Equities Foreign investors stay away on rate increase concerns

BY S ANURADHA local institutions. entirely allocated to local month, where foreign investors The trust owns toll roads investors. were the main buyers in the State-owned infrastructure trust including ’s Chalong The lack of interest of foreign institutional tranche. “The THAILAND FUTURE FUND completed Rat Expressway and the elevated investors did not come as a consumer sector continues to the kingdom’s largest IPO in Burapha Withi (Bang Na) surprise as concern over rising grow in Thailand but the same three years thanks to support can’t be said of infrastructure from local institutions even as which has seen many delays in foreign investors stayed away. “Thailand is now being considered a safe haven of recent years,” the banker noted. TFF last week raised Bt45bn sorts in Asia. It’s one of the few Asian economies However, Osotspa’s weak (US$1.4bn) through its IPO, with a current account surplus and while elections listing may have put off foreign having priced it at the bottom are due early next year, we have been witnessing a investors. The shares traded at of a 4.75%–5.30% range. The decent phase of political stability.” Bt24.20 last Friday against the float is the biggest in Thailand IPO price of Bt25, having lost since Jasmine Broadband’s most of the gains made shortly Bt37bn infrastructure fund Expressway linking the capital to interest rates in the US has after listing on October 17. listing in 2015. the eastern economic corridor. made them averse to yield- The fact that foreign Local investors made up most TFF has to be majority based instruments in emerging investors, who have been net of the 50 accounts joining the owned by local investors markets. “Infrastructure, yield sellers of Thai stocks so far this institutional tranche while under Thai government rules. instruments are low on their year, have reduced the pace of participation from foreign Foreign investors, who were shopping list,” an ECM banker their selling did not help the investors was very limited, also given a chance to join the away from the deal said. TFF deal. according to a person close to transaction, decided to pass. This was in contrast to the “Although the intensity of the deal. The 15 cornerstone Eventually, shares in the Bt15bn IPO of energy drinks the sales has declined, the TFF investors in the IPO were also institutional tranche were maker Osotspa earlier this IPO didn’t have much to offer

as well as the lower reserve Metrobank leads bond charge requirements for bond issuance compared to LTNCDs, will „ Bonds Philippine banks to test appetite for bonds after rule change encourage the banks to seek out opportunities through this BY KRISHNA MERCHANT As a result, major banks Philippine Stock Exchange. channel,” said Simon Chen, vice like CHINA BANKING CORPORATION In the past two months, five president and senior analyst in Major Philippine banks are (China Bank) or BANK OF THE domestic banks – BPI, UNION BANK Moody’s financial institutions preparing to issue bonds and PHILIPPINE ISLANDS never issued OF THE PHILIPPINES, BDO UNIBANK, group. commercial paper for the first domestic bonds before, funding PHILIPPINE NATIONAL BANK and LTNCDs have been popular time since the central bank themselves instead through Metrobank – received board because domestic investors who dropped a rule requiring prior deposits, LTNCDs, rights issues approvals to raise a combined hold such instruments for more approval for debt sales. or offshore bonds. total of up to Ps270bn from than five years are exempted In a circular published on Following the circular, bonds or CPs. China Bank from 20% withholding tax. August 9, Bangko Sentral ng domestic banks have begun earlier announced a Ps50bn “We believe in the future there Pilipinas said it would allow planning maiden bond issues. programme to issue LTNCDs will be a tax rule change; the banks to raise bonds without The METROPOLITAN BANK TRUST and bonds. withholding tax exemption for prior authorisation, subject to COMPANY (Metrobank) could “Fundraising through LTNCDs will be scrapped,” said certain requirements regarding be the first to market. It is bonds is a cheaper option for BPI Capital’s Bonoan. corporate governance, planning to raise at least Ps2bn banks compared to traditional Banks now have the risk management, capital (US$37m), with an option to instruments such as long- flexibility to issue bonds adequacy and other similar upsize, from peso bonds within term negotiable certificates of across the yield curve and issues. Although banks were the next three weeks, according deposits,” said Franz Bonoan, even CPs of less than one year, not formally prevented to a source close to the plans. managing director at BPI DCM bankers note. That will from issuing bonds before, “It will raise a small amount Capital. add welcome depth to the permission was difficult at the shorter end of the yield In addition, the reserve Philippine capital market, to obtain and most banks curve to test the market,” said requirement rate for bonds where corporate bond issues preferred issuing long-term the source. is 6%, compared with 7% for are rare and tend to be sold negotiable certificate of deposit The bank has mandated LTNCDs, which are a form of through private placements. (LTNCDs) to their depositors – Standard Chartered Bank as sole time deposit. “New bank bonds will give an easier option as this type of arranger to offer two to five- “The recent initiatives to institutional and retail investors paper is in high demand and year domestic bonds, according further streamline and simplify a chance to diversify from the enjoys tax exemptions. to a recent filing on the the bond issuance process, usual blue-chip companies who

8 International Financing Review Asia October 27 2018 For daily news stories visit www.ifrasia.com

by way of yield or growth,” a country has been ruled by a local analyst said. military junta since a coup in Japanese bond market May 2014. BIG FLOATS PTT OIL AND RETAIL, a subsidiary turning greener While foreigners shunned of Thailand’s largest energy TFF, they are looking forward company PTT, plans to raise „ Bonds Success of earlier issues and government subsidy to some large IPOs next year around US$2bn through an IPO unleash more supply as Thailand remains a more next year. promising market than others Meanwhile TCC Group is BY TAKAHIRO OKAMOTO per issue. in South-East Asia. currently in the process of Ricoh Leasing was the first The benchmark Stock hiring banks for a US$1bn– Green bonds are becoming a to get the subsidy for its Green Exchange of Thailand index is $1.5bn IPO of its local property common feature in Japan, with bond in August, followed by down 8.5% year to date while unit ASSET WORLD CORPORATION and seven private companies and a Hitachi Zosen in September. the Thai baht has fallen 1.2% also Central Group for its retail municipal government already The number of subsidised deals against the US dollar. The business IPO of at least US$1bn. tapping the domestic market now totals six. financial markets in regional Both floats are expected next since the beginning of October. A banker said some of neighbours such as Singapore, year. Leasing company TOKYO the surge this month can be Indonesia and the Philippines A total of 4.5bn units were CENTURY, rated A/A+ (R&I/JCR), was explained by the fact that have weakened more in sold in the TFF float. After the the first out of the gate with a companies began preparations comparison. IPO, retail investors will own ¥10bn (US$89m) 0.20% five-year after they saw successful trades “Thailand is now being 50% of the fund, Thai institutions Green bond. Things hotted up that priced late last year and considered a safe haven of 40% and the Ministry of Finance in the second week of October, early in the fiscal year, and these sorts in Asia. It’s one of the few 10%. The shares start trading on with offerings from ANA HOLDINGS, are now surfacing. “Some issuers Asian economies with a current October 31. METROPOLITAN OF TOKYO, OBAYASHI, started preparing after they saw account surplus and while Merrill Lynch, MARUI GROUP, and DAIO PAPER. the Green bonds sold by Toda in elections are due early next Finansa, JP Morgan, KrungThai Airline ANA, rated A–/A (R&I/ December and Mitsubishi UFJ year, we have been witnessing Bank and Phatra Securities are the JCR), sold ¥10bn of 0.474% 10- Lease & Finance in April,” said a a decent phase of political joint global coordinators on TFF year bonds. Metropolitan of Japanese DCM banker. stability,” the analyst said. The IPO. „ Tokyo offered such bonds for The ministry’s scheme is the second year in a row with adding to the momentum as ¥5bn of 0.02% five-year and external reviewers are becoming have been frequent issuers in banks are primarily funded ¥5bn of 1.004% 30-year bonds. more familiar with it. Under the the local capital markets to by customer deposits. “Loan- Construction firm Obayashi, scheme, it is external reviewers, names that have just as strong to-deposit ratios have been rated A+ by R&I, sold ¥10bn not issuers or bankers, who a credit standing,” said Ryan steadily rising over the last five of 0.13% five-year notes, while apply for a subsidy. “External Martin Tapia, president of years as loan growth outpaced retail company Marui, rated reviewers are getting used to the China Bank Capital Corp, the deposit growth. Due to the high A– by R&I, chose to issue one of procedure,” said another DCM investment banking subsidiary cash reserve requirement set two tranches in a Green bond banker. of China Bank. at 18% of deposits, Philippine format, selling ¥10bn of 0.19% The investor base is also BPI Capital’s Bonoan expects banks are supplementing five-year notes. Daio Paper, expanding as more and more institutional investors such as their funding mix with other rated BBB+ by R&I, came with investors are seeking bonds banks, insurance companies, funding sources such as bonds,” ¥15bn seven-year and ¥5bn 10- that support sustainable trusts and pension funds to said Chen from Moody’s. year portions, with coupons of development goals. Life insurers invest in the bonds. While local banks gear 0.605% and 0.864%, respectively. are traditional Green bond up to tap the onshore debt Last week saw two additional buyers, along with regional FUNDING GROWTH market, high rates could act as Green bond transactions from banks, but the second DCM As the Philippine economy a dampener. Annual consumer JAPAN REAL ESTATE INVESTMENT, rated banker said corporate investors continues to grow at around price inflation rose to a nine- AA by R&I, and FUYO GENERAL are also now showing interest, 6.5% per year, “the banking year high of 6.7% in September, LEASE, rated A–/A (R&I/JCR). Both including unusual ones such sector will require substantial which has prompted the sold ¥10bn of five-year notes as recycling companies. sums to match the significant central bank to raise rates by with respective coupons of Meanwhile, it is now common requirements of infrastructure 150bp since May 2018. 0.23% and 0.21%. practice for bankers to pitch initiatives”, said Alex Escucha, Moody’s expects more rates Tokyo Century, ANA, Daio Green or Social bonds to issuers. senior vice president for China increases over the next 12-18 Paper and Fuyo received Green bonds do not Bank. months. “Demand among local subsidies from the Ministry of necessarily price at tighter levels Therefore, domestic banks retail and institutional investors Environment, which is keen than traditional bonds, but are looking at all kinds of for bank-issued fixed income to encourage Green bond they benefit from good investor instruments to supplement instruments have historically issuance. The ministry set up demand. “A headwind is actually their funding bases in order to been strong, however investor the subsidy scheme earlier blowing against the corporate support strong loan growth at sentiment will be dampened this year to reduce the costs bond market right now because mid-to-high teen percentage by the domestic inflationary and administrative burdens of rising five-year JGB yields, but points over the next 12-18 pressures and increasing of such bond offerings. The selling five-year Green bonds months, according to Moody’s. market expectations of rising subsidy covers the full cost of does not bother us at all,” said At the moment, Philippine interest rates,” said Chen. „ an internal review, up to ¥50m the first DCM banker. „

International Financing Review Asia October 27 2018 9 News KHFC makes euro covered debut

„ Bonds Yield pick-up helps Korean housing company negotiate volatile market

BY FRANCES YOON a regulatory framework that and can offer a structure that is WEAK MARKET governs the government similar to those issued at home. Wary of ongoing market KOREA HOUSING FINANCE CORPORATION, entity’s covered bonds. Liquidity is also better. We’re volatility, KHFC spent a rated Aa2/AA– (Moody’s/Fitch), “It was a big move to deviate hoping that this deal will set week gathering IOIs before issued its first euro covered from the US dollar covered a good benchmark for more announcing the deal at mid- bond, detouring from its bond market, where they have issuance from Korea. swaps plus 50bp area on usual US dollar route after it traditionally issued for years,” “We were surprised to Wednesday. got stronger feedback from said another banker on the see that we attracted more Comparables included the European investors in a soft deal. “We were able to find covered bond investors in Singaporean covered bonds market. out during the roadshow that our deal than similar deals from DBS and UOB, which were The €500m (US$573m) five- Europe is indeed the deepest recently.” trading in the mid-swaps plus year covered bond priced at market for covered bonds, The transaction is also the 10bp–15bp area, and Korean mid-swaps plus 40bp, drawing and investors will appreciate first Social covered bond from state-owned banks such as final orders of over €1.65bn. the commitment to building a Asia. In Europe, there is a lot Kexim and KDB’s euro bonds, At three times covered, curve. If they do this correctly, of overlap between demand which were around the 30bp the transaction was deemed this market will be available.” for Social bonds and demand area. a success given that this was for covered bonds, so the “It came tighter than we the Korean state entity’s first REGULAR EURO ISSUANCE deal ticked a lot of boxes for would have done a dollar deal foray in euros, and also the Shin Seung Yong, KHFC’s investors, another banker on on a swaps basis, but it was first for a Korean issuer in that securitisation planning team the deal said. mainly because they want to currency for covered bonds. head, told IFR that the issuer KHFC helps provide come back to the euro market KHFC is solely responsible plans to sell covered bonds affordable housing for low- – there’s not really a covered for implementing the on a regular basis in the euro income families and socially bond buyer base in dollars, it’s government’s housing finance market from next year. underprivileged households. a bit hit and miss,” said a lead. policies. “US investors are familiar Its role has become crucial “And this deal will trade The deal structure had the with Korean names, which are amid soaring home prices in much tighter quite quickly.” traditional, familiar elements frequent issuers in US dollars. the country’s capital of Seoul, The spread on offer is at the sought by European investors, Korea also issues sovereign which prompted President higher end of the euro covered including a dual recourse bonds in dollars,” said Shin. Moon Jae-in to implement bond spectrum – only Italian, structure and asset segregation. “But European investors liked multiple rounds of cooling Spanish, Greek and Polish paper It falls under the KHFC Act, that we are a stable jurisdiction measures. have priced wider this year.

the Australian government’s PEXA waits amid market sell-offs initiative to deliver a national e-conveyancing solution to the „ Equities ASX IPO postponement comes after Coronado cuts deal size country’s property industry, PEXA is reported to have made BY CANDY CHAN overnight. The benchmark ASX “The IPO window is closed,” losses of A$40m in 2016 and 200 index fell 2.83%, taking its said Jason Teh, chief investment A$79m in 2017. PROPERTY EXCHANGE AUSTRALIA one-month drop to 8.76%. officer at Sydney-based Vertium However, it is expected (PEXA) has delayed a proposed Against this backdrop, PEXA Asset Management. “With to turn profitable after state ASX IPO of up to A$862m failed to generate enough the stock market sending governments mandated that (US$610m) as investors have institutional demand. The a cautious note, not many all property transactions turned cautious amid global company, which was scheduled people would want to pay high must be conducted via an market sell-offs. to list on the ASX on November multiples for a fast-growing electronic platform, replacing The Australian online 22, was slated to lodge its company.” the traditional paper-based property settlement services prospectus last Friday before At a planned deal size of system. Victoria has kick- provider put the deal on pause opening books for retail buyers A$753m–$862m, PEXA was started the practice in October, on the last day of institutional from November 5 to November poised to surpass MYOB’s while Western Australia will go bookbuilding last Thursday, 13. A$833m float in 2015 and digital by December and New a person with knowledge of PEXA’s postponement came become Australia’s biggest South Wales in July next year. the matter said, adding that a week after CORONADO GLOBAL domestic listing by a the board would monitor the RESOURCES slashed its ASX IPO technology services firm. The PRIVATE SALE? situation over the next couple size by 33% to A$774m. Despite company set a price range The IPO delay may put a private of weeks. pricing a smaller deal at the of A$13.60–$15.80 per share, sale option back on the table. Asian markets saw deep sell- bottom of the indicative price representing an enterprise PEXA declined a A$1.6bn offs last Thursday following range, its shares fell 10% on value of A$1.8bn–$2.1bn. offer from a consortium led a sharp drop in US markets their trading debut last Tuesday. Formed in 2010 to fulfil by shareholder Link Group

10 International Financing Review Asia October 27 2018 For daily news stories visit www.ifrasia.com

Singapore’s UOB priced a €500m months after the maturity date September 2023 (Aaa/NR/AAA) to pay back the bonds. Tenaga uncovers considerably tighter, at swaps Korea’s Kookmin Bank was plus 7bp, in September. able to get a Triple A rating 10-year demand That is partly down to the for a US$500m five-year KHFC bond’s expected rating covered bond in 2015, but „ Bonds Malaysian utility attracts quality accounts against of Aa1 by Moody’s, as well a the commercial bank at the tricky backdrop smaller investor pool than for time included mechanisms more established borrowers. that insulated offshore swap BY FRANCES YOON “The market presented itself Singaporean banks, by contrast, counterparty cashflows from to be not the best, but the issuer have become relatively any sovereign risks. TENAGA NASIONAL, rated A3/BBB+ framed the deal well during the frequent issuers since their first EMEA accounted for 90% (Moody’s/S&P), successfully raised roadshow. The credit is solid euro covered trade in 2016. of the KHFC deal, with the long-term funds in a fragile and the quality of this book was KHFC’s Shin recognised the remainder going to Asian market that was still recovering good,” said the first banker. “We merits of frequent issuance, investors. Asset and fund from recent losses and kept could have pushed for more and underscoring his resolve to managers bought 60% of the other US dollar issuers away. had 160bp in our pocket, but come to the euro market again notes, banks took 24% and the Malaysia’s largest electric we didn’t, judging by the softer to help tighten pricing in the rest went to central banks. utility priced a US$750m 10- sentiment. People appreciated future. KHFC’s Social covered bond year bond at Treasuries plus that.” KHFC’s covered rating is framework was established 170bp, allowing it to term out The notes were spotted at higher than those of the issuer to raise funding to finance or maturities beyond 2025 and 165bp/163bp the next day. and the sovereign, but lower refinance KHFC’s mortgage 2026. Moody’s said Tenaga’s than the Triple A covered bond loan products and provide Appetite from the Middle East financial profile is expected to ratings of DBS, OCBC and UOB. stable and long-term housing for the first Asian corporate US weaken over the next three A banker on the deal explained finance. The framework dollar sukuk since 2016 was years, after factoring in the new that KHFC’s latest covered bond complies with the ICMA Social modest. A banker on the deal sukuk, planned capital spending has a hard-bullet structure, Bond Principles and has been explained that Middle Eastern and a new tariff. Tenaga is also under which the principal is reviewed by Sustainalytics. interest was currently skewed to planning to invest in emerging due after five years. The 144A/Reg S and 3c7 domestic assets given higher oil economies with strong growth That contrasts with some bonds will be backed by Korean prices and a stronger US dollar. potential. Moody’s warned that other jurisdictions such as the residential mortgages. Concerns about sales of this could expose it to uncertain UK, Canada, Singapore and BNP Paribas, DBS Bank, ING Malaysian assets by foreign regulatory and operating Australia, in which Triple A and Societe Generale were joint investors and trade tensions also environments, such as a recent ratings are made possible by bookrunners and joint lead softened investor appetite, the M$206.5m (US$50m) asset soft-bullet structures that give managers for the Social covered banker said. The World Bank this impairment in Turkey. the issuer an additional 12 bond offering. „ month said Malaysia’s economy Fair value was based on is expected to grow at a slower- Tenaga’s outstanding October than-expected 4.9% this year due 2026s, which were spotted in favour of an IPO. But with PEXA is owned by a to cancellations of infrastructure at the Treasuries plus 145bp the float in limbo, it may now Macquarie-led consortium. projects and the trade situation. level. Adding a two-year curve reconsider. Macquarie has a stake of Tenaga’s shares are down 7% extension brought fair value to Some bankers close to the around 23.9%, followed by in the year to date, while the 155bp–160bp, leaving a new deal, however, believe PEXA has Link Group at 19.8%. The other yield on its US$750m 3.24% 2026 issue concession for investors of a sound story to tell in an IPO. investors include Western bond spiked more than 20bp in around 10bp–15bp. The company is currently Australian Land Information the second quarter, according to Initial price guidance had been the only electronic platform Authority and the Refinitiv data. announced on Tuesday morning in Australia on which property Australian banks – Australia Malaysia will continue to face at 190bp area. market participants can settle and New Zealand Banking substantial risks because of the The Reg S issue drew final real estate transfers online. Group, uncertain external environment, orders of over US$1.25bn from “The beauty of simplicity has of Australia, National Australia the World Bank said. 94 accounts. made the business appealing, Bank and . Since the election victory of Of the notes, 82% went to Asia, and that would drive a lot of Link intends to sell Mahathir Mohamad’s coalition 15% to Europe, and 3% to the interest to this float because it’s approximately 12.5m of the in May, the new administration Middle East. By investor type, easy for Australian people to 26.5m shares it currently holds has pushed to review major 44% went to fund managers, 42% understand how this business through the IPO. infrastructure projects launched to banks, and 14% to insurance, works and how much time and PEXA was expected to by the previous government. pension funds and sovereigns. money it could save,” said one receive about A$80m from However, the ringgit has The bonds will be drawn from of the bankers before the deal the IPO through the sale of weathered volatility better a multi-currency sukuk issuance was put on hold. primary shares. It plans to use than its Asian peers, with the programme via TNB Global A likely comparable of the the proceeds to invest in its currency down only 2.8% so far Ventures Capital. The sukuk business is NYSE-listed software digital service and for general this year against the US dollar. is expected to be rated A3/BBB company Ellie Mae, which was corporate purposes. The Indonesian rupiah and (Moody’s/S&P). valued at US$2.76bn as of last Macquarie and Indian rupee have weakened 12% BNP Paribas, CIMB, Citigroup and Thursday. are working on the deal. „ and 15% during the same period. HSBC were joint bookrunners. „

International Financing Review Asia October 27 2018 11 People &Markets

TOP STORY BANK STRATEGY StanChart mulls job cuts again Anglo-Asian lender struggling to keep a lid on costs

STANDARD CHARTERED is preparing for a REVENUESûFORûTHEûlRSTûHALFûTOû53BN û month, the bank announced plans to close potential fresh round of job cuts during the although this was again overshadowed by a its equity derivatives and convertible bonds FOURTHûQUARTERûASûITSûCHIEFûlNANCIALûOFlCERû ûJUMPûINûOPERATINGûCOSTSûTOû53BN businesses. conceded that the bank’s cost-cutting drive Winters has consistently maintained In 2016, StanChart also started had stalled. that the bank remains on course to meet cutting around 10% of its corporate and “We have made virtually no progress its medium-term target of an 8% return institutional banking headcount, only a few since May when we adjusted our budgets on equity by the end of the year. Its ROE months after Simon Cooper was installed as in reducing our cost base,” StanChart ATûTHEûENDûOFûTHEûlRSTûHALFûSTOODûATûû CEO of the new division. CFO Andy Halford said in an email to Several analysts queried whether this was Recently, it has started trimming senior managers at the bank that was feasible. coverage focus in certain sectors that are subsequently leaked. h4HEûQUESTIONûFORûINVESTORSûAROUNDûCOSTû more heavily dominated by US and some Halford, who asked managers to outline control – which is a key contributor to the %UROPEANûRIVALSû4OBYû'ROSER ûCO HEADûOFû plans to lower expenses, including job cuts planned operating leverage designed to the general industries group in Asia, and and reduced investment spend, said that TAKEûTHEûGROUPSû2/4%ûRETURNûONûTANGIBLEû Dominic Richards, head of Asia media and the bank’s position was exacerbated by a EQUITY ûTOûûINûTIMEûnûISûWHETHERûTHEûlRMû telecoms coverage, are among those to recent slowdown in income that would is actually investing enough to compete,” have left. likely continue into the fourth quarter. said UBS analyst Jason Napier. h4HEYVEûOBVIOUSLYûBEENûTHROUGHûAûMAJORû “We have previously stated that our h3TAN#HARTûISûPRODUCINGûAû2/4%ûUNDERû restructuring programme for good reason second-half expenses will be similar to HALFûTHATûOFûTHEûMAINûlRMSûWITHûWHICHû but there comes a point where you have OURûlRST HALFûEXPENSESû4HATûREMAINSûOURû is competes, which reduces its ability to to ask ‘how much more fat is there left to VIEWûnûASûWEûWILLûCONlRMûINûOURûTHIRD invest or use balance sheet growth to drive trim?’,” said one former StanChart banker. quarter results update,” a spokesperson for the top line.” “When I was there, they had bankers StanChart said. wearing multiple hats and it gets to 4HEûLEAKEDûEMAILûCOMESûATûANûAWKWARDû JOB CUTS the point where if you cut back too time for the emerging markets lender, 4HEûPROSPECTûOFûJOBûCUTSûISûFAMILIARûTERRITORYû aggressively, you start to have an adverse which is due to report its Q3 results on for StanChart, which has undergone a impact on the quality of your offering to October 31. massive reorganisation under Winters. clients.” Chief executive Bill Winters has spent Shortly after taking up the reins in Analysts are predicting a tougher Q3 for the best part of a year seeking to reassure *UNEû ûHEûANNOUNCEDûTURNAROUNDû StanChart overall. investors that the bank would be able to PLANSûWHICHûINCLUDEDû ûJOBûCUTSûASû “We expect StanChart’s third-quarter keep a lid on costs even as it returned to well as changes to lending practices and a results to show weaker revenues driven growth mode. SIGNIlCANTûWRITE DOWNûOFûBADûLOANS by market volatility impacting wealth and StanChart announced in May during )Nû/CTOBERû û7INTERSûSPEARHEADEDû CORPORATEûlNANCEûINCOMEûINûPARTICULAR vû its Q1 results that its operating expenses a major reorganisation of the bank’s debt said UBS’s Napier. would likely be higher than the US$9.9bn lNANCINGûGROUP ûINûWHICHûHEûOUTLINEDû h3OMEûSEASONALûSOFTNESSûINûlNANCIALû REPORTEDûFORûTHEûLASTûlNANCIALûYEAR PLANSûTOûREMOVEûAROUNDûûOFûSENIORû markets is a reasonable expectation too.” In August, it reported a 6% rise in executives in bands 1-4. During the same THOMAS BLOTT

Who’s moving where...

