РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

JANUARY 26 2019 ISSUE 2268 www.ifre.com

BCP’s debut €400m AT1 adds to peripheral flurry, as BMPS joins the fun with €1bn covered

€46.5bn: Spain’s €10bn 10-year grabs largest ever book for a European SSA deal

Barclays ‘dead’ without controversial Qatar cash: trial of Varley and three others begins

EMERGING MARKETS EMERGING MARKETS BONDS/LOANS EQUITIES Venezuela IL&FS fallout US high-yield As shutdown bonds rally as threatens Indian bond market to drags on, US opposition leader proJect lnance pick up leveraged corporates risk claims power and ABS lnance slack new IPO model 06 07 08 10 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS Upfront „ OPINION INTERNATIONAL FINANCING REVIEW

Project mayhem While the market wasn’t closed to peripheral issuers in the second half of last year, access was hampered by Italy’s here in the world can a road builder default on a political ructions inmating funding costs. WUS$600,000 debt payment when it has more than But with noise around Rome’s differences with the EU over US$m locKed away in an escrow account specilcally its budget abating – at least for the time being – issuers from designed to service its debt? Italy, Spain and Portugal have shot out of the blocks to take India, sadly, is the all-too-obvious answer. It is hard to think advantage of a strong technical backdrop. of a country more in need of infrastructure funding but that Investors are cash-rich as order books north of €35.5bn and makes it a riskier proposition for investors. €46.5bn for Italy’s and Spain’s new issues this month demonstrate. The latest bizarre twist relates to IL&FS, a collapsing No doubt these issuers are offering attractive yields. The former giant that has been struggling to service its debts Monte dei Paschi offering, for example, came around 180bp since August. back of where $eutsche Pfandbriefbank priced a lve-year IL&FS, now run by a government-installed board of covered trade two days before. But in BMPS’s case – and for directors who supposedly know what they are doing, has many other peripheral issuers – beggars can’t be choosers. attempted to use temporary relief from its creditors to stop a With no one knowing when the next political explosion will special purpose vehicle from servicing its project debt. take place (and it will come), or where – Spain’s internal wrangles Bondholders, unsurprisingly, disagree with that should not be overlooked – there’s no point sitting on the sidelines. interpretation, but the dispute has frozen the escrow agent The message is simple: get the money in sharpish. into inaction, hence the default. To say this is a dangerous precedent is an understatement. Trillions of rupees of similar project lnancings rely on the Open and shut case understanding that debt service is tied to the project cashmows, not to the health of the sponsor. The entire n the face of it, US corporates pushing ahead with IPOs securitisation industry is also at risk. Owithout getting their prospectuses signed off by the SEC Add the fact that India is only just recovering from a look a little desperate. The lack of mexibility on price or sizing liquidity squeeze – provoked, once again, by an IL&FS default that comes with a route made necessary by the US – and the danger becomes even more apparent. government shut-down seems a high price to pay to go public. India’s regulators need to address this anomaly, and fast. So should the actions of Gossamer Bio and New Fortress The bankruptcy tribunal that granted a moratorium for Energy – two companies that are ploughing ahead with US IL&FS must clarify the limits of its order. And the IL&FS board IPOs despite not being able to get the nod from the SEC – set must be made to see the folly of dragging these arms-length alarm bells ringing for investors? projects down with it. It needs to monetise its assets, not Probably not. destroy them. The SEC review process is clearly important as it typically In the longer run, the understanding of securitisation in takes several months to complete. India needs an overhaul. India’s love of name-lending means New Fortress knows this as it lled conldentially in August that even project lenders are accustomed to taking risk on and publicly in November – this is not a shotgun marriage. the sponsor, when a properly structured SPV must be truly The company marketed its IPO with a US$17–$19 price range bankruptcy-remote. in the hope that the SEC would reopen before its pricing date If the IL&FS saga clariles what is required to keep an SPV last Thursday. away from the clutches of the newly empowered insolvency With the SEC still shut, changing tack to remove the courts, some good could still come of this sorry situation. delaying amendment from its lling allows an IPO to be /therwise, bankruptcy lawyers are going to lnd themselves priced 20 days later. The trade-off is that the lling must with a lot more work to do. include the exact offering price, but the company now knows where investors want to buy. Gossamer Bio similarly has a clear valuation from its US$230m Club Med funding round in July so has set pricing just 10% higher and has US$100m of demand from insiders for the US$230m IPO. ho would have thought that a Portuguese bank, BCP, Both these companies have clear need for the money. Wwould sell the year’s lrst mainstream AT deal or that Gossamer is a biotech that needs funds to develop its drug a second-tier Spanish lender, Abanca, would issue the lrst portfolio and New Fortress’s IPO pitch depends on massive Tier 2? capex to construct lve liqueled natural gas facilities. In the Or that an Italian corporate, Telecom Italia, would price meantime it is losing money on its single small facility. the only European high-yield offering since November? Could they have waited a few more days? Not without Or that sovereign transactions from both Italy and Spain incurring costs in time and money. Third-quarter results go would each get record order books? stale on February 14 and anything after that date will need The year may be only a few weeks old but the big story in new audited full-year numbers, pushing deals back into Europe’s bond markets – sterling issuance aside – is the March. And there is obviously no certainty that the swelling ranks of peripheral borrowers. Even Monte dei government shut-down will come to an end soon. Paschi has returned to the primary market after being shut It is true that there are some risks in pushing ahead out for a year with a €1bn covered bond offering, despite its without the legal cover of an SEC review, but for these two future still hanging in the balance. companies at least they are risks worth taking.

International Financing Review January 26 2019 1 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

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INTERNATIONAL FINANCING REVIEW Contents JANUARY 26 2019 ISSUE 2268

TOP NEWS 04 BONDS Rush BCP joins peripheral flurry. Pragmatic approach spurs wave of Southern European issuance. 04 BONDS Insatiable Another blowout as Spain breaks records. Demand for sovereigns shows no signs of waning. 05 PEOPLE & MARKETS Courts Barclays ‘dead’ without controversial Qatar cash: trial of Varley and three others begins. 06 EMERGING MARKETS Turmoil Venezuela bonds rally as opposition claims power. Investors see regime change within reach despite obstacles ahead. 06

Cheaper High-grade borrowers tune into term loans for acquisition deals. 08 Shutdown US corporates try new model for IPO. 10 Into black UBS finally recoups crisis losses. 11 Less drama No spillover from Evergrande tap. 12

PEOPLE & Underperforming UBS confused by equities weakness. Swiss bank trails US MARKETS rivals in equities, M&A and underwriting. 13 Blunt tools EU bail-in regime deterring white knights. Concerns mount that eurozone’s means of dealing with undercapitalised banks are off-putting. 14 Good news PG&E bankruptcy may be premature, as its equipment was found not to be at fault for igniting a 2017 wildfire. 15 Electronic Hong Kong to go paperless on IPOs. 19 New deadline RBNZ extends bank capital consultation. 19 Divorce Goldman warns as UK examines Brexit impact on banks. 20

BONDS Repricing Investors shrug off Triple B threat. 23 Demand No let-up in Sonia-linked whirlwind. 27 Softly softly Volkswagen learns its lessons. 29

EMERGING Support Turkey flies solo in helpful winds. 55 MARKETS Receptive Colombia joins rush to market. 55 New plan Arpeni Pratama charts new course. 60

LOANS Pressure Investors sweat over weakening documentation. 67 Terms ECB publishes benchmark fallback guidance. 71 Worries Leveraged loan risk still elevated. 76

EQUITIES New venue Jubilant heads to US after SGX flop. 81 Block trade ABN CEO expects state sell-downs. 81 Halted Shutdown, earnings hobble ECM again. 87

STRUCTURED Parex buy US$6bn book for Sika mandatory. 91 EQUITY Rising vol increased optimism in Europe. 91 Issuance High-yield to be welcomed back. 92

International Financing Review January 26 2019 3 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS Top news

Barclays ‘dead’ without Qatar 06 Venezuela bonds rally 06 IL&FS fallout threatens PF/ABS 07 BCP joins peripheral flurry

„ Bonds Pragmatic approach spurs wave of Southern European issuance

BY ALICE GLEDHILL "Ut conditions have improved whiLe the KINGDOM OF SPAIN Last /rders for the €00m considerabLY dUrinG *anUarY week priced a €10bn 10 Year on perpetUaL non caLL lve which BANCO COMERCIAL PORTUGUES soLd enabLinG the backLoG of a record €6.bn book. was priced inside initiaL price the lrst eUro !dditionaL Tier 1 transactions to start to cLear. 0ortUGUese sUppLY was aLso thoUGhts of 9. area peaked at bond issUe in foUr months Last BANCA MONTE DEI PASCHI DI SIENA forthcominG in the corporate €825m. Credit Suisse JP Morgan ThUrsdaY JoininG the rUsh of rated #aa1""( for eXampLe sector where ENERGIAS DE Millennium BCP and UBS were peripheraL borrowers makinG a soLd its lrst pUbLic bonds for a Year PORTUGAL issUed a 'reen hYbrid Joint Lead manaGers. dash to the credit market to on 7ednesdaY n a €1bn lve Year UpsiZed to €1bn from its "#0 Underwent a maJor capitaLise on the mUch improved covered issUe. 3ee storY beLow. eXpected €70m whiLe TeLecom restrUctUrinG foLLowinG the issUance backdrop. h)f YoUd toLd me at the start of )taLia opened 2019s %Uropean lnanciaL crisis bUt &itch )t was the third sUbordinated this week that a near defUnct hiGh YieLd market with apLomb hiGhLiGhted its stronGer bond offerinG from a 3oUthern bank woULd be doinG a €1bn earLier in the month. fUndamentaLs improvinG %Uropean lnanciaL issUer this Year covered bond )d have said YoU h3ome are in Less of a rUsh than proltabiLitY and redUced foLLowinG !bancas €30m 10.# mUst be smokinG somethinG v others. 0eripheraL issUers are probLem assets as it UpGraded Tier 2 and 'eneraLis €00m 10 said a sYndicate oflciaL who was probabLY keen to Get trades done the bank in $ecember. )ts non Year bULLet. /ther %Uropean not invoLved with the deaL in this part of the Year v said 'iLdas performinG eXposUre coveraGe Lenders bY contrast have LarGeLY referrinG to "-03. 3UrrY a partner at investment ratio has increased to 8 from steered weLL cLear of the sector. The mUrrY of 3oUthern manaGement lrm !Xiom. 23% in 2013. That arGUabLY remects a hiGher %Uropean issUance is not Limited h)ts a Great recoverY storY and LeveL of praGmatism amonG to &)'. TURNING THE CORNER the UnderLYinG macro ;backdrop= 3oUthern %Uropean or Lower rated The REPUBLIC OF ITALY for That "#0 "a3"""""" coULd in 0ortUGaL is verY stronG. TheY borrowers which were effectiveLY eXampLe is weiGhinG Up pLans to raise deepLY sUbordinated debt n have Good access to #%T1 capitaL Locked oUt of the primarY market issUe its lrst 53 doLLar bonds in even at a skY hiGh 9.2 coUpon and a verY stronG sharehoLder Last Year as )taLYs poLiticaL nearLY a decade after investors n was seen as fUrther testament base v said 3UrrY. rUctions inmated fUndinG costs Lapped Up its lrst pUbLicLY to the markets newfoUnd %ven so at #aa1### "n the and hampered market access. sYndicated eUro deaL for a Year strenGth. !T1 carries the Lowest ratinGs for a Monte proves access with covered comeback

„ Bonds Struggling Italian lender buys some breathing space, but Tier 2 conundrum unanswered

BY TOM REVELL reported earLier this month that h4heY need to potentiaLLY do a after beinG issUed. 9ieLd to worst )taLY is considerinG merGinG second tranche of Tier 2 and is the Lowest potentiaL YieLd. BANCA MONTE DEI PASCHI DI SIENA "-03 with heaLthier rivaLs. senior non preferred so theY proved its market access with a 4he new covered bond issUe does need to reactivate the machine v LIKE TIER 2 – BUT NOT õBN lve Year covered BoNd issUe not lX the 4ier 2 probLem bUt at said an investor. The covered bond deaL at Least that attracted more than €2.3bn Least makes a positive statement. h)n mY opinion thats whY bUYs the bank some mUch needed oF demand on 7ednesdaY bUt the h4he fact -onte has a 4ier 2 theYre paYinG a decent breathinG space. The )taLian 190bp over swaps spread raises tradinG in the 0s means theres premiUm over "T0s ;for the Lender had been monitorinG the the QUestion oF where a mUch a Lot of focUs riGht now on its covered bond= n theY want the market for some time and lnaLLY needed 4ier 2 woULd be priced. LiQUiditY have theY Got it v deaL to perform weLL. This is aLso annoUnced a mandate amid a 4he deaL is "-03s lrst ForaY asked a sYndicate banker at one important for the fUtUre 3.0. )ts roarinG backdrop Last TUesdaY. into the covered market since of the Leads. a bit Like the 'reek and ,eads beGan marketinG the lve .ovember 201 and its lrst h4his is a hUGe hUGe hUGe 0ortUGUese banks n theY do Year benchmark with initiaL price attempt to seLL debt to a broad transaction for them and theYve covered bonds in order to thoUGhts of mid swaps pLUs Low set of investors since it priced a proved theY have access to the ;obtain= data for the 3.0.v 200s area on 7ednesdaY morninG. €70m 4ier 2 a Year aGo. market with an oUtstandinG trade.v hTheY need to sort this Tier 2 "ooks were reported above "-03 stiLL needs to shore Up 4he banker said the deaL conUndrUm bUt its QUite toUGh €1bn after JUst an hoUr. 'Uidance its capitaL n risinG fUndinG costs represents ha startinG at the moment.v was sUbseQUentLY set at 200bp area prevented a second 4ier 2 Last enGaGementv with biG investors The oUtstandinG €70m with books in eXcess of €2.1bn. Year n and the %#" has and aLLows discUssions to beGin .37 202 Tier 2 which is The spread was lXed at 190bp sUbseQUentLY eXpressed concern on a potentiaL capitaL issUance. caLLabLe in 2023 is bid at a cash as demand reached aboUt over its capitaL position. 4he banks need for 4ier 2 was price of .1 for a YieLd to worst €2.2bn from 13 accoUnts. 4he banks fUtUre aLso at the forefront of other market of 1.1 accordinG to That is the biGGest spread seen remains Uncertain it was participants minds. Tradeweb prices JUst 12 months for a eUro benchmark covered bond

4 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

For daily news stories @ visit www.ifre.com High-yield to pick up levfin slack 08 Chinese brokers top up capital 10 UBS recoups crisis losses 11

eUro lnanciaL bond SaLe For more SUppLY from %Uropean bankS aS than SiX monthS. !dded to that theY emerGe from cLoSe periodS Another blowout as Some inVeStorS StiLL reFUSe to bUY aS weLL aS poSSibLe voLatiLitY 0ortUGUeSe paper aFter SUFFerinG ShoULd 3antander faiL to caLL an LoSSeS dUe to the tranSFer oF noteS !T1 iSSUe in -arch. Spain breaks records From .oVo "anco to "anco h)t removeS UncertaintY in „ Bonds Demand for sovereigns shows no signs of waning %Spirito 3anto in 01. whatS a trickY and Uncertain h)tS a Good deaL and the riGht Year v Said a banker at one of the BY PRISCILA AZEVEDO ROCHA opportUnitY to reassess YoUr price v the SYndicate oFlciaaL Yaw LeadS. portfoLio bUt ;there is= LittLe From the deaL Said. h)tS a 100bp (e Saw the conceSSion at JUSt )nSatiabLe inveStor appetite for reLative vaLUe. The primarY conceSSion GiVe or take bUt thatS three eiGhthS addinG that eUroZone SovereiGn debt waS market is becominG too GreedY v what YoU need to acceSS marketS.v accoUntS remain caUtioUS once aGain in evidence on said -aUro 6ittoranGeLi #)/ of deSpite the raLLY. "#0S €00m TUeSdaY when the KINGDOM OF conviction lXed income at MAKING HAY 10.# . haS tiGhtened SPAIN broke records after !LLianZ 'LobaL )nvestors. The price in fact divided SiGnilcantLY to . from .6 receivinG more than €6.bn of 6ittoranGeLi accepts however opinion with bankerS anaLYStS in $ecember whiLe #aiXa 'eraLS demand for a €10bn !priL 0 that investors need to depLoY and inveStorS peGGinG fair vaLUe €00m 0.#0 raLLied to 6.6 issUe despite the sLim concession cash and with vast tracts of varioUSLY between 8 and 10 from 8% over the period. over the sovereiGns cUrve. short end eUroZone sovereiGn one caLLinG the LeveL h7eve had a verY voLatiLe !t one point orders breached paper stiLL in neGative YieLd embarraSSinGLY wide. period in earLY *anUarY and a the €0bn LeveL bUt even lnaL territorY the 10 Year part of the "Ut "#0S ,UiS -oraiS a manaGer reaLLY Swift retracement of demand was sUflcient to beat cUrve hit a sweet spot. The issUe in the inveStor reLationS diviSion LeveLS So YoU coULdnt deScribe the €.bn Grabbed bY the was priced at a YieLd of 1.6%. toLd )&2 LaSt week that there iS no broader marketS aS StabLe v the %Uropean &inanciaL 3tabiLitY GUarantee market conditionS wiLL Lead banker Said. &aciLitYs debUt in 011 which VIRTUOUS CIRCLE improve SiGnilcantLY in the neXt h&Und mowS are certainLY was the previoUs biGGest book in &or 0abLo de 2amon ,aca head three to SiX monthS. The bond iSSUe doinG better than theY were at the %Uropean 33! market. of fUndinG and debt increaSeS the bankS Stock of LoSS the end of LaSt Year bUt inveStorS The deaL came after a mUrrY of manaGement at the 3panish abSorbinG LiabiLitieS whiLe aLSo in the capitaL Space are not mUSh %Uropean sovereiGn transactions TreasUrY the market is in a booStinG itS reGULatorY capitaL. with caSh and there iS vaLUe to that have aLL seen biG order books virtUoUs cYcLe. "Y cominG LaSt week "#0 aLSo hoLdinG caSh poSitionS aS bankS showinG JUst what Great shape the h-Y impression is that the avoided potentiaL competinG come oUt of bLackoUt.v „ market is in despite the end of %#" market is reLieved bY the fact bond bUYinG. "eLGiUm 3Lovenia that aLL of these *anUarY )reLand 0ortUGaL )taLY and 3pain sYndications have Gone so weLL n ISSUEûSINCEû'REECESû!LPHAû"ANKû bOnd MarKet aLOnGSide "anca have Garnered more than €10bn %3- 0ortUGaL )reLand "eLGiUm SOLDûAûSUB INVESTMENTûGRADEûõ00Mû #ariGe remectinG itS ratinGS and of combined interest in deaLs soLd 3Lovenia )taLY and now 3pain n lVE YEARûATûBPûINû*ANUARYû018 tHe UncertaintY arOUnd tHe naMe. since the tUrn of the Year. and that this boLsters their )TûISûALSOûBPûWIDERûTHANûTHEû "-03 iS rated #aa1""(iGH The scaLe of demand is thanks conldence to participate in the LASTûBENCHMARKû)TALIANûCOVEREDû -OOdYS&itcH$"23 and itS to a combination of the end of neXt one v he said. BONDûOFFERING ûAûõ0MûlVE YEARû cOVeredS are rated !1!  the %#"s bond bUYinG "Ut others are more scepticaL. DEALûFORû#REDITOû%MILIANOûONû !!,OW . proGramme and the wideninG of h7hen YoU have sYndications *ANUARYû10û"YûCONTRAST ûlVE YEARû (aVinG circLed tHe MarKet FOr spreads at the end of 018 YoU have to be aware of the 'ERMANûCOVEREDS ûATûTHEûTIGHTû SOMe tiMe "-03 picKed itS accordinG to )sabeLLe 6ic nUmbers somewhat becaUse ENDûOFûTHEûMARKET ûHAVEûRECENTLYû WindOW WeLL. 4He deaL WaS SOLd 0hiLippe head of eUro rates and peopLe pUt in hiGh bids in the been priced at 6bp and 8bp. in a bLOWOUt WeeK in tHe cOVered inmation at !mUndi. knowLedGe that theY are not h4He HeadLine Spread iS HUGe bond market in which a €16bn hThe end of Last Year was QUite GoinG to Get as mUch v said FOr a cOVered bOnd v Said a deLUGe oF SUppLY waS weLcomed detrimentaL in terms of market .icoLa -ai a portfoLio manaGer SYndicate banKer aWaY FrOM tHe with abUndant demand. LiQUiditY in most asset cLasses. 3o at 0imco. deaL. h)t iS cLOSer tO a 4ier  4hiS heLped make Up For a in order for issUers to perform -oreover he said the siZe of Spread x bUt nOt tHeir 4ier .v Lack oF SUpport From the their proGramme theY have to the books doesnt necessariLY 4He deaL paid a neW iSSUe %UroSYStem. 4he deaL waS be GeneroUs at the beGinninG of mean that the sector is cOnceSSiOn OF arOUnd bp ineLiGibLe For the %#"S coVered the Year v she said. performinG. VerSUS tHe iSSUerS cUrVe. bond reinVeStment pUrchaSeS "Ut whiLe the lrst sovereiGns The new )taLian Line for /F Greater iMpOrtance banKerS becaUSe it haS a conditionaL paSS to tap the market offered decent eXampLe was priced at 18bp Said iS tHe picK Up VerSUS tHe throUGh matUritY StrUctUre. concessions n )taLY for eXampLe over the reference "T0 bUt a )taLian SOVereiGn OF bpn0bp. 3ome reaL moneY inVeStorS aLSo offered a premiUm that Leads pUt week Later was roUGhLY in Line !LL OtHer )taLian cOVeredS brOUGHt reFUSe to participate in deaLS at bpn6bp n 3pain was abLe to bid at pLUs 1.bp. 3pains deaL tO MarKet Since LaSt SUMMer HaVe with thiS FeatUre. come with a mUch smaLLer 1bpn has tiGhtened 6bp in the been priced at LeaSt bp inSide Barclays, BNP Paribas, Credit bp pick Up over its cUrve at the aftermarket versUs swaps whiLe tHe SOVereiGn. Suisse, MPS Capital Services, swaps pLUs 6bp reoffer LeveL. oLd 10 Year bonds dUe 08 have "-03 StandS OUt aS One OF tHe NatWest Markets and UniCredit h)f YoU are UnderweiGht on aLso tiGhtened 6bpnbp WideSt naMeS in tHe )taLian cOVered were the LeadS. „ 3pain this coULd be a Good accordinG to Tradeweb data. „