„ CIMB GROUP has were as chairman. „ CITIGROUP’s head and is a notable appointed Mohd Nasir Mohd Nasir was of securities services figure locally due to Ahmad as its new most recently for Hong Kong Cindy her responsibilities chairman, effective an independent Chen has left the as head of business October 20. director at CIMB bank. development for Mohd Nasir replaces and chairman of its Edward Tse, product Stock Connect at Nazir Razak, the audit committee. He manager in the Citigroup. brother of ousted has also served as bank’s custody and Tse has been with Malaysian Prime chairman of Media clearing division, Citigroup for just Minister Najib Razak, Prima, Malaysia’s has taken over her over six years and is who has stepped largest media responsibilities on an currently a director. down after almost 30 company. interim basis. years with the bank, Chen spent over 21 the last four of which years with Citigroup

12 International Financing Review Asia October 27 2018 Please send job moves to [email protected]

move has not been made public yet. March 2013. Goldman Sachs !ûSPOKESWOMANûFORû'OLDMANûDECLINEDûTOû Before taking over the Asia leadership comment when contacted by Reuters. role, Vella had been co-head of the changing Asia IB ,ELANDûWASûNAMEDûAûCO PRESIDENTûOFûTHEû lNANCINGûGROUPûINûTHEûREGIONûSINCEû*ANUARYû BANKûFORû!SIAû0ACIlCûEXCLUDINGû*APANûINû 2014. Prior to that he was head of credit leadership September last year, after having previously capital markets in Asia excluding Japan. WORKEDûINû,ONDONûFORûûYEARS Among other executive changes since GOLDMAN SACHS veteran banker Todd Leland He takes over at a time when China's Solomon was named the group chief will become Asia investment banking head, aggressive outbound push for mergers and EXECUTIVE û'OLDMANûLASTûMONTHûNAMEDû$ANû a person with knowledge of the matter acquisitions has slowed this year amid an Dees, who heads the technology, media said, adding to leadership changes at the escalating trade war with the United States, and telecom investment banking group bank since CEO David Solomon took over and weaker markets are expected to weigh globally, as investment banking co-chief. this month. on the appetite for new equity offerings. $EESûWILLûSHAREûHISûNEWûTITLEûWITHû'REGGû )NûTHEûNEWûROLE û,ELAND ûANû!MERICANû )NûTHEûlRSTûNINEûMONTHSûOFû û ,EMKAUûANDû-ARCû.ACHMANN WHOûJOINEDû'OLDMANûINû ûWILLûREPLACEû 'OLDMANgSûREVENUEûINû!SIA ûWHICHûISûTHEû Dees's promotion came about a week Andrea Vella and Kate Richdale as head of smallest of its three regions, rose 9% to AFTERû'OLDMANûELEVATEDûFORMERûINVESTMENTû the Asia investment banking unit excluding US$3.9bn. Asia's share of group sales fell by banking co-head John Waldron to president Japan. Vella and Richdale were appointed one percentage point to 14% in that period, ANDûCHIEFûOPERATINGûOFlCERûANDûNAMEDû CO HEADSûOFûTHEûUNITûINû ITSûlLINGSûSHOWED 3TEPHENû3CHERRûASûITSûNEWûlNANCEûCHIEF Vella and Richdale will remain in Asia to 2ICHDALE ûAûmUENTû-ANDARINûSPEAKERûWITHû 4HEû7ALLû3TREETû*OURNALûlRSTûREPORTEDûTHEû become the co-chairs of the unit, said the experience in South-East Asian dealmaking, !SIAûLEADERSHIPûCHANGESûATû'OLDMAN person, who declined to be named as the JOINEDû'OLDMANûFROMû-ORGANû3TANLEYûINû SUMEET CHATTERJEE

holding companies should review the audits 4HEûDEFAULTûBYûTHEûNON BANKINGûlNANCIALû Sebi urges of all companies whose accounts are to be company has affected companies’ plans consolidated with listed entities. to raise funds through the bond market. monitoring of 4HEûMOVEûCOMESûAFTERûTHEû),&3ûGROUPû However, given the crisis of non-performing defaulted on a series of instruments and assets in India, corporates will have to shift end use of funds prompted the government to take control of INûTHEûMEDIUMûTOûLONG TERMûTOûlNANCINGû THEûCOMPANYûANDûAPPOINTûAûNEWûBOARDû4HEû projects via bonds rather than bank loans, India’s market regulator has urged corporates group has a complex business structure, with 4YAGIûSAID to properly monitor the end use of funds a holding company at the top controlling 4HEûREGULATORûEMPHASISEDûTHATûCREDITû after a series of defaults by INFRASTRUCTURE stakes in multiple subsidiaries spanning the rating agencies have an important role as LEASING & FINANCIAL SERVICES sent ripples across lNANCIALûSERVICESûANDûINFRASTRUCTUREûSECTORS gatekeepers in maintaining the trust of lNANCIALûMARKETS 4HEû),&3ûISSUEûHASûHIGHLIGHTEDûhTHEû investors in the bond market. “Proper monitoring of the end use of interconnectedness arising as a result of While Sebi has taken a number of steps funds, even at the last level of the corporate complex corporate subsidiary structures to rationalise the governing structure of STRUCTURE ûISûIMPORTANT vûSAIDû!JAYû4YAGI û and how the maze of subsidiaries facilitates rating agencies and encouraged the close chairman of the Securities and Exchange MASKINGûTHEûENDûUSEûOFûFUNDS vû4YAGIûSAIDû monitoring of ratings, “more needs to be Board of India, in remarks prepared for h)NVESTORSûCONlDENCEûHASûBEENûSEVERELYû done and we would consider bringing in delivery at an October 24 event in Mumbai. impacted by developments in recent months, required changes in consultation with 4HEûREGULATORûHASûMANDATEDûTHATûTHEû particularly as a result of a default by a large STAKEHOLDERS vû4YAGIûSAID statutory auditor of listed and unlisted entity.” KRISHNA MERCHANT

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„ Dai Kitamura has APAC global banking „ Kelvin Lim, a Lim started in his returned to HSBC co-heads Che Ning former loan banker new job last Tuesday, after a sabbatical as Liu and Martin with Citigroup, has returning to the head of corporate, Haythorne. rejoined DBS BANK as Singaporean lender financials and Kitamura has been executive director in after an 11-year stint multinationals with HSBC since Singapore. with Citigroup. banking for Asia 1994 and was most He will be responsible Before Citigroup, Lim Pacific. recently head of for origination of worked for DBS as Based in Hong Kong, global banking for loans from South an associate in the he reports to Philippe Hong Kong, where he and South-East syndicated finance Henry, global head of led the coverage of a Asia and report to team for three years corporate, financials number of the bank’s Mildred Chua, head from 2004. and multinationals key relationships. of syndicated finance banking as well as at DBS.

International Financing Review Asia October 27 2018 13 People &Markets

effect on companies involved, said Wang, a ASSET MANAGEMENT SCHEME Pledged shares PARTNERûATû(IWAYSû,AWû&IRMûh4HEûIMPACTûTOû 4HEûMOSTûCONCRETEûMEASUREûANNOUNCEDû the real economy would be even bigger if so far to address market fears has been an hobble China THEûCONTAGIONûSPREADSûTOûAFlLIATESûANDûOTHERû asset management scheme unveiled last businesses along the value chain,” he said. Monday by an industry association that stock market $URINGûTHEûMARKETûSLUMPûOFû  û TARGETSûSTRUGGLINGûLISTEDûlRMSû"UTûTHEû over 1,000 companies suspended share INITIALû2MBBNû53BN ûCOMMITMENTû #HINAûISûSTRUGGLINGûTOûRESTOREûCONlDENCEûINû trading to avoid margin call risks. But from 11 brokerages pales in comparison its stock markets, which are being weighed regulators have now tightened rules for to the nearly Rmb3trn worth of pledged down by a massive amount of shares that share suspension, giving no buffer to listed shares that some estimate face margin calls. have been pledged as collateral as credit- lRMSûFACINGûRISKSûOFûFORCEDûLIQUIDATION h4HEREûARENTûCONCRETEûPOLICYûMEASURESû starved companies seek to raise funds. being rolled out, and no new money is Analysts say the practice, which involves HUGE FUNDING PROBLEMS promised,” said Hong Hao, chief strategist 10% of total outstanding shares, is a 4HATûMEANSûTHEûPRIVATEûSECTOR ûWHICHû at BoCom International. MINElELDûFORûANûECONOMYûALREADYûBATTLINGû drives half the economy and generates the 4HEûWIDESPREADûPRACTICEûOFûBORROWINGû slowing growth and a trade war with the United States. 4IGHTûCREDITûMARKETSûINû#HINAûMEANû that many companies, especially small and medium-sized enterprises, have scarce Many analysts suspect that government rhetoric will only delay, recourse to banks or other sources of but not defuse, the implosion of the massive “pledged shares” lNANCING ûANDûPOLICYMAKERSûHAVEûYETûTOû minefield among smaller companies – one of the biggest woes promise any actual money. plaguing China’s stock market. Many of those companies have turned to PLEDGINGûSHARESûTOûlNANCEûCOMPANIESûASûAû way of raising cash. “Using pledged shares to borrow has become a very popular, and very important bulk of jobs, is going to face huge funding against share holdings has led to shares funding tool,” said Wang Jin, a Shanghai- problems, unless Beijing steps in with state OFûûOUTûOFûûCOMPANIESûLISTEDûONû based lawyer who is dealing with an money. China’s start-up ChiNext board being increasing number of disputes involving 4HEûGOVERNMENTûTHREWûMONEYûATûTHEû pledged for loans. By mid-2018, 16% of collateralised loans. PROBLEMûINû ûEVENûASKINGûSTATE OWNEDû Chinese domestic A-shares were pledged on About US$620bn worth of Chinese shares funds to buy shares. Now, it is asking private AVERAGE ûCOMPAREDûWITHûûINûMID  û currently trading on Chinese markets have sector funds to help these companies. according to Evergrande Research Institute. BEENûPLEDGED ûMOSTLYûBYû3-%Sû4HEûPRACTICEû 6ICEû0REMIERû,IUû(E ûCENTRALûBANKû Many analysts suspect that government BOOMEDûINûûANDûûASû"EIJINGûSTARTEDû GOVERNORû9Iû'ANG ûASûWELLûASû#HINASû rhetoric will only delay, but not defuse, the weaning companies off borrowing in the securities, and banking and insurance implosion of the massive “pledged shares” shadow banking sector. regulators, have called for private funds MINElELDûAMONGûSMALLERûCOMPANIESûnûONEû But now, the nearly 20% slump in the to pump money into struggling listed of the biggest woes plaguing China’s stock broader market this year has triggered companies. market. margin calls, forced liquidations, ownership 4HATûPUSHEDû3HANGHAIûSTOCKSûUPûû h2ISKûIS ûUNDERûCONTROL ûWITHûTHEû changes, business disruptions and bond on October 19 and 4.1% last Monday. By exception of some small-to-mid caps,” DEFAULTSûFORûHUNDREDSûOFûLISTEDûlRMS Wednesday, however, markets moved WROTEû'AOû4ING ûHEADûOFû#HINAûSTRATEGYûATû Forced liquidations have a disastrous lower as investor worries returned. UBS Securities last Monday.

Who’s moving where...

„ FITCH (CHINA) BOHUA holding company in „ Qing Liao, until years at the China CREDIT RATINGS, the Qingdao, and chief recently a senior Banking Regulatory newly created China credit officer and chief director with S&P Commission and also domestic rating rating officer at China in Beijing, has spent just over four agency of Fitch, has Lianhe. been appointed an years at the People’s appointed Danny Fitch previously independent director Bank of China. Chen as its chief held a 49% stake at BANK OF CHINA. executive. in Lianhe before Liao, who spent Chen’s previous selling its shares 13 years with S&P positions include to Singaporean covering China’s chief executive of sovereign wealth fund banks, left the rating Qingdao Conson GIC earlier this year. agency in June. Financial Holdings, a He previously state-owned financial worked for two

14 International Financing Review Asia October 27 2018 Please send job moves to [email protected]

)NûTHEûBROADERûMARKET ûûOUTûOFû û LISTEDûCOMPANIESûHADûMOREûTHANûû Fitch launches China rating agency of their outstanding shares pledged for LOANSûASûOFû/CTOBERûûDESPITEûANûOFlCIALû Fitch has launched a domestic rating the spirit of the initial pact. In March this ûCAPûONûPLEDGEDûSHARES ûANDûALLûBUTûû agency in China following the opening up year, the National Association of Financial listed companies had at least some shares OFûTHEûSECTORûTOûFOREIGNûlRMS Market Institutional Investors published pledged, according to China Securities FITCH (CHINA) BOHUA CREDIT RATINGS will rules requiring both domestic and foreign Depository and Clearing data. INITIALLYûCOVERûlNANCIALûINSTITUTIONS û credit rating agencies to register with it to !SûOFû/CTOBERû ûTHEûSHARESûOFûû INCLUDINGûBANKS ûNON BANKûlNANCIALû rate credits in the interbank bond market. companies had fallen below the alert institutions and insurers, as well as NAFMII said it would grant two types of level – where the value erosion in pledged STRUCTUREDûlNANCE û&ITCHûSAID licences: category A, which gives full ability shares would require borrowers to put 4HEû53 HEADQUARTEREDûCREDITûRATINGû to rate all securities in the interbank bond UPûMOREûCOLLATERALûnûANDûûCOMPANIESû agency has appointed Danny Chen as chief market, or category B, which grants limited triggered margin calls, putting them at EXECUTIVEûOFlCERûFORûTHEûNEWûENTITY access, based on the regulator’s assessment. risk of forced liquidation, according to #ATEGORYû!ûLICENCESûCOVERûlNANCIALû ANûESTIMATEûBYû#HINESEûBROKERAGEû4&û BONDS ûNON lNANCIALûDEBTûINSTRUMENTS û Securities. In July last year, the People’s asset-backed securities and bonds issued by 4HEûFUNDINGûSTRESSûISûRESHAPINGûCORPORATEû Bank of China issued formal offshore entities, NAFMII said. share structures, with the number of guidelines to allow foreign 4HEûSPOKESPERSONûCONlRMEDûTHATû&ITCHû share ownership transfer deals jumping rating agencies to rate onshore had applied for a category B licence. ûDURINGûTHEûlRSTûNINEûMONTHSûTOû û In August, Moody’s and S&P published according to Huatai Securities. bonds as part of a wider detailed applications for rating licences 4HEûDROPûINûSHAREûPRICESûhHASûGREATLYû agreement struck with the US to INûTHEûINTERBANKûBONDûMARKETû4HEûTWOû reduced funding options for many listed improve trade ties. strategies differed, however. lRMS vûSAIDû$Iû9ANG ûANALYSTûATûCREDITûRATINGû -OODYSû#HINA û#REDITû2ATINGûSAIDû agency China Bond Rating. it planned to use its parent company’s 4ANû*IALONG ûDIRECTORûOFûPRIVATEûSECURITIESû A spokesperson for Fitch said that the rating methodology, rating symbols INVESTMENTûATûCONGLOMERATEû:ENDAIû'ROUP û NEWûENTITYûWILLûHAVEûAROUNDûûSTAFFûBYûTHEû ANDûDElNITIONSû30 ûMEANWHILE ûSAIDû SAIDûTHATûWHILEûTHEû ûMARKETûCRASHû ENDûOFûTHEûYEARû4HEûCOMPANYûWILLûINITIALLYû its standalone business in China would hit mainly highly-leveraged stock punters, be based in Beijing with the possibility of apply a customised rating system and this year’s crisis could deal a bigger blow to expanding into other cities later. methodology, although it said it would use the real economy. Fitch previously held a 49% stake in its global methodology as a reference when h4HEûSTOCKûMARKETûDROPûTHISûTIMEû #HINAû,IANHEûBEFOREûSELLINGûITSûSHARESûTOû conducting rating analysis. is affecting operations of many listed 3INGAPOREANûSOVEREIGNûWEALTHûFUNDû')#û 4HEûSPOKESPERSONûSAIDû&ITCHû"OHUAû companies, at a time when economic earlier this year, a move widely interpreted will use a different rating methodology, PROSPECTSûAREûNOTûGOOD vû4ANûSAID as a sign that it was preparing to launch its although there may be some overlap with :ENDAISû4ANûSAIDûHISûGROUPûHASûNOûPLANSû own standalone business onshore. Fitch’s international ratings system. yet to answer the government’s call to In July last year, the People’s Bank of Moody’s currently holds a 30% RESCUEûSTRUGGLINGûLISTEDûlRMSûPARTLYûBECAUSEû China issued formal guidelines to allow shareholding in China Chengxin the worsening economic environment is foreign rating agencies to rate onshore International. S&P does not hold a stake disrupting existing valuation models, and bonds as part of a wider agreement struck in a Chinese rating agency. It ended its there is no guarantee that investing now with the US to improve trade ties. partnership with Shanghai Brilliance earlier WOULDûBEûEVENTUALLYûPROlTABLE Despite recent tensions between the this year. SAMUEL SHEN, ANDREW GALBRAITH two countries, China has largely stuck to THOMAS BLOTT

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„ Dutch asset wholly foreign-owned „ The former head firm Atkins Acuity. management enterprise in China. of the Philippines’ She was previously firm ROBECO said She will report PPP Centre Cosette head of the PPP last Friday it had to Graham Elliot, Canilao has joined Centre for five appointed Mitchelle Robeco’s head of ABOITIZ INFRACAPITAL, years, where she Zhou to lead its distribution Asia. the infrastructure was responsible commercial activities Zhou was most investment arm for overseeing in China, effective recently sales lead of Aboitiz Group, the country’s PPP October 29. for BlackRock’s China as chief operating programme under the Zhou will initially be institutional business officer. previous President, based in Hong Kong and has also worked Canilao was recently Benigno Aquino III. before relocating to at ABN AMRO and managing director She has also worked Shanghai next year BNP Paribas. and head of PPP at and to oversee the firm’s advisory at consulting PwC.

International Financing Review Asia October 27 2018 15 People &Markets

risks, it said. China to support POE fundraising In recent weeks, the government has repeatedly declared its support for private China will help private companies raise 4HEûCENTRALûBANKûHASûTAKENûAûNUMBERûOFû enterprises, even as state-owned enterprises funds in capital markets as part of a series steps this year to spur commercial banks AREûENCOURAGEDûTOûBECOMEûSTRONGERû4HEû of measures to address slowing growth, the to lend. But authorities have so far stopped private sector accounts for 60% of China’s government said. short of massive credit stimulus, concerned '$0ûANDûûOFûURBANûJOBS Commercial banks historically have about undoing their multi-year campaign 4HEûGOVERNMENTûWILLûALSOûSTEPûUPûSUPPORTû preferred to lend to state-owned enterprises to reduce corporate leverage and curb risky FORûSMALLûANDûMEDIUM SIZEDûlNANCIALû rather than private companies, which are lending practices. INSTITUTIONSûWITHûRElNANCINGûNEEDS ûTHEû viewed as being less creditworthy. 4HEû0EOPLESû"ANKûOFû#HINAûWILLûPROVIDEû State Council said. 4HEIRûACCESSûTOûCREDITûFURTHERûSHRANKû initial funding to institutions that can 4HEû3TATEû#OUNCILûDISCLOSEDûTHEûPLANSû after Beijing opened a campaign against a HELPûENHANCEûTHEûCREDITûPROlLEûOFûPRIVATEû AFTERûAûMEETINGûLEDûBYû0REMIERû,Iû+EQIANG build-up of corporate debt and off-balance- companies that are operating normally but In a later statement last Monday, the sheet loans, the chief source of the private FACEûTEMPORARYûLIQUIDITYûDIFlCULTIES ûSAIDû central bank said it would boost re-lending SECTORSûlNANCING the State Council, or cabinet, in a statement ANDûRE DISCOUNTûQUOTASûBYû2MBBNû Economists say the problems for on its website. 53BN ûTOûHELPûTHEûlNANCINGûNEEDSûOFû companies are one reason the economy is When the conditions are ripe, SMALLûENTERPRISESû4HATûWOULDûBEûINûADDITIONû SLOWINGû'$0ûGROWTHûINûTHEûTHIRDûQUARTERû commercial banks and insurance TOûANOTHERû2MBBNûISSUEDûINû*UNE SLOWEDûTOû ûTHEûLEASTûSINCEûTHEûlRSTû companies can be guided to participate on a RYAN WOO, STELLA QIU quarter of 2009. voluntary basis in the funding to share the

IN BRIEF Singapore launched a new government agency last Tuesday to support infrastructure projects Covalent Capital is designed to remove a lot of the duplication across Asia, referred to as INFRASTRUCTURE ASIA. Bond issuance platform to launch currently involved in bookbuilding. The global financial hub's decision to position “It covers the full life-cycle of any new issuance itself as a for regional infrastructure Fintech startup COVALENT CAPITAL is planning on – from roadshow through to allocations – investment comes as China ramps up efforts launching its bond issuance platform OMAS although it is flexible enough to allow banks to to fund and build transport and trade links in next month, its chief executive and founder choose which parts of the system to adopt,” said dozens of countries as part of its Belt and Road Sanjay Garodia said. Garodia. Initiative. The Singapore-based company recently He said that Covalent would target the G3 and Infrastructure Asia will be led by the Monetary completed the beta testing of OMAS with a bond markets to begin with but Authority of Singapore and Enterprise group of 12 banks and 50 institutional investors would look to expand its offering later including Singapore, an arm of the trade ministry. and is planning on going live with the final to other asset classes potentially. Asia faces an annual investment gap of version by the end of November. Rivals including London-based Origin and US- US$460bn for infrastructure, according to OMAS acts as a marketplace for issuers, banks headquartered Ipreo offer similar bookbuilding estimates from the Asian Development Bank. and investors in the primary debt capital platforms and have recently begun expanding Analysts say some governments have struggled markets with the aim of streamlining the into Asia. to prepare infrastructure deals in a way that process for issuing bonds. is 'bankable' and attracts private sector By creating a centralised platform for Infrastructure Asia investment. communicating orders and allocations, OMAS Singapore launches new agency "With better knowledge, skills and resources, we

16 International Financing Review Asia October 27 2018 Please send job moves to [email protected]

can improve project feasibility and bankability, against Commonwealth Bank of Australia The Singaporean bourse said that revenues enabling project leads to become viable over its alleged failure to disclose that it was from its derivatives business were up 21% to commercial projects," said Seth Tan Keng Hwee, being charged for money laundering, has been S$97.7m, accounting for almost half of group executive director of Infrastructure Asia. expanding in Asia recently. revenues. The exchange operator attributed The agency will work closely with the private Last month, Arvindran Manoosegaran joined this to heightened volatility, leading to an sector, governments and commercial and as associate investment manager from law firm increase in activity for FTSE China A50 futures development banks, Tan said. K&L Gates. He is based in Singapore. and foreign exchange futures contracts in It also recently received approval from the particular. IMF Bentham Singapore High Court to enter into a funding Meanwhile, revenues from listings fell 14% to Share placement to fund expansion agreement with liquidators for Trikomsel to $11.1m with total proceeds from new equity finance investigations and potential claims listings plummeting to S$0.2bn from S$2.7bn a Australia-headquartered litigation funding firm related to the Indonesian mobile phone year ago. IMF BENTHAM has raised A$74.48m (US$59.91m) distributor, which defaulted on S$215m At the end of June SGX allowed companies with from a share placement to fund its global (US$155.83m) of bonds in 2015. dual-class shares to list in the city in a bid to expansion. attract more listings from overseas, although The company completed a placement of 26.6m so far there have been no IPOs from companies shares to institutional investors last Tuesday Q1 results lifted by derivatives with DCS structures. and said it had initiated a share purchase plan Jubilant Pharma, a subsidiary of Indian for retail investors, which is set to raise an SINGAPORE EXCHANGE eked out a 2% gain in pharmaceuticals company Jubilant Life additional A$10m. revenues for the July-September quarter as Sciences, started preliminary investor meetings It said it was aiming to have close to A$1.5bn in a strong showing in derivatives offset more for a US$500m SGX IPO earlier this month and funds under management by the end of 2019 to disappointing results in other businesses. is considering a DCS structure. expand its footprint in continental Europe, Asia SGX said that for the first quarter of its 2019 SGX said that securities trading and clearing and Canada. financial year revenues stood at S$208.9m revenues decreased by 8% to S$46.9m during IMF Bentham, which has financed prominent (US$151.4m) versus S$204.5m a year earlier. Q1. Expenses rose 4% to S$102.5m, mainly due class action lawsuits in Australia, including Net profit was flat at S$91.1m. to higher staff costs.

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International Financing Review Asia October 27 2018 17 China Insight at your Fingertips News, Finance, Connectivity, Community.

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major banks reflects a much improved › THINK TANK MARKETS RARE CMBS geopolitical backdrop in the Korean AUSTRALIA peninsula in recent months. THINK TANK GROUP has mandated CBA, At its previous Kangaroo visit on and Westpac to arrange February 7 2017, Kexim sold a A$400m investor meetings from October 29 for a DEBT CAPITAL MARKETS dual-tranche five-year note at 117bp over potential Australian dollar SME commercial asset swaps and three-month BBSW. mortgage-backed security issue. › VICTORIA THREE-YEAR NETS A$2BN On February 27, Australia and New The specialist non-bank lender Zealand Banking Group printed a A$2bn previously issued a A$300m offering of TREASURY CORPORATION OF VICTORIA, rated Aaa/ two-part five-year at 100bp over. commercial mortgage-backed securities AAA (Moody's/S&P), targeted the short end in December 2017 via Think Tank Series of the domestic bond market with last › SUNCORP TAPS FLOATER FOR A$500M 2017-1 Trust. Tuesday's A$2bn (US$1.42bn) syndicated It also printed a A$280m CMBS in three-year sale via joint leads Deutsche Bank, SUNCORP-METWAY (A1/A+/A+) tapped its October 2016 through ConQuest 2016-2. NAB and Westpac. August 16 2022 senior unsecured Besides Think Tank, only Liberty The 2.25% October 29 2021s priced at floating-rate note for A$500m last Financial has been a regular visitor to the 99.856 for a yield of 2.3%, within 19.5bp– Wednesday to double the size of the line market in recent years. 21.5bp guidance at 20bp over EFP (three- to A$1bn. Most large Australian commercial year futures contract) and 21bp wide of the ANZ, RBC Capital Markets and Westpac property companies have steered clear of December 2021 ACGB. were joint lead managers for the relatively complex and expensive CMBS Earlier this year, TCV focused on reopening, which had a minimum size because of the competitive pricing available longer-dated syndicated issuance. On requirement of A$250m. It priced at in the local loan markets, as well as the January 23, the state government funding 100.331, inside 90bp area price talk at domestic and offshore bond markets for arm tapped its 3% October 20 2028s and three-month BBSW plus 88bp. longer maturities. 4.25% December 20 2032s for A$800m and The initial A$500m sale of the note on A$500m, respectively, before increasing August 10 last year priced 97bp wide of the 2028s by a further A$850m on three-month BBSW. SYNDICATED LOANS September 6. › NWB OPENS 2029 KANGAROO LINE › VICINITY HOLDS NON-DEAL MEETINGS › BROAD DEMAND FOR KEXIM KANGAROO Dutch agency NEDERLANDSE Australia-listed VICINITY CENTRES held non-deal The EXPORT-IMPORT BANK OF KOREA (Aa2/ WATERSCHAPSBANK, rated Aaa/AAA (Moody’s/ meetings with banks last week. AA/AA–) attracted a peak order book S&P), opened a 10.5-year benchmark Mizuho Bank helped the company organise in excess of A$830m for last Tuesday's Kangaroo line with last Tuesday's the meetings. A$500m sale of five-year floating-rate A$260m sale via sole lead manager Vicinity Centres is said to be considering Kangaroos arranged by ANZ, Mizuho and Nomura. borrowing next year. TD Securities. The 3.30% May 2 2029s priced at 99.780 The company comprises Vicinity Centres Demand was broad-based, with Asian, to yield 3.325%, 52bp wide of asset swaps Trust, which holds the group’s shopping Australian and EMEA investors taking 51%, and 62bp over the April 2029 ACGB. malls, and Vicinity, which manages and 41% and 8%, respectively. develops the properties. Asia bought a larger, 59% share of The group, which owns 73 malls in identically rated Korea Development STRUCTURED FINANCE Australia, is rated A2/A (Moodys/S&P). Bank's A$400m five-year Kangaroo FRN issued on October 12. Australian accounts › BOQ READIES REDS ABS took 30% of that trade and EMEA 11%. EQUITY CAPITAL MARKETS Banks were allocated 66% of the new Initial price talk has been released at one- Kexim note, asset managers 25%, official month BBSW plus 105bp–110bp for the › YANCOAL SURVEYS NOVEMBER LAUNCH institutions 5% and others 4%. indicative A$389.5m (US$275m) Class A The Kexim October 30 2023s priced notes of the REDS EHP 2018-1 ABS offering. ASX-listed coal miner YANCOAL AUSTRALIA inside 98bp area guidance at three-month The Class B notes will be retained by the is evaluating an option to open books BBSW plus 95bp, which is 3bp tighter issuer. for a Hong Kong dual primary listing in than the 98bp margin paid by KDB, whose Originator Bank of Queensland mandated November, according to people close to the note performed strongly in the secondary ANZ, Macquarie, NAB and Westpac to deal. market. arrange recent investor meetings for the Yancoal, which finished a two-week Kexim also paid just 2bp more than the securitisation. pre-marketing drive around mid-October, 93bp spread for the A$2bn dual-tranche Series 2015-1 Reds EHP Trust, a A$750m is assessing market conditions and plans domestic five-year sale by similarly rated offering of securities backed against BoQ to move the deal forward if markets (Aa3/AA–/AA–) on equipment finance-originated automotive stabilise after the November 6 US midterm September 18. and equipment loans and leases, was issued elections, said the people. Such a modest premium over Australia's in September 2015. Other Australian issuers have seen their

International Financing Review Asia October 27 2018 19 plans perturbed by weak stock market managers and underwriters of the Its statutory net loss for the year to July conditions. Last Thursday, online services entitlement offer. 31 came in at A$15.6m, the company said, platform Property Exchange Australia compared with a profit of A$114.5m last (PEXA) delayed an ASX IPO of up to A$862m › CORONADO SLUMPS ON DEBUT year. Barring one-off costs, the company’s (US$610m) due to market volatility. underlying net profit fell 28%. Adding to the negativity, Coronado Shares of CORONADO GLOBAL RESOURCES fell as Macquarie and UBS were the joint lead Global Resources, a newly ASX-listed much as 12% below the IPO price on their managers, bookrunners and underwriters coal miner, slashed its IPO size by 33% to first trading day, which came after the firm of the transaction. A$774m. Despite pricing a smaller deal at downsized the deal to raise A$774m. the bottom of the indicative price range, its The stock opened at A$3.80 a share, shares fell 10% on their trading debut last 5% below the offering price of A$4.00. Tuesday. The shares were trading as low as A$3.49 People close to the deal have told IFR that intraday. CHINA Yancoal’s Hong Kong share sale could raise The US coking coal miner had trimmed about US$500m–$650m. Yancoal’s shares in the number of shares in the offering from Australia have dropped more than 17% as of 290m CDIs to about 193m, which were sold DEBT CAPITAL MARKETS last Friday since it started pre-marketing for at the bottom of an indicative price range its Hong Kong offer. of A$4.00–$4.80. The final price gave a › HAINAN AIRLINES PAYS OVER 13% BOC International, CMB International and market capitalisation of A$3.79bn. Morgan Stanley are the joint sponsors for the Energy & Mineral Group, a Texas-based HAINAN AIRLINES (HONG KONG) priced a US$100m dual listing. private investment firm, remains a major two-year non-put US dollar bond at 13.17% shareholder with about 78.9% of Coronado’s yield to maturity. › WORLEYPARSONS RAISES A$1.8BN total issued capital after the IPO. The coupon is 12%. The notes were issued Goldman Sachs was the sole global at a discounted cash price of 98. WORLEYPARSONS, an Australian engineering coordinator. It was also the joint lead The unrated notes have an investor services company, has raised A$1.8bn from manager with Bell Potter Securities, Credit put option in October 2019 at par to yield the institutional tranche of a A$2.9bn Suisse, and UBS. 14.216%. underwritten entitlement offer. Hainan Airlines Holding, a unit of debt- The offer was well supported by eligible › NUFARM COMPLETES A$303M ISSUE laden HNA Group, is the guarantor. institutional shareholders, with a take-up The company has a US$300m 6.35% 364- rate of 82%. The institutional shortfall NUFARM, an Australian crop protection and day note due on October 31. That deal was bookbuild was heavily oversubscribed seeds company, has completed a A$303m Hainan Airlines’ second sale of US dollar from both existing shareholders and other underwritten entitlement offer to fund the notes with a maturity of less than one year institutional investors. growth of its business. in 2017. The company was selling 187m new The company raised A$31m from the Guotai Junan International was sole global shares to eligible shareholders on a retail portion of the offering, representing a coordinator and joint bookrunner, and was 1–to–1.47 basis at A$15.56 per share, participation rate of about 46%. also joint lead manager with GPB Financial representing a 12.8% discount to the pre- About 6.2m shares of the retail shortfall Services Hong Kong. deal close of A$17.84 on October 19. were allocated in full to sub-underwriters, A similar mandate was first announced The retail portion of the offer, which is given the shares were not priced above in May via Guotai Junan, but a deal did not fully underwritten and is expected to raise the entitlement offer price of A$5.85 each, materialise then. Last month, the mandate A$1.1bn, will be open from October 29 to according to a statement. was announced with Guotai Junan and DBS November 7. Approximately A$238m was earlier raised Bank, and fixed income investor meetings John Grill, chairman of WorleyParsons, in the institutional tranche with a 68% followed. has committed to participate in the offer participation rate by eligible institutional In the onshore market, HAINAN AIRLINES with A$100m of his entitlement. shareholders. Nufarm’s largest shareholder HOLDING, another unit of HNA Group, Dubai-based Dar Al-Handasah Sumitomo Chemical, with a 16.38% stake, raised Rmb1.5bn (US$216m) from onshore Consultants Shair and Partners Holdings, did not participate in the offering. perpetual non-call three bonds on the the largest shareholder in WorleyParsons Nufarm sold 52m new shares at Shanghai Stock Exchange. with a 22.78% stake prior to the A$5.85 each on a 3-for-19 basis. The price The notes, priced at par to yield 7.45%, transaction, has committed to take up represented an 11.9% discount to the will have a 300bp step-up if not called after about A$170m of its entitlement via the closing price of A$6.64 on September 26. three years. institutional books. The group intends “The equity raising helps ensure Both the issuer and the notes have AAA to subscribe to its remaining interest of Nufarm remains in a strong position to ratings from China Chengxin. A$490m through the retail offer. manage short term balance sheet risk, and The issuer intends to use the proceeds for The trading halt on WorleyParson shares supports the continuation of the company’s debt refinancing and working capital. has been lifted. growth strategy in light of recent market Huajing Securities was lead underwriter The proceeds of the rights issue will uncertainty,” said Grey Hunt, Nufarm on the offering with Huafu Securities as joint part fund the A$4.6bn purchase of the managing director and CEO. lead underwriter. energy, chemicals and resources division Nufarm posted an annual net loss Hainan Airlines received approval to of Jacobs Engineering Group. Apart from because of a writedown of its Australian issue up to Rmb5bn perps on the SSE. It the entitlement offer, the company has business following dry weather conditions issued Rmb500m on September 14 and issued A$985m in stock to Jacobs and on the east coast of the country, but the Rmb800m on September 27. A$895m of debt to fund the acquisition. company had said it expected a partial The company on October 12 said it had Macquarie and UBS are the joint lead recovery in 2019. decided not to call Rmb2.5bn onshore

20 International Financing Review Asia October 27 2018 COUNTRY REPORT CHINA

perps issued in the China’s interbank coordinators, joint lead managers and joint issuance plan by 12 months, according to a bond market, reversing a September 21 bookrunners on the Reg S issue. stock exchange filing last Monday. announcement. It faulted the uncertainty The chemical producer, which is 63.6% The bank first disclosed the plan to facing the airline industry amid owned by state-owned China National issue offshore preference shares in August intensifying global trade tensions, China’s Chemical Corp (ChemChina), has started 2017 and obtained the authorisation of economic slowdown, the oil prices surge to meet investors in Hong Kong, Singapore shareholders on November 8 2017. and the US dollar’s appreciation. and London, from October 25. It did not disclose in which currency the Bluestar Finance Holdings is the issuer AT1s will be denominated. › SICHUAN TRANSPORTATION HIRES of the proposed notes and China National Bluestar is the guarantor. › SPIC PRINTS US$800M DUAL-TRANCHER SICHUAN TRANSPORTATION INVESTMENT GROUP The notes have expected ratings of Baa2/ CORPORATION, rated A– (stable) by Fitch, has BBB+ (Moody’s/Fitch). STATE POWER INVESTMENT CORP, rated A2/A–/A, mandated Standard Chartered Bank, China Moody’s on October 15 changed China one of the five largest state-owned International Capital Corporation, Citigroup National Bluestar’s Baa2 rating outlook to electricity producers in China, has drawn and Industrial Bank Hong Kong branch as joint stable from negative, citing expectations final orders of US$1.5bn for a US$800m global coordinators for a US dollar bond. that the company’s improved credit profile two-tranche bond issue. The JGCs are also joint bookrunners and will be sustained over the next 12-18 A US$300m 4.25% three-year tranche joint lead managers with BNP Paribas, CMB months. was priced at Treasuries plus 135bp and International, CMBC Capital, ICBC (Asia) and a US$500m 4.65% five-year tranche was Shanghai Pudong Development Bank Hong Kong › GANSU HIGHWAY TAPS BONDS priced at Treasuries plus 170bp, well inside branch. initial guidance of 165bp area and 190bp Fixed income investor meetings in GANSU PROVINCIAL HIGHWAY AVIATION TOURISM area, respectively. Hong Kong, Singapore and London began INVESTMENT GROUP tapped its US$350m The three-year bonds drew final orders last week for the proposed Reg S senior 6.25% senior unsecured notes due August of over US$493m from 48 accounts. Asia unsecured notes, subject to market 2 2021 for US$150m, bringing the total Pacific took 88% of the notes and EMEA conditions. outstanding to US$500m. 12%. By investor type, 34% went to asset The bonds will be issued by Sichuan The reopening priced at a cash price of managers, 30% to banks and insurance, 22% Communications Overseas Development, 100.413, implying a yield of around 6.08%. to sovereign, and 14% to private banks and a wholly owned offshore subsidiary of This was at the tight end of final guidance others. Sichuan Transportation, which will also of 100.363–100.413, which translated to Final orders for the five-year tranche guarantee the notes. a yield of around 6.08%–6.10%. Marketing were over US$1bn from 75 accounts. Asia The bonds are expected to be rated A– by began at 100.238 area, translating to a yield Pacific took 86% of the notes and EMEA Fitch. of around 6.15%. 14%. By investor type, 65% went to asset Orders were over US$250m when final managers, 13% to banks and insurance, 7% › AVIC INTL LEASING MEETS INVESTORS guidance was announced. to sovereign, and 15% to private banks and The Reg S bonds are rated BBB–/BBB (S&P/ others. AVIC INTERNATIONAL LEASING, rated A– by Fitch, Fitch), in line with the issuer. The senior unsecured Reg S bonds will be has hired banks for a proposed offering of Bank of China, and Citigroup issued by SPIC Luxembourg Latin America US dollar senior unsecured bonds. were joint global coordinators. They were Renewable Energy Investment Company Bank of China, Barclays, CICC, DBS Bank also joint bookrunners with Shanghai and guaranteed by SPIC Luxembourg and Haitong International are joint global Pudong Development Bank Hong Kong branch, Energy Investment Company, a wholly coordinators as well as joint bookrunners Industrial Bank Hong Kong branch, Guotai Junan owned subsidiary of the state-owned and joint lead managers with Agricultural International and Orient Securities (Hong Kong). parent. Bank of China Hong Kong branch, China Citic Industrial Bank was added to the The bonds, with an expected rating of Bank International, First Abu Dhabi Bank, ICBC syndicate midway through bookbuilding. A– by Fitch, will also have the benefit of Asia and Mizuho Securities. Gansu Highway is the only enterprise a keepwell and equity interest purchase The Chinese leasing firm has started to authorised by the provincial government undertakings to be provided by State Power meet investors in Hong Kong, Singapore of Gansu, a north-central Chinese province, Investment Corp. and London from October 24. to manage and operate transportation Proceeds will be used for debt The proposed Reg S notes, to be infrastructure projects there. refinancing and general corporate issued under a US$1bn medium-term The original US$350m issue priced in purposes. note programme, will be issued by July at 99.328 to yield 6.5%, in the first JP Morgan, Bank of America Merrill Lynch, wholly owned subsidiary Soar Wise and benchmark-sized US dollar bond from BOC International and ICBC were joint global guaranteed by AVIC International Leasing. a local government financing vehicle in coordinators as well as joint bookrunners The notes have an expected A– rating months. and joint lead managers with BoCom from Fitch, in line with the guarantor. International. › JJRCB NEEDS MORE TIME FOR AT1 ISSUE › BLUESTAR EYES US DOLLAR PERPS › TAIZHOU INFRASTRUCTURE HIRES BANKS JILIN JIUTAI RURAL COMMERCIAL BANK said it needs CHINA NATIONAL BLUESTAR (GROUP), rated Baa2/ more time to prepare an up to Rmb5bn TAIZHOU INFRASTRUCTURE CONSTRUCTION INVESTMENT BBB/A–, has hired four banks for a proposed Additional Tier 1 securities offering in the GROUP, rated BBB– by Fitch, has hired banks offering of US dollar-denominated senior offshore market. for a proposed offering of US dollar senior guaranteed perpetual securities. The Hong Kong-listed Chinese lender will unsecured notes. BNP Paribas, BOC International, Credit seek shareholder approval to extend the Citigroup, Orient Securities (Hong Kong) and Agricole and Morgan Stanley are joint global validity period of the authorisation for the Industrial Bank Hong Kong branch are joint