International Financing Review January 26 2019 5 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS Top news Barclays ‘dead’ without Qatar cash

„ People & Markets Trial of ex-Barclays CEO and three others starts over 2008 fundraising

BY STEVE SLATER the banKers aGreed the eXtra HARD BARGAIN beCaUse Qatar pLaYed hardbaLL as fees for the Qatari inVestors and 0roseCUtors said Qatar there Were not manY soUrCes BARCLAYSûWASûhBASICALLYûDEADvûIFû then hid them from other demanded to be paid 3.75% WiLLinG and abLe to provide the it did not raise £1bn from Qatar investors. Commission to UnderWrite the cash. inVestors in tHe sUmmer of  6arLeY 2oGer *enKins 4om Cash CaLLs and 6arLeY and his h7ithoUt 1bn ;poUnds= at the one of foUr former toP "arCLaYs +aLaris and 2iChard "oath denY aLLeGed Co Conspirators aGreed to verY Least from Q ;Qatar= We are banKers WHo are on triaL for ConsPirinG to Commit fraUd bY paY 3.5%. 4hat Was more than basicaLLY dead v "oath said in an fraUd Wrote in an emaiL as tHeY faLse rePresentations When doUbLe the 1.5% other emaiL in -aY  the Were PUttinG toGetHer a "arCLaYs raised £11.bn UnderWriters Were beinG paid so prosecUtion said. "oath Was lnanCinG to saVe tHe banK 531bn in tWo Cash CaLLs in "arCLaYs hid the eXtra paYments capitaL head of "arcLaYs 4He "ritisH banKs need to Get . 4he ProCeeds aLLoWed the in side deaLs KnoWn as advisorY %Uropean lnanciaL institUtions Qatar to inVest Was a CrUCiaL banK to avert a state baiLoUt. serviCe aGreements the GroUp at the time. faCtor in tHe LenGtHs tHe former !t the heart of the Case is an proseCUtion aLLeGes. "arcLaYs had foUr core eXeCUtiVes Went to seCUre aLLeGation that Qatari investors Qatar ended Up bUYinG investors Lined Up as inVestment WHiCH meant demanded and Were Paid eXtra £3.5bn of "arCLaYs shares in the UnderWriters of its *Une  "arCLaYs aGreed to PaY Qatar moneY to UnderWrite tWo oPen tWo offers. 4he proseCUtion fUndraisinG code named 0roJect £m in seCret fees in reLation offers bY "arCLaYs. aLLeGes Qatar Was paid an eXtra (eron. 4heY Were Qatar to tWo fUndraisinGs in  $UrinG the lrst three daYs of £m Under a lrst !3! in *Une 3inGapores 4emaseK *apans ProseCUtors said the triaL the ProseCUtors aLso  and an eXtra £m in a 3Umitomo and #hina 4He triaL of *oHn 6arLeY tHe said "oath had asKed 6arLeY to seCond !3! in /Ctober . $eveLopment "anK. former "arCLaYs CHief eXeCUtiVe teLL broKers ha tinY PorKYv on Qatar is not aCCUsed of anY “The evidence demonstrates and three other men started hoW mUCh "arCLaYs had seCUred WronGdoinG. that the Qataris drove a hard in a ,ondon CoUrt on in fUndinG. 4he foUr aLso JoKed %dWard "roWn LeadinG the barGain x the defendants KneW 7ednesdaY 0roseCUtors for the on severaL oCCasions aboUt the proseCUtion Case toLd a paCKed that to secUre the Qataris 5+s 3erioUs &raUd /flCe aLLeGe risK of GoinG to JaiL. CoUrtroom the fees Were paid investment theY WoULd have to Vene bonds rally as opposition claims power

„ Emerging Markets Investors see regime change within reach despite obstacles ahead

BY PAUL KILBY !nd WhiLe eUphoric marKets “That wiLL be the beGinninG of lLed a compLaint in the .ew pUshed some of the coUntrYs debt restrUctUrinG. 9orK 3tate 3Upreme #oUrt over 7ith the 53 bacKinG 6eneZUeLas bonds to a one Year hiGh Last %ven then assessment of debt non paYment on the 1s and YoUnG opposition Leader after he WeeK hoW the sitUation pLaYs sUstainabiLitY in a coUntrY whose 2019 bonds. decLared himseLf interim oUt in a coUntrY that noW economY is in tatters n and where /thers n incLUdinG a LarGer president Last WeeK the bUYsides effectiveLY has tWo Governments the )nternationaL -onetarY &Und creditor GroUp represented bY bet on a chanGe of Government remains far from certain. has not condUcted an on the lnanciaL adviser 'UGGenheim and the start of debt taLKs seems “7e are GettinG cLoser ;to a GroUnd consULtation since  3ecUrities n see no advantaGe in cLoser than ever to paYinG off. chanGe of Government= bUt not as n wiLL be toUGh and LenGthY. LeGaL action at this point and have The sUdden ascent of the 35 cLose as marKet prices indicate v a “) dont thinK the new decided to wait to neGotiate once Year oLd *Uan 'Uaido Who has hedGe fUnd manaGer toLd )&2. Government wiLL be abLe to 53 sanctions have been Lifted. noW been recoGnised as the )ndeed creditors maY have speaK inteLLiGentLY with coUntrYs Leader bY mUch of the some time to wait before the creditors UntiL theY see the )-&s CHANGING DYNAMICS internationaL commUnitY is seen start of LonG awaited neGotiations assessment v a sovereiGn debt (owever with -adUros as a Game chanGer for investors to restrUctUre aboUt 53bn of eXpert said. downfaLL LooKinG more LiKeLY the WaitinG to cash in on biLLions of bonds 53.bn of which are ,itiGation has aLreadY started dYnamics of a debt restrUctUrinG doLLars of defaULted bonds. now in arrears. amonG some impatient amonG competinG creditors maY 'Uaido has momentUm on his $ebt neGotiations are onLY bondhoLders who had Given Up on be set to chanGe. side foLLoWinG nationWide eXpected to move forward if and an imminent -adUro departUre .ot onLY coULd a new protests aGainst 0resident .icoLas when 'Uaido taKes fULL power. and feLt that #anadian GoLd Government deem anY cLaims -adUro bLamed for an economic “The neXt move is when companY #YrstaLLeX and won dUrinG the -adUro crisis that has forced miLLions of 'Uaido secUres -iramores ;the #onoco0hiLLips had stoLen a march Government iLLeGitimate bUt 53 6eneZUeLans to mee the coUntrY. presidentiaL paLace= and the on them after winninG heftY cLaims coUrts maY not aLLow the "Ut -adUro is not eXpected to reLaXinG of sanctions v said -artin aGainst 6eneZUeLa in 53 coUrts. freeZinG of assets once Good reLinQUish poWer WithoUt a lGht 3chUbert #%/ of %Urinam a &ive fUnds moved to faith neGotiations beGin. and for noW he stiLL has controL lnanciaL adviser orGanisinG acceLerate paYment on the !nd as ,ee "Uchheit partner of the miLitarY n the Linchpin for bondhoLders in preparation for coUntrYs 3 bonds Last Year at Law lrm #LearY 'ottLieb anY transition of poWer. possibLe debt taLKs. whiLe hedGe fUnd 0haro recentLY recentLY arGUed the TrUmp

6 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

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lNDûAûWAYûTOûPAYûTHEMûWHATû h) thinK the Best thinG to do is THEYûDEMANDEDûWHILSTûALSOû x we BasiCaLLY start aGain we IL&FS fallout threatens HIDINGûTHEûTRUEûPOSITIONûFROMû Get the #hinese BaCK at the other investors and the wider taBLe  Fees #hinese CoMe in project finance/ABS MarKet v "rown said everYBodY CoMes in we disCLose )F the other Underwriters  Fees we dont have anY oF „ Emerging Markets Bankruptcy-remote structures in question Knew aBoUt the Fees Paid to this shit none oF Us is GoinG to 1atar theY too woULd want eXtra Be JaiLed and we Get a deaL done BY KRISHNA MERCHANT deBt despite the coLLapse of the PaYMents and iF the MarKet on 4UesdaY v "oath toLd *enKins sponsor. India 2atinGs for Knew how MUCh "arCLaYs had on a CaLL. *enKins was "arCLaYs ! fUrther defaULt from the eXampLe kept its !! 3/ ratinG Paid it CoULd have UnderMined chairman of investment emBattLed INFRASTRUCTURE LEASING intact after the moratoriUm ConldenCe in the BanK "rown manaGement in the -idLand AND FINANCIAL SERVICES GroUp has citinG the Use of rinG fenced said. %ast and .orth !frica and heLd raised qUestions over the Use of reserve and escrow accoUnts the KeY reLationshiP with 1atar. BanKrUptcY remote strUctUres in and staBLe cashmows cominG “FOOD SUCKS” +aLaris the head of "arcLaYs the Indian market. from annUities from the state ! KeY Part oF the triaL is LiKeLY to weaLth manaGement BUsiness at JHARKHAND ROAD PROJECTS Government. FoCUs on whether the !3!s the time aLso JoKed aBoUt the IMPLEMENTATION set Up BY I,&3 !fter the missed paYment invoLved GenUine serviCes threat of JaiL if the 1atari deaL Transportation Networks to #risiL and India 2atinGs Provided BY 1atar or whether did not PLaY BY the rULes. UpGrade   kiLometres of immediateLY downGraded theY were JUst a sMoKesCreen to h.one of Us wants to Go to JaiL roads in the eastern Indian state *harkhand 2oad 0roJects Bonds PaY eXtra Fees. here v +aLaris said to "oath in of *harkhand faiLed to redeem to $ from "" 3/ after havinG 3trUCtUrinG the deaL to another recorded Phone caLL. 2s.m 53  of Bonds aLreadY cUt them from !! 3/ a Provide the eXtra PaYMents aLso h4he food sUcKs and the seX is dUe on *anUarY  despite week earLier. India 2atinGs Proved a headaChe and "rown worse v he said. havinG more than 2s.Bn in a downGraded Bonds totaLLinG PLaYed reCordinGs oF Phone CaLLs 4he ProsecUtion said aLL of deBt service reserve accoUnt 2s.Bn whiLe #risiL showinG "oath was worried "oaths Phone conversations were accordinG to India 2atinGs. downGraded 2s.Bn. aBoUt theM. !t one Point he recorded dUe to his roLe at the The speciaL pUrpose vehicLe 2atinG aGencies and Bankers teLLs a "arCLaYs LawYer he FeeLs BanK UnLiKe the other defendants. had earLier asked the trUstee to are warninG that the hsiCKv aBoUt the PotentiaL 4he triaL is set to Last UP to siX haLt deBt servicinG Under a interpretation of the N#,!T sCrUtinY on the 1atar deaL. months. „ moratoriUm ordered BY the order coULd Lead to more NationaL #ompanY ,aw defaULts where the sponsors !ppeLLate TriBUnaL Indias have rUn into diflcULtY BUt are administration coULd LeGaLLY PUt dependinG on the timinG of BankrUptcY triBUnaL which in otherwise operatinG normaLLY an end to Private creditors reGime chanGe. /ctoBer Granted I,&3 potentiaLLY terminatinG attachment cLaims in an effort “We are of the view that the protection from creditors whiLe concession aGreements. to ensUre an orderLY oiL indUstrY is the channeL to a it restrUctUres its deBts. India 2atinGs said it rates restrUctUrinG mUch LiKe what tUrnaroUnd in 6eneZUeLa v said !LthoUGh the trUstee had more than 2s.trn of 306 Bonds happened in Iraq. 2icardo .avarro a portfoLio reqUested the paYment Be made with a weLL delned paYment hIt wiLL Be verY poLiticaL v said manaGer at .octUa 0artners. the escrow accoUnt Bank faiLed waterfaLL mechanism hintinG at -ichaeL 2oche an emerGinG “"Ut the asset Base that sets to reLease the fUnds accordinG the scaLe of the secUrities at marKet lXed income anaLYst at the foUndation for recoverY to India 2atinGs. stake. 3eaport. h4he 53 4reasUrY wiLL vaLUes in 0$63! Becomes Less The Use of the N#,!T order to “The defaULts BY 306s wiLL pUsh BacK on the maXimisation vaLUaBLe over time.v BLock the repaYment of proJect decrease sentiment for of retUrn BY private creditors.v 4hat timeframe coULd Become LeveL deBt has triGGered strUctUred prodUcts from the 3 tiLL investors continUe to see shorter after 53 0resident $onaLd warninGs of a conldence crisis infrastrUctUre space v said a Upside at cUrrent LeveLs even 4rUmp BacKed 'Uaido Last weeK. in Indias strUctUred lnance $#- Banker. after Last weeKs mULti point “4rUmps recoGnition of market. Indias domestic deBt markets raLLY. 'Uaido coULd have stronG #risiL said the move are stiLL recoverinG from the 3overeiGn Bonds were mostLY impLications in the sense that as chaLLenGed the LeGaL standinG of faLLoUt from I,&3s shock BeinG Bid aroUnd  cents on the LeGitimate head of the the rinG fencinG and arms defaULt which triGGered a doLLar on 4hUrsdaY Up from the Government 'Uaido coULd LooK LenGth protection from LiqUiditY sqU eeZe as investors Low s at the start of the Year. to freeZe aLL assets incLUdinG BankrUptcY that 306s are shUnned other non Bank 0$63! Bonds meanwhiLe were in doLLar deposits ;U sed BY 0$63!= v sUpposed to provide. lnanciaL companies. the mid to hiGh s Up from the the hedGe fUnd manaGer said. 2aJeev 2adhakrishnan head Indias N"&#s have recentLY mid to hiGh teens in earLY *anUarY. (e coULd aLso force chanGes at of lXed income at 3"I &Unds tUrned to credit enhancement 4hat is stiLL LarGeLY BeLow the the 53 Unit of 0$63! #itGo -anaGement said it was throUGh strUctUred lnancinGs Up to  cent recoverY vaLUe whose shares are aLreadY pLedGed “eXtremeLY worrYinGv. sUch as covered Bonds to ease that some anaLYsts are to  hoLders and other “Investors wiLL start their access to fUndinG. The caLcULatinG. creditors sUch as 2Ussias 2osneft. qUestioninG the entire rinG moves at I,&3 306s wiLL 4he Governments neGLect of “-adUro is no LonGer in charGe fenced strUctUre mechanism v hamper this deveLopment. its oiL sector amid a sharp of foreiGn assets and that is the he said. “5ntiL the investors Get cLaritY decLine in prodUction has some noose aroUnd his necK v said 2aY "ondhoLders and anaLYsts had from the BankrUptcY triBUnaL investors assessinG whether to :Ucaro chief investment oflcer assUmed that the strUctUre of theY wiLL Be caUtioUs in invest in cheaper priced 0$63! at 268 !sset -anaGement in the *harkhand proJects woULd investinG in sUch strUctUres v Bonds or the sovereiGn -iami. „ ensUre theY coULd service their said 2adhakrishnan. „

International Financing Review January 26 2019 7 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS Top news High-yield to pick up levfin slack „ Bonds/Loans Dun & Bradstreet financing adds bonds at the expense of loans

BY DAVID BELL h7ith severaL other LarGe !Gainst this backdrop one &ridaY. )t is eXpected to end on deaLs now in the market there investor sUGGested that $Un  ThUrsdaY. #ommitments on the ,everaGed lnance bankers are was some concern whether the "radstreets hiGh lnanciaL LeveraGe Loan are dUe on &ebrUarY . LookinG to take the pressUre off a Loan market woULd be readY to n over eiGht times accordinG to !n investor GroUp Led bY ## strained Term ,oan " market bY fUnd a 53bn senior secUred &itch n maY have made the deaL a #apitaL "iLcar #annae (oLdinGs issUinG more hiGh YieLd bonds in Loan transaction v said a banker trickier seLL to Loan bUYers. and Thomas ( Lee 0artners is ,"/ lnancinG packaGes. on the $Un  "radstreet deaL. acQUirinG $Un  "radstreet in a The banks LeadinG data and The UncertaintY in the TL" deaL that vaLUes the companY at anaLYtics provider DUN & market foLLows a torrid “With several other 53.bn incLUdinG 53.bn of BRADSTREETs acQUisition $ecember in which severaL large deals now in net debt and pension obLiGations. lnancinG for instance have deaLs incLUdinG the $Un  the market, there was shifted some of the lnancinG "radstreet lnancinG were some concern whether PICKING UP SLACK from the Loan portion into bonds deLaYed or discoUnted to Get the loan market would -ore L"/s coULd see simiLar in response to market conditions. them off Underwriters books. chanGes in their lnancinG Lead Bank of America Merrill ) nvestors have pULLed cash be ready to fund a strUctUres accordinG to the banker Lynch LaUnched a 53.bn from Loan fUnds for  US$3bn senior secured on the deaL incLUdinG the bUYoUt of seven Year senior secUred term consecUtive weeks totaLLinG loan transaction” *ohnson #ontroLs power soLUtions Loan on ThUrsdaY smaLLer than aLmost 53bn accordinG to Unit bY "rookleLd "Usiness the initiaL commitment for a Lipper data. Last week saw The hiGh YieLd market 0artners n for which bankers are 53.bn Loan faciLitY. 53m of oUtmows. meanwhiLe has been resUrGent LookinG to raise 53.bn in Loans The banks are lnancinG the 3everaL other LarGe Loan deaLs in the new Year. 3everaL issUers and bonds in both the 53 doLLar and rest of that faciLitY with a emerGed ahead of $Un  have been abLe to increase the eUro markets. 53m . Year non caLL three "radstreet Last week incLUdinG a siZe of deaLs and tiGhten pricinG Credit Suisse is LeadinG the senior secUred bond in addition 53.bn term Loan from after severaL weeks withoUt bond portion of the *ohnson to a 53m eiGht Year non caLL heaLthcare services lrm issUance and heavY coUpon #ontroLs deaL which is eXpected three senior UnsecUred note. ATHENAHEALTH and a 53.bn repaYments in *an UarY Left to be priced in doLLars. The "!-L is LeadinG the secUred Loan packaGe from aircraft investors mUsh with cash. bank did not immediateLY bond with Citigroup Lead on the enGine services lrm "ankers started a 53 respond to a reQUest for UnsecUred. STANDARDAERO. roadshow for the bonds on comment. High-grade borrowers tune into term loans

„ Loans US investment grade companies turning to term loans for acquisition deals

BY LYNN ADLER Year matUrities WiLL reDUce tHe TOUGH CALL? hUGe TripLe " rated companies companYs reLiance on LonGer !cQUisitions are tYpicaLLY FUnDeD beinG downGraded to JUnk 53ûHIGH GRADEûCOMPANIES û term BonD issUance to repLace BY BriDGe Loans which are continUes to rattLe the markets. INCLUDINGûBRISTOL-MYERS SQUIBB ûAREû tHe BriDGe Loan UsUaLLY repaiD BY LonGer term !cQUisition term Loans heLp BOOSTINGûTHEûLOANûELEMENTûOFûMULTI Term Loans maDe Up  oF a DeBt in the BonD marKet companies to deLeveraGe more BILLIONûDOLLARûACQUISITIONûlNANCINGSû recorD 53Bn oF 53 aLLowinG BanKs to reUse capitaL QUickLY which can protect INûAûMOVEûTHATûCOULDûSTRETCHûSOMEû inVestment GraDe acQUisition 0UttinG meDiUm term Loans in investment Grade credit ratinGs. BANKSûBALANCEûSHEETS Loans Last Year THis is tHe pLace is more eXpensive For TheY aLso offer an advantaGe ,OANSûFORûINVESTMENTûGRADEû HiGHest sHare since tHe lnanciaL BanKs which have to hoLD over LonGer term bonds in that COMPANIESûAREûCURRENTLYûCHEAPERû crisis oUtstrippinG  in  aDDitionaL capitaL aGainst them theY can be repaid with fewer THANûBONDS ûWHICHûISûPROMPTINGû anD a recent LoW oF  in  anD are not aBLe to reUse capitaL penaLties. companies to increase Term ! recorD 53Bn oF totaL QUicKLY #osts can rise FUrther in hTerm Loans which are ,oan ! paper anD potentiaLLY inVestment GraDe term Loans Were Line with BanK FUnDinG costs prepaYabLe at anY time withoUt postpone tappinG VoLatiLe anD issUeD Last Year Up  From tHe DepenDinG on cUrrencY penaLtY offer more meXibiLitY eXpensiVe BonD marKets prior peaK set tWo Years earLier h&UnDeD LiQUiDitY tenDs to Draw than lXed rate debt. That is "ristoL -Yers 3QUiBB LineD Up !LL tHis is in contrast to WHat is more risK premiUm internaLLY partLY whY YoU see LarGe deaLs 53Bn in term Loans to reDUce HappeninG For LoWer rateD more risK capitaL is appLieD 3ome Like #iGna #omcast "ristoL a 53Bn BriDGe Loan pUt in companies where there is a move ;BanKs= Do it For their Best -Yers and others incLUde LarGe pLace earLY tHis montH to to FavoUr BonDs over Loans when reLationships BUt others hate it v term Loan components.v said sUpport its 53Bn pUrcHase oF it comes to acQUisition lnancinG a senior banker said. *ason +Yrwood partner at Law #eLGene Those arranGinG the BUYoUt DeaL )t coULd aLso raise baLance lrm $avis 0oLk  7ardweLL. THese moatinG rate term Loans For $Un  "raDstreet For sheet risk for banks in a weaker -oodYs eXpects a downGrade WitH 53Bn oF  DaY 53Bn eXampLe have Done eXactLY that economic environment if credit for "ristoL -Yers Limited to one oF tHree Year anD 53Bn oF lVe 3ee storY aBove ratinGs decLine as the risk of notch to ! from ! based on