International Financing Review Asia October 27 2018 21 global coordinators, as well as joint lead shareholders as collateral for loans. to yield 4.50%, 20bp tighter than initial managers and joint bookrunners with Silk The planned Rmb1bn bond issuance by 4.70% area guidance. Road International and ICBC Asia. the wholly state-owned investment holding It also sold HK$1.2bn (US$153m) two- The Chinese local government financial company of the Shenzhen municipal year Hong Kong dollar bonds at par to yield vehicle in Taizhou, Zhejiang province, government is part of China’s recent 3.15%, the tight end of final guidance of started to meet investors in Singapore and initiatives to support private companies as 3.15%–3.20%, and 35bp tighter than initial Hong Kong on Friday. economic growth slows. 3.50% area guidance. The proposed Reg S notes have an Books for the five-year non-call three The bonds will be issued off a US$3bn expected BBB– rating from Fitch. bonds has been opened on Friday with medium-term note programme and an indicative range of 3.60%–4.60%. Final guaranteed by Sinopec Group. The notes › XIANGJIANG GROUP EYES BOND ISSUE pricing will be announced on October 29. have expected ratings of A1/A+ (Moody’s/ Shenzhen Investment Holdings will S&P), in line with the guarantor. HUNAN XIANGJIANG NEW AREA DEVELOPMENT GROUP, also sell Rmb2bn three-year bonds at the Proceeds will be used for general rated Baa3/BBB (Moody’s/Fitch), has hired same indicative price range. Proceeds corporate purposes. three banks for a proposed offering of US for this tranche will be used for debt The Dim Sum tranche drew final orders dollar senior bonds. repayment. of over Rmb1.3bn from more than 40 Standard Chartered Bank and CEB Both the issuer and the notes are rated accounts. Of the notes, 92% went to Asia International are joint global coordinators, AAA by China Chengxin. The bonds will be and 8% to Europe. By investor type, 45% as well as joint bookrunners and joint listed on the Shenzhen Stock Exchange. went to banks, 52% went to fund managers lead managers with Industrial Bank Hong Guosen Securities is lead underwriter on and insurance, and 3% to private banks. Kong branch. the offering and China Galaxy Securities is The Hong Kong dollar tranche attracted The company, a local government joint lead underwriter. final orders of over HK$2.9bn from 35 financial vehicle of Changsha municipal Established in 2004, Shenzhen accounts. Of the notes, 97% went to Asia government, has started to meet investors Investment Holdings is mainly involved in and 3% to Europe. By investor type, 34% in Singapore and Hong Kong on Friday. tech finance, science and technology parks, went to banks, 63% went to fund managers The proposed Reg S bonds have expected and industrial investments. and insurance, and 3% to private banks. ratings of Baa3/BBB (Moody’s/Fitch), in line The company is rated A2/A/A+ by the DBS Bank and HSBC were joint global with the issuer. three global rating agencies. It issued coordinators, joint bookrunners and joint The issuer’s main mandate is to promote US$700m offshore bonds in two tranches lead managers. the development of the Xiangjiang New last month. Area of Changsha city in Hunan province through primary land development, › CHINA GAS SELLS RMB2BN PANDA BONDS SYNDICATED LOANS municipal road and infrastructure construction, and property management Bermuda-incorporated CHINA GAS HOLDINGS has › ADVENT SEEKS FUNDS FOR MATTRESS and services. raised Rmb2bn from an offering of Panda bonds in China’s interbank bond market, US private equity firm Advent International › XINJIANG ZHONGTAI MEETS INVESTORS according to a stock exchange filing late is seeking a US$330m five-year loan Thursday. that will fund its leveraged buyout of a Chemical producer XINJIANG ZHONGTAI GROUP is The issue size was at the high end of premium mattress maker, distributor and set to hold fixed income investor meetings the indicative range of Rmb1bn–Rmb2bn exclusive licensee of US mattress brand in Hong Kong and Singapore this week via given by the Hong Kong-listed company on Serta in China. CICC, according to a market source. October 18. Cathay United Bank, CTBC Bank and The company will meet investors in The five-year non-put three notes were Taipei Fubon Commercial Bank are the Hong Kong on October 31 and November 1 priced at par to yield 4.38%. mandated lead arrangers, bookrunners and in Singapore on November 2, according The issuer and the bonds are rated AAA and underwriters of the transaction, which to the source. by China Chengxin and Lianhe. offers an interest margin of 225bp over The company is a state-owned company Proceeds will be used for debt repayment. Libor. of the Xinjiang Uyghur Autonomous Region Citic Securities was lead underwriter and Banks joining as MLAs with provincial government. bookrunner on the offering. ICBC was joint commitments of US$35m or more are lead underwriter. offered a participation fee of 105bp, while › SZ INV BOND TO BACK A-SHARE FIRMS The issuer is primarily engaged in the lead arrangers with US$20m–$34m receive construction and operation of city gas a 75bp fee. The loan represents a leverage SHENZHEN INVESTMENT HOLDINGS is set to issue pipelines in the PRC. multiple of around 4x–5x. Rmb1bn of bonds to provide liquidity to the AL DREAM 3 (CAYMAN) is the borrower on the A-shares of private companies, and hence › SINOPEC PRINTS DUAL-CURRENCY BONDS loan. reduce the risks related to pledged shares, In July, Advent entered into a share the company said in a stock exchange CHINA PETROCHEMICAL CORPORATION, known purchase agreement to acquire a 100% statement. as Sinopec Group, priced US$297m- equity interest in “Sky”, which is the Proceeds from the proposed issue will equivalent dual-currency Reg S senior notes exclusive licensee of mattress brand Serta be used to set up an equity investment denominated in offshore renminbi and in China, for around US$380m. fund. The fund will provide liquidity to Hong Kong dollars. The buyout will further expand Advent’s Shenzhen-based listed private companies Through SINOPEC CENTURY BRIGHT CAPITAL footprint in the premium mattress market that are operating normally but face INVESTMENT, rated A2/A (Moody’s/S&P), the in China following the acquisition of a temporary liquidity difficulties due Chinese state-owned oil company sold peer in October 2016. Advent acquired a to shares pledged by their controlling Rmb1bn three-year Dim Sum bonds at par majority interest in King Koil Shanghai

22 International Financing Review Asia October 27 2018 COUNTRY REPORT CHINA

It indirectly holds about 60% of Hong Kong-listed CMBC Capital Holdings, which Country Garden prunes offer is in the market for a term loan of up to HK$1.4bn-equivalent (US$179m). E Sun „ Loans Borrower seeks shorter tenors of two and three years after bond success Commercial Bank is the sole mandated lead arranger and bookrunner of that financing, Hong Kong-listed property developer COUNTRY respectively, via upfront fees of 165.75bp and which pays interest margins of 155bp over GARDEN HOLDINGS has launched a US$1bn- 229.5bp. Hibor and 150bp over Libor. The top-level equivalent term loan. MLAs with tickets of US$75m–$99m earn all-in pricing is 179.3bp for the HK dollar The size of the latest borrowing has been all-in pricing of 340bp and 370bp via fees portion and 174.3bp for the US dollar scaled back from the original plan of US$2bn of 146bp and 202.5bp, lead arrangers with portion. after Country Garden, rated Ba2/BB+/BBB−, commitments of US$50m–$74m receive raised US$975m via three and five-year senior all-in pricing of 335bp and 365bp via upfront › SHUI ON LAND LIFTS LOAN TO US$480M notes in September. fees of 136.5bp and 189bp, while arrangers The borrower has also shortened the with US$30m–$49m get 330bp and 360bp Shui On Land has increased a three-year maturity of the loan to two and three years in all-in pricing via fees of 126.75bp and term loan to US$480m from an initial from its original proposal of four years. 175.5bp. launch size of US$250m. ICBC (Asia) and HSBC are coordinating the The two and three-year tranches have Sole mandated lead arranger, new deal. The two banks, together with China average lives of 1.95 years and 2.7 years, bookrunner and underwriter Standard Merchants Bank, China Minsheng Banking respectively. Repayments on the former Chartered (Hong Kong) has brought in 10 Corp, , Industrial Bank and JP tranche will take place in two semi-annual banks, including Hong Kong Morgan, are likely to be the mandated lead instalments of 10% and 90% after a 1.5-year branch, which joined as equal status arrangers and bookrunners. grace period. The latter portion will be repaid arranger. The facility offers interest margins of 265bp via four semi-annual instalments after a 1.5- StanChart pre-funded the loan at the and 295bp over Libor/Hibor for the two and year grace period: 10% (18th, 24th and 30th initial size before launching it into general three-year tranches. Commitments can be in months) and 70% (36th month). syndication in June. It ended up with a either US or HK dollars or both. Commitments are due by November 21. US$100m final hold. Banks have been invited to join as MLABs Some of the company’s subsidiaries The loan offered a top-level all-in of with commitments of US$100m or more are providing guarantees. Funds are for 450bp based on an interest margin of for a top-level all-in pricing of 350bp and refinancing and general corporate purposes. 365bp over Libor and an average life of 380bp for the two and three-year tranches, APPLE LAM, YAN JIANG 2.625 years. The borrower is SHUI ON DEVELOPMENT (HOLDING), while Shui On Land is the guarantor. Sleep System, known as King Koil China, a equivalent yen-denominated borrowing, Funds are for refinancing, to back maker and retailer of premium mattresses while Huawei Technologies is also seeking acquisitions, for developing property and the exclusive licensee of US mattress a Samurai loan of a similar size. projects and for general corporate purposes. brand King Koil. Chinese names are seen as challenging For full allocations, see www.ifrasia.com. Advent already owns the Serta and in Japan as most regional banks have no Simmons brands in the US via its credit lines or limited lines allocated to › GREENLAND JV SEEKS RMB1.15BN LOAN ownership of Atlanta-based mattress maker the country due to a difficult historical Serta Simmons Bedding. relationship, the sources said. A joint venture of property developer In July, CMB International Leasing Greenland Holding Group is seeking a › CMB FL EYES DEBUT SAMURAI LOAN Management launched a US$400m three- Rmb1.15bn (US$166m) four-year term loan year term loan into syndication after to back the construction of a real estate CMB FINANCIAL LEASING has launched an up to Industrial & Commercial Bank of China project. ¥20bn (US$178m) three-year debut Samurai Singapore branch and Agricultural Bank of Nanyang Commercial Bank (China) is the sole loan, becoming the third Chinese borrower China Hong Kong branch pre-funded the mandated lead arranger and bookrunner of to tap the Japanese market in recent months. deal on July 9. The facility offered a top- the facility, which offers an interest margin MUFG launched the deal earlier this level all-in pricing of 122bp via an interest of 130% of the PBoC rate. month and responses are due in mid- margin of 95bp over Libor. MLAs committing Rmb200m or above November. CMB International Leasing Management earn an upfront fee of 60bp per annum for The facility offers an all-in pricing of is rated BBB+/BBB (S&P/Fitch), while parent a top-level all-in pricing of above 140% of about 130bp. CMB Financial Leasing is rated A3/BBB+/ the PBoC rate, lead arrangers coming in The borrower is CMB International BBB. with Rmb100m–Rmb199m receive 40bp Leasing Management, a fully owned Hong per annum in fees, while arrangers with Kong-incorporated unit of CMB Financial › CMBC INTERNATIONAL SOUNDS MARKET commitments of Rmb50m–Rmb99m get an Leasing. The parent will provide a keepwell upfront fee of 30bp per annum. agreement and a liquidity support deed as CMBC INTERNATIONAL HOLDINGS, a wholly owned Syndication is expected to close before credit enhancement for the deal. subsidiary of China Minsheng Banking the end of this year, while the drawdown is CMB Financial Leasing is a wholly owned Corp, is sounding the market for a three- scheduled for early next year. unit and the sole leasing business arm of year loan of around US$500m. Funds will be used to build a residential China Merchants Bank. The company hopes to sign the new- real estate project which will also have Last month, money deal, which could be a club or a some retail and serviced apartment space Financial Leasing launched a US$200m- syndicated facility, by the end of this year. in a prime location of Wuxi city in China’s

International Financing Review Asia October 27 2018 23 Pintec enlists heavy insider support

„ Equities Base deal oversubscribed thanks to demand from existing holders

The US$44m Nasdaq IPO of Chinese fintech partner and a corporate investor indicated an US$70m target but then trimmed the deal size. company PINTEC TECHNOLOGY went through interest in US$20m of ADS, according to a Fintech has proved a tough sell in the last week with the help of significant insider regulatory filing. IPO market and especially so in the Chinese demand, following in the footsteps of many Eventually, Pintec priced the IPO near the context. other Chinese issuers which have relied on top of the price range at US$11.88 each and Pintec posted total income of Rmb19m such support to pass the finish line. raised US$44m. The company sold 2.24m (US$3m) in the first three months of this Rather than securing insider support to ADS to certain existing holders while the year, compared with a Rmb35.5m loss a year take up part of the deal, Pintec convinced business partner and the corporate investor earlier. It posted a full-year loss of Rmb84m insiders to commit to subscribing shares for took 1.68m ADS, according to another filing. in 2017. more than its base deal. The insiders took 3.92m ADSs in total, The IPO proceeds will be used to repay The Pintec deal came with a base offer more than the 3.73m ADS the company some shareholder loans and to acquire of 3.73m American depositary shares at an offered in the base deal. complementary technologies, as well as for indicative price range of $10–$12 each. There “The company has over-alloted the whole general corporate purposes. is an over-allotment option of 558,750 ADSs, 15% of shares. So apart from the insiders, there Shares of Pintec rose 5.1% to US$12.49 on equal to 15% of the base deal. was also some demand from institutional their trading debut last Thursday. At the launch, certain existing holders investors,” said a person close to the deal. Citigroup, Deutsche Bank and Goldman indicated an interest in buying up to US$34m Similar to many Chinese IPOs in the US this Sachs were joint underwriters. of ADS in the offering while a business year, Pintec first filed publicly in July with a FIONA LAU

Jiangsu province. The project’s total EQUITY CAPITAL MARKETS enable mobile users to log in to websites investment is estimated to be Rmb2.3bn. without having to enter their user ID and Greenland holds about 40% of the project › CLOUDMINDS MEDITATES ON IPO password. company, called WUXIN YONGSHENG REAL ESTATE, Apart from SoftBank and Foxconn, which is also the borrower. CLOUDMINDS TECHNOLOGY, a developer of cloud- Keytone Ventures and Walden International One of the guarantors is Jiangsu based robots backed by SoftBank Group, is have also invested in CloudMinds. The Provincial Construction Group, one of mulling an IPO of up to US$1bn in the US company has recently closed Series A+ Yongsheng’s direct shareholders, which is or Hong Kong in 2019, according to people funding of US$147m, said CloudMinds in a in charge of the construction and sales of familiar with the situation. statement in September when it announced the project. The AI and cloud-computing startup, it has extended its collaboration with NYSE- The land and project under construction which also counts Foxconn Technology listed telecommunications firm Sprint in form part of the security for the loan. Group among its investors, is in discussion artificial intelligence. Meanwhile, Greenland is also raising with advisers about the potential listing, US$330m offshore to back the construction said the people. › FOUR DEALS TO START PRE-MARKETING of two overseas projects, one in New The deal could raise about US$500m– York and the other in South Korea’s Jeju $1bn, said two of the people. Four companies are set to start pre- island. Deutsche Bank is the MLAB of that The company is evaluating the pros and marketing this week for Hong Kong IPOs transaction, which offers an all-in pricing of cons of a US or Hong Kong listing and has of a combined US$2.7bn, if they win listing 145bp over Libor. not made a decision as yet on the venue, approvals from the Stock Exchange of Hong said the people. Kong. › CHAILEASE SIGNS RMB2BN LOAN CloudMinds did not reply to emails from Chinese online travel service provider IFR seeking comment. TONGCHENG-ELONG plans to raise up to CHAILEASE INTERNATIONAL FINANCE has signed a Founded in 2015, CloudMinds is a US$800m–$1bn from its float. Rmb2.015bn three-year term loan with 10 creator, developer and operator of cloud CMB International, JP Morgan and Morgan banks, with the deal size slightly above its robots. It has R&D operations in Santa Stanley are the joint sponsors. Rmb2bn target. Clara, California, Beijing and Tokyo. Tongcheng merged with eLong in March Mizuho Bank (China) was the sole mandated Headquartered in the US, CloudMinds this year. The company is backed by tech lead arranger and bookrunner and is the was founded by Chinese entrepreneur giant Tencent Holdings and travel service facility and security agent. Bank of Shanghai Bill Huang, who was the general manager provider Ctrip, which own respective stakes joined as MLA and eight other lenders also of the China Mobile Research Institute, of 24.92% and 22.88%. came in during general syndication. according to the company’s website. China’s leading online parenting firm The deal offered an interest margin SoftBank is more than a financial BABYTREE GROUP, backed by e-commerce of 120% of the PBoC rate and a top-level investor in CloudMinds. In May, SoftBank giant Alibaba Group, intends to raise up to participation fee of 25bp. and CloudMinds announced they had US$800m from an IPO. Signing took place on October 18. developed a new authentication solution by Babytree, which also counts The borrower is a fully owned unit of combining CloudMinds’ blockchain-based conglomerate Fosun International among Taiwan-listed Chailease Holding. authentication with the mobile carrier’s its backers, is China’s largest maternity and For full allocations, see www.ifrasia.com. authentication platform. This solution will child-focused online community and had

24 International Financing Review Asia October 27 2018 COUNTRY REPORT CHINA

139m monthly active users last year. Stock Exchange of Hong Kong for an IPO. › TWO BIOTECHS PLAN IPO Alibaba in late May invested US$214m It is unclear how much the company in Babytree, valuing the 11-year-old firm at is looking to raise, but a banker who has Two Chinese biotech companies, ALPHAMAB Rmb14bn (US$2bn). pitched for the transaction said the deal and ZESHENG TECHNOLOGY, are planning to list China Merchants Securities, Haitong might be around US$100m–$200m. in Hong Kong in 2019. International and Morgan Stanley are joint Founded in 2005, the company Alphamab has started working with banks sponsors for the IPO. designs, manufactures and markets on a float which could raise about US$200m, Chinese mobile advertising provider laboratory equipment for commercial according to people close to the deal. WANKA ONLINE, meanwhile, plans to raise use. Its signature product, a biomedical Established in 2009, it has a pipeline of US$400m–$500m. refrigerator, is designed to enable scientific over 20 biologics programmes in oncology The company marketed more than 2,800 researchers to keep vaccines, blood samples and several other areas. mobile apps in 2017 and recently expanded and related life-science specimens to Meanwhile, the board of Zesheng into the online game co-publishing and perform research projects and to produce Technology has approved a plan to list online video distribution businesses, pharmaceutical products. in Hong Kong. The company is already according to regulatory filings. Haier Biomedical is 40% held by a listed on National Equities Exchange and CICC, Citigroup, ICBC International and financial holding platform of Haier Quotations, China’s third board, an over- Macquarie are joint sponsors on the Corporation, 30% by US private equity the-counter market. proposed float. company Carlyle and 8% by healthcare It plans to sell 78m shares, or up to 30% Finally, Chinese mobile marketing investment firm Vivo Group. of its enlarged share capital, according to company MOBVISTA aims for a US$300m– It is also 22% owned by Shanghai-listed an announcement. A total of 89.7m shares $400m listing. Qingdao Haier. will be sold if a 15% greenshoe is fully CMB International and UBS are the joint Haier Biomedical posted a half-year exercised. sponsors. profit of Rmb46m for the period ended Mobvista posted net profit of US$27m June 30, down from Rmb69m a year ago. It › TUANCHE FILES FOR US IPO in 2017, up 38% from a year earlier. Its had yearly profits of Rmb74m in 2017 and revenues in 2017 were US$313m. Rmb122m in 2016. TUANCHE, which operates an automotive ABC International is the sole sponsor of the marketplace in China, has filed a US$150m › HAIER COMPLETES FIRST D-SHARE IPO float. Nasdaq IPO on a best effort basis. AMTD Tiger and Maxim Group are the joint Shanghai-listed QINGDAO HAIER has completed › INNOVENT IPO NEAR TOP OF RANGE bookrunners. the first D-share IPO in Frankfurt after Based in Beijing, TuanChe posted a net pricing the deal near the bottom of an Chinese biopharmaceutical company loss of Rmb21m for the first half of 2018, indicative price range of €1.00–€1.50. INNOVENT BIOLOGICS has raised HK$3.3bn compared to a net loss of Rmb58m over the The company sold 265m D-shares at (US$421m) from its Hong Kong IPO after same period of 2017. €1.05 each to raise €278.3m (US$320m). pricing it near the top of the indicative The company intends to use the proceeds There is a greenshoe of 15%, or 39.75m price range, according to people close to for the development and expansion of D-shares. the deal. business, strengthening information Three cornerstone investors took up a The company sold 236m primary shares, technologies and data analytics capabilities, combined €138m of the float. Silk Road or 21% of the enlarged share capital, at and general corporate purposes. Fund has committed to purchase 55m HK$13.98, versus the HK$12.50–$14.00 shares, while Camry Investment and Rechi range. › HANERGY TO RELIST IN CHINA Precision have backed €60m and €20m, The final price values the company at respectively. about US$2bn. Hanergy Mobile Energy Holding Group, Haier’s Frankfurt listing introduces a new Despite the weaknesses of other biotech parent of HANERGY THIN FILM POWER GROUP, class of equities for Chinese companies. IPOs and recent volatile market conditions, plans to take private the Hong Kong-listed D-shares, similar to Hong Kong-listed Innovent drew strong demand for the subsidiary and relist it in China, according H-shares, are new instruments being touted float. The books, excluding the cornerstone to a statement on the parent’s website. by the China Europe International Exchange. tranche, were more than 10x covered, said Hanergy Thin Film Power, whose shares Deutsche Bank was the sole global the people. have been halted from trading for more coordinator for the Frankfurt listing. Innovent secured 10 cornerstone than three years, had a market capitalisation CICC, JP Morgan and UBS are joint investors for a total of US$245m. of HK$163bn before suspension. Hanergy bookrunners. There is an overallotment option of 15% Mobile Energy is proposing to take the of the base deal. company private at HK$5 per share, versus › QINGDAO HAIER BIOMEDICAL FILES IPO The shares are due to list on October 31. the last close of HK$3.91. China Merchants Securities, Goldman Sachs, Hanergy Mobile Energy said it had sent QINGDAO HAIER BIOMEDICAL, the medical device JP Morgan and Morgan Stanley are joint the buyout suggestion to the subsidiary on unit of Haier Corporation, has filed to the sponsors for the IPO. October 12 and the board of the listco had

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International Financing Review Asia October 27 2018 25 Bestway Global paddles into loan markets

„ Loans Outdoor leisure product manufacturer launches US$100-$150m refi

Hong Kong-listed BESTWAY GLOBAL HOLDING has A site visit to Nantong, Jiangsu, will be Enterprise and Bestway Resources Group, launched a US$100m–$150m term loan. held on November 12-13. Commitments are and Bestway Global’s chairman and CEO Standard Chartered (Hong Kong) is the due by November 23. Zhu Qiang to remain the largest shareholder mandated lead arranger, bookrunner and Repayments will be through four semi- owning at least 50.1% of Bestway Global. facility agent of the borrowing. annual instalments after a 1.5-year grace The borrower must remain Bestway Bestway Global and its unit Bestway period: 10% (18th month), 15% (24th and Global group’s major export sales subsidiary Enterprise are providing joint and several 30th months) and 60% (36th month). contributing at least 51% of the group’s total guarantees, while the listed company’s A commitment fee of 35bp applies during sales. Its annual sales to third parties must wholly owned subsidiary BESTWAY (HONG KONG) a six-month availability period. be at least US$500m. INTERNATIONAL is the borrower. Financial covenants require Bestway Bestway Global must also continue to be The three-year amortising loan has an Global’s ratio of consolidated total net debt listed on the Hong Kong Stock Exchange and interest margin of 245bp over Libor and an to consolidated tangible net worth capped trading of its shares must not be suspended average life of 2.625 years. at 0.7x, the ratio of consolidated Ebitda to for more than 15 consecutive trading days. Banks have been invited to join as mandated consolidated total interest expense at a Funds are for refinancing secured lead arrangers with commitments of US$30m minimum of 5x, consolidated tangible net borrowings and for working capital, capital or more for an upfront fee of 144bp and a top- worth at a minimum of US$350m, the ratio expenditure and general corporate purposes. level all-in pricing of 300bp, lead arrangers of consolidated total net debt to consolidated Bestway Global is headquartered in with tickets of US$20m–$29m for a fee of Ebitda capped at 3.5x and the dividend Shanghai and makes inflatable pools, rafts 131bp and 295bp all-in, and arrangers with payout ratio capped at 30%. and hot tubs, as well as paddle boards, commitments of US$10m–US$19m for a fee of Ownership covenants require Bestway goggles, snow tubes and air mattresses. 118bp and an all-in of 290bp. Global to own 100% of the borrower, Bestway APPLE LAM

unanimously accepted the suggestion. the removal of the covenant by November 2. KONG INTERNATIONAL CONSTRUCTION INVESTMENT Hanergy Thin Film Power’s Hong Some banks that have already committed MANAGEMENT GROUP is the guarantor, while Kong stock has been suspended since it to the deal will need credit approval for the its indirect wholly owned subsidiary MILWAY plummeted nearly 47% in less than an change. DEVELOPMENT is the borrower. hour of trading on May 20 2015, ending a XINYI GROUP (GLASS), a unit of Xinyi Glass, The loan paid an all-in pricing of 305bp run that had seen the company’s market is the borrower for the financing, which through an interest margin of 275bp over capitalisation more than treble since pays a top-level all-in of 118bp based on an Hibor. November 2014. interest margin of 90bp over Hibor. Xinyi HNA Finance I, an indirect subsidiary of Hong Kong’s Securities and Futures Glass is the guarantor. HNA Group, holds 74.66% of HKICIM Group. Commission then launched an investigation Financial covenants remain unchanged Funds are to finance the development in the company. and require the guarantor’s tangible net of a 9,482-square-metre land site in Kai worth at a minimum of HK$8bn, Ebitda-to- Tak, Kowloon, and refinance a HK$2.98bn interest expense ratio at a minimum of 4.5x one-year bridge signed in June 2017. and the ratio of total borrowings to tangible That facility partly funded the group’s net worth capped at 7x. HK$7.44bn acquisition of the plot in March HONG KONG Xinyi Glass has production bases in seven last year. DBS was also the facility agent of Chinese cities as well as Malaysia. the bridge, which offered an all-in of 190bp via a margin of 150bp over Hibor. SYNDICATED LOANS › TWO JOIN HNA'S HK$5BN KAI TAK LOAN › MINMETALS LAND CLUBS HK$3.5BN LOAN › XINYI GLASS TO BREAK WITH COVENANT Two banks have joined HNA GROUP’s four- year term loan of up to HK$5.047bn that Allocations and pricing have emerged for Chinese automobile glass maker XINYI GLASS refinanced a bridge facility for the purchase Minmetals Land’s HK$3.5bn four-year club HOLDINGS is looking to amend the covenant of a land parcel in Hong Kong’s Kowloon loan with 10 banks. package on its HK$750m (US$96m) three- district and will be used to develop the plot. The loan offered an all-in pricing in the year bullet deal launched last month. China Citic Bank International and Shanghai high 200s via an interest margin of 200bp The Hong Kong-listed company is seeking Commercial & Savings Bank have committed over Hibor. the removal of a dividend payout covenant HK$500m each and joined the facility via Subsidiary ONFEM FINANCE is the borrower that caps the annual dividend payout at 50% an accession agreement. of the self-arranged transaction, while the of the guarantor’s consolidated net profit This brings the total committed amount Hong Kong-listed parent is the guarantor. after tax and prohibits dividend payments to HK$4bn, after DBS Bank and Shanghai Minmetals Land is the real estate flagship from being declared in the event of default. Commercial Bank each provided HK$1.5bn of state-owned China Minmetals Corp, Sole mandated lead arranger and earlier this year. which is rated Baa1/BBB+/BBB+ (Moody’s/ bookrunner Sumitomo Mitsui Banking Corp has DBS is also the facility agent. S&P/Fitch). asked banks to revert with their consent to HNA Group’s Hong Kong-listed unit HONG For full allocations, see www.ifrasia.com.

26 International Financing Review Asia October 27 2018 THE FIRST STEP IN CLO ANALYSIS: DETAILED, ACCURATE, AND TRANSPARENT LPC COLLATERAL

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[email protected] www.loanpricing.com › HDFC TARGETS RS12BN 10-YEAR BONDS The yields for a cumulative payment option are 9.7%, 9.85%, 10.00%, 10.40% and INDIA HOUSING DEVELOPMENT FINANCE CORP is planning 10.40% for 400 days, two, three, five and to raise Rs12bn from partly paid bonds at seven years. 9% for a tenor of 10 years, according to a The issue opened on October 24 and DEBT CAPITAL MARKETS market source. closes on November 22. This will be HDFC's third bond issue in a The notes are rated AA (stable) by Care › IFC PRINTS THREE-YEAR MASALA month. and AA+ (stable) by Brickwork. The largest private housing finance AK Capital Services and Edelweiss Financial INTERNATIONAL FINANCE CORPORATION, rated Aaa/ company in India raised Rs17bn two weeks Services are the lead arrangers. AAA (S&P/Moody’s), has issued Rs7.4bn ago from bonds maturing in December (US$100m) three-year Masala notes at a 2019 at 9.11%, which was alloted to › NABARD TO ISSUE JAN 2022 TAP yield of 7.46%. investors on October 26. The World Bank affiliate had given Earlier this month, HDFC raised NATIONAL BANK FOR AGRICULTURE AND RURAL indicative guidance at 7.5% levels for the Rs29.53bn from 10-year senior secured DEVELOPMENT is seeking bids to raise Rs5bn, offshore rupee issue, which was launched bonds at 9.05%, returning to the market plus a greenshoe option of Rs15bn, from a on October 18 and priced the next day. after nearly a year's absence. tap of its 8.5% January 2022 bond, according The Masala notes were sold to a range of The bonds are rated AAA by Crisil and to a market source. investors, including asset managers, banks, Icra. The Indian policy lender has asked and a pension fund, in the United States HDFC is yet to make an official investors to place bids on the electronic and Europe. announcement on the price, size and tenor platform in a closed bidding session on Bank Bank of America Merrill Lynch and TD of he bonds. October 29. Securities were the leads. The outstanding amount of the January The issuance is part of a US$1bn › INDIAN BANK TO RAISE T2 BONDS 2022 bonds is Rs44.95bn. Masala bond programme that IFC has just The notes have a put/call option in launched. INDIAN BANK is planning to raise up to Rs4bn January 2020 and are rated AAA by Crisil IFC has invested in affordable housing, from Basel III-compliant Tier 2 bonds, and India Ratings. SME finance, distressed assets resolution, according to market sources. On October 19, Nabard raised Rs12.89bn renewable energy, logistics, and disruptive It is targeting Rs2bn, plus a greenshoe from 15-year bonds at 8.92%. technologies in the country. option of the same amount from an open Nabard is yet to make an official “Our pipeline remains strong, and this bidding session. The notes have a call announcement on the bond sale plans. Masala bond programme will help us option in the fifth year. support our investment activities in the Indian Bank is yet to make an official › REC EYES 10-YEAR SUB DEBT near and medium term,” said Mengistu announcement on the T2 bond sale plans. Alemayehu, director for South Asia in a The notes are rated AAA by Crisil and RURAL ELECTRIFICATION CORP is planning to raise release. Care. up to Rs35bn from unsecured subordinated In September, India eased restrictions on 10-year bonds, according to a market Masala bonds to shore up the rupee. The › LIC HOUSING PRINTS THREE-TRANCHER source. government waived the 5% withholding It has asked investors to place bids on tax on coupon payments on offshore rupee LIC HOUSING FINANCE raised Rs16.8bn from a BSE's electronic platform from 10:30am to bonds issued from September 17 to March triple-tranche bond offering, according to 11:30am India time on October 29. 31 2019. a filing on National Securities Depository The state-owned issuer is targeting The central bank has also scrapped a rule Limited. Rs5bn, plus a greenshoe option of Rs30bn. preventing banks from supporting Masala It has fixed the yields at 9.25% for a one- On October 20, REC raised Rs21.71bn bonds as market-makers, a step that should year 11-month portion of Rs5.55bn, 9.17% from three-year three-month bonds at boost liquidity in the secondary market. for a three-year and five-month tranche of 8.83%. Rs4.95bn and 9.1% for a nine-year 11-month REC is yet to make an official › REC APPOINTS BANKS FOR DOLLAR SENIOR piece amounting to Rs6.3bn. announcement on the subordinated bond The housing finance company had asked sale plans. REC LIMITED, rated Baa3/BBB– (Moody’s/Fitch), investors to place bids in a closed bidding has been meeting investors for a senior US session on October 23. › NBFCS PRINT ZERO-COUPON BONDS dollar bond in Asia, Europe and the US. The notes are rated AAA by Care and The roadshow ends on Monday. Crisil. ADITYA BIRLA FINANCE, HDB FINANCIAL SERVICES and IFR reported in September that the KOTAK MAHINDRA INVESTMENTS have raised a Indian utility had mandated Barclays, › MANAPPURAM FINANCE SETS YIELDS total of Rs20.25bn from shorter maturity Citigroup, HSBC, JP Morgan, MUFG and zero-coupon bonds, according to a filing on Standard CharteredBank. MANAPPURAM FINANCE has announced the National Securities Depository Limited. A benchmark 144A/Reg S bond with yields for a Rs10bn public issue of bonds. Aditya Birla Finance raised Rs11.5bn from tenors of five and/or 10 years will be drawn The non-banking financial company has one-year one-month and 14-day bonds. down under its US$5bn global medium- set the effective yields at 9.85%, 9.99% and HDB Financial raised Rs8bn from three-year term note programme, subject to market 10.39%, payable annually, for two, three and 12-month notes and Kotak Mahindra conditions. and five-year tenors. Investments printed Rs750m from two-year REC last visited the dollar market in The effective yields for a monthly and 11-month bonds. March, pricing a US$300m 4.625% 10-year interest payment option for three and five The NBFC are yet to announce the yields bond at Treasuries plus 200bp. years are 10.02% and 10.46%, respectively. for the zero-coupon bonds.

28 International Financing Review Asia October 27 2018 COUNTRY REPORT INDIA

The secured debentures of ABF are rated domestic bond market to raise funds after Sumitomo Mitsui Banking Corp and UOB AAA (stable) by India Ratings and Icra. nearly a year's absence. In November last Bank were the mandated lead arrangers Crisil has assigned AAA ratings to the year, it raised Rs15bn from bonds in an and bookrunners of the bullet facility, bonds of HDB Financial Services and Kotak equally redeemable format at the end of which closed as a club. The deal is said to Mahindra Investments. the third, fourth, fifth, sixth and seventh have been mandated at below 130bp all-in The deals are a response to demand years, at 7.99%. pricing. from mutual funds’ fixed maturity plans, Tata Power has been active in the dollar according to a domestic fund manager. loan market in recent months. It launched › SBI PICKS SEVEN FOR US$500M LOAN a US$245m three-year refinancing into › SIDBI PRINTS RS12.45BN AT 8.81% general syndication with an interest margin has mandated seven banks of 115bp over Libor on October 22. on a five-year loan of US$500m, its fourth SMALL INDUSTRIES DEVELOPMENT BANK has printed borrowing of the year. Rs12.45bn three-year and three-month CTBC Bank, DBS Bank, HSBC, First Abu bonds at 8.81%, according to a market SYNDICATED LOANS Dhabi Bank, Sumitomo Mitsui Banking Corp, source. Westpac and UOB Bank are the mandated It was seeking bids to raise up to Rs15bn › BPCL, BHARAT OMAN SEND RFPS lead arrangers, bookrunners and equal from bonds on the electronic platform on underwriters. October 24. India’s state-owned BHARAT PETROLEUM and The mandated all-in pricing is said to be The notes are rated AAA by Care. an affiliated entity, BHARAT OMAN REFINERIES, around 130bp, significantly more generous In August, Sidbi raised Rs15bn from have each sent out request for proposals for than the pricing on SBI’s US$750m three- three-year bonds at 8.4%. loans totalling up to US$725m. year loan that closed to a poor response in Sidbi is yet to make an official BPCL is seeking a US$300m five- July. announcement on the final yield and the year loan with a US$300m greenshoe No lenders committed in general size option, while BORL – a 50-50 joint syndication on that deal, which was venture between BPCL and Oman Oil – launched in May offering a top-level all-in › TATA POWER SEEKS BOARD APPROVAL is sounding the market for a US$125m pricing of 90bp based on an interest margin three-year refinancing. of 70bp over Libor and a 2.6-year remaining TATA POWER will seek board approval on The deadlines for the RFPs were last life. Axis Bank, Barclays, Credit Agricole October 29 to issue bonds via a private Friday and last Tuesday, respectively. CIB, First Abu Dhabi Bank, HSBC, MUFG, placement, according to a filing on BPCL last closed a US$100m three-year SBI Capital Markets, Standard Chartered exchanges. refinancing in October 2017 as a bilateral. and UOB Bank were the MLABs. On October 12, Crisil Ratings assigned MUFG provided the loan, which is said to SBI’s latest borrowing is its fifth loan a AA– (stable) rating to Tata Power's non- pay an all-in around the mid 70s to low since September last year when it raised convertible debentures aggregating to 80s. a US$750m five-year facility that paid Rs15.64bn. BORL last raised a US$125m three-year a top-level all-in pricing of 115.35bp The Indian utility is coming to the loan in December 2015. Mizuho Bank, based on a margin of 105bp over Libor

Jaguar Land Rover revs up US$1bn loan

„ Loans Tata Motors unit borrows for capex

JAGUAR LAND ROVER AUTOMOTIVE, a unit of Tata title for tickets of US$50m–$74m via a fee syndication as MLAs, while 16 other lenders Motors, has launched a US$1bn financing of 50bp, or an all-in of 178.7bp and the lead participated in general syndication. into general syndication at four ticket levels arranger title for US$25m–$49m via a fee of That loan comprises a £415m dual-tranche with nine banks at the top. 40bp. Arrangers get an all-in of 176.1bp for facility A and a £225m facility B. Facility A ANZ, Axis Bank, BNP Paribas, Credit US$15m–$24m via a fee of 25bp. is split into two amortising portions – one Agricole CIB, Citigroup, DBS Bank, First Abu The deadline for early bird commitments maturing in July 2020 and the other in July Dhabi Bank, Mizuho Bank and Standard is November 23, while the actual deadline 2023. Facility B has a bullet repayment due Chartered are the original mandated lead is December 7. Signing of the syndication in July 2022. Lenders were offered a top-level arrangers and bookrunners of the new- agreement is slated for mid-December. all-in pricing of 132bp based on a blended money deal, which was pre-funded on Jaguar Land Rover Holdings and Jaguar margin of 120.4bp and a blended remaining October 22. Land Rover are the guarantors of the facility, average life of 4.3 years. The amortising loan, which matures on which will be used for capital expenditure JLR, the holding company of the Jaguar January 31 2025, pays an interest margin of and general corporate purposes. Land Rover business, is rated Ba2/BB 170bp over Libor and has an average life of JLR last closed a £640m loan in January (Moody’s/S&P). 5.74 years. with 20 lenders joining in syndication. ANZ, JLR is a direct, wholly owned subsidiary of Based on an early bird fee of 10bp, lenders Credit Agricole, DBS, FAB, Mizuho, MUFG TML Holdings, which itself is wholly owned receive a top-level all-in pricing of 183.1bp and StanChart were the MLABs of that by Tata Motors. Tata Sons, together with its and the MLAB title for commitments of deal. Bank of Nova Scotia, Citigroup, Export subsidiaries, held 37.27% of the voting rights US$75m and above via a participation fee Development Canada and Sumitomo Mitsui in Tata Motors as of September 30. of 65bp, an all-in of 180.5bp and the MLA Banking Corp joined the facility in senior CHIEN MI WONG

International Financing Review Asia October 27 2018 29 and a remaining life of 4.83 years. syndication. Mizuho, MUFG and SMBC were include selling stakes in some of its That facility saw participation from 18 the MLABs of the bullet deal, which offered businesses, an Indian government official lenders, including eight joining in general a top-level all-in pricing of 100bp based told Reuters. syndication. on a margin of 80bp over yen Libor and a State Bank of India Sydney is wrapping remaining life of 9.5 years. up syndication of a A$200m (US$150m) )2&#ûANDû.40#ûAREûRATEDû"AA"""¦ EQUITY CAPITAL MARKETS term loan that has attracted four banks. """¦ ûWHILEû0OWERû'RIDû#ORPûISûRATEDû"""¦û CTBC Bank and Mizuho Bank are the by S&P and Fitch. › SBI BOARD CLEARS RS200BN EQUITY PLAN MLABs of the bullet financing, which has three and five-year portions and offers STATE BANK OF INDIA’s board of directors has top-level all-in pricing of 105bp and 133bp RESTRUCTURING approved a plan to raise equity capital of up based on margins of 93bp and 126bp over to Rs200bn (US$2.7bn) in the financial year BBSY, respectively. › IL&FS APPOINTS ADVISERS to March 31 2019. In April, SBI Sydney closed a A$120m The funds can be raised through a bilateral with SMBC. That deal paid a INFRASTRUCTURE LEASING & FINANCIAL SERVICES qualified institutional placement, follow-on margin of 106bp over BBSY, according to has appointed Arpwood Capital, JM Financial offer or rights offer. LPC data. Consultants and Alvarez & Marsal as advisers The board also approved a plan to raise to help develop and execute a resolution up to Rs50bn through an issue of Tier 2 › IOC SENDS RFP FOR US$300M LOAN plan for the debt-laden company. bonds. The bonds can be issued either in US In a meeting last week, the IL&FS board dollars or Indian rupees to foreign or local State-owned oil and gas company INDIAN OIL “considered it important to harmonise all investors in the 2019 financial year. CORP has sent a request for proposals for a asset monetisation activities, including The timing of the transactions and the US$300m three-year financing. ongoing initiatives, and to undertake participating banks will be decided later. The deadline for the deal, which comes the same in a transparent and speedy In 2017, SBI completed the country’s with an unspecified greenshoe, is on Friday. manner” to serve the interest of different largest qualified institutional placement of IOC last signed a US$300m refinancing stakeholders, the non-banking financial Rs150bn at a zero discount. with five banks in December 2017. Bank company said in a release. SBI shares closed last Monday at of Nova Scotia was the original mandated Arpwood Capital and JM Financial Rs260.35, down 16% year to date. lead arranger and bookrunner of the tightly Consultants will act as financial and priced deal, which paid a top-level all-in transaction advisers, and Alvarez & Marsal › SHORTLISTS FOR HUDCO AND NBCC SALES pricing of 91bp based on an interest margin will be the restructuring adviser. of 70bp and a remaining life of 4.75 years. Alvarez & Marsal will assist the board in The Department of Investment and maintaining strict liquidity management Public Asset Management has ranked PNB › NTPC SENDS RFP FOR 10-YEAR SAMURAI controls at the group on a daily basis, Investment, Elara Capital and IDBI Capital evolve the resolution plan and manage as the top three bidders to manage a 10% India’s largest power utility company communications with stakeholders during stake sale in state-owned NBCC INDIA. NTPC has sent a request for proposals for the implementation of the restructuring The stake is valued at a maximum a US$150m-equivalent 10-year facility plan. Rs9.5bn at last Thursday’s close. denominated in yen, returning to the Separately, a proposed IL&FS rights The bank line-up will be finalised when Samurai loan market less than a year after issue of Rs45bn (US$610m) cannot go Elara and IDBI match the fees quoted by its last visit. ahead as the company must first present PNB. The deadline for responses is November its resolution plan to the National ICICI Securities, SBI Capital and Yes 2. Company Law Tribunal by the end of this Securities were the other bidders. In April, the borrower signed a ¥39.42bn month, according to a market source. The Separately, Elara Capital, IDBI Capital and (then US$370m) 10-year facility – the company had received approval for the SBI Capital have been ranked the top three first unsecured decade-long borrowing in rights issue in August, before it made a bidders for a 10% stake sale in HOUSING the offshore loan market. Mizuho Bank, series of defaults. AND URBAN DEVELOPMENT COMPANY. At last MUFG and Sumitomo Mitsui Banking Corp IL&FS has outstanding debt of Rs910bn Thursdays’s close the stake sale will total a were the mandated lead arrangers and and needs a fund injection to address a maximum Rs8.2bn. bookrunners of the Samurai loan, which short-term liquidity crunch. The banks will be finalised when IDBI attracted eight other lenders in general Earlier this month, the government took Capital and SBI Capital match the fees bid syndication. the extraordinary step of effectively seizing by Elara. That deal offered a top-level all-in pricing control of IL&FS after the defaults caused PNB Investment, ICICI Securities and Yes of 105bp based on an interest margin of turmoil in financial markets. Securities were the other bidders for the 95bp over Tibor and a weighted average The IL&FS board was replaced with Hudco transaction. remaining life of 10 years. six nominees, including Uday Kotak, the The financial bids of PNB Investment for Another Indian state-owned electric managing director of , NBCC and Elara’s for Hudco are not known. utility, Power Grid Corp of India, is seeking as non-executive chairman. Up to three banks will be hired for each a US$200m-equivalent 12-year door-to- The board also appointed Vineet Nayyar of the sale. door Samurai, marking its debut in the as managing director. Nayyar is executive The government owns 89.81% of Hudco international loan markets. vice-chairman of Tech Mahindra, which and 73.75% of NBCC. Separately, state-owned Indian helped turn around failed computer NBCC shares are down 57% year to date Railway Finance Corp closed last month services company Satyam. and Hudco down 50%. a ¥26.231bn 10-year Samurai loan, The new board will come up with a DIPAM manages stake sales in state- which attracted three banks in general revival plan for the lender that could owned companies.