8 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

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h5NTIL THE LOAN MARKET GETS moment v said another BanKer BACK TO WHERE IT WAS ) THINK on the $Un  "radstreet deaL. RPC paves way for WELL SEE THE BOND MARKET "Ut whiLe this is a departUre PICKING UP SOME SLACK v SAID From the trend seen Last Year n public-to-private deals 0ETER 3CHWAB PORTFOLIO when sponsors shiFted lnanCinG MANAGER AT 0!8 7ORLD &UNDS awaY From the Bond marKet into „ Loans Apollo lands loan to buy packaging firm 4HIS COULD GIVE A MUCH Loans to tap demand For moatinG NEEDED BOOST TO THE HIGH YIELD rate paper n its UnLiKeLY to BY PRUDENCE HO hWe are VerY caUtioUs to PRIMARY MARKET WHICH BEFORE siGniFY a maJor shiFt in how Underwrite sterLinG deaLs. )ts THE MARKET REOPENED EARLIER THIS sponsors LooK to lnanCe 0riVate eQUitY lrm !poLLo has JUst YoU dont know how to MONTH HAD SUFFERED ITS LIGHTEST BUYoUts said other soUrCes. seCUred a õ.Bn eQUiVaLent price it v a second banker said. TWO MONTH STRETCH SINCE THE h4here are other deaLs GoinG Loan to FUnd its pUrChase oF 4he deaL has an additionaL lNANCIAL CRISIS the opposite waY v said a "ritish paCKaGinG CompanY RPC a5m mULti cUrrencY reVoLVinG 4HESE LIGHT VOLUMES HAVE LeVeraGed lnanCe sYndiCate hiGhLiGhtinG the potentiaL For credit faciLitY aVaiLabLe to be HOWEVER GIVEN TECHNICAL SUPPORT BanKer awaY From the $Un  pUBLiC to priVate deaLs amid drawn in eUros 53 doLLars and TO THE PRIMARY MARKET IN THE NEW "radstreet deaL. h) dont thinK FaLLinG stoCK VaLUations. sterLinG. )t carries a marGin of YEAR IN COMBINATION WITH MUTUAL its GoinG to dramatiCaLLY aLter /pportUnities are openinG Up 300bp. FUND INmOWS AND BOND the trend. Where sponsors are For priVate eQUitY lrms LooKinG 'eneraL sYndication is LikeLY redemptions. Lipper data showed aBLe to Get Committed lnanCinG to make the most of the to come after the LaUnch of the 53.Bn oF inmows to hiGh YieLd in seCond Lien Format theYre tUrBULent eQUitY markets. 4he GeneraL offer to sharehoLders FUnds in the weeK BeFore Last the stiLL GoinG to preFer seCond Lien.v 3toXX %Urope  )ndeX is down another banker said. siXth LarGest on reCord. Loans are tYpiCaLLY more meXiBLe aBoUt  sinCe /CtoBer and 20# 20# which makes (einZ than Bonds and haVe more shares dropped 22.5% from the tomato ketchUp bottLes and SNAPPED UP attraCtiVe CaLL strUCtUres maKinG it BeGinninG of 2 to 3eptemBer packaGinG for .iVea sUn cream .ewLY issUed deaLs haVe Been easier For sponsors to relnanCe  the Last tradinG daY Before the posted 3% Growth in reVenUe snapped Up and are tradinG weLL deBt iF marKets moVe tiGhter. offer period BeGan. Last Year as of -arch and a 3% in the seCondarY marKet n h4heres so mUCh moneY 3imiLarLY ++2 has Lined Up increase in adJUsted %bitda to oFFerinGs From 4arGa 2esoUrCe sittinG in priVate deBt FUnds that lnanCinG for its aCQUisition of £590.3m. 0artners and %nerGiZer earLier iF a sponsor Can do a 53mn 3panish piZZa CompanY 20# operates in 33 coUntries this month haVe risen as hiGh as m seCond Lien and priVateLY TELEPIZZA whose shares feLL as with the 5+ accoUntinG for  For eXampLe. pLaCe it theY wiLL. 4hats where mUCh as % Last Year Before the aboUt 2% of reVenUe. h)ts not that the Loan marKet the CapitaL is riGht now v said offer was annoUnCed in h)ts an internationaL isnt reCoVerinG BUt the hiGh 'rant -oYer head oF LeVeraGed December. companY and its 5+ bUsiness YieLd marKet is stronGer at the lnanCe at -5&'. „ -ore pUbLic to priVate deaLs isnt that mUch v a banker cLose are eXpected. "ain said in to the deaL said. .oVember it was eXpLorinG a RAPIDûDEBTûREPAYMENTûTHATû SWELLEDû,OWERûRATINGSûFURTHERû takeoVer bid for &rankfUrt Listed MORE CHALLENGES REDUCESûLEVERAGEûTOûTHREEûTIMESû INCREASEûBORROWINGûCOSTS LiGhtinG prodUcts maker OSRAM 4akinG a Listed companY priVate FROMûFOURûTIMESûWITHINûTWOû 53ûCOMPANIESûINûTHEûLOWESTû LICHT whiLe #6# is in eXcLUsiVe has more chaLLenGes than YEARSû4HEûRATINGûAGENCYûISûALSOû INVESTMENT GRADEûCATEGORYû û taLks with %VoLem to bUY its acQUirinG a cLoseLY heLd LOOKINGûFORûAûDIVERSIlEDûBONDû 4RIPLEû"û ûNOWûACCOUNTûFORûMOREû maJoritY stake in &rench insUrer companY pUttinG more pressUre OFFERINGûWITHûSTAGGEREDû THANûHALFûOFûTHEûHIGH GRADEûSECTOR û APRIL. on the sponsors and Lenders MATURITIES UPûFROMûAûTHIRDûAûDECADEûAGO h(aLf of oUr pipeLine are inVoLVed. )NDUSTRIALûGIANTû'ENERALû take priVate deaLs v said a h&irst YoU haVe to identifY “Term loans, which are %LECTRICûISûPREPARINGûTOûUNLOADû banker. tarGets which haVe depressed prepayable at any time ASSETSûTOûCUTûITSûMASSIVEûDEBTûTOû VaLUation. 4hen YoU are hopinG TRYûTOûRETAINûINVESTMENT GRADEû NO STERLING shares wont Go Up too mUch without penalty, offer RATINGS ûANDûBREWERû!NHEUSER Barclays BNP Paribas Citigroup dUrinG the process. !nd there more flexibility than "USCHû)N"EVûISûALSOûTRYINGûTOû Deutsche Bank HSBC Jefferies and are reGULatorY discLosUres and fixed-rate debt” PROTECTûITSûRATINGûFROMûSINKINGû Rabobank haVe Underwritten the lnancinG discLosUres v another TOûJUNKûSTATUS senior interim term Loan to back banker said. h)Fû"RISTOLûBORROWEDûTHEûFULLû ,ENDERSûLOOKINGûTOûFOSTERû 20#s bUYoUt spLit between a DeaLs can aLso be bLown off AMOUNTûINûBONDSûWITHûLONGERû STRONGûRELATIONSHIPSûAREûWILLINGû õ2.5bn faciLitY and a coUrse bY riVaL bids and MATURITYûDATES ûTHEûPACEûOFû TOûPROVIDEûFUNDEDûTERMûLOANû 53.222bn faciLitY. sharehoLder obJections. DELEVERAGINGûWOULDûBEûSLOWER ûANDû ASSETSûTOûCORPORATEûCLIENTS û 4he eUro tranche paYs a (oUrs after !poLLos deaL was PROBABLYûINCONSISTENTûWITHûTHEû WHICHûUNDERSCORESûROBUSTû marGin of 5bp oVer %Uribor annoUnced sharehoLder !ViVa EXPECTEDûRATINGûOFû! vûSAIDû LENDERûCONlDENCEûINûTHEûHIGH whiLe the 53 doLLar tranche paYs )nVestors said the biddinG -ICHAELû,EVESQUE ûAû GRADEûMARKET 5bp oVer Libor. "oth tranches process for 20# had not PHARMACEUTICALûANALYSTûATû-OODYS h&OLDINGûTERMûLOANSûINTOû haVe a % moor. deLiVered fair VaLUe to ACQUISITIONûlNANCINGûISû !part from its siZe the deaL is sharehoLders. TAMING THE BEAST DElNITELYûAûHEALTHYûSIGN vûTHEû notabLe for the absence of !ViVa hoLds onLY a .93% stake 3OMEûCOMPANIESûHAVEûBEENû SENIORûBANKERûSAIDûh)TûSAYSûTHATû sterLinG on the term Loan in 20# bUt it coULd caUse other SLOWERûTOûREPAYûDEBTûTHANû BANKSûHAVEûTHEûABILITYûTOû showinG that banks haVe a Low institUtionaL inVestors of the PROMISEDûANDûCREDITûRATINGSû PROVIDEûTHATûTYPEûOFûBALANCEû appetite for the cUrrencY same View to press !poLLo for a DOWNGRADESûMOUNTEDûASûDEBTû SHEETûRISKv „ becaUse of "reXit concerns. hiGher price. „

International Financing Review January 26 2019 9 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS Top news US corporates try new model for IPO

„ Equities Gossamer Bio and New Fortress attempt workaround during government shutdown

BY STEPHEN LACEY thE 53M )0/ On &EBRUaRY (owever 'ossaMers the deaL redUCinG the risK oF  BUt aRE YEt tO LaUnCh thE aPProaCh is LiKeLY to ChanGe iF 'ossaMers UnorthodoX aPProaCh. #ORPORATESûHOPINGûTOûGOûPUBLICû investor roadshow. the GovernMent shUtdown is INûTHEû53ûHAVEûGROWNûIMPATIENTû 'ossaMer is LooKinG to seLL resoLved BY &eBrUarY . UNCHARTED WATERS WAITINGûFORûTHEûlVE WEEKû .M shares at a lXed PriCe oF 4hoUGh Most 53 )0/s NEW FORTRESS ENERGY an UPstart in GOVERNMENTûSHUTDOWNûTOûENDûSOû 53 MarKinG a  inCrease CoMPLete BooKBUiLdinG with the BUsiness oF LiQUeled natUraL AREûMOVINGûAHEADûWITHû in its vaLUation sinCe a 53M MarKetinG ranGes UsUaLLY with a Gas oPted For the saMe aPProaCh IMPERFECTûWORKAROUNDS 3eries " roUnd in *ULY. two doLLar sPread the Path that as 'ossaMer aFter its 53M GOSSAMER BIO ûAûBIOTECHûWHOSEû 4he Move has aLreadY Been 'ossaMer is now on Means it is )0/ FaiLed to PriCe on 4hUrsdaY. MOSTûADVANCEDûDRUGûISûINû0HASEû eMPLoYed BY severaL 30!#s LoCKed in to PriCe the )0/ at .ew &ortress had LaUnChed earLier ))BûTRIALS ûTOOKûTHEû where the lXed PriCinG that 53 and Cannot UPsiZe the this Month in the eXPeCtation UNPRECEDENTEDûSTEPûOFûREMOVINGû CoMes FroM aUtoMatiC deaL iF it draws eXCess deMand. that the 3%#s oPerations woULd THEûDELAYINGûAMENDMENTûINûAû eFFeCtiveness is not an issUe. h7e woULd not have Gone this resUMe and it woULd raPidLY Give REVISEDû)0/ûlLINGûONû7EDNESDAY û 4he 3%# is not reviewinG or roUte iF we did not have a hiGh the CoMPanY neCessarY aPProvaLs. ALLOWINGûITûTOûGETûAUTOMATICû deCLarinG lLinGs eFFeCtive For the deGree oF CertaintY we Can Get !s )&2 went to Press .ew EFFECTIVENESSûFROMûTHEû53û dUration oF the shUtdown. this one done v said the BanKer &ortress was lnaLisinG detaiLs oF 3ECURITIESûANDû%XCHANGEû 'ossaMer does not PLan to B eGin addinG 'ossaMer had aLreadY a PLan to re lLe an aMended #OMMISSIONûINûûDAYS MarKetinG PUBLiCLY UntiL *anUarY UndertaKen a Pre MarKetinG ProsPeCtUs to seLL M shares at Bank of America Merrill Lynch û  aLLowinG a traditionaL nine daY eXerCise with investors. a lXed PriCe oF 53 versUs the with SVB Leerink Barclays and roadshow a BanKer invoLved in the %XistinG investors have aGreed 53  MarKetinG ranGe at Evercore in tOw EXPECt tO PRiCE UnderwritinG toLd )&2. to BUY 53M oF shares  oF LaUnCh.

iMPairMent Losses in the FoUrth Chinese brokers top up capital QUarter oF 2018 dUe to an inCrease in CLient deFaULts in oUr „ Equities Securities firms build war chests to fight off increasing competition stoCk BaCked LendinG BUsiness v 3henwan (onGYUan said in the BY FIONA LAU, KAREN TIAN 3henwan (onGYUan and FALLING PROFITS lLinG. #hina 3eCUrities are JoininG lve 4he BroKeraGes are BUiLdinG war h/Ur investMent BankinG #hinese BroKeraGes have eMBarKed other #hinese BroKeraGes that Chests to eXPand their BUsiness has Been adverseLY on a 53.Bn eQUitY FUndraisinG have annoUnCed PLans For eQUitY BUsinesses aFter seeinG Prolts aFFeCted BY the More strinGent sPree as theY strive to MaKe UP For raisinGs in the onshore and shrink in 2018. reGULatorY review over ! share dePLeted  Prolts and deFend oFFshore MarKets to raise !CCordinG to its (onG +onG )0/s and a deCrease in the their MarKet share aMid GrowinG 53.Bn in totaL 3ee taBLe . ListinG lLinG 3henwan CoMPLeted )0/s in the Market v CoMPetition inCLUdinG FroM 3ino HUATAI SECURITIES GUOSEN SECURITIES (onGYUan Posted net Prolt oF it said. ForeiGn Joint ventUres. HAITONG SECURITIES INDUSTRIAL 2MB.2Bn For the lrst nine !BoUt 10 CoMPanies raised 3henZhen Listed SHENWAN SECURITIES and GF SECURITIES are either Months oF 2018 down 1. 2MB18.Bn FroM ! share )0/s HONGYUAN GROUP lLed a ListinG waitinG For reGULatorY aPProvaL or Year on Year. in 2018 down  BY nUMBer aPPLiCation to the 3toCK the riGht MarKet Conditions to 4he Broker said thinGs are not and 0 BY voLUMe FroM a Year %XChanGe oF (onG +onG on LaUnCh deaLs. LookinG UP Yet. earLier. *anUarY  a Year aFter raisinG h7e eXPeCt More #hinese h3inCe 3ePteMBer 0 2018 #itiC 3eCUrities one oF the 2MBBn 53.Bn FroM an BroKeraGes to annoUnCe oUr PersonaL lnanCe seGMent CoUntrYs toP Brokers said Last ! share Private PLaCeMent in FUndraisinG PLans either seLLinG has Been adverseLY aFFeCted BY 7ednesdaY that net Prolt *anUarY . 4he lrM PLans to eQUities or Bonds to FUnd their the UnFavoUraBLe Market attriBUtaBLe to owners oF the raise 53Bnn.Bn FroM the eXPansion in an inCreasinGLY Conditions on the ! share stoCk Parent FeLL 1.8 in 2018 to (onG +onG moat in the seCond CoMPetitive environMent v said Market x )n PartiCULar we 2MB.Bn. (aitonG 3eCUrities QUarter aCCordinG to PeoPLe one %#- BanKer. inCreased oUr Provision For said earLier this Month that its CLose to the deaL. -eanwhiLe CHINA SECURITIES Last CAPITAL COMPETITION weeK UnveiLed PLans to raise UP MAJOR EQUITY OFFERINGS PLANNED FROM CHINESE SECURITIES COMPANIES to 2MBBn FroM a Private Issuer Amount Format Status ! share PLaCeMent onLY seven Shenwan Hongyuan US$1bn-$1.5bn Hong Kong IPO Filed listing application Months aFter it raised 2MB.Bn China Securities Rmb13bn A-share private placement Announced FroM a 3hanGhai )0/ Last *Une. Huatai Securities at least US$500m GDR Received CSRC approval 4he BroKeraGe whiCh is aLso Guosen Securities Rmb15bn A-share private placement Announced Listed in (onG +onG Under the Haitong Securities Rmb20bn A-share private placement Announced naMe #3# &inanCiaL PLans to seLL Industrial Securities Rmb8bn A-share private placement Announced UP to .Bn ! shares to UP to  GF Securities Rmb15bn A-share private placement Received CSRC approval investors. Source: IFR Asia, public filings

10 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

For daily news stories @ visit www.ifre.com

)f the 53 GoVernMent were to decrease the siZe of an )0/ BY Up UBS finally recoups re open the 3%# coULd Make to  withoUt haVinG to lLe a that lLinG effectiVe earLY neXt new prospectUs with the 3%# week aLLowinG the stock to Under safe harBoUr rULe ! . crisis losses price as earLY as -ondaY and h7ere BeinG toLd BY the LawYers trade 4UesdaY )f not the new that the safe harBoUr proVision is „ People & Markets Profits accrued push Swiss bank into black lLinG woULd Be aUtoMaticaLLY aVaiLaBLe v said a second Banker effectiVe on &eBrUarY  inVoLVed in the offerinG. BY CHRISTOPHER SPINK 53Bn Bad assets VehicLe was soUrces inVoLVed in the process /thers howeVer View the aLso set Up toLd )&2 on &ridaY afternoon safe harBoUr as a hGreY areav #HOPPYûMARKETSûPRE #HRISTMASû 4he lXed incoMe proBLeMs 4hat third QUarter lnanciaLs BecaUse it has neVer Been Used MAYûHAVEûMARREDû5"3SûFOURTH eVentUaLLY Led 'rUBeLs Go staLe on &eBrUarY  factored in this conteXt. QUARTERûlGURESûREPORTEDûLASTû sUccessor 3erGio %rMotti when into the decision to re lLe 2eGardLess the GoVernment 4UESDAYûBUTûTHEûOVERALLû he took oVer in Late  to withoUt the deLaYinG shUtdown has stUnted the )0/ 3&RBNûNETûPROlTûNOTCHEDûUPû LarGeLY ditch that actiVitY and amendment. pipeLine Both in terms of FORûTHEûWHOLEûOFûûMEANTûTHEû concentrate on weaLth h7e are workinG with the pricinGs as weLL as companies on 3WISSûBANKûPASSEDûAûMAJORû ManaGeMent LawYers on a pLan " BUt were lLe that had hoped to Go pUBLic MILESTONE ûlNALLYûRECOUPINGûTHEû not  there v said one Banker Later in the Year. 3&RBNûOFûLOSSESûINCURREDû inVoLVed in .ew &ortresss )0/. h7ere LikeLY to haVe a Low DURINGûTHEûlNANCIALûCRISIS The 2008 loss was h7e are in Uncharted waters.v sUppLY of )0/s into -arch v said 4HEûRECOVERYûHASûTAKENûAû more than UBS’s h/ne of the BiG deBates is 2ichard 4rUesdeLL co head of DECADEû/NûTHEûCORRESPONDINGû investment bank had whether there is anY wiGGLe GLoBaL capitaL markets at $aVis RESULTSûANNOUNCEMENTûINû û generated in profits room aroUnd a lXed price v she 0oLk. h%Ven after the THENûCHIEFûEXECUTIVEû/SWALDû – SFr33.9bn – since said. GoVernment reopens there is 'RUBELûREVEALEDûAûWHOPPINGû )n normaL times companies GoinG to Be a BottLeneck at the 3&RBNûNETûLOSSûFORû û its creation 10 years haVe meXiBiLitY to increase 3%#.v „ AFTERûTAKINGûOVERû3&RBNûINû earlier writedowns to its credit positions at the peak of the 4hat has now paid off 3ince net prolt for  was  stake in -orGan 3tanLeY credit crUnch Between  5"3 has now reported siX 2mBm down  from (UaXin 3ecUrities has aLso 3epteMBer  and *Une  Years of steadY prolts with 2017. appLied to increase its 4he preVioUs Year the Bank  GeneratinG More pre taX 7ith a sLowinG economY and sharehoLdinG to 1. recorded a 3&rBn net Loss prolt 3&rBn than anY since LinGerinG UncertaintY oVer the h$omestic brokeraGes wiLL 4he  Loss was More than  when the GroUp Made #hina 53 trade war 201 Looks face more competition from 5"3s inVestMent Bank had 3&rBn set to Be another chaLLenGinG foreiGn lnanciaL institUtions. Generated in prolts n 3&rBn 4he rUMp inVestMent Bank Year for the indUstrY. #UrrentLY some LeadinG n since its creation  Years UntiL recentLY rUn BY !ndrea h)ts a criticaL Year for Us. )f we domestic pLaYers are aLreadY earLier throUGh the MerGer of /rceL has since focUsed on dont eXpand fast enoUGh we acQUirinG smaLLer pLaYers to 3"# 7arBUrG and $iLLon 2ead in eQUities tradinG aLonGside a wiLL Be LosinG manY of oUr eXpand their bUsinesses or  )n  aLone the diVision More BoUtiQUe capitaL Markets BUsinesses to the BiG pLaYers enter into new bUsiness Lost 3&rBn and adVisorY operation /rceL and wiLL eVentUaLLY Be sQUeeZed streams v said #hina 3ecUrities !fter ,ehMan "rothers faiLed Left in 3epteMBer oUt of the markets v said a in its annoUncement of the in 3epteMBer  5"3 was /VeraLL in the  Years froM Banker at a mid siZed #hinese proposed ! share pLacement. forced to tUrn to the 3wiss  5"3 has Made a 3&rBn BrokeraGe. #itic 3ecUrities for eXampLe GoVernMent for assistance 4he net prolt see chart  annoUnced earLier this month it GoVernMent BoUGht a 3&rBn &or More on 5"3s foUrth INCREASING COMPETITION wiLL paY as mUch as 2mb1.bn MandatorY conVertiBLe note QUarter resULts see 0eopLe  )n addition to home Grown to bUY smaLLer riVaL 'UanGZhoU paYinG an eYe waterinG  ! -arkets section „ riVaLs BrokeraGe lrms are now 3ecUrities. facinG the prospect of more #hina 3ecUrities is raisinG UBS NET PROFIT 2007-18 (SFrm) aGGressiVe and Better capitaLised moneY to eXpand its

3ino foreiGn secUrities Joint intermediarY and inVestment 10,000 VentUres. bUsinesses increase capitaL at ,ast !priL the #hina its sUbsidiaries repLenish 5,000 3ecUrities 2eGULatorY workinG capitaL and inVest in )4. 0 #ommission aLLowed foreiGn 3henwan (onGYUan -5,000 banks to raise their meanwhiLe wiLL Use the moneY sharehoLdinGs in secUrities *6s raised to deVeLop its secUrities -10,000 to 1 with the aim of bUsiness make principaL -15,000 remoVinG the cap aLtoGether inVestments and eXpand within three Years. oVerseas. )t pLans to seLL Up to -20,000