30 International Financing Review Asia October 27 2018 COUNTRY REPORT INDONESIA

› SHRIRAM PROPERTIES TO FILE IPO That meant that the tender offer was dependent on Pertamina being able to price SHRIRAM PROPERTIES plans to file the draft INDONESIA a new bond on Thursday, which turned out prospectus for a Rs10bn–Rs15bn IPO next to be an extremely weak session for Asian month, people with knowledge of the credit, following drops of 2.4% and 3.1% transaction have said. DEBT CAPITAL MARKETS in the Dow Jones and S&P stock indices in Axis, Edelweiss and Nomura are the Wednesday’s US trading session. bookrunners. › PERTAMINA POSTPONES NEW ISSUE The same banks were dealer managers The IPO is likely to be a combination of for the tender offer. primary and secondary shares. PERTAMINA (Baa2/BBB–/BBB) has postponed The company develops residential and a proposed new US dollar bond issue and › PAN BROTHERS BUYS BACK BONDS commercial projects mostly in South India called off a tender offer for some of its and has a portfolio of 20 million square feet existing paper. PAN BROTHERS will repurchase US$28.922m of built-up space. It is part of the Shriram The Indonesian state-owned oil and gas of its US$200m 7.625% bonds due 2022, Group, which has interests in financial company visited Asia, London and the following a tender offer. services. US last week ahead of a potential 144A/ The purchase price was set at 95% of face Other real estate firms that have Reg S bond issue via joint bookrunners value. also filed for domestic IPOs are Lodha BNP Paribas, Deutsche Bank, HSBC, Standard The Indonesian apparel supplier had Developers and Puranik Builders (Rs10bn). Chartered and Mandiri. Investor meetings offered to pay 92%–95% of face value, and However, both companies have pushed ended on October 24. buy up to US$40m of bonds, with the price back the deals because of weak market Pertamina announced that the bond decided by a modified Dutch auction. conditions. offering would not go ahead at the Netherlands-incorporated subsidiary PB moment, but a lead said the issuer might International issued the bonds in January › JSW STEEL RIGHTS OFFER CLEARED look at another window later. 2017 with a guarantee from Pan Brothers and The new issue would have funded a its subsidiaries. It was a debut offshore issue. The board of directors of JSW STEEL has tender offer for Pertamina’s US$1bn 5.25% ANZ was dealer manager for the offer. approved the company’s plan to sell rights senior notes due 2021 and its US$1.242bn shares of up to Rs50bn. 4.875% senior notes due 2022. › INALUM HIRES FOR DOLLAR BONDS The timing of the issue and the It had offered US$1,034.50 per US$1,000 underwriting bankers will be decided in principal amount of the 2021s, and Indonesian state-owned aluminium later. US$1,022.50 per US$1,000 of the 2022s. producer INDONESIA ASAHAN ALUMINIUM (Inalum) Jindal Organisation owns 19.56% of The offer ended on October 25, and was has hired banks to arrange investor the company, followed by JFE Steel dependent on completing a new issue large meetings ahead of a potential US dollar at 15.08% and JSW Techno Projects at enough to fund the tender offer and leave bond offering, after it agreed to buy a 10.29%. at least US$500m for general corporate majority stake in the world’s second-biggest JSW Steel shares are up 28% year to date. purposes. copper mine. MSky seeks extension of 2016 facility

„ Loans Pay-TV operator to stretch maturity by another three years

Indonesian pay-TV operator MNC SKY VISION is for tranches A and B, respectively. The the 2013 loan, MSky decided to cap the size reaching out to lenders to extend a US$170m average life was 2.9 years. ING Bank and of the new refinancing loan to US$200m three-year loan signed in 2016. Siemens Financial Services joined in senior with a single-tranche structure instead of Deutsche Bank and Standard Chartered syndication, while three other lenders the dual-tranche borrowing it had sought were the mandated lead arrangers and participated in general syndication. initially. bookrunners of the deal, which will be At that time, the borrower endured The December 2013 loan paid a top-level extended by another three years. The terms a challenging period following two all-in pricing of 490bp via a margin of 425bp and conditions of the financing, which pays downgrades to the ratings of MSky’s parent over Libor, based on an average life of 2.9375 an interest margin of 425bp over Libor, will MNC Investama from B to B− by S&P and B3 years. remain the same. to Caa1 by Moody’s in August and September Separately, MSky’s affiliate free-to-air The US$170m single-tranche loan – used 2016, respectively. broadcast company Media Nusantara Citra to refinance a US$243m three-year deal from MSky subsequently repaid 25% of the most recently raised another US$50m December 2013 – was reduced from a size of US$243m loan in mid-September with through an accordion facility last December up to US$225m when launched into general help from Rp1.1trn it largely raised through after closing a US$200m four-year syndication. additional capital contributions from refinancing in August 2017. The financing was originally split into Jakarta-listed Global Mediacom, the holding Deutsche Bank, ING and StanChart were a senior amortising term loan (tranche A) company of MSky and its affiliate Media the MLABs of the 2017 transaction, which and a bullet loan (tranche B). The top- Nusantara Citra. The Rp1.1trn was raised over originally offered a top-level all-in pricing of level all-in pricing in general syndication a nine-month period ending September 30 366.5bp based on a margin of 325bp over was 494bp and 617bp based on interest 2016. Libor and an average life of 3.85 years. margins of 425bp and 500bp over Libor Following the first principal repayment of CHIEN MI WONG

International Financing Review Asia October 27 2018 31 BNP Paribas, Citigroup and MUFG are joint held in Singapore on October 30. a floating storage and regasification unit. global coordinators. They are also joint Medco Energi last raised a US$360m The power plant, located on the west side bookrunners with CIMB, , SMBC reserve-based lending facility in December of the island of Java, will start construction Nikko and Standard Chartered. 2017. The same banks were the MLABs of this year and is expected to begin The issuer is expected to be rated Baa2/ that financing, which attracted six lenders operations in 2021. BBB– (Moody’s/Fitch). in limited syndication. That RBL pays The electricity will be sold to Indonesia’s It will visit Singapore on October 29, different interest margins to account for government-owned utility PLN for over 25 followed by Hong Kong, Los Angeles, the project’s construction risks. The margin years. Boston and New York, ending in London on is 450bp over Libor pre-completion before November 5. An offering of 144A/Reg S bonds stepping down to 385bp post-completion. may follow, subject to market conditions. Last month, Inalum agreed to acquire › PAMA OBTAINS US$1BN CLUB shares from Rio Tinto and Freeport- JAPAN McMoRan for US$3.85bn to give it a 51.23% Mining contractor PAMAPERSADA NUSANTARA stake in Freeport Indonesia, which operates has obtained a US$1bn five-year financing the Grasberg copper mine in Papua with 12 lenders. SYNDICATED LOANS province. The transaction is expected to ANZ, Bank of China Hong Kong, CIMB, close by the first quarter of 2019. Citigroup, DBS Bank, HSBC, KDB Singapore, › AFREXIMBANK TO VISIT TOKYO Mizuho Bank, MUFG, OCBC, Sumitomo Mitsui › SMI EYES DUAL-TRANCHE BONDS Banking Corp and are AFRICAN EXPORT-IMPORT BANK (Afreximbank) the lenders of the facility, which comprises is holding a non-deal roadshow in Tokyo SARANA MULTI INFRASTRUKTUR is planning to a US$700m term loan and US$300m this week ahead of the maturity of a debut raise Rp1trn (US$66m) from dual-tranche revolving credit facility. Ninja loan it completed last year. bonds, according to an offer document. The deal, which was to be signed on MUFG is arranging the roadshow. The Indonesian infrastructure financing Friday, pays an interest margin of 105bp Last year, Afreximbank closed a firm has put out indicative yields in the over Libor. The term loan has an average US$150m-equivalent two-year deal, range of 7.75%–8.50% for a 370-day tranche life of 3.25 years. increasing it from a US$106m-equivalent and 8.25%–9.00% for a three-year portion. Funds will be used for general corporate size via an accordion feature. The loan with The books opened on October 23 and will and working capital purposes. the original size was closed in April last close on November 2. The borrower last raised a US$400m year with five Asian lenders, including sole The notes are rated AAA by Pefindo. dual-tranche financing in 2013, according coordinator, bookrunner, mandated lead Bahana, CGS-CIMB, Danareksa, Indo Premier, to LPC data. ANZ, Citigroup, DBS, HSBC, arranger and facility and documentation Mandiri and Trimegah Sekuritas are lead Mizuho, MUFG, OCBC, SMBC and Standard agent MUFG. Two of those banks increased arrangers. Chartered were the lenders of that club, their initial commitments and two other which is equally split into a term loan and lenders joined via the accordion. revolver. The Ninja loan will mature in March. It is SYNDICATED LOANS PAMA is a wholly owned subsidiary of split into a US$100m facility and a ¥6.2bn United Tractors, which is in turn majority- facility and had offered all-in pricing of › MEDCO ENERGI UNITS LAUNCH RBL owned by Astra International. 180bp and 80bp, respectively. Last month, Afreximbank completed Two units of oil and gas company MEDCO › JAWA 1 LNG PROJECT SIGNS FINANCING its first Korea-focused US$150m three- ENERGI INTERNASIONAL have launched a year club loan. acted US$500m three-year reserve-based Japan Bank for International Cooperation and as coordinator and lender, with other revolving credit facility into general other lenders on October 20 signed a participating banks comprising KEB Hana syndication. US$1.312bn financing to back the Jawa 1 Bank, and NongHyup Bank. ANZ, ING Bank and Societe Generale are the LNG-to-Power project in Indonesia, JBIC said Afreximbank, rated Baa1/BBB– (Moody’s/ mandated lead arrangers and bookrunners last Monday. Fitch), is a pan-African multilateral financial of the financing, which pays an interest JBIC is funding US$604m, while Credit institution devoted to financing and margin of 375bp over Libor and has an Agricole, Mizuho Bank, MUFG, OCBC and Societe promoting trade in and from the continent. average life of 2.83 years. Generale are providing a US$403m 21-year The bank was established in October 1993 Subsidiaries Medco E&P Malaka and loan. The Asian Development Bank is also by African governments, African private Medco E&P Tomori Sulawesi are the providing a loan to back the project. and institutional investors, and non-African borrowers of the financing, which will be Nippon Export & Investment Insurance will investors. used for general corporate purposes. provide 100% political and 90% commercial Lenders receive a top-level all-in risk coverage to the US$403m commercial pricing of 431.7bp and the MLA title for portion, the agency said in a statement on EQUITY CAPITAL MARKETS commitments of US$75m and above via Monday. a participation fee of 160bp, an all-in of JAWA SATU POWER, a borrowing entity › TOKYU FUDOSAN MAKES FOLLOW-ON 426.4bp and the lead arranger title for established by Marubeni, Sojitz and tickets of US$50m–$74m via a fee of 145bp, Pertamina, will use part of the funds to Real estate company TOKYU FUDOSAN HOLDINGS or an all-in of 419.3bp and the arranger title build and operate a 1,760MW gas-fired has raised ¥50.6bn (US$449m) through for US$30m–$49m via a fee of 125bp. power plant, while JAWA SATU REGAS, the a follow-on offering to fund projects in The deadline for commitments is other special purpose company set up by Tokyo’s Shibuya area. November 28. Bank presentations are being the same three companies and Mitsui OSK The company offered 80.4m shares at held in Jakarta on Thursday and will be Lines, will use the rest of the funds to build ¥629 each. The final price represents 3.08%

32 International Financing Review Asia October 27 2018 COUNTRY REPORT MALAYSIA

Lao Viet Bank returns after a year

„ Loans Borrower taps up to US$100m loan with tighter pricing

LAO VIET BANK has launched a three-year term Funds are for working capital purposes. a US$100m B loan. ADB will provide the A loan of up to US$100m, returning to the loan In September 2017, the borrower raised loan, and only the B loan is being syndicated. market after an absence of more than a year. a US$40m three-year term loan from six The B loan has three and five-year portions. Cathay United Bank is the mandated lead banks. Cathay United was the sole MLAB on The interest margins are 110bp and 160bp arranger and bookrunner of the bullet loan, that deal, which offered a margin of 320bp over Libor, respectively, for the three and which has a base size of US$60m and a over six-month Libor. five-year portions, and the respective average greenshoe option of US$40m. Established in 1999, the bank is a joint lives are 2.5 years and 3.15 years. Lenders are The deal offers an interest margin of venture between JOINT STOCK COMMERCIAL BANK being offered top-level all-ins of 130bp and 200bp over Libor. FOR INVESTMENT & DEVELOPMENT OF VIETNAM (BIDV) 173.3bp, respectively, via a fee of 50bp. MLABs committing US$20m or more and Laotian state-owned Banque pour le In June, BCEL raised a US$150m four-year will receive an all-in pricing of 217bp via a Commerce Exterieur Lao (BCEL). BIDV is debut term loan. Cathay United was the participation fee of 50bp, while MLAs joining providing a standby letter of credit to the MLAB on that deal, which offered a margin with US$10m–$19m earn an all-in pricing of latest facility. of 400bp over Libor and had a 3.1-year 208bp via a 25bp fee. Lead arrangers coming Separately, BIDV is in the market for a average life. Banks joining as MLAs were in for US$5m–$9m will receive an all-in US$300m financing. Asian Development offered a top-level all-in pricing of 413bp via pricing of 203bp via a 10bp fee. The deadline Bank is the sole MLAB of the facility, a participation fee of 35bp. for commitments is November 16. which comprises a US$200m A loan and EVELYNN LIN

discount to October 22’s close of ¥649, Affin Hwang, AmInvestment Bank, CIMB, year after it raised M$3bn in tenors of five, within the 3%–5% indicative range. Maybank and RHB are expected to launch seven, 10 and 15 years in March. There is an overallotment option of up to the deal as early as this week. 15% of the base size and a concurrent third- The state-owned owned funding vehicle › ECO WORLD GOES SHORT-DATED party allotment of 17.5m treasury shares. for state transportation projects is looking Books were almost 15 times covered. There to sell the notes in tenors of seven to 30 ECO WORLD INTERNATIONAL has sold M$350m of was very strong demand in the international years, depending on investor demand. three-year Islamic bonds priced at par to book from long-only and real estate investors The bonds will be irrevocably and yield 6.4%. including existing shareholders, a person unconditionally guaranteed by the federal The deal follows a M$180m offering of with knowledge of the deal said. government of Malaysia and will be five-year notes in April at 6.65%. International investors took up 40% of drawn from a M$61bn Islamic CP/MTN The unrated sukuk settled last Thursday the offering and domestic buyers were programme under the murabahah format with proceeds to be used for general allocated 60%. The allocation shifted 5% via a tawarruq arrangement. corporate use and debt refinancing. in favour of international versus domestic CIMB and Maybank were joint lead compared with the original plan due to › LPPSA TIES UP SUKUK managers. strong demand, the person added. The issuer is subject to a 180-day lock-up LEMBAGA PEMBIAYAAN PERUMAHAN SEKTOR AWAM has › UEM SELLS SUNRISE SUKUK period. raised M$3bn from the sale of government- Proceeds will be used primarily to fund guaranteed Islamic bonds in tenors of five UEM SUNRISE has priced M$700m of Islamic existing real estate projects in the greater to 30 years. bonds in tenors of three, five and seven Shibuya area and repay outstanding A M$550m five-year tranche will pay years. borrowings. 4.05%, a M$500m seven-year note will pay A M$350m three-year tranche was priced Daiwa, Mizuho and Nomura are the joint 4.20%, a M$900m 20-year will pay 4.85% and at par to yield 4.85%, a M$100m five-year at global coordinators of the deal, and joint a M$500m 30-year will pay 5.10%. All four 4.98% and a M$250m seven-year at 5.15%. bookrunners and joint lead managers with Islamic tranches were privately placed with Settlement is on October 31. Morgan Stanley in the international offering. investors. The private placement was jointly led by A M$550m 10-year tranche was the only CIMB, HSBC Amanah Malaysia and Maybank. tranche that was put through bookbuilding The Malaysian real estate company will last Tuesday and priced at 4.39%, in the issue the notes, rated AA– by Marc, off a lower half of initial price guidance of M$2bn Islamic CP/MTN programme under MALAYSIA 4.36%–4.46%. the murabahah format via a tawarruq All the notes will be unconditionally arrangement. and irrevocably guaranteed by the federal DEBT CAPITAL MARKETS government of Malaysia. › AFFIN ISLAMIC PRINTS BASEL III SUKUK Settlement is on October 31. › DANAINFRA READIES SUKUK Affin Hwang, AmInvestment Bank, Bank Islam, AFFIN ISLAMIC BANK has printed M$1.1bn of CIMB, Maybank, OCBC and RHB were joint subordinated Islamic bonds that will qualify DANAINFRA NASIONAL has mandated five banks lead managers. as Basel III-compliant Tier 2 and Additional to lead an offering of Islamic bonds to raise This is the Malaysian public-sector housing- Tier 1 capital. up to M$4bn (US$974.4m). financing agency’s second bond deal for the It issued last Tuesday M$800m of Islamic

International Financing Review Asia October 27 2018 33 Tier 2 notes which priced at par for 5.05%. earlier in the day at 4.95%-5.05%. ANZ is the mandated lead arranger, The 10-year non-call five bonds, rated A1 by Demand was robust with the deal bookrunner and underwriter of the bullet RAM, will be callable on October 23 2023. subscribed 1.6x. deal, which pays an interest margin of The Malaysian bank also issued M$300m The Malaysian bank was looking to raise 100bp over Libor and has an unspecified of perpetual non-call five Islamic AT1s, M$1bn. greenshoe. rated A3 by RAM, on October 18. The AmInvestment Bank was sole lead manager. Banks are invited to join as MLAs with Islamic perps priced at par for 5.65%, commitments of US$20m or more for an tighter than the 5.8% paid by Affin Bank for upfront fee of 60bp and a top-level all-in of a M$500m conventional AT1 bond in July. 120bp, and as lead arrangers with tickets of Both deals, led by Affin Hwang Investment US$10m–$19m for a 48bp fee and an all-in Bank, were drawn from a M$5bn MTN NEW ZEALAND of 116bp. programme established in early October. Bank presentations will be held in Taipei on Monday and in Singapore on Tuesday. › TM RINGS IN SUKUK DEBT CAPITAL MARKETS Commitments are due by November 23. Funds are for general corporate purposes. TELEKOM MALAYSIA has raised M$800m from › KIWI PROPERTY PLANS SEVEN-YEAR NOTE Metrobank Card, a wholly owned the sale of 10-year Islamic bonds. subsidiary of Manila-listed Metropolitan The sukuk, with a coupon of 4.68%, was KIWI PROPERTY GROUP, rated BBB+ (S&P), has Bank & Trust, is a credit card issuer with first placed on a bought basis via joint lead mandated ANZ Bank New Zealand, Deutsche more than 1.5 million cards in force. managers AmInvestment Bank and Maybank, Craigs and Westpac as joint lead managers and then sold down to investors for a yield for a seven-year fixed-rate senior secured of 4.65%. retail note offer, expected to open in the EQUITY CAPITAL MARKETS Settlement is on October 31. The notes week commencing October 29. will be issued off a newly established Last December, Kiwi Property Group sold › SAN MIGUEL PRICES SMFB FOLLOW-ON M$4bn Islamic MTN/CP programme. a NZ$125m 4.33% seven-year senior secured The two lead managers are also joint retail note, priced at mid-swaps plus 145bp. SAN MIGUEL FOOD AND BEVERAGE’s follow-on share principal advisers and joint lead arrangers offer is set to raise Ps34bn (US$634m), with for the sukuk wakalah programme, rated parent company San Miguel selling 400.9m AAA by RAM. shares at the bottom of the a Ps85–Ps95 Proceeds will be used for capital range. expenditure and operating needs. PHILIPPINES The transaction comprised a base deal of 349m shares with an upsize option of 174m › AMBANK MARKETS T2 which was exercised only partially. SYNDICATED LOANS Originally San Miguel planned to sell AMBANK GROUP last Friday was marketing a 887m shares at an indicative price of Ps140. 10-year non-call five subordinated bond at a › METROBANK CARD LAUNCHES LOAN The total shares sold represent 6.8% of revised price guidance of 4.95%-5.00%. the capital. The notes, which will qualify as Basel III- METROBANK CARD has launched a US$100m The final price is equal to the pre-deal compliant Tier 2 bank capital, were offered three-year term loan. close of Ps85. It translates into a 2019 P/E Sands China retiring 2016 facility

„ Loans Macau’s biggest resorts operator self-arranges US$2bn revolver

SANDS CHINA, the biggest operator of resorts the repayment. The bond was split into a receive 140bp. Senior managers coming in for in Macau, is self-arranging an unsecured US$1.8bn portion due in 2023, a US$1.8bn US$50m–$99m are offered 115bp. US$2bn revolving credit facility to replace senior note due in 2025 and a US$1.9bn Sands China is looking to close the new a same-sized outstanding portion of a piece due in 2028 with respective coupons of deal by the year-end. US$6.385bn loan signed in 2016. 4.6%, 5.125% and 5.4%. VML US Finance, a unit of Venetian Macau, The new revolver will mature on July 31 The A&E exercise had offered an opening is the borrower on the 2016 loan. The latter is 2023, extending the maturity of the original interest margin of 175bp over Libor and a a subsidiary of Sands China. US$2bn revolver by nearly three years. top-level fee of 145bp. Bank of China Macau branch is the facility The US$6.385bn borrowing from August The new US$2bn revolver pays interest agent. 2016 was split into a US$2bn four-year margins tied to a leverage ratio grid. The Bank of America Merrill Lynch, Bank of revolver and a US$4.385bn six-year term opening margin for the first six months is China, China Citic Bank International, DBS loan. 250bp over Libor. Bank, Industrial & Commercial Bank of China, In February, the company had launched Banks can join as global coordinating OCBC Bank and Sumitomo Mitsui Banking an amendment and extension exercise for lead arrangers with commitments of Corp were the MLAs on the 2016 deal, which the entire loan, but scrapped the process US$400m or above for upfront fees of 170bp. carried a pledge over the mortgages for the after repaying the US$4.385bn tranche in Mandated lead arrangers with tickets of casinos. August. Proceeds from a jumbo US$5.5bn US$200m–$399m earn 155bp in fees, while Sands China is rated Ba1/BBB−/BBB−. bond offering in early August helped fund lead arrangers taking US$100m–$199m APPLE LAM