,ast month 5"3 became the 20 of its enLarGed share capitaL -25,000 lrst foreiGn bank to raise its in the (onG +onG ListinG Via 2011 2017 2013 2012 2015 2016 2014 2018 2010 2007 2009 stake in a LocaL *6 n in its case Joint sponsors ABC International 2008 5"3 3ecUrities n to 1. -orGan Goldman Sachs ICBC International 3tanLeY which cUrrentLY hoLds a and Shenwan Hongyuan HK. „ Source: UBS

International Financing Review January 26 2019 11 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS Top news

No spillover from Evergrande tap „ Emerging Markets Latest jumbo high-yield offering comes with much less drama

BY FRANCES YOON .0% aNd 10.0% resPectIVeLY “0eopLe thinK its a “#hinese asset manaGers and accordING to 4radeWeB. sYstemicaLLY important companY bank prop desks have voiced CHINA EVERGRANDE GROUP added to $eMaNd aNd dIstrIBUtIoN that is too Bv isaidG to thefaiL GeneraL concerns aboUt the ItS RePUtatIoN aS !SIaS BIGGeSt n statistics were not made inVestor. “)ts a Good credit to companY and have started to waLk aNd MoSt aGGReSSIVe n HIGH YIeLd aVaiLaBLe BUt orders were said to trade for momentUm and awaY from hoLdinG these bonds v ISSUeR LaSt WeeK WItH a 53BN HaVe PeaKed at oVer 53Bn and tradinG oriented inVestors. 9oU said another asset manaGer. “7ere deaL tHat PRoVed FaR LeSS settLed aroUnd 53.5Bn at lnaL coULd aLso pUt a BULLish or concerned aboUt their LeveraGe dISRUPtIVe tHaN ItS PReVIoUS PricinG. !ncHor orders were said Bearish position on it to eXpress bUt we aLso think ULtimateLY this JUMBo lNaNCINGS to Be oVer 531Bn not incLUdinG a View or Use it as a proXY for the can be a too biG to faiL scenario.v 4He "" " Rated deVeLoPeR interest From tHe Lead manaGers. #hinese hiGh YieLd indUstrY.v ReoPeNed tHRee BoNd oFFeRINGS It SHORT-TERM FOCUS oRIGINaLLY ISSUed IN  )t “The buyside expected SHORT SQUEEZE 3tandard  0oors said the tap added 53BN to tHe 53M the leads would buy Investors who tried to short the shoULd “miLdLYv cUt short term oF  -aRCH S at a YIeLd oF some of the bonds and companYs Bonds ahead of debt which as of the end of Last  53M to tHe TUesdaYs new issUe however *Une stood at 2mb2bn 53M oF  *UNe S at they would be able to were caUGht oUt BY the short 53bn . %verGrandes neXt  aNd 53BN to tHe buy it cheaper the next matUrities and an UnUsUaL 0 offshore bond matUritY is the % 53BN oF  -aRCH S at day, based on past daY deLaY on fUnGiBiLitY with the -arch 2020s one of the bond 10.5%. results” oriGinaL Bonds. issUes that it tapped. 4He LateSt taP CoMeS JUSt %verGrandes credit cUrve MoNtHS aFteR tHe CoMPaNY widened on -ondaY Before the “Chinese asset RattLed a WeaK HIGH YIeLd “The pace of orders was mandate annoUncement on managers and bank MaRKet at tHe eNd oF /CtoBeR reLatiVeLY sLow BecaUse peopLe TUesdaY morninG as rUmoUrs of WItH a 531.BN tHRee tRaNCHe were pUttinG in reaL demand. an imminent deaL circULated. prop desks have voiced deaL tHat WaS MoStLY SoLd to ItS TheY were coGnisant that theY The seLLinG was focUsed on the general concerns about oWN CHaIRMaN aNd a 531BN coULd Get fULLY aLLocated v said an LonG end of the cUrve with the the company and have taP a MoNtH LateR. 4He MaSSIVe inVestor. “"Ut for a deaL where .5% 05s faLLinG from .0 to started to walk away PReMIUM aNd LaCKLUStRe peopLe were GettinG fULLY lLLed ) 1.5 the .5% 0s droppinG from holding these ReSPoNSe SeNt %VeRGRaNdeS thinK the deaL went oKaY.v from . to .0 whiLe the bonds” eXIStING BoNdS to ReCoRd LoWS The inVestor said the sLow .5% 0s feLL from .0 to aNd WeIGHed HeaVILY oN tHe BooKBUiLd was partLY dUe to the . accordinG to TradeweB. sector. Leads not specifYinG how mUch “0eopLe who heard the rUmoUr “In oUr view one of of the deaL was BeinG sUpported soLd the LonG end thinKinG it %verGrandes keY ratinG “But for a deal where BY friends and famiLY. woULd Be that then had to cover v constraints is the sUbstantiaL Credit Suisse CEB International said one of the investors. “"ecaUse amoUnt of entrUsted and trUst people were getting China Citic Bank International and the new Bonds are not fUnGiBLe for Loans which tYpicaLLY have fully filled, I think the UBS were Joint GLoBaL 0 daYs theY woULd have had to short matUrities v said 30 deal went okay” coordinators Joint Lead Borrow the oLd Bonds dUrinG that anaLYsts in a report. manaGers and Joint time and coLLapse the trade after.v “The retap wiLL sLiGhtLY BooKrUnners. "anK of !merica "anKers on the deaL decLined improve %verGrandes LiQUiditY -erriLL ,Ynch which was Listed to comment. which we stiLL assess to be Less %VerGraNde aGaIN PaId a as a BooKrUnner on term sheets The 05s reBoUnded to .5 than adeQUate with LiQUiditY PreMIUM oVer Its eXIstING on TUesdaY was not part of the on TUesdaY and were Last Bid at soUrces marGinaLLY coverinG BoNds aNd BeNelted FroM lnaL Line Up. 83.625 on Tradeweb. Uses over the neXt 12 months.v FrIeNdLY aNcHor INVestors aNd The three tranche tap is !sias ! fUnd manaGer said investors The Latest lnancinG comes as BacKstoPs FroM Its BooKrUNNers. BiGGest offshore Bond saLe this had hoped to picK Up cheaper the GroUp is redUcinG its totaL debt "Ut IN a recoVerING MarKet Last Year and the BiGGest hiGh YieLd paper in secondarY tradinG. which feLL to 2mb61.1bn at the 4UesdaYs taP PUt MUcH Less offerinG in doLLars from !sia eX “The bUYside eXpected the Leads end of *Une from 2mb36.2bn siX PressUre oN tHe coMPaNYs *apan since 01 when woULd bUY some of the bonds and months earLier. ,iQUiditY remains oUtstaNdING cUrVe aNd traded %VerGrande issUed 53.Bn of theY woULd be abLe to bUY it tiGht with totaL cash eQUaL to 0. WeLL IN tHe secoNdarY MarKet. new Bonds aLonGside an cheaper the neXt daY based on past times its short term LiabiLities !Fter aN INItIaL WoBBLe IN tHe eXchanGe offer accordinG to resULts v said the fUnd manaGer. accordinG to #redit3iGhts. 00s n WHIcH traders PUt doWN 2elnitiV data. “.ow the bonds are bacK aroUnd ! redUction in LeveraGe to seLLING BY oNe oF tHe Leads n Despite the poor performance reoffer so it LooKs oKaY.v earned the companY a &itch aLL tHree traNcHes Were aBoVe of preVioUs deaLs %VerGrande (owever %verGrandes debt UpGrade on its senior UnsecUred reoFFer BY tHe eNd oF continUes to attract !sian bUrden and siGns of weaKness in notes to " from "n Last 7edNesdaY. "Y &rIdaY inVestors who lnd comfort in the propertY sector continUe to 3eptember whiLe -oodYs aFterNooN tHe 00s 01s aNd its LiQUid cUrVe and massiVe rattLe some investors who saY revised its oUtLook to positive 0s Had tIGHteNed to .5% scaLe. theY are steerinG cLear. from stabLe. „

12 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS People &Markets

Californian Project Heron Goldman 15 utility PG&E 16 is the 2008 20 Sachs may be is found not to have fundraising at the getting ready for its caused a lethal heart of the fraud new London HQ, but 2017 wildfire, but trial of four former its CEO warns it could it still faces a long Barclays executives, cut UK jobs if there’s a bankruptcy case Bellwether finds no-deal Brexit

„ FRONT STORY RESULTS UBS confused by equities weakness Swiss bank trails US rivals in equities, M&A, underwriting

UBS’s investment bank underperformed its Bank of America Merrill Lynch was at the derivatives business was also hit by adverse US rivals in the fourth quarter in most areas, other extreme with an 8% year-on-year drop. market conditions, costing it €100m. including a 13% fall in revenues in its core Ermotti said the weakness could not be SOCIETE GENERALE has also warned that equities business. blamed on the departure of investment fourth-quarter revenues from its trading UBS said equities revenues were US$792m in bank head Andrea Orcel at the end of businesses will be a lfth lower than in the the fourth quarter, down from US$912m a year September. Still, the resignation of such a same period a year earlier. earlier and lagging well behind a 10% rise major rainmaker has obviously not helped. Ermotti said the strong start to 2018 might reported by the big lve US investment banks. Equity capital markets, normally a UBS key also create a tough comparison for this quarter. Chief executive Sergio Ermotti initially strength, was a particularly sore point. “It’s way too early to call what will claimed, wrongly, that the choppy markets Although the market was tough, with total fees happen in 2019. Last year in 2018 this was a had hit everybody in the same way. down 36%, UBS saw a 48% plunge in ECM very euphoric moment. We will have to see. “December was the worst month since the revenues to US$122m. Its usually smaller DCM If we see conditions not improving, then we Great Depression regarding market movements. business held up slightly better, with revenues have a series of measures to make sure we These very dramatic conditions saw lots of down 16% to US$160m. continue to invest for our future,” he said. volatility and almost no market activity. The M&A advisory revenues dropped 21% from a Operating income at the investment bank investment bank performed as expected in this year earlier to US$115m, again underperforming was down 12% year-on-year at US$1.54bn, environment. We are comfortable with our US rivals. leaving the division with a US$47m loss, its business mix,” Ermotti said. lrst for four years. He said this had also brought forward the DERIVATIVES WOE Christopher Spink usual slowdown seen in the second half of Much of UBS’s equities trading stems from its

December. wealth management side, which also had a UBS MISSES Q4 EQUITIES SURGE AND ALSO “The seasonal affect was seen in November tough quarter, with pre-tax prolts down 22% SUFFERS WEAK END TO YEAR IN M&A after October, which had been a decent year-on-year to US$769m. The bank said that AND UNDERWRITING month. We started to see the convergence of was partly due to lower client activity because concerns in November,” he said. of the negative market environment. % UBS fared better in foreign exchange, rates Chief lnancial oflcer +irt Gardner said 20 and credit, where revenues rose 14% from a the equities disappointment was largely 15 year earlier to US$304m, compared with a 19% attributable to diflculties with derivatives 10 drop at the US banks, although UBS has shrunk trading in Asia-Pacilc. 5 the business so it makes a modest contribution. “We saw a much sharper drop in 0 derivatives. The fact that we saw increased PRIMARY WEAKNESS levels of correlation meant structured -5 UBS fared worse on the primary side than its products became less attractive,” he said. -10 US peers. Its corporate client solutions “This was very pronounced in Asia-Pacilc, -15 revenues slumped by 29% to US$461m, where we have a disproportionate exposure -20 which the bank attributed to !sia Pacilc and compared to peers. Conversely the cash -25 the Americas, and a strong year-earlier business held up well. It was still down -30 period. overall but up in the US. Prime brokerage US avg UBS US avg UBS Advisory and underwriting revenues were [revenue] was down slightly.” Q4 Q4 2018 2018 down 2% across the US banks. JP Morgan UBS is the lrst European investment bank FICC Equities Advisory/underwriting reported a 3% rise in revenues from capital to report Q4 results, although France’s Source: Company results, IFR calculations; US avg based on markets underwriting and advisory, while NATIXIS has warned that its Asian equities top 5 investment banks

International Financing Review January 26 2019 13 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

“Do I look tired?” SPRIGHTLY UBS CEO SERGIO ERMOTTI KNOCKS DOWN CHATTER ABOUT SUCCESSION PLANNING, P21

EU bail-in regime deterring white knights )nvesTors in %UroPeAn lnAnCiALs Are Spain’s Popular was in the end bought by close to covering their costs of capital”. Low increasingly concerned the eurozone’s SANTANDER for €1 after its junior debt had interest rates had killed sustainable prolts mechanisms for dealing with been converted into equity. And INTESA for most lenders, and many had not yet undercapitalised banks have ended up as SANPAOLO took on the good assets of two deployed technology to reduce costs. blunt tools that have put them off backing Venetian banks only after the Italian Italy’s economy minister Giovanni Tria higher risk lenders. government had provided €5bn support. said at Davos last week that possible After facing criticism for how it handled Having seen this generosity, others are mergers were being considered for Carige. the resolution of Spain’s BANCO POPULAR in waiting for similar offers before stepping in, said He said he preferred a market solution, but June 2017, the European Central Bank’s one major investor in bank debt. “This is was prepared to face “other situations” that supervisory arm is treading delicately in preventing white knights from coming to the were not speciled. dealing with Italy’s BANCA CARIGE. rescue of distressed banks,” he said. “Other The fund manager said bail-in rules were Shares in the bank have been suspended banks are waiting for them to be on their knees.” a step in the right direction, but were not since the start of this year, while temporary “If you are the chief executive of a BBVA or yet working perfectly. administrators installed by the ECB are UniCredit and your major rivals Santander and “I completely agree that bank creditors seeing if they can come up with a new Intesa have been handed banks on a plate, then should bear losses. That is a good thing. But rescue plan after the previous €400m capital forget it. Why would you spend your money?” how such decisions are made over who is raising plan was blocked. bailed in are not predictable.” So far other Italian banks, which collectively CONSOLIDATION HOPES He said a good example of them working backed a €320m subordinated debt issue in UBS chief executive Sergio Ermotti said last well was when the Bank of England allowed September, have yet to express interest in week he expects consolidation to be “part of a junior creditors to take over Co-Op Bank in taking over Carige, unless at a knockdown solution to Europe’s banking problems” by July 2017. price that comes with added state support. clearing over-capacity in the sector. “It’s not ‘too That is hardly surprising seeing how other big to fail’ any more but ‘too small to survive’.” AT1 ISSUES weak lenders in Italy and elsewhere in the He said banks should also reassess their One of the major tools developed since the eurozone have been dealt with over the past business models, reckoning that “80% or crisis has been additional Tier 1 bonds, few years. more of banks in Europe don’t even come which either stop paying dividends or More change at top of Goldman FICC ranks GOLDMAN SACHS’ chief operating oflcer for 2017 fourth quarter, when revenue was years, including two of the three co-heads of lxed income, currency and commodities, down 50% from 2016. the securities division. Justin Gmelich, is retiring from the bank after Gmelich is the highest level departure Gmelich was previously global head of credit 21 years. from the FICC group since October, when and mortgage trading and before that he was His exit comes as Goldman continues to global head of FICC sales, John Willian, head of US credit and mortgage trading. try to right its FICC franchise after a couple retired after leading the FICC group for a The FICC COO position will not be rellled, of gruelling years. Revenue from FICC was little less than a year. perhaps a sign of cost cutting in the group. up 11% last year, but that followed a slump Gmelich was named FICC COO in 2017, in 2017, when the business had its worst working under the bank’s securities division “BIG, IMPORTANT BUSINESS” year since the lnancial crisis. co-heads. Goldman said that during the past three to Goldman’s fourth-quarter FICC revenues His exit adds to a long list of departures lve years it has been working to reduce also fell 18%, even compared with a weak from the bank’s FICC group in the past two expenses in the FICC group by about 30%. Who’s moving where…

JEFFERIES has will join Jefferies in July. Russian investment Dmitry Gladkov. Zitha poached Oliver Diehl Diehl was at Berenberg bank RENAISSANCE previously worked at from Berenberg to run for nine years and CAPITAL has hired Morgan Stanley for 18 Continental European oversaw growth in its Risana Zitha as head years, most recently as equity capital markets. ECM operation. Diehl is of investment banking head of sub-Saharan Diehl resigned as head expected to build a for Africa, based in investment banking of Continental similar platform at London. Zitha will be (excluding South European ECM at Jefferies centred in in charge of Africa Africa). Prior to that he Berenberg in Frankfurt and focused client coverage and was its head of December but is still on Germany, Austria deal origination and investment banking working on some and Switzerland, but execution, and report coverage in South projects at the bank for also covering the rest of to acting global head Africa. He left Morgan a few more weeks. He the Continent. of investment banking Stanley in June 2017.

14 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS People &Markets convert into equity when a common equity Tier 1 capital ratio falls below a set level. PG&E bankruptcy may be premature At Popular this never happened, as Good news for California’s largest utility positions in the capital structure anticipating Santander was allowed to step in overnight PG&E last week, when its equipment was the workout, said another restructuring adviser and wipe out those bonds entirely. found not to be at fault for igniting a 2017 who expects the company to lle on Tuesday. “AT1 sequencing, after the point of non- wildlre, is unlikely to save the company “Maybe PG&E’s board should pause in viability is reached, has not happened. It from a long, hard-fought bankruptcy case. light of new information, but the board is never will do,” said the investor. “Not paying PG&% is eXpected this week to lle for already set,” he said. coupons in any case hardly matters. If a bankruptcy protection. That is despite the PG&E’s stock and bonds spiked on news bank is already losing £10bn, like RBS, California Department of Forestry and Fire that the utility was not responsible for the which stopped coupons in 2009, it does not Protection last week lnding the company’s Tubbs lre. save much by not paying coupons.” equipment was not responsible for igniting The stock, which stands to be wiped out Rather than abandoning many of the the 2017 Tubbs wildlre in the wine country in a bankruptcy, rose nearly 75% to close at principles of the new bail-in regime, he said that killed 22 people. US$13.35 on Thursday, despite the regulators should act more predictably and )nvestigators said the lre was caused by a company’s warning that it still faced compensate retail holders of junior debt private electrical system close to a problems and would likely still need to seek after such actions. residential structure. bankruptcy protection. “The problem is we have a 21st century rule “Regardless of today’s announcement, PG&E’s 6.05% 2034 benchmark rose six book for 19th century balance sheets,” he said. PG&E still faces extensive litigation, points to 88. Its 3.3% 2027 issue rose 4.5 Vitor Constancio, vice-president of the signilcant potential liabilities and a points to 82, and its 5.8% 2037 bond jumped European Central Bank until last May, deteriorating lnancial situation,v PG&E said. about seven points to 87.25. defended the ECB’s decisions at an event in The company has been gearing up for a “Resolving the legal liabilities and lnancial London last week. protracted bankruptcy case as it has tried to challenges stemming from the 2017 and 2018 “All the decisions regarding resolution organise a massive US$30bn legal liability wildlres will be enormously complex and will taken by the ERM [European Resolution related to a number of wildlres that killed require us to address multiple stakeholder Mechanism] have been done along legal more than 100 and caused billions of dollars interests, including thousands of wildlre terms including the BRRD [bank recovery of property damage. It is still planning to victims and others who have already made and resolution directive],” he said. proceed with its bankruptcy case, according claims and likely thousands of others we Christopher Spink to sources familiar with the case. expect to make claims,” PG&E said. “It faces billions in liabilities from the lres that could effectively wipe them out,v NOT SO FAST During the bank’s fourth-quarter earnings said one creditor adviser. But CreditSights analysts reckon the call this month chief executive David But with a decision from California company has a chance to avoid bankruptcy. Solomon said the bank sees an opportunity investigators that wipes out as much as If lre investigators lnd that third-party to further reduce expenses including US$7bn in liabilities before the company equipment caused the Tubbs lre, then PG&E increasing automation – as many businesses even lles, it could have a hard time cannot be sued and the company’s lre within FICC evolve as equities did, where convincing a judge that it’s insolvent. liability drops from about US$30bn to about most trading is now electronic. “! lling now may be premature and it US$22bn, CreditSights said. “I really like our FICC business. It’s a really will likely be challenged,” the adviser said. That, combined with benelts of big, important business,” Solomon said. “But “That will add time and expense on a case California’s 2018 wildlre liability law that we’re not confused by the fact that the that is already easily three years to resolve.” allows securitisation for some of the lres available wallet in market intermediation The utility has already lined up a US$5.5bn “leads us to believe they could now have a for large institutions has materially declined debtor-in-possession loan from JP Morgan, chance of avoiding the need to lle over the course of the last lve years.” Bank of America Merrill Lynch, Citigroup and bankruptcy”, CreditSights said. Philip Scipio Barclays. Investors are already building Philip Scipio

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Sara Huish has joined most recently chief LAZARD has named investments. During BNP PARIBAS as chief operating officer of Alejandro Capote as the prior three years, operating officer of the financial head of its Mexico Capote was a global banking UK, institutions and financial advisory managing director at reporting to Matthew technology, media business based in Evercore Mexico Ponsonby, who joined and telecoms groups Mexico City. Capote Capital Partners. He the French bank to across EMEA. Huish joined Lazard after a had previously worked head the unit from replaces Vivek Menon, second turn at Credit at Credit Suisse’s Barclays in October who has taken up a Suisse. For the past investment bank in 2017. Huish joined new role in Asia as three years he was in New York and Mexico. from Credit Suisse head of conduct its asset management where she had been across Asia-Pacific. unit, responsible for since 2007 and was private equity

International Financing Review January 26 2019 15 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

Bellwether Bellwether: n. From the practice of placing a bell around the RAVENS, HERONS, QUAILS… a London courtroom was full of neck of a castrated ram so that it might lead its flock them last week as the trial of former Barclays CEO John Varley and three more of the bank’s former top brass began. CONSPIRACY THEORISTS MIGHT suggest that this year’s World The birds were code-names used by Barclays in relation Economic Forum in Davos was just one long collective to two fundraisings in 2008, and indicates someone in the whinge by the world’s elite intended to depress markets – investment bank was given an ornithology book for Christmas and the rest of us – as much as possible so they can return 2007. Given Barclays’ corporate logo is a blue eagle, bankers to work on Monday and buy the dip. must have been conldent that by dubbing the bank Raven it Bellwether thinks differently and considers the whole would throw anyone off the scent. Less imaginatively, Quail thing an opportunity for the CEOs of the world’s biggest was Qatar. Project Heron was the June 2008 fundraising. banks to show off their winter wardrobes as they hold Perhaps ominously for the four bankers trying to avoid jail, TV interviews in the Swiss ski resort. Because, as any another codename used for the cashcall was Project Birdcage. fashionista knows, coats speak louder than words. Tidjane Thiam of Credit Suisse opted for a high- DEUTSCHE BAN+ HAS started the new year with a positive performance wickable fabric to demonstrate his innovative mind-set. Speaking at Davos, CEO Christian Sewing talked streak, while Barclays’ Jes Staley donned an anorak/overcoat of the bank “getting its pride back”, sounding like a combo to show investors his responsible side. struggling football manager after a 9-0 drubbing. But Morgan Stanley’s James Gorman went the equivalent As well as getting the boss to rally the troops, Deutsche of commando, playing the archetypal tough Aussie by also looked to boost morale by posting a video of former turning up in just a lounge suit. He didn’t even look cold. JP Morgan CFO-turned activist investor Doug Braunstein Goldman CEO David Solomon adopted a hybrid approach, explaining why he took a 3.1% stake in Deutsche in wearing a suit jacket over a gilet. It was a hard look to pull November. And no, alcohol played no part. off, but he just about got away with it, mainly because the It was the other explanation – Deutsche’s stock is cheap as gilet was bleu, not jaune. chips, or as Braunstein referred to it, “the most compelling investment in the lnancial services space bar none”. SOLOMON MAY NEED more than an extra layer of clothing as he Addressing the bank’s senior managers at a company off- lghts the MBD scandal, a sticky situation that makes Lloyd site, Braunstein told the assembled throng that he knows Blankfein’s decision to step down last July look better by the day. what he’s talking about because he’s “sat in your shoes [sic] And while David faces mak, Lloyd has kicked off his shoes and there have been some dark moments”. and tuned out. Look no further than his Twitter feed where Those included the US$5.8bn trading loss booked by JP Morgan he now describes himself as “former CEO on a gap year”. in the lrst half of 2012 as a result of the London Whale Trade. But despite his free time he has still failed to deliver on his At the time, Braunstein was CFO and told analysts “we are promise of “unrestrained tweeting” made when he stepped very comfortable with our positions as they are held today”. down from the hotseat. Maybe he’s gone for a digital detox. He left the bank just a few months later. „ Who’s moving where…

„ David Steckl has He joined UBS from „ BANK OF AMERICA Australia before „ Khalid Rashid has Europe, Middle East joined CREDIT Deutsche Bank in 2017 MERRILL LYNCH has retiring in 2017. He taken up a role as and Africa. Rashid AGRICOLE as head of in a wave of departures. appointed former replaces Karla Wynne, director for bond previously worked at rates, short-term and He has also worked at Macquarie Group who left in August to origination in the Standard Chartered. solutions sales for North Credit Suisse and Merrill veteran Mark join Viva Energy as Middle East and North Deutsche also America financial Lynch covering FIG Warburton as head of head of investor Africa in the debt appointed Damiano institutions in its clients. Credit Agricole ECM for Australia. relations. BAML had capital markets team Cimignolo as a corporate and also hired Yang Tang Warburton is a well- appointed Credit at DEUTSCHE BANK. director in ratings investment bank, based from Deutsche as head known rainmaker in Suisse banker and Rashid is based in advisory. Cimignolo in New York. Steckl was of solutions sales for Australia after more UBS veteran Simon Dubai and reports to previously spent 12 most recently at UBS, North America financial than two decades with Cox to replace her, but Petri Kivinen, head of years at ABN AMRO where he was head of institutions. Macquarie, including he died while on bond origination for and RBS. institutional rates sales. as head of ECM for gardening leave. Central and Eastern

16 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS People &Markets BAML names Joo COO for investment banking

BANK OF AMERICA MERRILL LYNCH named Mike Joo currencies origination since 2013, BAML’s M&A advisory revenues slumped to chief operating oflcer for its global responsible for the origination of interest US$1.26bn last year, down 26% from 2017, in corporate investment banking group to rate and currency risk management contrast to a 15% average rise across the succeed David Glaser, who is retiring after solutions for corporate and commercial other four big US banks. Rivals have been more than a decade with the bank. clients. able to take advantage of a hyperactive Glaser was also co-head of the business “[Joo] is a veteran banker with extensive market that has produced near record fees. selection and conmicts group. He joined experience in banking and markets across Revenues across BAML’s investment BAML in 2008 after spending more than 20 the globe,” said BAML head of corporate and banking division fell 12% last year to years at Bear Stearns, which he left after the investment banking Matthew +oder in an US$5.53bn, including a 15% drop in debt bank was bought by JP Morgan and as Bank internal memo. “He is ideally positioned to underwriting revenue and a 26% rise in of America was absorbing Merrill Lynch. assume this leadership role and I look equity underwriting. His decision to retire follows the decision forward to partnering closely with him.” Jill Schwartz will succeed Joo as head of of BAML’s global head of investment global rates and currencies business, banking, Diego De Giorgi, to step down. He GRIM 2018 reporting to Elif Bilgi Zapparoli and Sarang will exit in February. +oder was tapped to replace Christian Meissner Gadkari, co-heads of global capital markets. Joo joined BAML in 2006 as head of Asia in September, touching off a cascade of She will maintain her current debt capital markets and was named chief departures in the investment banking group. responsibilities as executive vice-chairman operating oflcer for global markets in 2009. The bank had a grim 2018 in investment of GCIB. He has served as head of global rates and banking, especially M&A advisory work. Philip Scipio Natixis shuffles CIB top ranks

NATIXIS has appointed Stephane About, About will be based in Paris. He has run CIB and managing growth through acquisitions currently CEO of its corporate and Americas for seven years after two years as and partnerships. investment bank in the Americas, to run CIB global head of lxed income, commodities and Natixis said he will start in the role on in Europe, the Middle East and Africa treasury. He began his career in 1986 as a trader February 11 and report to Francois Riahi, (excluding France), as part of a number of for Credit Lyonnais in Paris and subsequently Natixis CEO. leadership changes. held senior roles at Deutsche Bank, UBS, SG Honig joined from BNP Paribas and since The French bank said Olivier Delay, global Warburg Bank and then CDC Ixis. May 2015 he has been head of sales wealth head of real assets in CIB, will take over as Delay joined Natixis CIB in 2008 in the management and family oflce distribution, head of CIB Americas, based in New York. New York debt platform team, has held and head of strategic equity solutions for Anne-Christine Champion will take over as senior project lnance and infrastructure global markets in Asia. head of real assets, CIB. She is currently head roles, and has led real assets since March He started his career at BRED Banque of distribution and portfolio management. 2018. He previously worked at Credit Populaire and in 2000 joined Cortal Consors Isabelle Reux-Brown, head of human Lyonnais and Calyon. France, part of the BNP Paribas group. His resources for CIB, will become CIB’s head of roles have included head of integration, distribution and portfolio management. STRATEGY CHANGE strategy and synergies for BNP Paribas All the changes take effect on March 1. The bank separately said it had hired Luxembourg in 2009 during the integration They will all report to Marc Vincent, global Stephane Honig as head of strategy, tasked of Fortis. head of CIB. with developing and coordinating strategy Steve Slater

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„ The head of in ECM and corporate „ GOLDMAN SACHS ex-Japan alongside „ CREDIT SUISSE has „ INVESTEC has hired MIZUHO’s ECM and finance, have left the is moving one of its current sole head hired Duncan Mann Jonathan Arrowsmith corporate finance for bank, said the people. US-based partners to Raghav Maliah. Min from Deutsche Bank as head of advisory for Asia ex-Japan has left From now on, Hong Hong Kong to become joined Goldman in as head of financial its investment banking after the Japanese Kong-based bankers co-head of the 2005 as an associate sponsors for Australia. team. Arrowsmith securities house will focus on technology, media in TMT and was Mann has been with joined from mid- limited its regional transactions with a and named partner in Deutsche for more market corporate focus to Japan-related Japanese angle. telecommunications 2016. He previously than eight years and finance adviser DC transactions only, group in the region. worked at Monitor was most recently co- Advisory, where he led sources said. Ian Long, Jung Min is due to Group as a head of financial the business services head of ECM and relocate from San management sponsors in Australia. practice in the UK. corporate finance, and Francisco to run the consultant. He has also worked at Joseph Lun, a director division in Asia-Pacific UBS.

International Financing Review January 26 2019 17 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS h)FûTHISûISûRESOLVEDûINûAûDIFlCULTûWAYûORûAûHARDûWAY ûITLLûHAVEû an impact on where we invest and where we put people” GOLDMAN CEO DAVID SOLOMON ON BREXIT, P20 Capital markets week ahead: Gefco, Aramco, Dun & Bradstreet

START YOUR ENGINES Gefco kicks off what is set appear to have been put on ice. The SABIC deal is a month late, and was postposed further after to Be the lrst %uropean )0/ of the Year with a a roundabout way of raising money for the Saudi the subscription deadline was extended. fortnight-long bookbuilding period starting on state after Aramco’s own IPO plans were Monday. The logistics company, which was set indelnitely delayed. HOT PROPERTY GLP China, a subsidiary of the up by Peugeot in the 1940s to transport new cars Singapore-based property investor formerly to customers, is selling a minimum 40% stake, DATA POINT Dun & Bradstreet is set to tap the known as Global Logistic Properties, is with shareholders PSA Peugeot Citroen and high-yield bond market, as the data and analytics expected out with a bond sale. It is expected Russian Railways – which bought a 75% stake in company seeks to lnance its US$6.9bn takeover. to tap Hong +ong dollars, issuance in which 2012– set to cash in a sizeable sum. The loan market had been expected to lnance seems to be having a bit of a resurgence The deal ends a six-week-long drought for the lion’s share of the deal, but choppy lately. Recent sizeable deals from China IPOs in the region, and comes as deals on the conditions – and 10 consecutive weeks of Development Bank and Bank of China seem other side of the Atlantic are still held up by outmows – have led bankers to shift some of the to have brought corporate issuance in the the US government shut-down, which has lnancing to bonds. But, with leverage at a once-dormant market alive. prevented regulators from signing off on new whopping eight times, will investors buy in? listings. But a lot could happen between now KOC AND BULL STORY Banks are expected to and the deal closing, with pricing only set to WALK IN THE PARK? Dubai Investments Park, respond to a request for proposal from take place on February 11. Fingers crossed. which runs an industrial, commercial and Turkish conglomerate +oc Holding, which is residential city-within-a-city on the edge of keen to tap the bond markets. Its interest the emirate, wraps up a roadshow for a US comes after the Turkish sovereign garnered dollar sukuk issue on Monday. The strong demand for a €1.25bn bond offering development hit the road last Friday and has last week. With a funding target of US$8bn taken in Asia, the Middle East and Europe. A for this year, the government is clearly keen deal from DIP four years ago ended up 13 to get as much done as early as possible. times oversubscribed. Will they get the same level of demand? GOING DUTCH FMO, the development bank of the Netherlands, has mandated Bank of SET IN STONE? The subscription period on a America Merrill Lynch, Credit Agricole, N90bn (US$250m) rights issue from Nigerian Citigroup and HSBC to arrange a series of cement producer Lafarge Africa wraps up on meetings and calls with lxed income Monday. Subscription was initially intended investors starting on Wednesday. A debut US THE LIST LENGTHENS The waiting game to end last Saturday before people on the dollar-denominated Green bond transaction continues in the US, meanwhile, with deal realised it wasn’t a working day. The with a lve-year maturity is expected to something of a bottleneck of IPO candidates company, which is majority owned by follow, subject to market conditions. forming. New Fortress Energy optimistically Franco-Swiss giant LafargeHolcim, has been hit the road earlier this month, hopeful that working on a capital raising for well over a SEWING KIT It’s a busy week for European the government shut-down would end – but year. investment bank earnings. Deutsche Bank, it didnt. It is likely bankers there will lnish which releases results on Friday, is likely to *anuary without a single deal – the lrst time catch the most attention, with talk still swirling it’s happened since 2016, which turned out about a possible tie-up with German rival to be a very bad vintage indeed. Commerzbank. After almost €9bn of losses over the past three years, the ailing lender is lnally JUST THE TICKET It’s a different story in Asia, expected to report a prolt for full-year 2018. where dozens of smaller IPOs have been Things can only get better, right? priced. And this week is no different, with Maoyan Entertainment hoping to raise as much as (+2.7bn US45m from its (ong LAST WEEK IN NUMBERS +ong listing on Monday. The Chinese online 330bp – Drop in Metro Bank’s capital movie ticketing platform can already count ratio after lending surge and on lve cornerstone investors that have reclassilcation of its RWAs committed to buying almost 10% of the deal. FINALLY! Global Sustainability Trust hopes to 15 – Number of covered bond deals, the raise £200m when it lists in London on busiest one-week period in a whopping CHEMISTRY SET Monday is the deadline for banks Monday, more than two months behind plans. seven years to submit lnancing proposals for Saudi Aramco’s The investment vehicle, which focuses on €46.5bn – Order book for Spain’s €10bn US$70bn purchase of a stake in petrochemicals assets deemed to have a positive 10-year issue, a record level of demand giant SABIC. The oil giant could borrow US$50bn environmental and social impact, had initially for the issuer – although plans for the biggest bond deal ever hoped to list in November. The deal kicked off

18 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS People &Markets Hong Kong to go paperless on IPOs

(oNGû+oNGûIsûplaNNINGûtoûMoVeûtoWarDsûaNû operate on a 4  basis. 4rading also starts one Many bankers welcomed the possibility of entirely electronic subscription process for day after books close in the 53 and the 5+. a shorter lag between pricing and trading, IPOs, as the city looks to cement its status as the “It’s a global trend to have scripless but said it would have little impact on IPO number one venue for new listings globally. subscription,” said Cheung Wah-fung, a pricing or listing volumes. HONG KONG EXCHANGES AND CLEARING is representative of the lnancial services “This is way overdue but will have no major preparing to publish a consultation in which it constituency in (ong +ong’s Legislative impact except for the people who recycle will outline plans to scrap paper-based Council. paper,” said the head of ECM at a global bank. subscriptions for IPOs, sources said last week. “In other words, the [current] IPO process Last year, (ong +ong regained its status as 4he (ong +ong bourse currently allows for doesn’t quite lt our status as the lfth-largest the number one venue for IPOs globally, with paper as well as internet-based subscriptions, trading house and number one market companies raising a total of US$36.3bn, a 174% mostly due to the preference among some worldwide for IPOs.” rise year-on-year, according to 2elnitiv data. retail investors for manual applications. Cheung said he expected the introduction This was (ong +ong’s best year since 2010 One consequence of the exchange’s dual of an entirely electronic subscription process as reforms introduced last April that allow subscription model is that the settlement would result in a shortening of the companies with dual-class share structures period for (ong +ong IPOs is far longer than settlement cycle by “at least one to two days”. as well as pre-prolt and pre-revenue biotech in other major markets globally, while lrms to list attracted a murry of deals. shares can only start trading lve days after MORE ATTRACTIVE IPOs are expected to fall signilcantly this books close. (ong +ong’s top lnancial policy advisory year, according to bankers, although this (ong +ong currently operates a 4  body, the Financial Services Development will be partly offset by more block trades settlement cycle compared with the London Council, said in a 2014 report that the long and follow-on offerings. and New York stock exchanges, which both settlement cycle adversely impacted pricing. Thomas Blott New Zealand reviews markets in push for listings New Zealand’s exchange operator NZX and CEO of FMA said. “From early-stage capital existing securities without new capital lnancial regulator, the FINANCIAL MARKETS raising and investment opportunities all the being raised, and PaySauce for a backdoor AUTHORITY, have kick–started a review of the way up to main board listings and listing through the shell of Energy Mad. country’s capital markets to boost equity listings. institutional investor appetite, we felt the The last +iwi IPO was Oceania The industry-wide Capital Markets 2029 time is right to plan for the future,” he said. (ealthcare’s NZ$200m moat in May 2017. review will make recommendations to The average daily value traded on NZX is NZX said in October it would introduce a attract more market participants and only NZ$82m (US$55.9m), compared with single market in an attempt to encourage diversify the range of lnancial products, an average of A$4.4bn (US$3.13bn) in 2018 new listings. The exchange will scrap the NZX and FMA said in a joint statement. on Australia’s ASX. two small company boards NXT and NZAX, “This review responds to concerns There were just two new listings on NZX leaving only the main NZX board to host all expressed about the overall depth and last year, neither of them IPOs. They were listed companies as soon as July 1 this year. breadth of our capital markets,” Rob Everett, QEX Logistics for a compliance listing of Candy Chan RBNZ extends bank capital consultation

The RESERVE BANK OF NEW ZEALAND has and 15% for smaller banks, up from a mat and the wider review of capital rules that extended the consultation deadline for its 8.5% requirement at present. began in 2016. proposal to raise the minimum amount of “We want to ensure all interested parties These papers include the research, capital that banks must hold, to give have time to adequately consider the modelling and analysis that have gone into stakeholders more time to respond to the proposals and provide feedback,” said the reviews, while further technical papers dramatic shake-up. deputy governor and general manager of on specilc topics, including the cost of The December proposal called for the lnancial stability 'eoff Bascand. capital, will be released in due course. conservation buffer that all banks are required The RBNZ has extended the deadline to The Reserve Bank expects to publish lnal to hold to be raised to 7.5% of risk-weighted reply from March 29 to May 3 decisions on minimum capital ratios in the assets, from 2.5% currently, and for the The proposed substantial increases in third quarter of 2019 and plans a lve-year introduction of a further 1.5% counter-cyclical capital ratios are designed to make bank transition period to meet new requirements. buffer, alongside an extra 1.0% buffer for failures less likely and ensure that bank Higher Tier 1 ratios would inevitably domestic systematically important banks. shareholders have a meaningful stake, so increase bank costs, as occurred in Australia Added to the existing requirement of Tier that they absorb a greater share of losses if a after the lnancial system inquiry in 2015 1 capital equal to a minimum 6% of risk- bank fails, according to the RBNZ. forced the country’s major banks to lift their weighted assets, this translates to a new Tier The Reserve Bank has also released capital levels. 1 capital ratio requirement of 16% for D-SIBs background papers relating to the review John Weavers

International Financing Review January 26 2019 19 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS h4HEûCURRENT û)0/ûPROCESSûDOESNTûQUITEûlTûOURûSTATUSûASûTHEûlFTH largest trading house and number one market worldwide for IPOs” HONG KONG LEGISLATIVE COUNCIL’S CHEUNG WAH-FUNG, P19

The committee said on Friday it would Goldman warns as UK examines look at what Britain’s priorities should be when it negotiates future trading relations with the EU and other countries. Brexit impact on banks The EU has said Britain’s lnancial sector British lawmakers have launched an inquiry trading platforms in Britain with European faces the same patchy and unpredictable to Plot the best way forward for lnance after customers scrambling to open new EU hubs. system of market access as other non-EU Brexit, just as Goldman Sachs warned it Goldman chief executive David Solomon told countries like the United States and Japan. could cut jobs if the 5+ crashes out of the the BBC in Davos the US bank would invest less Brussels grants access to foreign lnancial bloc without an agreement in two months’ in Britain if there was a diflcult or hard Brexit. lrms if their home regulation stays time. hOver time, if this is resolved in a diflcult way “equivalent” or closely aligned with the The inquiry will determine if the country or a hard way, it’ll have an impact on where we bloc’s own rules, a determination that has should track European Union rules or cut loose invest and where we put people,” Solomon said. no timetable. to best serve its lnancial sector after Brexit. A vote in parliament on Tuesday could take Miles Celic, chief executive of TheCityU+, Finance is Britain’s biggest tax-raising a no-deal Brexit off the table, but it would which promotes Britain’s lnancial services sector, earning government coffers more remain unclear what would replace it. abroad, said there was no appetite in the than £70bn (US$91bn) a year, and the EU is industry to take a bulldozer to current rules. the sector’s largest single customer. OPPORTUNITY KNOCKS? “The U+’s reputation for quality h,ondon is the world’s premier lnancial Supporters of Brexit say departure from the regulation and high standards is a key centre, and many of us want to keep it that EU is an opportunity to trim the rulebook competitive advantage,” Celic said. way,” Treasury Select Committee chair and keep the City of London competitive as a Stephen Jones, head of U+ Finance, a Nicky Morgan said in a statement. global lnancial hub. banking industry body, said Britain must Britain has yet to secure a divorce British regulators want to stay aligned with avoid fragmenting markets. “We also need settlement with the EU to avoid leaving the the EU and have ruled out a bonlre of to ensure the U+’s tax policy is globally bloc on March 29 without any framework, regulations, warning about the perils of light competitive,” Jones said. leaving banks, insurers, asset managers and touch rules that led to the lnancial crisis. Huw Jones

FROM THE ARCHIVE: 10 years ago this week THE FINANCIAL CRISIS

With the ink barely dry on the walk away from the commitment to be replaced by chairman Jan commitment letter, a syndicate of if Pfizer’s credit rating drops Hommen. five banks that signed up to provide below A2/A. Moody’s and S&P, As part of a number of cost- the US$22.5bn, 364-day bridge which currently rate the company cutting measures aimed at loan backing Pfizer’s US$68bn Aa1 and AAA, are reviewing their reducing operating expenses acquisition of Wyeth jumped into ratings, while Fitch downgraded by €1bn this year, ING is cutting action by prepping the market for the company to AA, from AA+. To 7,000 positions in 2009. The the first in a series of investment- bolster liquidity, Pfizer slashed redundancies will contribute to grade bond offerings that will be its quarterly dividend in half to 16 35% of the targeted cost savings. used to term out the facility. The cents a share. Ministers are thought to have speed to market reflects both the Such contingency provisions considered nationalisation for current strength of the investment- are one likely staple of M&A loans ING, but shied away from the From January 31 2009 issue grade market as well as the going forward. Higher borrowing complexity of such a move. Instead, Pfizer stuns stringent conditions of the loan. costs that escalate over time may the bail-out plan that the Dutch Just when it seemed the days of JP Morgan (lead left), Goldman be another. government has agreed with ING – gargantuan acquisitions were over, Sachs, Citicorp, JP Morgan, Bank of the Illiquid Assets Back-up Facility Pfizer floored market participants with America Merrill Lynch and Barclays Big losses for ING as Dutch test – will cover 80% of ING’s portfolio its US$68bn acquisition of rival Wyeth. agreed to fully underwrite the new bail-out plan of Alt-A mortgage securities. The purchase has the pharmaceutical bridge loan, with each contributing The Dutch government announced The plan involves a full risk giant racing to the capital markets to US$4.5bn of loans. Pfizer will a new bail-out plan for the banking transfer of the 80% portion to term out a US$22.5bn bridge loan finance the balance of the purchase sector, with loss-making ING the Dutch government, with to fund the cash component. In a price with US$22.5bn of cash and chosen as the test case for the the transfer taking place at a loan market where liquidity is at a stock, valued at US$23bn at the proposal. ING warned of a full- 10% discount to par value, for a premium, lenders have structured a time of announcement. year net loss of €1bn and a loss of transaction size of €21.6bn. ING facility with escalating costs, stringent The loan carries a key change in €3.3bn for the fourth quarter alone. remains the legal owner of the ratings tests, and high up-front fees to the terms of contingency for M&A At the same time, CEO Michael entire portfolio but is exposed to ensure a swift take-out. deals. Specifically, the banks can Tilmant stood down from ING, just 20% of its P&L.