34 International Financing Review Asia October 27 2018 COUNTRY REPORT SINGAPORE

multiple of 23 while local competitors trade Settlement was on October 25. dated notes so demand is still there,” said a in a 28–32 range. DBS was global coordinator and joint lead banker close to the deal. JP Morgan, Morgan Stanley and UBS are the manager and bookrunner with OCBC, UOB, The new 2053s were trading around joint global coordinators and bookrunners HSBC and Standard Chartered Bank. 100.25 on Tuesday morning, suggesting the with Deutsche Bank and Goldman Sachs. deal priced on the money. BDO Capital and BPI are the domestic › RETAIL INVESTORS CROWD TEMASEK Settlement will be on October 30, and underwriters. the notes will be issued off a S$12bn multi- Retail investors in Singapore have thronged currency MTN programme. Proceeds will be to the debut retail five-year bond from used to fund land transport infrastructure TEMASEK HOLDINGS. projects. The public offering closed last Tuesday DBS was sole lead manager and SINGAPORE with some S$1.68bn in orders submitted, bookrunner. contributing to a book of just over 8x on a targeted S$200m issue size. DEBT CAPITAL MARKETS As a result, Temasek has raised the RESTRUCTURING public tranche to S$300m so that all 53,282 › CITIC ENV TO MAKE CALL valid applications from retail investors will › HYFLUX SHELVES TUASPRING SALE be allocated a portion of the notes. CITIC ENVIROTECH (CEL) will redeem its The state-owned investment firm, rated HYFLUX is shelving plans to sell its Tuaspring US$355m 5.45% senior perpetual notes on Aaa/AAA (Moody’s/S&P), priced the notes on integrated power and water plant, one the first call date of November 27. October 16 at par to yield 2.7%. week after receiving a financial rescue The announcement on SGX last Friday The retail tranche was marketed proposal from two strategic investors. cleared any lingering doubts over the water alongside a placement tranche to The Singapore water treatment company and wastewater treatment company’s institutional investors, who had put in said it would hold talks about the matter ability to repay the perpetual bond. orders amounting to S$1.44bn. with Malayan Banking (Maybank), the sole CEL’s financial position was boosted The institutional placement will remain secured creditor of the project. by the availability of loan facilities at S$200m, bringing the total issue size to Hyflux announced on October 18 that SM denominated in renminbi and US S$500m. Investments, a partnership of Indonesia’s dollars from Citic Finance. CEL obtained While the strong retail appetite reflects Salim Group and Medco Group, will invest shareholder approval on October 12 to tap investor willingness to buy the bonds S$400m (US$290m) in the embattled the Rmb10bn (US$1.47bn) facilities as well despite recent restructurings in the company, and provide S$160m of loans. as a US dollar loan for up to US$240m. Singapore dollar debt market, bankers The Indonesian investors appear keen caution that the demand is only for high- to retain the Tuaspring plant as the asset › TEMASEK UPSIZES RETAIL BOND quality bonds from high-grade issuers. complements their businesses. While Funding vehicle Temasek Financial IV Salim Group owns and operates a 800MW Retail investors in Singapore have thronged will be the issuer of the notes, which will power genco in Singapore and has water to the debut retail five-year bond from be guaranteed by the parent company. treatment and supply businesses in the TEMASEK HOLDINGS. DBS was global coordinator and joint lead region, Medco supplies natural gas to The public offering closed last Tuesday manager and bookrunner with OCBC, UOB, Singapore and operates clean energy power with some S$1.68bn (US$1.22bn) in orders HSBC and Standard Chartered Bank. plants in Indonesia. submitted, contributing to a book of just Hyflux, burdened by a debt of over over 8x on a targeted S$200m issue size. › LTA BACK FOR MORE S$3bn, had embarked on a sale of As a result, Temasek has raised the Tuaspring to pay off a S$720m secured public tranche to S$300m so that all 53,282 LAND TRANSPORT AUTHORITY of Singapore last project loan to Maybank. Local media valid applications from retail investors will Monday built its benchmark yield curve reported that only one formal bid was be allocated a portion of the notes. on pricing S$1bn of 35-year bonds at par submitted and was well below Hyflux’s The state-owned investment firm, rated to yield 3.43%, or a spread of 31.9bp over targeted sale price. Aaa/AAA (Moody’s/S&P), priced the notes on Singapore dollar SOR. Hyflux said last Tuesday on its website October 16 at par to yield 2.7%. The new unrated bonds come three that given the investors’ offer, “a voluntary The retail tranche was marketed months after the statutory agency sold a sale of Tuaspring will no longer be actively alongside a placement tranche to S$1.5bn 3.45% 40-year bond, the longest- pursued” and that talks to that effect would institutional investors, who had put in dated bond denominated in Singapore be held with Maybank. orders amounting to S$1.44bn. dollars since 2010. The strategic investments are subject The institutional placement will remain This is LTA’s third foray into the local to various approvals from regulatory at S$200m, bringing the total issue size to market this year. It broke a three-year agencies, creditors and shareholders. One S$500m. absence in March with a S$1.2bn deal of 10 requirement is for the restructuring of While the strong retail appetite reflects and 30 years priced at 2.75% and 3.35%. existing debt through court proceedings in investor willingness to buy the bonds Distribution details were not released a scheme of arrangement. despite recent restructurings in the for the latest transaction, but orders well The company said it seek the buy-in Singapore dollar debt market, bankers exceeded S$1bn, allowing the issuer to of creditors on the intended scheme of caution that the demand is only for high- upsize from an indicative benchmark size arrangement. No further details were given. quality bonds from high-grade issuers. of around S$600m–$700m. Appetite was “There is still a significantly large cash gap Funding vehicle Temasek Financial IV strongest among insurance companies which would need to be reduced via other will be the issuer of the notes, which will eager for long-dated assets. means. We think at least part of the principal be guaranteed by the parent company. “The investors can still take more long- amount on the perpetual and preference

International Financing Review Asia October 27 2018 35 Oxley seeks smaller Royal Wharf refi

„ Loans Borrower offers more generous pricing on up to US$225m financing

Developer OXLEY HOLDINGS is wooing lenders The deadline for commitments is level. That loan had offered a top level all-in with a smaller refinancing of up to US$225m November 14. A bank presentation was held pricing of 383.33bp based on an interest for a property development in London and in Singapore last week. margin of 300bp over Libor. more generous pricing than that offered on Oxley International Holdings, Oxley The refinancing is among a slew of loans an earlier attempt in July. London, Oxley Wharf Property 1, Oxley Oxley has tapped this year. The borrower Sole mandated lead arranger and Wharf Property 2, Oxley Wharf Property is also seeking a S$317m (US$230m) 4.5- bookrunner Deutsche Bank has relaunched 3 and Oxley Wharf Property 4 are the year loan to fund the redevelopment of the two-year financing with an interest guarantors of the financing, which will Mayfair Gardens, a private residential estate margin of 275bp over Libor, 25bp more be used to refinance a US$200m senior in Singapore. HSBC and Maybank are the than the pricing offered on a loan of up to secured three-year term loan completed in MLABs of the borrowing, which is expected to US$250m that was originally launched three late 2016. launch into limited syndication soon. months ago. Deutsche Bank was also the MLAB Listed on the Stock Exchange of It is not clear if the earlier attempt and underwriter of the 2016 bullet loan, Singapore, Oxley Holdings is a developer attracted any lenders before Deutsche which attracted four other lenders – China of high-end residential, commercial and relaunched the deal earlier this month. Minsheng Banking Corp and Qatar National industrial projects in Singapore, the UK, The financing carries first lien mortgage Bank as MLABs in senior syndication, and Ireland, China, Cambodia, Malaysia, against Royal Wharf Phase II and III, which is Chang Hwa Commercial Bank and Taiwan Myanmar, Indonesia and Japan. under construction. Cooperative Bank as arrangers at the lower EVELYNN LIN, CHIEN MI WONG, APPLE LAM

shares would need to be equitized,” said Zurich roadshow on October 30. Daiwa Securities, DBS Bank, Mizuho and Ezien Hoo, OCBC’s credit analyst. Korea Electric Power, which is 51% Standard Chartered were joint lead managers owned by the Korean government, owns of the Reg S deal. Kospo as well as five other regional gencos. The public-listed carrier counts Hanjin EQUITY CAPITAL MARKETS KAL and National Pension Service as its › LG DISPLAY TO START GREEN MEETINGS major shareholders. Korean Air is rated › CMT RAISES S$277M VIA PLACEMENT Aa2/A+ (Moody’s/S&P). LG DISPLAY has mandated Korea Development CAPITALAND MALL TRUST has raised S$277m Bank and Societe Generale as joint (US$201m) through the sale of 134m units bookrunners and lead managers for a US SYNDICATED LOANS at S$2.07, against a S$2.049–$2.097 range. dollar-denominated Green bond. The transaction comprised a base deal Fixed income investor meetings in › DAEWOO E&C TAPS OFFSHORE LOAN of S$250m at the bottom of the range and Asia and Europe will start on Monday for an upsize option of S$25m which was fully the Reg S senior unsecured Green notes, DAEWOO ENGINEERING & CONSTRUCTION is tapping exercised. The shares sold represent 3.6% of which will also have an unconditional and the offshore market for a US$100m two- the post issue share capital. irrevocable guarantee by KDB. year loan. The final price represents a 4.6% discount The proposed notes are expected to be Emirates NBD is the mandated lead to the pre-deal close of S$2.17. rated AA by S&P. arranger and bookrunner of the facility, Books were multiple times which has an unspecified greenshoe option. oversubscribed, with the top 15 investors The bullet deal pays an interest margin of getting 70% of the deal. Long-only STRUCTURED FINANCE 240bp over Libor. institutions and long-term investors Lenders will receive a top-level all-in participated in the transaction. › KAL PRINTS OFFSHORE ABS pricing of 290bp and the MLA title for DBS and JP Morgan are the bookrunners. commitments of US$30m or more via an KOREAN AIR LINES priced US$350m three-year upfront fee of 100bp, an all-in of 285bp and asset-backed securities at one-month US the lead arranger title for US$20m–$29m dollar Libor plus 0.9%, in line with initial tickets via a 90bp fee, or 280bp and the guidance. arranger title for US$10m–$19m via an SOUTH KOREA The deal is backed by US dollar- 80bp fee. denominated credit card receivables The deadline for responses is November 1. generated by the airline’s ticket sales. Funds are for working capital purposes. DEBT CAPITAL MARKETS The secured notes have provisional In April 2016, Daewoo E&C raised a ratings of Aa3 from Moody’s, on par with US$100m one-year senior loan. Korea › KOSPO READIES SWISS ROADSHOW Shinhan Bank, which is providing a credit Development Bank was the MLAB on that facility and an interest rate swap. deal, while Woori Bank and KDB Ireland KOREA SOUTHERN POWER, rated Aa2/AA– The notes will be issued by KAL ABS 23 were the lenders, according to LPC data. (Moody’s/Fitch), has mandated BNP Paribas Cayman Limited, a bankruptcy-remote KDB owns a 50.75% stake in the Suisse and UBS as lead managers for a vehicle. borrower.

36 International Financing Review Asia October 27 2018 COUNTRY REPORT TAIWAN

EQUITY CAPITAL MARKETS US$66m loan with First Commercial Bank as Far Eastern Group, owns a 59% of stake in the MLAB. the borrower, while Japan-based J-Power › TEMASEK PRICES CELLTRION BLOCK The NT$5bn loan can be drawn in either owns 40%. NT or US dollars. The NT dollar portions Ion Investments, controlled by Singapore’s pay an interest margin of 95bp over Taibor, › YFY UPSIZES LOANS TO NT$10.8BN Temasek Holdings, has priced a block in with a pre-tax interest rate floor set at 1.7%, Korean protein producer CELLTRION at the while the margin on the US dollar portion Paper maker YFY and its unit YFY PACKAGING bottom of an indicative price range to is 140bp over Libor. The borrower will pay have increased five-year loans to NT$10.8bn raise W895bn (US$789m), a person with any excess interest rate beyond a 35bp combined from a NT$9bn target after knowledge of the transaction said. difference between TAIFX and Libor. attracting 10 banks in general syndication. The block was upsized to 3.63m The US$66m loan comprises a US$35m YFY is borrowing NT$7.2bn, while YFY shares from 3.39m shares and priced at term loan tranche A and a US$31m Packaging is taking NT$3.6bn. Bank of W247,000 versus the range of W247,000– revolving credit tranche B. The margin, Taiwan was the mandated lead arranger and W255,000 each. The price represents a which ranges from 135bp to 155bp over bookrunner of both deals. discount of 8% to the pre-deal close of Libor, is tied to the borrower’s pre-tax The NT$7.2bn loan comprises a NT$7.2bn W268,500. net profit margin. The borrower will pay revolving credit tranche A and a NT$5.04bn Books were multiple times oversubscribed, any excess interest rate beyond a 35bp tranche B. The two tranches cannot exceed the person said. A mix of hedge funds and difference between TAIFX and Libor. NT$7.2bn combined. Tranche A pays an local investors participated in the deal. Lenders were offered a top-level upfront interest margin of 55bp over Taibor, with a There is a 90-day lock-up on the vendor’s fee of 12bp. pre-tax interest rate floor set at 1.7%, while residual shares in the company. Signing was on October 17. tranche B offers an annual guarantee fee Temasek previously raised a combined For full allocations, see www.ifrasia.com. of 55bp. W1.07trn from a sell-down in Celltrion and The NT$3.6bn loan has a NT$3.6bn distributor Celltrion Healthcare in March › CHIAHUI POWER BACK AFTER A DECADE revolver tranche A and a NT$2.52bn through two block trades. tranche B. The two portions cannot exceed The Singapore state fund held a 12.45% Taiwanese power producer CHIAHUI POWER NT$3.6bn combined. Tranche A pays a stake in Celltrion prior to the latest has sent out a request for proposals for margin of 60bp over Taibor, with a pre-tax transaction. a NT$10bn (US$324m) 20-year project interest rate floor set at 1.7%, while tranche Celltrion’s shares closed at W246,500 financing, returning to the loan market a B offers an annual guarantee fee of 60bp. each on October 23. decade after its last visit. Banks were offered top-level upfront fees Citigroup and are the joint The mandate is expected to be awarded of 17bp for both deals. bookrunners on the block. soon. Funds are to refinance two five-year loans Funds are to back the expansion of the totalling NT$9bn completed in November borrower’s power plant in Chiayi city. 2014. , Chang Hwa Chiahui Power last tapped the loan Commercial Bank, First Commercial Bank, market in April 2008 with an NT$8.4bn- Hua Nan Commercial Bank and Taiwan TAIWAN equivalent three-tranche facility. Cooperative Bank were the MLABs on those Chang Hwa Commercial Bank, facilities – a NT$6bn loan for YFY and a Chinatrust Commercial Bank, First NT$3bn loan for YFY Packaging. SYNDICATED LOANS Commercial Bank, Mega International The NT$6bn loan was split into a revolver Commercial Bank, Mizuho Bank, Shanghai tranche A1 and an up to NT$600m term › PANJIT INCREASES LOANS TO US$227M Commercial & Savings Bank, Taipei Fubon loan tranche B1. The two tranches could Commercial Bank and Taiwan Cooperative not exceed NT$6bn combined. Tranche A1 Electronics manufacturer PANJIT INTERNATIONAL Commercial Bank were the coordinating offered a margin of 63bp over the 90-day and its unit PANJIT ASIA INTERNATIONAL have arrangers and bookrunners of that deal, secondary CP rate, while tranche B1 offered increased two five-year loans to US$227m- which comprised a NT$7.958bn 10-year 65bp over the four-year the Taiwan dollar equivalent from the US$191m-equivalent loan with an interest margin of 70bp over interest rate swap (TWD IRS). target. the secondary CP rate, a NT$190m 10- The NT$3bn facility comprised a revolver Panjit International is the borrower on a year guarantee facility and an US$8.5m tranche A2 and an up to NT$300m term NT$5bn loan with Land Bank of Taiwan as the seven-year guarantee facility with a 50bp loan tranche B2. The two tranches could mandated lead arranger and bookrunner, guarantee fee. not exceed NT$3bn combined. Tranche A2 while Panjit Asia is the borrower on a Asia Cement Corp, which is part of the and B2 offered margins of 68bp each over

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International Financing Review Asia October 27 2018 37 Wpd may increase wind farm PF

„ Loans Handful of lenders in for jumbo borrowing of up to NT$80bn

German wind project developer WPD is likely to second phase of another offshore wind credit agency-backed tranche. The tenor is increase its 18-year project financing backing project in Taiwan’s Guanyin area next year. likely to range from 16 to 18 years. Formosa II the first phase of an offshore wind project in On April 30, the country’s Ministry of acquired 378MW of grid allocation from the Taiwan’s Yunlin area to NT$80bn (US$2.6bn), Economy awarded 1GW of grid connection Ministry of Economic Affairs in April 2018, after it sent out a request for proposals for a capacity to Wpd for the implementation of and is expected to deliver the project by facility with a NT$64.7bn deal size in July. the two projects. 2020. Banks are being invited to join as The Yunlin project, to be built eight Formosa II is jointly owned by Taiwan’s underwriters with commitments of NT$7bn kilometres off Yunlin County’s coast, will be Swancor Renewable Energy Co and or more. The transaction has attracted a commissioned in 2020/2021 with about 650– Australia’s Macquarie Capital. handful of lenders so far. 700 MW. The Guanyin project, to be built two Meanwhile, Danish wind energy developer Sumitomo Mitsui Banking Corp is the kilometres off Taoyuan County’s coast, will be ORSTED is sounding the market for a PF of up financial adviser to the deal. The NT$64.7bn commissioned in 2021 with about 350 MW. to NT$100bn to back offshore wind projects facility comprised a NT$25.88bn commercial Separately, in August, FORMOSA II OWF in Changhua county. That deal is expected to loan tranche and a NT$38.819bn ECA sent out a RFP for a NT$60bn PF to back be launched next year. tranche with insurance cover from EKF, its offshore wind project in the Miaoli area. The projects are part of Taiwan’s ambitious Hermes and Atradius. Societe Generale is the coordinator of the target to install 5.5GW of offshore wind Separately, Wpd will raise another project deal, which is expected to comprise a power capacity by 2025. financing of about NT$55bn to back the commercial loan tranche and an export EVELYNN LIN

the 90-day secondary CP rate and the four- 55bp over Taibor, with a pre-tax interest Lenders were offered a top-level upfront fee year TWD IRS, respectively. rate floor set at 1.7%, while tranche B’s of 8bp. YFY’s previous loan market visit was margin is 85bp over Libor. The borrower Separately, Taiwan Prosperity Chemical in December for a NT$5bn five-year will pay any excess interest rate beyond a Corp, another TCC unit, raised a NT$4.8bn borrowing. Hua Nan, Mega International 45bp difference between TAIFX and Libor. five-year refinancing in late September. Commercial Bank, Taipei Fubon Tranche C offers a guarantee fee of 50bp. CTBC Bank and Mega were also the MLABs Commercial Bank and Taiwan Cooperative Banks joining as MLABs were offered a on that deal, which comprised a NT$3bn were the MLABs of that transaction, which top-level upfront fee of 11bp. term loan tranche A and a NT$1.8bn comprised a NT$5bn revolver tranche A Funds are to refinance a NT$7.2bn three- revolver tranche B. The interest margin is and a NT$3bn guarantee tranche B. The year revolver completed in October 2015 58.5bp over Taibor, with a pre-tax interest borrower can only draw NT$5bn of the and for working capital. Bank of Taiwan, E. rate floor set at 1.7%. Lenders were offered total facility. The margin on tranche A is Sun, Mizuho and Taipei Fubon Commercial a top-level upfront fee of 10bp. 60bp over Taibor, with a pre-tax interest Bank were the MLABs on that deal, which For full allocations, see www.ifrasia.com. rate floor of 1.7%, while tranche B has an comprised a NT dollar tranche and US annual guarantee fee of 68bp. dollar portion, and paid a margin of 62bp For full allocations, see www.ifrasia.com. over Taibor with a pre-tax interest-rate floor set at 1.7% for NT dollars and 110bp over › WPI INCREASES LOAN TO NT$12BN Libor for US dollars. THAILAND The Taiwan-listed borrower, established Electronic products distributor WORLD PEACE in 1980, distributes semiconductors, INDUSTRIAL has increased its three-year loan electronic components and computer DEBT CAPITAL MARKETS to NT$12bn-equivalent after attracting products mainly in Asia. eight lenders in general syndication. For full allocations, see www.ifrasia.com. › MUANGTHAI SELLS IN THREES AND FOURS Cathay United Bank, E. Sun Commercial Bank, Mizuho Bank and MUFG are the original › TCC UNIT INCREASES LOAN TO NT$4.2BN MUANGTHAI CAPITAL will invite institutional mandated lead arrangers and bookrunners and high-net-worth investors to subscribe of the transaction, while Bank of China, TA-HO MARITIME, a unit of conglomerate to three and four-year bonds from October Taiwan Cooperative Bank and Mega Taiwan Cement Corp, has increased its 30 to November 1. International Commercial Bank came in seven-year debut facility to NT$4.2bn from The three-year tranche was priced at par with the same title. the NT$3.5bn target. to yield 4.1% while the four-year tranche is The deal was initially launched with CTBC Bank and Mega International at 4.3%. Muangthai is looking to raise up to a NT$10bn-equivalent target. It now Commercial Bank were the mandated Bt4bn (US$121.6m) split equally between comprises a NT$12bn revolving credit lead arrangers and bookrunners of the the two tranches. tranche A, a US$400m revolving credit transaction, which comprises a NT$1.7bn Bangkok Bank, CIMB Thai, , tranche B and a NT$8bn guarantee facility term loan tranche A and a NT$2.5bn and Phatra Securities are joint tranche C. The three tranches cannot revolving credit tranche B. lead managers and underwriters. exceed a combined NT$12bn-equivalent. The margin is 58.5bp over Taibor, with The Thai auto leasing company is rated Tranche A has an interest margin of a pre-tax interest rate floor set at 1.7%. BBB by Tris.