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India’s debt reforms delight borrowers „ IN BRIEF Bankers are expecting more Indian companies more conldent of taking a three-year view on No return to issue offshore debt after a number of state- high-yield credits,” said Shantanu Sahai, co- The return of investment banker Andrea Orcel to owned issuers moved quickly to take advantage head of debt capital markets at Nomura. UBS is not a “realistic option”, the Swiss bank’s of the recent easing of restrictions on overseas !vinash Thakur, head of !sia-Pacilc debt CEO Sergio Ermotti has said. Spain’s Santander borrowing. origination at Barclays, echoed that view. “The said in September it had hired Orcel, at the time “We’re seeing a lot more conversations taking minimum average maturity for all overseas UBS’s investment banking chief, as CEO, but this place with companies following the revised ECB borrowings at three years is helpful because month it pulled the plug on the appointment [external commercial borrowing] rules,” said there is good investor demand for shorter because of a row over his deferred pay. Gaurav Pradhan, co-head of India investment tenors and pricing tends to be better,” he said. “It is not a realistic option for all the banking and capital markets at Credit Suisse. stakeholders involved,” Ermotti told Reuters in an “We expect a decent supply of offshore bonds LIQUIDITY TAP interview at Davos. and loans from India over the next two to three The RBI’s revised ECB framework introduces The departure of Orcel, who was regarded as months. The pipeline includes companies from a more standardised approach, with one set a possible replacement for Ermotti at UBS, has sectors such as renewables, metals and mining of rules for all foreign currency borrowings rekindled speculation about its succession plans. and non-banking lnancial companies.” and one for rupee-denominated ECBs. That Ermotti, 58, has been CEO since 2011. But he poured State-owned oil relner BHARAT PETROLEUM replaces a regime that set different rules for cold water on the idea of a change at the top soon, CORPORATION received a strong response this different categories, or tracks, of issuance. saying this week that a succession was “years away”. month to its US$500m three-year bond In addition to setting the minimum “Do I look tired?” he said, adding that while the offering, allowing it to price the deal average maturity for all overseas borrowings bank was used to hiring externally and promoting comfortably inside initial guidance. at three years, the central bank also said all insiders, an external choice for top jobs often That was the lrst deal after the 2eserve eligible borrowers can raise up to US$750m indicated a problem within a bank. Bank of India issued new rules on ECBs on from ECBs in a given lnancial year, “When you have people coming from outside … January 16, allowing borrowers to raise debt replacing the previous sector-specilc limits. in the vast majority of cases it’s because the firm at tenors of three years compared with the Starting from April, large corporate needs a huge discontinuity or is in a crisis, and previous lve-year minimum for most deals. borrowers will have to meet at least a quarter that’s clearly not the case for UBS,” he said. State-owned OIL INDIA began meeting of their annual funding requirements through investors in Singapore, (ong +ong and bonds. The all-in cost ceiling under the new In tune London last week, ahead of a proposed Reg S ECB norms is unchanged at a spread of 450bp India’s EDELWEISS has closed a Rs92bn (US$1.3bn) offering of US dollar, senior unsecured bonds over the relevant benchmark rate. fund focused on distressed debt, the country’s and bankers are predicting more deals, The more streamlined approach comes as largest of its kind, in the latest sign of demand for particularly from lower-rated companies. regulators aim to ensure that the offshore investments in the sector. “The companies in the Single B and Double B liquidity tap is open for Indian companies to EISAF II, an alternative investment fund (AIF), range stand to benelt the most with the help take the pressure off the domestic market. aims to turn around viable non-performing revised ECB norms, as investors and lenders are Krishna Merchant assets and help stressed companies avoid the bankruptcy process. “Ever since the Insolvency and Bankruptcy China tech board debut IPO looms Code has come about since 2016, companies are approaching us to see if we can provide capital Chinese chipmakerMONTAGE TECHNOLOGYhas According to a newspaper backed by the and restructure their balance sheet,” said Venkat hired CITIC SECURITIESto advise on a potential Government of Shanghai, it was one of 12 Ramaswamy, executive director at Edelweiss A-share IPO,prompting speculation that it innovative and technology-focused companies Financial Services, in an interview with IFR. may be one of the lrst companies to moat on present at a January 3 meeting where Qiang Li, India’s revised bankruptcy framework and Shanghai’s new technology board shortly the Party Secretary of Shanghai, pledged that stricter lending policies in the banking system after Beijing gave the green light to its latest Shanghai would promote local companies in have put borrowers under pressure to restructure initiative to attract more tech listings. key industries such as integrated circuits, their debts or face liquidation, creating A lling to the China Securities Regulatory artilcial intelligence and biomedicine. opportunities for distressed debt specialists. Major Commission’s Shanghai bureau named Citic The chip manufacturer provides products bad debts in the country’s banking system total as pre-listing tutor, the lrst step towards a used in data centres and has branches in nearly US$150bn. domestic relisting for Montage since it China, Macau, South +orea and the US. It delisted from Nasdaq in 2014. raised US$71m from a Nasdaq IPO in In play The lling comes in the same week as October 2013, and delisted in November Kazakh authorities are urgently looking for a lawmakers endorsed plans to launch a new 2014 when a Chinese consortium acquired bank to take over No 2 lender TSESNABANK as technology board that will pilot a the company for US$693m. they believe it needs new financing to prevent registration-based IPO process, potentially Citic Securities was one of the investors in a collapse, three sources familiar with the allowing companies to go public in a far a private lnancing round in May 201. It discussions told Reuters. shorter timeframe. owns a 5.65% stake in the company. Officials from the government and central bank Montage’s Shanghai connections and focus Last week, lawmakers signed off on the have approached at least three other Kazakh on cloud computing and artilcial intelligence new board following a meeting of a reform banks and hope to tie up a deal in February, the make it a prime candidate for the Shanghai commission chaired by President Xi Jinping. sources said. They are offering financial incentives Stock Exchange’s new venture. Karen Tian, Thomas Blott for any bank prepared to take it over.

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SSAR 25 Corporates 29 FIG 33 Covered Bonds 37 High-Yield 38 Structured Finance 41

„ FRONT STORY CORPORATES Investors shrug off Triple B threat Buyers feast on spreads despite junk danger Market repricing makes riskier bonds attractive again

Investors are putting concerns about the But for some onlookers, it is not enough “The Triple B theme hasn’t changed. burgeoning Triple B sector to one side, in to transform the company. And if you do believe the economy is order to pick up widening spreads in the “The concern is that the company hasn’t slowing down, then corporate balance ratings bracket. really got an action plan,” the investor said. sheets do look overextended,” a DCM AUCHAN HOLDING, for example, priced a “The company has been burning cash banker said. “But the market has repriced €1bn January 2024 issue at 250bp over post dividends over the last two years and signilcantly, which makes the risk of swaps on Tuesday, 30bp inside initial price we expect this to continue,” BAML analysts ratings slip less important for investors,” talk, after books hit more than €3.4bn. The said in a report that highlighted Auchan as he said. scale of demand enabled the French one Triple B name with the potential for With €835bn of bonds outstanding, the retailer to upsize the bond from its original further downgrades. size of the Triple B corporate market is €750m target. And they think its spreads could have more three times bigger that of the high This is despite the fact that the company further to run. yield market, according to BAML data, with is on a downwards ratings trajectory as it “Despite recent widening, weak around €50bn of those notes at risk of struggles to reverse a decline in prolts. operating performance is likely to slipping into junk. That would be 21% of Last September, S&P assigned a negative continue, which will put further pressure the current high yield market size. outlook to Auchan’s BBB rating thanks to on spreads.” “While corporate leverage is generally disappointing results, a move that came low in Europe, it disguises that fact that the just six months after the company had TRIPLE B TROUBLE distribution of Triple B credit quality is been downgraded by the agency to that Despite plenty of headlines around Triple B skewed to names with 4x and higher ranking in the lrst place. It was rated A as credits, investors told IFR said they are now leverage,” said analysts at BAML. recently as 2014. more willing to buy the sector in an Still, Triple B credits are not a one size In September 2018, S&P analysts environment of wider spreads. lts all, investors say. described Auchan’s situation as “one of the Average Triple B corporate bond spreads “We have a deteriorating macro most pronounced declines among other have widened by around 84bp over the past environment in broader Europe (including European rated peers”. 12 months to be quoted at 135bp as of the UK), which is a concern for the Triple B Part of the new deal’s success was down January 21, according to iBoxx non European bond market,” the investor said. to what one banker away described as an lnancials data. “So you want to concentrate on those eye watering new issue concession of Average corporate bond spreads have companies that are stable, and not around 45bp 50bp at initial price thoughts. widened by 64bp over the same time strategically challenged.” A lead on the deal declined to comment period. He pointed to French retailer and on fair value, but described the credit as Auchan competitor Carrefour, rated BBB+ carrying a higher spread in general. GAPPED OUT (negative) by S&P, which posted its fourth Auchan’s 2.250% April 2023s were seen AUCHAN’S 2.25% APRIL 2023s (MID-SWAP SPREAD) quarter sales data on Tuesday. bid at 228bp on Tuesday, according to bp “They have a bit more of a credible Tradeweb prices exactly a year ago they 250 strategy.” were quoted at plus 17bp. VONOVIA, another Triple B rated company, “This is classic fear and greed,” one was also in the market on Tuesday. 200 investor said of the demand for Auchan’s The German residential property new bond, who didn’t participate in the company, rated BBB+ (stable) by S&P, deal. 150 priced a €500m June 2025 bond with “You need a lot of spread to compensate investor orders to the tune of more than for this credit. I can see why the book was €4.3bn. so big, but the danger is that there’ll be a 100 Demand allowed the company to trim lot of mippers in the next couple of weeks, pricing by 30bp to a lnal spread of plus which will create a negative headwind.” 145bp. The concession was in single digits. 50 Auchan launched a three year turnaround That was a smaller premium than the plan in 2017 after struggling with price 20bp 6onovia had to pay for a €500m lve pressure in France’s lercely competitive 0 year trade last June. But in another sign of retail market with heat coming mainly 01/01/ 01/04 01/07 01/10 01/01/ how the market has repriced, that bond 2018 2019 from peers including Carrefour and online came at swaps plus 73bp. competitors such as Amazon. Source: Refinitiv data Eleanor Duncan

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Metro Bank Tier 2 tumbles WEEK IN NUMBERS 330bp on capital attrition „ THE DROP IN METRO BANK’S TOTAL CAPITAL RATIO AFTER IT ANNOUNCED UK challenger bank faces higher capital charges THAT NET LOAN GROWTH AND A CHANGE IN CLASSIFICATION OF CERTAIN The price of METRO BANK’s single outstanding eligible liabilities (MREL), on which front MORTGAGES SAW ITS RWAs JUMP. ITS bond dropped sharply on last Wednesday’s Metro Bank falls short: it disclosed plans last TIER 2 BONDS TUMBLED 5pts AS A RESULT warning that its total capital ratio had year to raise £750m of MREL eligible debt by 88 Metro Bank's £250m 2028 non-call 2023s dropped by 330bp, an unwelcome step 2020, but so far has only managed to issue 87 backwards as it attempts to wrestle market the £250m Tier 2. 86 share from the 5+’s hbig lVev Metro Bank’s management made 85 The bank announced that net loan growth reference to funding markets as an area of 84 and a change in the classilcation of certain concern on a call held earlier on Wednesday, 83 mortgages had led to a Jump in full year risk according to a FIG banker. 82 weighted assets (RWAs) to around £8.9bn “That raises question marks around the 81 from £7.4bn. That wiped 330bp off its MREL gap,” he said. 1/1/19 7/1/19 3/1/19 5/1/19 9/1/19 11/1/19 eXpected total capital ratio for the lscal 17/1/19 13/1/19 21/1/19 15/1/19 19/1/19 23/1/19 year, which dropped to 15.8% from 19.1%. REALITY CHECK The announcement, part of an unscheduled Metro Bank’s proltability is also under release ahead of its full year results on &ebruary pressure, a potential stumbling block when 27, saw Metro Bank’s unrated £250m 10NC5 it comes to maintaining suflcient capital to 17 Tier 2 tumble on the day around lVe points to support its ambitious growth targets. „ THE NUMBER OF COVERED BOND DEALS an 82 cash price, according to Tradeweb. Slower than expected loan growth LAST WEEK, THE BUSIEST SINCE JANUARY Its shares, meanwhile, dropped 37%, resulted in annual pre tax prolt of £50m for 2011. THE MAIN REASONS BEHIND THE hitting an all time low. Metro Bank, which 2018, falling short of the £59m predicted by DELUGE ARE A BACK UP IN SUPPLY, CASH- became the 5+’s lrst new (igh 3treet bank analysts. RICH INVESTORS AND FORTHCOMING for over 100 years when it launched in 2010, BLACKOUTS moated in 201. That reaction shines a light on the “In a world with less QE and multiple headwinds facing the UK’s nascent cheap central bank loans, the 92bp banks as they strain to compete with the challengers are overextended, „ THE RALLY IN US HIGH-YIELD SPREADS larger dominant lenders in a highly in my opinion. I think what will ON AVERAGE SINCE THE START OF THE competitive marketplace. happen is more consolidation, YEAR, ACCORDING TO ICE BAML DATA, “In a world with less QE and cheap central SPURRING A SLEW OF ISSUANCE LAST bank loans, the challengers are overextended, like Virgin Money” WEEK in my opinion. I think what will happen is more consolidation, like Virgin Money,” said CEO Craig Donaldson declined to comment Filippo Alloatti, senior credit analyst at during the call on whether the bank would €46.5bn Hermes Investment Management. need a cash call to reinforce its capital „ THE FINAL ORDER BOOK FOR SPAIN’S CYBG plc’s merger with Virgin Money buffers, but told analysts the company “will €10bn 10-YEAR ISSUE, A RECORD LEVEL created Britain’s sixth largest bank by assets, look at all options to maximise shareholder OF DEMAND FOR THE EUROPEAN SSA an attempt to create the lrst true national return”, according to a Reuters report. MARKET. PEAK BOOKS REACHED NORTH competitor to the status quo. The bank’s increase in RWAs was driven OF €50bn But despite some progress, Financial by adjustment in the treatment of certain % 1.8 Spain's €10bn April 2028s Conduct Authority data show that the major commercial loans secured on property and banks still have over 80% of the personal buy to let mortgages, two areas closely 1.7 current accounts (PCAs) market. scrutinised by regulators. 1.6 The higher capital charge for this type of 1.5 TIGHT MARGINS lending is likely to impact Metro Bank’s 1.4 Funding costs an important component of pricing policy, potentially weighing on its 1.3 net interest margin are a particular cause volume of business. 1.2 for concern for the challenger banks. “If they wanted to sell ‘x’ amount in the 1.1 Though elevated for all UK banks, CYBG market this year, it probably won’t be ‘x’ 31/1/18 31/7/18 31/3/18 31/5/18 31/8/18 30/4/18 28/2/18 30/6/18 30/9/18 31/12/18 31/10/18 plc, for example, had to pay a particularly it’s more likely to be ‘y’ because the cost has 30/11/18 eye watering coupon of 7.875% to raise a gone up,” said Hermes’ Alloatti. £250m Tier 2 (BB/BBB) in December. “There was already a lot of scepticism in The termination last February of the Bank the equity community about its growth plan. 179.5bp of England’s Term Funding Scheme (TFS) I think this is maybe a reality check for „ THE DIFFERENCE IN YIELDS BETWEEN removed a valuable source of cheap funding, Metro Bank.” MONTE DEI PASCHI’S AND DEUTSCHE which in time will need to be relnanced. Metro Bank declined IFR’s request for PFANDBRIEFBANK’S FIVE-YEAR COVERED Banks are also grappling with the comment. BONDS LAST WEEK. THE FORMER CAME minimum requirement for own funds and Alice Gledhill AT 2.083%

24 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

BONDS SSAR

Although pricing looked tight, so have US$1.5bn deal but with the book we had, we other recent US dollar SSA trades too. Yet were able to get them to 9bp and the book SSAR investors that have bought new issues in held together very well. We lost some 2019 have seen bonds rally in secondary, accounts but the book more than Justiled a helping to put the market on a strong US$2bn trade in the end.” US DOLLARS footing after a hesitant start. EIB’s US$4bn March 2024, for instance, CLEAR STORY SHRINKING DOLLAR SPREADS NO was bid at 7.4bp, having priced at 12bp over, The story in US dollars, according to the OBSTACLE TO STRONG DEAL RECEPTION while KfW’s US$5bn February 2024s were a same banker, is clear. basis point tighter than their plus 9bp “Everyone went into this month thinking, Investors were undeterred by the tight reoffer. with the basis swap where it is, there is sPreAds on oFFer For lve yeAr 53 doLLAr Kommuninvest’s US$1.5bn September going to be bugger all supply, and as a result benchmarks from ASIAN DEVELOPMENT BANK 2022s, which priced through fair value everything that has come has mown. Things and FMS WERTMANAGEMENT. The two issuers at swaps plus 12bp, were quoted 2bp were slower and expectations were lower went head to head showing that there was tighter. than previous years and then the lrst deals plenty of room for everyone in the market. Just like ADB, FMS showed the ample went really well.” "y mid morning last 7ednesday more demand for issuers willing to tap the US The expectations, according to the lrst than US$5.75bn of orders had been placed dollar market. banker, were proven wrong. for ADB’s US$3.5bn, enabling leads Goldman It launched a US$2bn lve year 'lobal via “People were just reticent [because] of the Sachs, JP Morgan, Mizuho and RBC to move Bank of America Merrill Lynch, Citigroup, basis. But there will always be demand for pricing by 3bp from I0Ts to a lnal swaps Commerzbank, Credit Agricole and TD Securities US dollars; it is the biggest market in the plus 7bp. at 9bp over swaps, 2bp tighter than world.” That was through the 8.5bp fair value Tuesday’s IPTs. Books closed at over OESTERREICHISCHE KONTROLLBANK joined the level estimated by bankers. Still, a lead US$3.4bn. queue, setting IPTs at 7bp area for a three banker said, the deal was the tightest lve “We were a little nervous when we went year Global via Barclays, Deutsche Bank, JP year print of the year. out and then ADB came hot on the heels, Morgan and RBC. The closest pointers were its 2.75% March only 1bp tighter,” said a lead on FMS. With books over US$2.4bn by mid 2023s and 2% January 2025s, the former “But it didn’t impact the momentum in Thursday morning, OeKB set the spread at trading at plus 7bp pre mandate and the latter the deal one iota. It was a fabulous deal. I 5bp over swaps 2bp tighter than IPTs and at 11.25bp, according to Tradeweb prices. think they were thinking they would do a mat to where leads saw fair value.

ALL INTERNATIONAL BONDS (ALL CURRENCIES) ALL BONDS IN EUROS ALL US DOLLAR FIXED-RATE GLOBALS BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE Managing No of Total Share Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues €(m) (%) bank or group issues US$(m) (%) 1 JP Morgan 82 30,601.81 8.7 1 JP Morgan 26 11,726.44 8.2 1 Barclays 12 7,998.62 11.5 2 Citigroup 81 28,294.78 8.1 2 Credit Agricole 36 10,920.61 7.6 2 JP Morgan 19 7,306.78 10.5 3 Barclays 63 23,071.05 6.6 3 UniCredit 37 10,759.85 7.5 3 Citigroup 16 6,217.62 9.0 4 HSBC 71 22,157.00 6.3 4 HSBC 29 10,756.08 7.5 4 BAML 16 5,804.74 8.4 5 BNP Paribas 51 19,371.26 5.5 5 BNP Paribas 29 10,461.42 7.3 5 Goldman Sachs 12 3,786.62 5.5 6 BAML 61 17,712.85 5.1 6 Citigroup 18 8,402.25 5.8 6 RBC 12 3,773.19 5.4 7 Deutsche Bank 59 15,739.44 4.5 7 SG 26 7,967.70 5.5 7 Mizuho 9 3,480.01 5.0 8 Credit Agricole 45 14,252.19 4.1 8 Barclays 24 7,934.81 5.5 8 Deutsche Bank 6 3,322.65 4.8 9 Goldman Sachs 42 13,319.16 3.8 9 Natixis 18 6,839.27 4.8 9 Morgan Stanley 9 2,587.82 3.7 10 UniCredit 40 12,964.70 3.7 10 BAML 14 5,301.69 3.7 10 BMO 4 2,569.97 3.7 Total 348 349,927.65 Total 120 143,728.24 Total 33 69,469.88

Including Euro, foreign, global issues. Excluding equity-related debt, Including Euro-preferreds. Excluding equity-related debt, Excluding equity-related debt, ABS/MBS. US Global ABS/MBS. US Global ABS/MBS.