38 International Financing Review Asia October 27 2018 ASIA DATA

LAST WEEK’S ECM DEALS Stock Country Date Amount Price Deal type Bookrunner(s) Thailand Future Fund Thailand 19/10/18 Bt45bn 4.75% IPO (primary) BAML, Finansa, JP Morgan, KrungThai Bank, Phatra Qingdao Haier China 22/10/18 €278.3m €1.05 IPO (primary) Deutsche Bank,CICC, JP Morgan, UBS Tokyu Fudosan Holdings Japan 22/10/18 ¥50.6bn ¥629 Follow-on (primary/secondary) Daiwa, Mizuho, Nomura, Morgan Stanley Celltrion South Korea 23/10/18 W895bn W247,000 Follow-on (secondary) Citigroup, Credit Suisse Nufarm Australia 23/10/18 A$303m A$5.85 Follow-on (primary) Macquarie,UBS Innovent Biologics China 24/10/18 HK$3.3bn HK$13.98 IPO (primary) China Merchants Sec, Goldman Sachs, JP Morgan, Morgan Stanley San Miguel Food and Beverage Philippines 24/10/18 Ps34bn Ps85 Follow-on (secondary) JP Morgan, Morgan Stanley, UBS, Deutsche Bank, Goldman Sachs, BDO, BPI Pintec Technology China 25/10/18 US$44m US$11.88 IPO (primary) Citigroup, Deutsche Bank, Goldman Sachs Capitaland Mall Trust Singapore 25/10/18 S$277m S$2.07 Follow-on (primary) DBS, JP Morgan Source: IFR Asia

ASIAN SYNDICATED LOAN PIPELINE UPDATES WEEK OF 22 OCTOBER (1) Company Currency Size (m) Margin (All-in) Tenor (mths) Facility Arrangers Australia Cohuna Solar US$ 42 Revolver/Term Loan SMFG, SG, NAB, CBA FRV Benalla Solar A$ 100 Revolver/Term Loan NAB, ANZ, SMFG Mortlake South Wind Farm A$ 288 Revolver/Term Loan BBVA, Westpac Northern Star Resources A$ 400 12 Bridge Loan HSBC, CBA, ANZ US$ 72 36 Other Loan CBA, HSBC, ANZ US$ 3 36 Other Loan HSBC, CBA, ANZ Treasury Wine Estates US$ 100 130 60 Revolver/Term Loan ANZ, HSBC US$ 200 165 84 Revolver/Term Loan HSBC, ANZ WCX M4 Finco Pty A$ 4,000 Revolver/Term Loan CBA, ICBC, EDC, ING , CA-CIB WCX Stage 3A A$ 600 Construction Facility China AVIC International Leasing US$ 117 Term Loan NordLB , BNP C&D International Investment Group US$ 200 250 (300) 36 Term Loan BoC China Grand Automotive Services Rmb 1,000 593.75 (618) 24 Term Loan Hang Seng Bank, BNP, HSBC, DBS Greenland Holding Group US$ 330 140 (145) 36 Term Loan DB Logan Property Holdings HK$ 1,200 395 (503) 42 Term Loan , Hang Seng Bank Shanghai Fosun High Technology (Group) Rmb 800 560.5 (673) 36 Term Loan SCB, HSBC, SG, Hang Seng Bank Wuxi Yongsheng Real Estate Rmb 1,150 617.5 (665) 48 Term Loan China Cinda Asset Management Hong Kong Asia International School US$ 120 (280) 36 Term Loan UBS Becl Strategy Holding HK$ 1,300 230 (280) 36 Term Loan China Merchants Bank Central China International Financial Holdings HK$ 550 300 (325) 36 Term Loan China Merchants Bank HK$ 550 300 (325) 36 Revolver/Line >= 1 Yr. China Merchants Bank China Zhengtong Auto Services Holdings US$ 100 315 (359) 36 Term Loan TCB Fortune Choice Development HK$ 2,640 250 (268) 42 Term Loan China Everbright Bank HK$ 2,640 250 (268) 65 Term Loan China Everbright Bank Hong Kong Huafa Investment Holdings HK$ 1,000 208 (259) 36 Term Loan Shagang South-Asia (Hong Kong) Trading US$ 180 190 (215) 36 Term Loan SCB Xinyi Group (Glass) HK$ 750 (118) 36 Term Loan SMFG Yuexiu REIT 2013 HK$ 2,200 138 (154) 60 Term Loan BoC, SCB HK$ 600 138 (154) 60 Term Loan SCB, BoC India Ideal Real Estate Developers Rs 3,500 72 Term Loan IndusInd Jaguar Land Rover US$ 1,000 72 Revolver/Term Loan SCB, Mizuho, BNP, CA-CIB, DBS Piramal Realty Rs 11,500 60 Term Loan IndusInd Solairepro Urja Rs 8,953 237 Term Loan IndusInd Tata Steel [Ex-Tata Iron & Steel] Rs 210,000 144 Revolver/Term Loan Indonesia Bank Rakyat Indonesia US$ 200 36 Revolver/Term Loan US$ 200 36 Revolver/Term Loan US$ 200 48 Revolver/Term Loan Titan Infra Energy US$ 430 575 (602) 60 Term Loan CS, Persero, CIMB US$ 20 575 (602) 60 Term Loan CS, CIMB, Bank Mandiri Persero

International Financing Review Asia October 27 2018 39 ASIAN SYNDICATED LOAN PIPELINE UPDATES WEEK OF 22 OCTOBER (2) Company Currency Size (m) Margin (All-in) Tenor (mths) Facility Arrangers Japan AEON REIT Investment Corp ¥ 27,000 Revolver/Term Loan Bank of Communications Financial Leasing ¥ 22,558 36 Revolver/Term Loan ABC, Communications, Mizuho, BTMU Calsonic Kansei Corp € 5,000 Revolver/Term Loan SMFG, BTMU, Mizuho Ugajin Ryokuhan ¥ 74 Revolver/Term Loan Japan Finance Corporation, Tochigi Bank Pakistan BW FSRU II Pte US$ 192 Term Loan SMFG, KfW, CA-CIB, SMTB Philippines Universal Robina Corp NZ$ 420 110 60 Revolver/Term Loan Citi, ANZ, SCB Singapore APRIL International Enterprise US$ 600 215 (241) 60 Revolver/Term Loan US$ 200 240 (265) 84 Revolver/Term Loan GLP ¥ 30,000 60 Revolver/Term Loan Mizuho ¥ 30,000 84 Revolver/Term Loan Mizuho Lippo Malls Indonesia Retail Trust S$ 100 48 Revolver/Term Loan S$ 100 60 Revolver/Term Loan CIMB, Bank of East Asia, CS, Shanghai Pudong, BNP Mercuria Energy Trading US$ 500 65 12 Revolver/Line >= 1 Yr. SG, BTMU, ENBD, ANZ, ING US$ 200 110 12 Revolver/Line >= 1 Yr. US$ 300 125 36 Revolver/Line >= 1 Yr. Oxley Holdings S$ 317 54 Revolver/Term Loan HSBC, Malayan Banking Pilmico International US$ 338 120 (125) 60 Revolver/Term Loan DBS, BTMU, Mizuho, SCB RBC Investor Services Trust Singapore S$ 700 Revolver/Term Loan HSBC, Malayan Banking, RHB Capital, UOB Tat Hong Holdings S$ 400 300 60 Revolver/Term Loan SCB, OCBC Taiwan BES Engineering Corp NT$ 3,700 125 36 Term Loan B of Taiwan Froch Enterprise NT$ 2,500 84 Term Loan Land Bank of Taiwan NT$ 667 84 Revolver/Line >= 1 Yr. Land Bank of Taiwan NT$ 667 84 Revolver/Line >= 1 Yr. Land Bank of Taiwan NT$ 667 84 Revolver/Line >= 1 Yr. Land Bank of Taiwan Gloria Material Technology NT$ 2,400 60 Term Loan Chang Hwa Commercial Bank NT$ 1,600 60 Revolver/Line >= 1 Yr. Chang Hwa Commercial Bank NT$ 500 65 60 Guarantee Chang Hwa Commercial Bank Kuang Tai Metal Industrial NT$ 1,100 60 Term Loan First Financial Holding NT$ 1,100 60 Revolver/Line >= 1 Yr. First Financial Holding Mei Ta Industrial € 145 100 60 Term Loan Bank SinoPac, CTBC € 75 100 60 Term Loan Bank SinoPac, CTBC Radium Life Tech US$ 1,500 60 Term Loan B of Taiwan US$ 1,000 60 Revolver/Line >= 1 Yr. B of Taiwan Ta Chen Stainless Pipe NT$ 6,550 60 Term Loan Chang Hwa Commercial Bank NT$ 1,000 60 Revolver/Line >= 1 Yr. Chang Hwa Commercial Bank NT$ 1,800 60 Revolver/Line >= 1 Yr. Chang Hwa Commercial Bank NT$ 650 115 60 Guarantee Chang Hwa Commercial Bank Unimicron Technology NT$ 5,000 60 Term Loan CTBC UPC Technology NT$ 6,060 60 Term Loan Mega Wan Chio Petrochemical (Jiangsu) US$ 50 160 48 Term Loan Mega Winbond Electronics Corp NT$ 30,000 Revolver/Term Loan Wonderful Assets NT$ 2,800 175 60 Term Loan Mega NT$ 2,000 175 60 Term Loan Mega Thailand Gulf Energy Development Public US$ 1,200 270 Term Loan Mizuho Vietnam Dam Nai Wind Power US$ 45 204 Revolver/Term Loan Electricity of Vietnam D 550,000 84 Revolver/Term Loan SCB D 550,000 71 Revolver/Term Loan Formosa Ha Tinh (Cayman) US$ 1,500 84 Term Loan Formosa Ha Tinh Steel Corp US$ 400 60 Term Loan Joint Stock Commercial Bank for US$ 50 110 (130) 36 Revolver/Term Loan Asian Development Bank Investment & Development of Vietnam US$ 50 160 (173) 60 Revolver/Term Loan Asian Development Bank Saigon Securities Inc US$ 50 180 (199) 36 Revolver/Term Loan Bank SinoPac Source: Refinitiv data LPC

40 International Financing Review Asia October 27 2018 GIFR ASIA DCM BRIEFING FINNNG JUNE 25 2012 IFR ASIA DCM BRIEFING PAGE 2  JUNE 25 2012 Follow us @IFRAsia rantee and L ocal Markets the Asian Development Bank’s Credit Gua ce guaararaannntteeeedd by BC,DCM which bankers tend to say that credit markets are always the first to price in future EDITORIAL ENQUIRIES he first bond issuance guaranteed by the Asian Developmentthe next few Bank’s months Credit via HS Guarantee and T lilikkeelyly to emerge over developments.arket. If that is true, then Indian companies will soon have access to the CGIF) iis l ASIA PAC G3 (EX JAP) DCMing the Singapore dollar m PAGE 1 Investment Facility (CGIF) is likelyi cocorrporate to emerge aiming over at thetapp next few months via HSBC,international whichtatement capital markets again. by a TThThahaa BOOKRUNNERS: 1/1/2012 TO ms21/6/2012 part of ADB’s mission s Christopher Langner has been mandated by a Thai corporate aiming00m trustat tapping for the Singapore dollar market.cal debt. +65 6417 4552 is struuuctctuurreedd as a US$7 N currency lo Spreads on the dollar bonds from India-based institutions have been tightening steadily The CGIF, which is structured asManaging a US$700md will bank only No. trust of Total g uaranteeforms Share part ASEA of ADB’s mission statement [email protected] ondd mmararkets an is likelysince theyto peaked in the beginning of June as credit investors seemed to be predicting that ocal bo or group l being thrashed out, but to develop Asia’s local bond markets andcture will isonly stil guarantee ASEAN currency Newlocal. Delhi debt. would do something to stop the free-fall of the rupee and boost the economy at Umesh Desai ng pololilicylicyy anandd fee stru dit guarantee CGIF’s underwriting policy and1 JP fee Morgan structure 54 12,735.6 11.7is stillissues beingfor US$(m) athrashed 95% (%) cre out, but is likely to +852 2843 6935 erre arounda 80bp is charged the samegeting time. ucturee wwhhe 2 HSBC Holdings 58 12,528.2 11.5 [email protected] mimic JBIC’s structure wheree iissuance around 80bpin the is US$50m–$75m-equivalent charged for a 95% credit guarantee. ballpark,They atingtar were from right in expecting that, if this was the driver, as on Monday the Indian central to guararrananntntetee 3 Citigroup get a sufficiently high r Kit Yin Boey CGIF intends to guarantee issuance in the beUS$50m–$75m-equivalent unable to ballpark,government targeting announced plans to increase by US$5bn to US$20bn the total amount that he MMME ssesececttoor which would arkets. +65 6417 4549 companies in the MME sector4 Deutsche which Bankwould 43 9,208.3 be 8.5unable40 9,292.5 to get 8.6 a sufficiently high rating from llee to issue in the offshore G3 public m foreign investors region’s can put into local government bonds. cies too bebe abab 5 Barclays 26 7,698.2 7.1 EAN +3 drive to deepen the [email protected] the main agencies to be able to issue in therty offshore of the G3AS public markets. lished the bblisblishshh ththehe fund forms pa SEAN +3 estabForeign exchange markets greeted the measures with scepticism, pushing the rupee to Nethelie Wong The move too establishestab the6 Morgan fund formsStanley 36 7,294.5party 6.7of the on.ASEAN In 2010 +3 drive A to deepen the region’s gional financial cooperati 56.97/US$ after the announcement, close to its all-time high of 57.12 hit last Friday. The +852 2912 6674 s and fofostf steteterer rere7 Standard Chartered 33 6,802.4 6.3 20bn was set aside to bond markets and foster regional financialon agreement cooperation. by which In 2010 US$1 ASEAN +3Sensex established+3 wentmember into the negative territory after the announcement. But In [email protected] nitiatiivvee MMuultlt8ilateralizati Goldman Sachs 19 5,892.7 5.4 Chiang Mai Initiative Multilateralizationhort-term agreement liquidity by which shortages US$120bn in ASEAN wasnot give set backaside what to they had gained in recent weeks. Atanas Dinov cility tththaatt wwoo9uuld BofA address Merrill Lynch s 28 4,490.7 4.1 provide a facility that would address short-term liquidity shortages in ASEANMore +3 than businessmember that, one trader said he saw increased buying interest in Indian names. The +81 3 5218 7690 10 UBS 22 4,205.0 3.9 to derive DCM countries. cross-selling initiative 2015 bondsank of the [email protected] tee iiss thet fruit of HSBC’s whom the UK b The Thaii mandatemandnddatate is theTotal fruit of HSBC’s cross-selling in initiative Asia, to to derive DCM business dian dollar bonds did ing customers 55bp sinceush June 15, S TwhenATE they hit this year’s wide of 392bp, mid-market. ICICI Bank’s Manju Dalal f coc mmercial bank BANK O ast rosostststererr ofo Source: Thomson Reuters (SDC code:172 108,588.8 AR1) F INDI +65 6417 4551 from its vast roster of commercial bankingfinance customers lines and in Asia,which to HSBC whom hopes2016s the UK haveto pbank been trading in the 420bpA , for area, instance, almost have 30bp seen inside their the spread wide theytighten hit byat somethe end woororkkikininngg capitc al and trade [email protected] provides FX, working capital and trade finance lines and which HSBC ofhopes May. to push n thhee tetermrmASIAN fu ndingCURRENCIES curve. DCM Jonathan Rogers further out ono the term funding curve. BOOKRUNNERS: 1/1/2012 TO 21/6/2012 It is no wonder, then, that the State Bank of India has been monitoring the market more +65 6417 4546 closely. The institutiontive is said to have held informal talks with banks as i [email protected] dary S econdary Managing bank No. of Total Share least US$1bn through a Reg S/144a issue in August – or even earlier – according to bankers diningng daor ygroup in Asian credit markets with little local input for to cues set aon defini the short- Neha D'Silva It was a lightlightt tradingtratrraad day in Asian credit markets with littleter this local week input to set a definitive on the European summit la involved in the discussions. The bank has not handed out RFPs for this deal. +852 2912 6604 l mmimininndds 1 HSBCfocused Holdings 211 11,842.0 6.1 issues US$(m) (%) tone and all minds focused on the European summit later this week Onefor cues banker, on the though,rst short-Pacific was betting there may not even be an RFP for a transaction of SBI. [email protected] nn. 2 Standard Chartered 191 11,383.6 5.9 , with the Fi term direction.directtitioo “They are getting daily updates from the banks and will probably just announce,”t plans tohe raise said. at John Weavers ance has for the most part held in and well the Hang Lung 2017s at Meanwhile,eanwhhihileee,, rrerecentececent3 CITIC 21 9,240.4 new issuissuance 4.8 has for the most part held in well, with the First Pacific +61 2 9373 1655 versus the deal’s par reoffer last week He noted that the Indian IOI banks were looking at the market but that SBI was likely to be the aat a 101000.754 China bid, International Capital 11 8,905.8 4.6 exception are [email protected] 2022s2s up at a 100.75 bid, versus the deal’s 335bp par reofferreoffer lastspread. week An andfirst the out. Hang “It will Lung have 2017s to be at SBI” to reopen the market for them, he said. He added, though, s 325bp35 Haitong bid Securities versus 4 6,523.2 a plus 3.4 ffer. Treasurieseasuriees pplplusuus 325bp bid versus a plus 335bpid versus reoffer a p lusspread. 280bp An thatreo exception levels were are thenot IOIyet where the bank wanted them. Mia Stubbs plus 283bp b om US-based Citron 22s whhicichchh arre6 Bankhanging of China at Ltd 22 6,448.6 3.3 ch report” fr +81 3 5218 6674 2022s which are hanging at plus paper 283bp follow biding versus a “resear a plus 280bp reoffer.This comes as Nomura circulated a note on Monday stating that Indian banks have been on7 China Evergrande’s Construction Bank 14 6,059.3 3.1 arter to 93 bid, having [email protected] The attackatattaa tacacck ono Evergrande’s paper followingompany’s a “researchdue 2015s report” up activelya qu from buying US-based dollar-denominated Citron loan portfolios from European banks, which are rtiaially8 UBS 14 5,490.1 reverse 2.8 d, with the c hursday. researchesearcch partiallyppaart reversed, with the company’sthe report due came 2015s out lastupexiting a T quarter that to market 93 bid, and ashaving they was deleverage. Nomura noted that SBI in particular had bought a loow9 Hana print Financial of 89 Group soon 28 5,358.6after 2.8 ncouraging day of trading SUBSCRIPTION ENQUIRIES tankedd too a low print of 89 soon after the report came out lastUS$500m Thursday. in loans recently.625, while and hence may need to raise dollars to fund these acquisitions. 10 DBS Group Holdings 37erty 4,295.1 sector 2.2 had a mildly e quarter at 99 Thee restreesst ofof thethe China propertyprop sector had a mildly encouraging18s are up a day of trading and was rage. Bellwether Cogard 20 Nomura also said SBI was eyeing a five-year bond with a spread equivalent to a swapped EMEA uarterTotal on ave up aroundarrourounndd a quarterq on average. Bellwether0.375 Cogardat 98.7 52018s bid. arelevel up ofa quarter350bp over at 99.625, Libor.ian Itswhile 2015s are currently trading at a Z-spread of 347bp–327bp. If it +44 (0)20 7369 7317 Source: Thomson Reuters2017s (SDC are code: up AS1) the recentlyrrecceenenttlyy issued Agile 2017s are1,273 up 194,562.20.375 atat about98.75 thebid. potentialpriced the for newthe heavyfive-year As flat to that, it might be able to achieve the Libor level it se [email protected] 2.5bn flowed A regionalreegegigioonnal syndicatesyndicate head remained upbeatupbe about the the US potential lastany week new for issuesome the premium US$heavy Asian could breach the threshold, so SBI is likely to wait for its bonds to ASIA-PACIFIC HONG KONG DCM live deal, noting that in equities and into pipelinepipppelipelininne to convertconvert into a live deal, noting that in the US lasttighten week a bitsome more. US$2.5bn flowedt +852 3762 3336 BOOKRUNNERS: 1/1/2012, underscorin TO 21/6/2012g the bias away from risky ort end. Abou de bond funds yields available at the sh [email protected] intoinntntoo high-gradehhiighgh-h-gra bond funds, underscoringto the the scant bias away fromOther risky banks equities are likely and into to follownal into the footsteps of SBI as they seek dollars to fund Managinghicles bank offeri No. ofng Total a Sharepick-up that could support additio JAPAN investmentinnnvnvevesessttmmeent vevehicles offering a pick-up to theother scant number yieldsthese available loan acquisitions.at the short end.But corporatesAbout are also looking at dollar market more closely as or groupinto EM bond funds too, an eks, but +813 5218 7687 US$553mUUS$S$$55555353mm went into EM bond funds too, another numberdollar that loans could become support scarcer. additional 1 HSBCsia. Holdings issues US$(m) (%) [email protected] activityaactctititivvittyy in Asia.A India’s 2 Standard Chartered 56 20,802.8 29.3 J IN US DAL ST 73 32,644.0 46.0 looking at bonds,E accordingEL AND to bankers. PIPELINEPPIPIPEELLINE POWER +646 223 6123 3 RBS and Indian transmission utility Power Grid Corp are both ill, BNP, Citi, MS Jindal Steel and Power could be looking to raise dollars to partly refinance its US$75m [email protected] SKS SKK InInnovationInnovation4 BNP Paribas –– US$ BofA Merrill,Merr BNP, Citi, MS Citi, HSBC, MS, 9UBS 4,539.0 6.4 loan maturing in November 2012 in addition to fresh borrowing. On top of that, JSPL has a Ke Kepcoeppco5 National –– BofA Merrill,Australia Citi, Bank HSBC, 4 1,543.6 MS, 2.2 UBS – GS, MS 14 4,260.0 6.0 planned capex of about Rs100bn (US$1.8bn) in the fiscal year that started in April which it AABMBM6 UBS Investama , UBS CLIENT SUPPORT SHSSHKHK && CoCo –– US$ StanChartStanChart, UBS DB may look at funding through dollar bonds. US$ BofA MerrMerrill,ill, Barclays, DB Hyyundai7 Barclays 2 1,190.0Motor 1.7– 3 1,400.0 2.0 P JP Morgan OWER G +800 8727 8326 ZhengTong8 Bank of Communications – 2800.0 1.1 RID CO US$ MS, UBS for investmentsR Pof also Rs200bn aims to in tap 2012/13 the dollar to expand bond marketits capacity. as a new issuer as it seeks funding [email protected] B Baoxin – 9 Morgan US$ Stanley DB 2772.0 1.1 Tianrui – BS All of the issuers, though, would like to see spreads tighten a bit further. However, credit 10 G BofAolomt Merrill – US$ Lynch DB, 683.0 1 MS, 1.0UUBS – US$ ING, UBUBSS investors have already predicted that Indian issuers are keen on the market, so they are ADVERTISING X acBankTotal s, DB, JPM H ongqiao – US$ BarclayBarclays, DB, JPM DB holding back from buying massively in the secondary – even if some find the curren Source: Thomson Reuters (SDC code: AS5a)RBS, Barclays, OB – US$ Citi, HHSBC,SBC, SCB,172 JPM, 71,025.4 RBS, Barclays, , US I ill, DB attractive. EMEA Shinhan – US$ BofA MerrMerrill, DB THE IFR ASIA US$ GS, JPM +44 (0)20 7369 7556 To find C oun outtrtry howy Garden you can – generate league tables and Again, investors have been nibbling on the Indian bonds and that alone has already [email protected] analyseGS Caltexinvestment– US$ banking Citi, GS and deal trends take a tightened spreads. But there seems to be a floor, simply because of the pending supply. look at ThomsonONE.com SFr Investment CS, UBS Banking and ASIA-PACIFIC Korea Telecom – US$1.2bn This suggests that a well-priced first deal may even reprice the outstanding bonds tighter. SDC Platinum. Aluminum Corp ofof ChinaChina – – t levels +65 9755 5031 US$2bn Now, though, as bankers like to say, it is just a matter of who will stick their head out C hina Cosco – US$ JPM, MS [email protected] KoreaKorea Midland Midland Power Power– – first. Or for custom league tables and US$500m deal analysis, Citi, HSBC State Bank of IndiaIndia – – please contact [email protected]– US$ HSBC, RBS C itic Bank InternationalIn – US$ HSBC Quezon Power ((Philippines)Philippines)– – S, StanChart I ndian Bank – US$300m–$500m Citi, HSBC, RBS,RB StanChart BC, StanChart, UBS Aluco – US$ BNP, DBS arclays, DB, HS US$1bn 10-year10-year Reg S/144a. BBarclays, DB, HSBC, StanChart, UBS Bharti Airtel – out prior written r distributed with inn in whole or in part, may not be reproduced, copied, o . is Briefing, either inst companies who ignore this warning. IFR Daily Briefings end areof year produced break The contents of ththis Briefing, either in will whole be taken or in part,aga mayThe not contents be reproduced, of this Briefing, copied, eitheror distributedmagazine's in whole without orannual in part, prior may written not be reproduced, copied, or distributed without prior written publishers. Action permission of the publishers. Action will be taken againstear duringpermission companies national of who the holidays ignore publishers. this and warning. theAction will IFR be Daily taken Briefings against are companies produced who i ignore this warning. IFR Daily Briefings are produced i ishing dates of IFR and will not app line withwi the publishingpubl dates of IFR and will not appear lineduring with national the publishing holidays dates and theof IFR magazine's and will not annual appear end during of year national break. holidays and the magazine's annual end of year break. 2012 © ThomsonThomsThomsonmsonson ReuteReutersReuReuters 2012 © Thomson Reuters 2012

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