Source: Refinitiv SDC code: J1 Source: Refinitiv SDC code: N1 Source: Refinitiv SDC code: O5

EUROPEAN SOVEREIGN BOND AUCTION RESULTS WEEK ENDING JANUARY 25 2019 Pricing date Issuer Size Coupon (%) Maturity Average Yield (%) Bid-to-cover Jan 22 2019 UK £1.75bn 1.75 Sep 7 2037 1.76 2.28 Jan 23 2019 Germany €3.1994bn 0.00 Apr 5 2024 –0.29 1.20 Jan 24 2019 France €3.854bn 0.00 Feb 25 2022 –0.35 2.03 Jan 24 2019 France €1.455bn 0.00 May 25 2022 –0.35 2.37 Jan 24 2019 France €2.7bn 0.00 Mar 25 2024 –0.06 2.11 Jan 24 2019 France (ei) €535m 0.25 Jul 25 2024 –1.07 2.69 Jan 24 2019 France €948m 0.50 May 25 2025 0.10 4.09 Jan 24 2019 France (i) €803m 0.10 Mar 1 2028 –0.48 1.86 Jan 24 2019 France (ei) €161m 0.10 Jul 25 2047 –0.04 3.02 Jan 25 2019 Italy €2.5bn 0.00 Nov 27 2020 0.36 1.47 Jan 25 2019 Italy (i) €845.3m 1.30 May 15 2028 1.92 1.69 Jan 25 2019 Italy (i) €404.7m 2.55 Sep 15 2041 2.27 1.85 Source: IFR

International Financing Review January 26 2019 25 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

OeKB’s closest pointers were a 2.375% The state last came to market in 2017, than €1.65bn of orders. It priced in a €1bn October 2021 and a 2.875% March 2023, bid raising €500m via a June 2027 bond that was size at 15bp over mid swaps. pre Mandate at bp and 12.7bp, subsequently increased by €500m. That deal respectively, on Tradeweb. was bid at .7bp through mid swaps from a MORE DEMAND More US dollar supply is expected from less 15bp pricing, encapsulating the Euro offerings last Wednesday proved that FMO. The Development Bank of the widening seen in the sector. there is still plenty of demand left for the Netherlands has mandated Bank of America “Spreads widened at the end of last year, long end, with a 10 year line for COUNCIL OF Merrill Lynch, Credit Agricole, Citigroup and but looking at the trades that have come EUROPE DEVELOPMENT BANK and a 15 year for the HSBC to arrange a series of meetings and since the beginning of the year, most deals CITY OF BREMEN both healthily subscribed. calls with lxed income investors for an have performed and the market has found “The euro market has gone through a inaugural 2eg S lve year 'reen bond. an equilibrium,” another banker said. repricing and this demand shows that the European Investment Bank’s €5bn new reality is acceptable for investors,” said January 2029 that priced at 3bp through a third syndicate banker. EUROS mid swaps the week before was bid at .bp “Those investors, usually insurance through, according to Tradeweb. companies and pension funds, have a lot of SAXONY-ANHALT’S BLOWOUT RETURN “Investors are comfortable in putting cash in hand to put to work and are looking SHOWS THERE’S ROOM FOR EVERYONE money to work,” the second banker said. for longer dated tenors in the currency, “While QE activity has dropped, the ECB which explains why these deals are mying.” Strong competition from the Kingdom of will remain in the market for the Council of Europe, for example, did not Spain did not deter investors from foreseeable future. They won’t drive the have to offer much of a concession to garner embracing the STATE OF SAXONY-ANHALT’s lrst market like they did in the past, though, and demand for its January 2029, said a fourth transaction since 2017, enabling the region we’re now in an environment where you banker. to land a €1bn trade, its biggest in nearly have to identify who the true investors are.” “It is pricing relatively mat to its curve, but lve years. Even taps that usually offer little in the if you are looking at the euro market for While other SSA issuers mostly opted to way of new issue concession have seen ALM purposes [as bank treasuries may do], leave the way clear for Spain’s new €10bn rampant demand. LAND NRW more than the 10 year is where you want to buy,” he 10 year benchmark last Tuesday, Saxony doubled the size of a €625m June 2040 line said. Anhalt decided to brave the market and last week after the increase attracted more A second banker agreed. discovered there was plenty of demand to be found. ALL INTERNATIONAL US$ BONDS ALL SOVEREIGN BONDS IN EUROS At the last update, books for its 10 year BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE had passed €2.25bn, allowing leads Managing No of Total Share Managing No of Total Share Commerzbank, DekaBank, Deutsche Bank, LBBW bank or group issues US$(m) (%) bank or group issues €(m) (%) and Nord/LB to launch a €1bn trade at 2bp 1 JP Morgan 52 16,648.38 11.2 1 HSBC 4 5,399.95 14.3 through mid swaps, offering around 2.5bp 2 Citigroup 51 15,106.10 10.2 2 JP Morgan 3 5,150.49 13.6 of concession and tighter than the mat area 3 Barclays 28 11,282.97 7.6 3 Citigroup 4 4,987.14 13.2 IPTs. 4 BAML 40 10,230.33 6.9 4 BNP Paribas 5 3,902.83 10.3 “I have never seen the German market in 5 Goldman Sachs 33 9,601.66 6.5 5 Barclays 3 3,071.38 8.1 such a good shape,” a banker said. 6 Deutsche Bank 23 8,003.00 5.4 6 Credit Agricole 3 2,579.23 6.8 “Spreads are stabilising and volatility is 7 HSBC 25 6,865.64 4.6 7 SG 2 2,330.00 6.1 pretty low. In Germany, there are also a lot 8 RBC 19 5,666.29 3.8 8 BBVA 2 2,329.77 6.1 of redemptions. With all the offerings, it is 9 BNP Paribas 16 5,430.56 3.7 9 UniCredit 1 1,992.18 5.3 time to get invested. If I had to pick one, it 10 Mizuho 16 4,637.27 3.1 10 Natixis 1 1,493.49 3.9 would be Saxony Anhalt. It is a rare animal, Total 130 148,581.79 Total 7 37,890.58 more approachable because it doesn’t come Including Euro, foreign and global issues. Excluding equity-related debt, Excluding ABS/MBS. US Global ABS/MBS. to the market often enough, so it offers rarity value.” Source: Refinitiv SDC code: O1 Source: Refinitiv SDC code: N4

ALL AGENCY BONDS IN EUROS ALL SUPRANATIONAL BONDS IN EUROS MUNICIPAL, CITY, STATE, PROVINCE ISSUES IN EUROS BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE Managing No of Total Share Managing No of Total Share Managing No of Total Share bank or group issues €(m) (%) bank or group issues €(m) (%) bank or group issues €(m) (%) 1 SG 3 2,126.10 13.1 1 JP Morgan 4 2,574.93 24.4 1 UniCredit 5 2,372.63 28.7 2 Commerzbank 2 1,977.79 12.2 2 UniCredit 2 2,244.03 21.2 2 DGZ-DekaBank 5 968.46 11.7 3 BAML 2 1,799.84 11.1 3 BAML 3 1,695.70 16.1 3 TD Securities 4 770.27 9.3 4 Goldman Sachs 4 1,727.03 10.6 =3 Credit Agricole 3 1,695.70 16.1 4 LBBW 4 600.34 7.3 5 JP Morgan 5 1,602.90 9.9 5 HSBC 2 1,243.03 11.8 5 DZ Bank 3 524.89 6.3 6 Credit Agricole 5 1,230.86 7.6 6 Morgan Stanley 2 281.69 2.7 6 Nord/LB 3 382.32 4.6 7 Barclays 2 792.84 4.9 7 Barclays 1 249.01 2.4 7 JP Morgan 2 365.81 4.4 8 Deutsche Bank 3 708.88 4.4 =7 BNP Paribas 1 249.01 2.4 8 Barclays 1 311.35 3.8 9 Citigroup 2 560.58 3.5 9 TD Securities 1 247.45 2.3 =8 RBC 1 311.35 3.8 10 TD Securities 2 545.79 3.4 10 SG 1 81.89 0.8 =8 BAML 1 311.35 3.8 Total 15 16,244.68 Total 6 10,562.44 Total 11 8,273.18

Excluding equity-related debt. Including publicly owned institutions. Excluding ABS/MBS. Excluding ABS/MBS. Source: Refinitiv SDC code: N6 Source: Refinitiv SDC code: N5 Source: Refinitiv SDC code: N7

26 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

BONDS SSAR

No let-up in Sonia-linked whirlwind „ SSAR Risk-free rate is market’s new darling

The Sonia-linked market welcomed another benchmark and compelling funding costs are period as compared to SOFR and ESTER, so newcomer last week as its breakneck speed of behind this perfect storm for the market. we are keen to explore opportunities in these growth shows no signs of letting up, putting “It’s demand-driven, a large chunk of sterling markets as well.” other risk-free benchmark markets in the shade. investors who buy sterling globally are buying EXPORT DEVELOPMENT CANADA, later joined by Sonia-linked,” the banker said. LAGGING BEHIND ASIAN DEVELOPMENT BANK, brought an inaugural It has helped that the transactions that have The chance to explore those opportunities may £700m transaction via Barclays, HSBC and RBC, come have been well received and fully sold in take a while yet, however. a January 2022 trade that was met more than a market where the success rate can sometimes The ECB is still in the process of developing £700m of demand. be hit-and-miss. the Euro Short-Term Rate (Ester), with Such is the popularity of the format that ADB “Obviously, for some international issuers, publication set to begin in October 2019, for opted to bring its second new Sonia-linked it has to come at a price that makes sense for example. trade, a £500m February 2022 via HSBC, RBC them,” the banker said. And the contrast between Sonia and SOFR, and TD on more than £500m of demand, while “But the price is a reflection of the demand, the US risk-free rate, could not be starker. EDC took to four the number of new SSA issuers which also drives secondary markets.” “SOFR is very much a money market fund tapping the market. EDC landed its bond issue at 29bp over Sonia, instrument, dominated by domestic issuers and The two deals take year to-date public sector while ADB’s was priced at 26bp over. investors,” the banker said. issuance in the format to £3.95bn, almost 40% “We’ve been monitoring developments in “It’s probably fair to say that the UK has led the more than the £2.85bn issued in the whole of 2018. alternative reference rates to Libor and have market in terms of moving the needle and in terms “It’s interesting to see that over the last three been keen to explore issuance opportunities of new issuance. And even though there’s been more weeks, we’ve had more issuance that over the using these reference rates across currencies,” volumes in SOFR, they’re just not that relevant.” whole of last year,” a banker said. said Maria Lomotan, assistant treasurer and The European Investment Bank, for example, “There were doubters who a year ago said head of funding at ADB. which priced a US$1bn October 2021 SOFR- there’s no way Libor is going. That noise has “We’ve found the sterling market to be further linked issue at the end of last year, has yet to completely gone.” along as compared to US dollar and euro, return to market, whereas it has done two Sonia- Ample demand, with more than 130 investors allowing us to issue in three and five-year tenor. linked deals. now participating in deals, a well-accepted Granted, Sonia has been in use for a longer Helene Durand

h4HEû YEARûISûWORKINGûWELLûATûTHEû 2038, which were bid at less 1bp and plus Investment Board, has announced plans moment. Council of Europe today and BNG 11bp, respectively, according to Tradeweb. over the past year to invest more than last week worked well. It is the sweet spot,” RENTENBANK also ventured into the euro C$3bn (US$2.3bn) in the renewable energy he said. market, with a €400m increase of its sector. h9ou Get the !,-s that can Go to  year, €1.75bn 0.375% March 2026 at 10bp through but also the central banks, the asset swaps through Bank of America Merrill Lynch, manager community and insurance DekaBank and UniCredit. STERLING companies too, so it works well on all fronts The outstanding bond was bid at less and, even if it is not always an ideal 7.6bp at Tuesday’s market close, moving to KFW REAPS STERLING REWARDS maturity, it can be bought by everyone.” less 8.1bp when lnal terms were set mid With books exceeding €1.7bn for a €1bn morning on Wednesday, according to KFW hit sterling for the second time in 2019 trade, the issuer priced 2bp tighter than Tradeweb. in a deal that surpassed expectations. where it started marketing, at 5bp through The week closed with an outstanding It sold a £1bn December 2024 off books of swaps via Bank of America Merrill Lynch, Credit result for CAISSE D’AMORTISSEMENT DE LA DETTE more than £1.5bn and a banker on the trade Agricole, HSBC and TD Securities. SOCIALE. expressed pleasant surprise with the deal’s With this deal, the issuer extended its The French agency planned on tapping its progress as accounts stayed in the books euro curve by a year. The closest pointer is a 0.125% October 2023s by €500m but throughout execution. 0.75% January 2028, which was bid last surprised with a €3.7bn book and ended up hIt’s diflcult to put a lnger on exactly the Wednesday at less 5.5bp, according to landing a jumbo €2.5bn increase. reason, but I guess we didn’t get much Tradeweb. The Aa2/AA (Moody’s/Fitch) rated agency supply in November December, so investors CITY OF BREMEN, in contrast, left some came through Credit Agricole and NatWest have cash,” he said. concession on the table for its January 2034 Markets at 19bp over interpolated OATs, a The banker said a £500m trade would trade, according to the lrst banker, who saw basis point inside the 20bp area guidance have been a great result, given KfW had only fair value at around 6bp, based on level. recently been to the sterling market. secondaries. Also, CPPIB CAPITAL held investor calls last KfW lured orders of over £1.8bn earlier With orders of €1.1bn for a €800m deal, Thursday and Friday ahead of a 10 year 2eg this month on its way to selling a £1.25bn Bremen priced in line with guidance, at S euro benchmark Green bond through December 2021, its biggest bond in the 10bp over swaps through BayernLB, Barclays, BNP Paribas, Bank of America Merrill currency. DekaBank, DZ Bank, HSBC and TD Securities. Lynch and Citigroup. The sterling market has proved fertile Bremen’s closest points of reference were The Triple A rated borrower, fully owned hunting ground this year, with issuers a 1% February 2028 and a 1.5% November and guaranteed by the Canada Pension Plan taking advantage of a favourable cross

International Financing Review January 26 2019 27 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

currency swap that has made funding costs asset swaps. My only concern is, as we get The outstanding New South Wales more attractive for overseas entities. closer to crunch time, who knows where the (TCorp) 3.0% May 2027 bond was yielding However, the bulk of the supply has been market goes?” 2.64% on Wednesday, 33bp less than NTTC, concentrated in the 2021 and 2022 With or without a deal, the United while the World Bank’s 3.0% February 6 maturities with appetite for new Kingdom remains scheduled to leave the 2027 Kangaroo was yielding 2.36%, 61bp benchmarks at longer tenors little tested. European Union on March 29. below NTTC. At 43bp, the banker said the deal offered The IBRD also had the basis swap working “Supply dynamics are also working in zero to 1bp concession at best. in their favour, said a second DCM banker. favour of the Double As with both Victoria “Bank treasuries in particular are very “For US dollar based issuers, bringing and New South Wales expected to increase cash rich and its a part of the curve where deals in sterling and swapping back into issuance this year as their asset selling we haven’t had much activity,” said the dollars is economical,” he said. programmes draw to a close and large banker. “If you have liquidity to put to work, At 40bp over Gilts, the supranational infrastructure projects are funded,” White KfW is the type of name you want to buy, priced at roughly 2bp over US dollar Libor, said. even if you expect some volatility going according to IFR calculations, inside a forward. This is coming at a premium over similar maturity IBRD US dollar issue. SCARCITY VALUE Gilts, which helps.” Its outstanding US dollar 3% September Separately, the bid for semi government Citigroup, Deutsche Bank and NatWest 2023, for example, was bid on Thursday at bonds from local banks has also Markets were leads. 6.3bp over swaps, according to Tradeweb. strengthened as a result of a slowdown in “The levels, though, are quite tight versus competing Commonwealth supply as the ON THE COATTAILS everything else that has come,” said a third national government moves into lscal RENTENBANK rode on the coattails of KfW, banker. surplus. marketing a rare sterling deal last Friday, The Aaa/AAA rated supranational, The Australian /flce of Financial seeking to take advantage of more however, tends to come with a tight Management last December slashed its favourable funding costs in the currency. premium because of the strength of its planned issuance of Treasury bonds, in Leads HSBC, NatWest Markets and RBC name, said the second banker. response to a much improved lscal position, opted for a more pointed selling strategy “They don’t have to pay a premium and don’t to around A$52bn in lscal year 2018 19, than the one employed by KfW, however, have to pay a spread in order to get a £1bn plus down A$18bn from the A$70bn projected at marketing the £250m December 2024 bond order book in the third week of January. The the time of the May budget. at initial price thoughts of 43bp over Gilts regard that people have on that name means The AOFM cancelled plans to establish no area included. that they can get a result even though there new lines maturing in September 2023 and The level is in line with where KfW priced were many other deals ahead of them.” December 2030 after the federal a £1bn December 2024 on books of £1.5bn Leads were Barclays, Citigroup and NatWest government lowered its underlying cash last Tuesday. For that bond, however, Markets. delcit forecast in 2018 19 to A$5.2bn, or marketing started with IPTs at plus 45bp 0.3% of GDP, with a projected underlying area and tightened progressively as books cash surplus projected to follow in 2019 20 grew. NON-CORE CURRENCIES of A$4.1bn. Despite tapping the market at the same Since only state and Commonwealth level, the cost of funding in sterling versus NORTHERN TERRITORY REOPENS government bonds, alongside cash held at euro secondaries is more economical for SEMI MARKET the central bank, count as Level 1 high Rentenbank than it was for KfW. quality liquid assets for Basel III purposes in The 43bp over Gilts level equated to NORTHERN TERRITORY TREASURY CORP, rated Aa2 Australia, reduced opportunities to buy one around 17bp through Euribor, much tighter Moody’s , reopened Australia’s semi asset almost inevitably lifts demand for the than where Rentenbank trades in euros. The government market last Wednesday with a other. issuer has an outstanding euro denominated popular long eight year bond that bodes Australia’s restricted list of Level 1 HQLA 0.25% July 2024 which was bid at less 9bp, well for syndicated sales of state paper, assets is nowhere near suflcient for banks while its 0.5% March 2025 was bid at less especially within the Double A spectrum. to meet the Basel III standard, which is 9.2bp, according to Tradeweb. The A$600m (US$427m) 2.75% April 21 designed to ensure lenders hold enough In contrast, the difference is not as 2027s, NTTC’s largest ever issue, priced at liquid assets to survive a 30 day funding signilcant for KfW. Its euro 0.125% /ctober 98.403 for a yield of 2.97%, in the middle of squeeze. 2024 was bid at less 16.5bp, while its 0.625% 66bpn68bp guidance at 67bp over EFP (10 To meet their shortfalls banks can place January 2025 was at less 16.3bp, also year futures) and 75.75bp wide of the April other repo eligible HQLAs, including Triple A according to Tradeweb. 2027 ACGB. rated SSA Kangaroos, asset backed securities The deal continued the strong run of “Broad based demand underpinned the and authorised deposit taking institution issuance in the currency and follows the transaction as a slowdown in issued senior unsecured notes rated at least World Bank, which priced a £1bn Commonwealth government supply and the BBB+ in a Committed Liquidity Facility. September 2023 benchmark on books over relative value over Triple A semis and The CLF can then be used as collateral for £1.2bn. supranationals boosted domestic and cash directly from the Reserve Bank of The frenzy for the currency, according to offshore interest,” said Paul White, global Australia, but this involves a 15bp fee paid a DCM banker, remained strong head of syndicate at joint lead manager ANZ. to the central bank. independent of the deal format. Double A rated states such as NTTC, Australian investors bought 73% of the “Everything is going well: Sonia deals are Western Australia and South Australia are NTTC trade with Asia allocated 18% and going well, lxed rate deals are going well,” paying around 15bp–35bp more than Triple EMEA 9%. he said. A rated Victoria and New South Wales in Fund managers took 35%, bank balance “It has helped that the short end has this part of the curve and offer a bigger sheets 30%, while oflcial institutions, which opened up and levels are positive versus pick up over Triple A rated SSAs. tend to focus on intermediate tenors,

28 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

BONDS CORPORATES

Volkswagen learns its lessons „ CORPORATES Auto-maker treads softly with investor base

VOLKSWAGEN took a different approach to its first “This bond was deliberately different [from VW Bank’s 1.25% December 2025s have euro trade of the year compared with its last November’s offering],” a lead syndicate banker said. widened 127bp over the past year to around outing in the market, which caused a storm with “We signalled from the beginning that it swaps plus 185bp, according to Refinitiv Eikon its investor base. was only going to be around €2bn, and it was data. The auto-maker, which priced a €2.5bn four- deliberately shorter and more constrained. It Average corporate spreads have widened part via its Volkswagen Bank entity, kept tranche was set up to be different: they needed this to go some 65bp to 103bp over the same period, sizes small, tenors short and concessions well given the push-back from November.” according to iBoxx data. enticing but not egregiously so. The tactic worked. Investors lapped up the deal, Demand for the new deal allowed leads Its last euro offering, issued in November placing more than €9.75bn in orders and allowing to drive spreads in for each of the three fixed through Volkswagen International Finance NV, the issuer to upsize to a €2.5bn total size. tranches by 18bp from IPTs to launch, leaving came with premiums of up to 75bp at the long premiums in the double digits. end. MARKET REPRICED “VW tightened to a level where there’ll still be The chunky concessions on the €5.15bn- Investors are also eager to pick up spread in a some performance,” the investor said. “I like to equivalent deal (four euro and two sterling market that has been repriced substantially over think they’ve learnt a lesson.” tranches) forced investors to re-mark their the past six months. The company priced €300m of August 2022 books, not just on VW but on credits across And Volkswagen’s various troubles mean it is floaters, €500m of August 2022 fixed, €850m several sectors. one of the highest yielding names for its ratings of January 2024s and €850m of July 2026s. At the same time, US accounts were smarting in an already beleaguered auto sector. Leads were BayernLB, Credit Agricole, because they had bought a much less generous The company’s bonds trade at levels more Deutsche Bank, Santander (B&D) and SMBC US dollar issue just a couple of weeks before consistent with lower-rated Renault (Baa3/BBB) Nikko. The notes are expected to be rated A3/ through Volkswagen Group of America and Peugeot (BBB–/BBB–) but VW (A1/A–) has a BBB+. Finance. better operational performance, one investor said. Eleanor Duncan

received 31%. Bank trading and securities Council of Europe previously accessed the EDC is the second Kauri issuer of 2019 were allotted the remaining 4%. Kangaroo market back in April 2014 with a following the International Bank for NAB and UBS were joint lead managers A$75m tap of its 4.75% February 13 2024 Reconstruction and Development which alongside ANZ. line. sold a NZ$400m lve year on *anuary 15 at Canada’s PROVINCE OF ALBERTA (Aa1/A+/AA) 41bp and 74bp over mid swaps and NZGBs. KANGAROOS MAKE MODEST RETURNS tapped its 3.60% April 11 2028 Kangaroo Kauri supply totalled NZ$6.15bn in 2018, bond for A$50m, increasing the amount just shy of the annual record of NZ$6.3bn set Several regular supranational and agency outstanding to A$460m. in 2014 and repeated in 2015. issuers made their lrst visits oF the year to ANZ was sole lead manager for the the Kangaroo market last week, including increase, which priced at 104.802 to yield Finland’s MUNICIPALITY FINANCE and Dutch public 2.9975%, 64bp wide of asset swaps and and sector agency BNG BANK, which opened new 72.5bp back from the May 2028 ACGB. 1. year lines with modest initial prints oF CORPORATES A$20m (US$14.2m) and A$25m, respectively. EDC ENJOYS NEW-YEAR KAURI BENEFITS HSBC and Daiwa were sole leads for the two transactions. EXPORT DEVELOPMENT CANADA, rated Aaa/AAA EUROS By some distance, the biggest SSA trade (Moody’s/S&P), took advantage of was by 'erman government guaranteed traditionally high demand for New Year IBM HITS EUROS IN SIZE AHEAD OF agency KFW (Aaa/AAA/AAA) which on Kauri offerings with last Thursday’s POTENTIAL M&A BOND Wednesday tapped its 5.00% March 19 2024 NZ$650m (US$440m) tap of its NZ$350m Kangaroo for A$300m to increase the 2.875% November 30 2023 bond, taking the IBM got some of its general funding needs out outstanding size of the bond to A$2bn. outstanding size of the line up to NZ$1bn. of the way with the biggest deal yet in the Deutsche Bank, RBC and TD were joint lead ANZ, BNZ and CBA were joint lead euro market this year, ahead of what is managers for the reopening which priced at managers for the reopening which had an likely to be a multi billion bond to lnance 112.335 for a yield of 2.4275%, 42bp wide of indicative minimum size of just NZ$100m. its US$34bn acquisition of US software asset swaps and 49.5bp over the April 2024 The increase priced at 101.445711 for a company Red Hat. ACGB. yield of 2.553%, in line with mid swaps plus The US tech company crossed the Atlantic On the same day, COUNCIL OF EUROPE 42bp guidance and 75bp over the April 2023 to price a õ5bn four tranche SEC registered DEVELOPMENT BANK (Aa1/AA+/AA+) made a rare NZGB. bond on Thursday with a book that one lead trip to the Australian dollar market with a 2emecting the recent shifts in local and banker described as massive. That allowed A$50m 10.5 year sale via Daiwa and RBC global rates, the yield on Thursday’s tap was pricing to be revised by up to 30bp on the Capital Markets. 41.7bp below the 2.97% return for the two longest tranches. The 2.9% August 1 2029s priced at 99.462 bond’s initial NZ$350m lve year print on The deal’s success was made all the more to yield 2.96%, 49bp and 67.5bp over asset November 16 last year whch priced 38bp impressive by the uncertainty about when IBM’s swaps and the April 2029 ACGB. wide of mid swaps. acquisition related bond might hit the market.

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Kampo, Murata make yen debuts „ CORPORATES/FINANCIALS First-time issuers draw strong domestic response

Two well-known Japanese companies JAPAN POST especially regional banks, picked up this bond Part of the proceeds will be used for equipment INSURANCE and MURATA MANUFACTURING made without hesitation.” investments. their debuts in the domestic market in January. The deal priced at a 1.0% coupon for the first Murata’s debut deal comprised ¥40bn of As they allowed their pricing levels to reflect the 10 years, or a 78bp spread over swaps. If not 0.08% three-year and ¥60bn of 0.15% five- recent spread widening, both debut deals went called, the coupon will revert to six-month Libor year notes. The coupons are higher than on oversubscribed. plus 178bp. similar recent deals, such as the one by Fujifilm Japan Post Insurance, also known as Kampo, The pricing level is wider than where Nippon Holdings. printed ¥100bn (US$913m) of 30-year non- Life’s latest deal priced in September. Nippon Fujifilm, a manufacturer of digital cameras call 10 subordinated bonds on Wednesday to Life, also with the same credit rating of A+ by and medical equipment with the same credit strengthen its finances. The insurance unit of R&I, sold 30-year non-call 10 subordinated rating of AA– from R&I, had sold three-year Japan Post Group will use the proceeds for bonds at 66bp over swaps. bonds in November with a 0.05% coupon and working capital. The pricing level was based on feedback from five-year bonds with a 0.11% coupon. The deal drew an unusually large range investors, who asked for a 1.0% coupon level or Bankers said the wider pricing was due to a of investors, with a total of 426 institutions an 80bp spread to reflect the widening in the “volume premium” and the current volatility in participating, including life insurers, non-life secondary market. The final book size was over the credit market. The final book exceeded the insurers, trust banks, asset managers, ¥150bn. issue size by about 10% in both tranches. central public funds, specialised banks, Daiwa, Mizuho and Mitsubishi UFJ Morgan Investors who participated in the deal were regional investors and non-financial Stanley were the joint lead managers. life and non-life insurers, trust banks, asset corporations. Murata, a well-known maker of electrical managers, specialised banks, central public “Kampo is a well known company in Japan, components and a key Apple supplier, sold funds, and regional investors. and it also received good credit ratings,” a ¥100bn of straight bonds in two tranches on Nomura was the sole lead. Japanese asset manager said. “Investors, January 18, to diversify its funding channels. Takahiro Okamoto

)TûALREADYûHASûAû53BNûlNANCINGû end of the world is tomorrow’ to ‘perhaps although still higher than 2017 and all but supporting its purchase of Red Hat in place, the end of the world might not even come the tail end of last year. in one of the largest ever bridge loans for a this year’,” the lead said. “The hybrid market has rallied strongly 53 investMent grade coMpanY “Investors feel they’re not positioned and retraced a lot of widening seen in the IBM’s euro bonds have widened correctly and these deals are cheap.” fourth quarter back to a level where it now signilcantlY since the Red Hat IBM priced four lxed tranches a õ1.75bn makes sense on an after tax basis to raise announcement in October. four year, a õ1bn six year, a õ1bn eight year hybrid capital,” Tobias Kessler, director for Its 2.875% November 2025s widened by and a õ1.25bn 12 year. New issue EMEA capital solutionslnancing solutions over 17bp to 63bp directly following the concessions were seen in the range of 5bp at HSBC, told IFR. M&A announcement, and were seen bid on 10bp at launch. “For a number of issuers who are seeking 4hursday at 73bp, according to Relnitiv to strengthen their balance sheet from a Eikon data. EDP ADDS TO RUN OF HYBRIDS ratings or accounting point of view, the “The response to this deal is made all the WITH GREEN DEBUT current hybrid coupon levels are workable more remarkable because investors don’t again.” know what’s coming or when,” the lead Hybrid borrowers are jumping in while the But while such borrowers are likely to said. going is good, with ENERGIAS DE PORTUGAL keep coming to market, some analysts There’s also downgrade risk in the mix. pricing a debut Green deal in the format. believe total hybrid volumes might be down IBM is in danger of being downgraded by all Syndicate bankers are ushering hybrid this year. three ratings agencies, having already borrowers into the market thanks to growing A mixture of geopolitical uncertainty, a suffered a cut by two of them in the wake of interest for riskier credits and structures, decreased number and size of M&A deals, the Red Hat announcement. pointing to recent trades in other sectors and a reduced volume of outstanding S&P and Fitch both downgraded IBM to A such as Telecom Italia’s €1.25bn April 2024s hybrids with upcoming calls in 2019 could from A+ in October. Both ratings carry a and Italy’s €10bn March 2035 BTP the latter see volumes fall back to the subdued levels negative outlook. drawing more than €35.5bn of orders. seen in 2016/2017 following a bumper 2018, Moody’s also placed the technology Such deals from peripheral European Scope Ratings analysts wrote in a report last company’s A1 and A ratings under review countries have helped the case for Wednesday. for downgrade. borrowers such as EDP, which is Portugal’s Around €7bn of deferrable hybrids with The company’s debt leverage is likely to largest utility. upcoming calls could be relnanced this year rise to around 2.4x compared with 1x, “[EDP’s] trade is simply taking advantage less than half the €15bn plus up for relnancing analysts said at the time. of a constructive market tone,” a lead in 2020, according to Fitch analysts. The success of IBM’s deal is a good syndicate banker said. indication of a 5 turn in sentiment among Hybrids closed at an average yield of SOLID DEMAND investors thanks to more attractive spreads 3.48% on January 22, according to the iBoxx Still, demand for hybrids is booming and and a more settled market. euro non lnancials subordinated index, EDP’s 60.25 year NC5.25 saw books of over “The market has gone from thinking ‘the down to levels seen in late November, €3bn.

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BONDS CORPORATES

Leads were able to drive down pricing on Now the ECB is out of the market, the BIG CHUNK such solid interest, setting the yield at 4.50%, Green format is seen by issuers as a useful Given last year’s volatile market conditions, well inside the 4.875% area IPTs. Fair value way to get stickier order books. Accor, rated BBB by SP and Fitch, wanted was seen by leads and a banker away at “In reality, there are some forced buyers to take a big chunk out of its funding needs around 4.30%. of Green investments that tend to remain in for 2019 in one go, to get ahead of events Demand also allowed EDP to upsize from the book, potentially allowing issuers to get such as Brexit and the European elections, a an expected €750m to €1bn. better pricing,” the lead said. second lead on the deal said. EDP followed Engie’s €1bn PNC6 on January Usually, the risk of pricing both a senior 17, which saw lnal books of over €6bn. ACCOR ROUNDS OUT HOT and a hybrid bond at the same time would CreditSights analysts called Engie’s deal “one HYBRID RUN be that the senior transaction might have to of the most successful bonds this year”. offer more spread in order to compete with Engie’s reoffer yield was 3.50%. ACCOR wrapped up a successful hybrid trade the yieldier hybrid bond. EDP, rated "aa3""" """ all stable , is a on Thursday, selling a €500m perpetual non But a lead speaking during the marketing slightly higher beta credit than Engie ! call 5.25 bond on orders of over €2.6bn. process said the two bonds would cater to ! !, all stable . The Portuguese company’s The lnal yield was set at 4.50%, inside different sets of investors, and so the dual hybrids are Ba2/BB/BB, compared with Baa1/ IPTs of 4.75% 4.875%. trade should not impact pricing: the hybrid BBB/BBB+ for Engie. The deal was the third hybrid to come to carries high yield ratings of BB/BB, while the In addition, EDP carries some event risk market in a week, following Engie and senior is rated BBB /BBB . for investors specilcally, a bid for the EDP’s deals in the format. These issuers “They are two relatively small trades. I company by state owned China Three were looking to grab early mover advantage, don’t think it’s going to be one where Gorges, which already owns a 23% stake. said a DCM banker on one of the hybrids. people struggle to make up their minds,” he The offer could run into regulatory “The windows for hybrid deals can be said. obstacles in Europe because the Chinese quite erratic,” he said. “You want to be the Indeed, the senior bond saw lnal books of state already owns a large stake in Portugal’s one opening it not the one lnding it shut.” over €2.9bn and a spread of 140bp over mid power grid operator REN, which could put it The French hotel group’s hybrid issue was swaps 25bp tighter than IPTs and leaving in breach of EU rules, Reuters News reported one cog in a rare four part trade Accor also only a 5bp premium, according to a banker in December. priced a €600m seven year senior note and away. “As a company we like EDP, we like its announced two tender offers earlier in the Active bookrunners on the euro hybrid management, and its strategy is focused on week for its outstanding €00m 4.125% non were BNP Paribas, Bank of America Merrill Lynch, relatively low risk networks and renewables, call 20 year hybrid notes and its €00m Citigroup, MUFG, NatWest Markets and but … it is in something of a strategic 2.625% February 2021 senior notes. Santander. vacuum,” CreditSights analysts said of the bid. The hybrid component is straightforward Active bookrunners on the euro senior European utilities such as EDP and Engie liability management: the new issue will were BNP Paribas, BAML, Credit Agricole, Natixis have sizeable green funding needs as they lnance the tender offer for the non call and UniCredit. seek to shift their businesses to more 2020s, which is capped at €500m. BNP Paribas and Citigroup are structuring renewable energy sources, while hybrids are Accor will lose its equity credit for those advisors on the hybrid tender offer. a useful way for such companies partly or hybrids it is offering to buy back, which will BNP Paribas and Credit Agricole are wholly government owned to obtain be replaced by the new issue. It is the lrst structuring advisers on the senior tender. eQuity like funding. time the company has taken advantage of Accor wrapped up three days of investor EDP set up its Green framework in revised SP methodology on the relnancing meetings on Wednesday. October and priced its debut Green bond of hybrids, according to IFR data. shortly after. It is using the new senior bond to IMMOFINANZ SWITCHES TO SHORT END “EDP felt it was a good idea to add the relnance its 2.50% March 201 notes, which FOR DEBUT DEAL Green label to its new hybrid transaction to have €335m outstanding, according to one extend the value of its green curve,” a lead, as well as the tender offer on the IMMOFINANZ erred on the defensive side to get second lead banker said of the deal. February 2021s. an inaugural bond across the line on

ALL INV-GRADE US CORPORATE BONDS ALL US INVESTMENT GRADE CORPORATE DEBT ALL CORPORATE BONDS IN EUROS BOOKRUNNERS: 1/1/2019 TO DATE (EXCLUDING SOLE SELF FUNDED DEALS) BOOKRUNNERS: 1/1/2019 TO DATE Managing No of Total Share BOOKRUNNERS: 1/1/2019 TO DATE Managing No of Total Share bank or group issues US$(m) (%) Managing No of Total Share bank or group issues €(m) (%) 1 Citigroup 4 1,070.76 13.2 bank or group issues US$(m) (%) 1 Deutsche Bank 11 2,601.13 9.4 2 Wells Fargo 5 1,025.25 12.7 1 Citigroup 25 8,813.01 11.6 2 BNP Paribas 9 2,143.24 7.7 3 Mizuho 4 949.12 11.7 2 Goldman Sachs 19 6,966.12 9.1 3 UniCredit 10 1,881.05 6.8 4 Barclays 3 704.19 8.7 3 JP Morgan 24 6,556.76 8.6 4 JP Morgan 7 1,857.98 6.7 5 Sumitomo Mitsui Finl 2 613.30 7.6 4 BAML 22 6,004.13 7.9 5 Citigroup 8 1,842.85 6.7 6 Credit Suisse 2 570.99 7.0 5 Deutsche Bank 8 5,726.72 7.5 6 Barclays 5 1,738.33 6.3 7 MUFG 2 514.52 6.4 6 Barclays 14 5,303.02 7.0 7 Credit Agricole 12 1,663.75 6.0 8 BNP Paribas 3 452.98 5.6 7 Mizuho 15 4,363.57 5.7 8 Santander 9 1,327.48 4.8 9 Deutsche Bank 2 296.03 3.7 8 Sumitomo Mitsui Finl 9 3,588.64 4.7 9 HSBC 8 1,230.22 4.4 10 US Bancorp 1 213.43 2.6 9 Morgan Stanley 16 3,482.35 4.6 10 Commerzbank 7 1,015.05 3.7 Total 7 8,099.87 10 MUFG 11 3,190.09 4.2 Total 26 27,660.07

Excluding equity-related debt, ABS/MBS, all foreign issues, global issues Total 51 76,251.38 Excluding equity-related debt. FIGs, ABS/MBS. and non corporates.

Source: Refinitiv SDC code: F6a Source: Refinitiv SDC code: F09a Source: Refinitiv SDC code: N8

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Monday, cutting the tenor and offering a Leads Deutsche Bank, JP Morgan, Societe but were still willing to go into that deal,” plump spread following investor feedback Generale and UniCredit mainly looked to CPI said a lead. on its roadshow. Property Group as a comparable for relative “While there is the parliament vote on The Austrian commercial real estate value, the lead said. Tuesday, the feedback we continue to get company, rated """ by 30, had gone on a CPI also owns oflce and retail properties from investors is that Brexit noise is going to four day roadshow with a proposed no grow in Germany and the CEE region, although it continue. Regardless of any speculation and õm . year bond, with investor carries higher ratings of Baa2/BBB. outcome, social housing is clearly going to feedback centred in the high 200s over be required,” he added. swaps, leads said. NOTTING HILL GENESIS priced a a250m 10 year But leads decided on the morning of the STERLING (A/A) that tightened notably, garnering a deal to switch to a four year tenor, and four times subscribed book at 17bp over approached the market with initial price HOUSING ASSOCIATIONS IN FOCUS Gilts, compared with the 185bp–190bp thoughts of 2. . where marketing started. A banker on that “There are concerns about the cycle for FUTURE HOUSING GROUP announced a mandate deal saw the concession at 8bp. the sector, particularly retail, and much of for a debut deal on Friday, capitalising on The bond has tightened to around 165bp )mmolnanZs portfolio isnt core %urope,v a the success of Notting Hill Genesis a day since, according to Tradeweb, which the lead banker said. “We moved to a nice earlier. lrst banker said had been further maturity which would appeal to a lot of Santander and NatWest Markets will be encouragement for Future Housing. people.” running the housing association’s senior “In terms of the immediate backdrop, )mmolnanZ owns oflces and retail secured A+ rated transaction, which will be people were quite comfortable participating. properties in Austria, Germany and Eastern long dated and have a retained element. The In a more general market view, investors are Europe. roadshow commences on Monday and ends learning to live with political uncertainty … Investors approached the credit with on Thursday – straddling the looming Brexit and putting money to work as it is today,” a caution, placing €750m in orders despite the vote in Parliament. lead on Notting Hill said. juicy initial yield on offer. This was whittled “There’s been demonstrated demand in He added that it would be diflcult to down and the trade priced at a 2.85% yield, the sector, as shown by Notting Hill. quantify the premium issuers are paying for giving a 2.625% coupon and a spread of Investors were aware of the [upcoming] vote political uncertainty but noted that the 277.bp over mid swaps. Bond buyers are cautious after 2018’s real ALL INVESTMENT-GRADE BONDS IN EUROS estate borrowing glut, one banker familiar BOOKRUNNERS: 1/1/2019 TO DATE ALL CORPORATE BONDS IN STERLING with the deal said. Managing No of Total Share BOOKRUNNERS: 1/1/2019 TO DATE “It’s an inaugural trade, the size is limited, bank or group issues €(m) (%) Managing No of Total Share and the question is for investors: what more 1 JP Morgan 23 11,425.95 8.8 bank or group issues £(m) (%) is to come?” he said, describing the credit as 2 HSBC 28 10,631.08 8.1 1 HSBC 2 111.05 12.8 niche. 3 BNP Paribas 29 10,461.42 8.0 =1 Barclays 2 111.05 12.8 One bond buyer said he could take it or 4 Credit Agricole 29 9,938.91 7.6 3 Commerzbank 1 82.86 9.6 leave it, noting that Immolnanz is likely to 5 UniCredit 29 9,737.58 7.5 =3 BNP Paribas 1 82.86 9.6 be a repeat visitor to the market. 6 Citigroup 16 8,039.94 6.2 =3 Credit Suisse 1 82.86 9.6 “If it started to tighten [from IPTs], we 7 Barclays 20 7,140.25 5.5 =3 Citigroup 1 82.86 9.6 wouldn’t be interested,” he said. “And in 8 SG 21 7,108.69 5.4 =3 Natixis 1 82.86 9.6 this sector, we know there’s more supply 9 Natixis 14 6,045.53 4.6 =3 Morgan Stanley 1 82.86 9.6 coming and can afford to be quite selective.” 10 BAML 13 5,214.19 4.0 =3 JP Morgan 1 82.86 9.6 Real estate borrowing volumes last year Total 103 130,521.60 10 NatWest Markets 1 62.73 7.3 were nearly twice as large as the prior year, Excluding ABS/MBS, equity-related debt. Total 3 864.82 after an increased number of commercial Source: Refinitiv SDC code: N9 Source: Refinitiv SDC code: N8a real estate borrowers opted to relnance bank loans with corporate bonds. Immolnanz also has some event risk in ALL INTERNATIONAL STERLING BONDS ALL SWISS FRANC BONDS EXCLUDING the name thanks to ongoing talk about a EXCLUDING SECURITISATIONS SECURITISATIONS potential combination with fellow Austrian BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE property lrm 3 Immo, the investor said. Managing No of Total Share Managing No of Total Share Immolnanz acquired a 2.1% stake in bank or group issues £(m) (%) bank or group issues SFr(m) (%) peer S Immo in September. 1 Citigroup 9 2,119.18 14.5 1 Credit Suisse 14 1,476.29 29.0 While that has implications for the 2 HSBC 14 1,943.26 13.3 2 UBS 13 1,476.01 29.0 company’s ,T6, Immolnanz has said it is 3 RBC 12 1,923.47 13.2 3 ZKB 8 603.19 11.9 committed to maintaining a maximum LTV 4 Barclays 10 1,593.49 10.9 4 Verband Schweizerischer 3 424.64 8.3 ceiling of 45%, he said. 5 TD Securities 7 1,195.07 8.2 5 BNP Paribas 3 302.01 5.9 That should keep LTV within an acceptable 6 Deutsche Bank 6 1,103.77 7.6 6 HSBC 1 200.00 3.9 range for an investment grade rating. 7 NatWest Markets 7 1,099.99 7.5 7 Raiffeisen Schweiz 4 184.28 3.6 Furthermore, the debut bonds offer investors 8 BNP Paribas 2 1,081.61 7.4 8 Basler KB 4 163.27 3.2 some protection in the form of a 125bp 9 BAML 4 904.98 6.2 9 Commerzbank 1 100.22 2.0 coupon step up if the company is 10 Lloyds Bank 3 587.50 4.0 10 Basellandschaftliche 2 54.69 1.1 downgraded to high yield, a regular feature Total 28 14,598.92 Total 27 5,085.95 for bonds carrying a low Triple B investment Including preferreds. Excluding equity-related debt. Including preferreds. Excluding equity-related debt. grade rating, a lead on the deal said. Source: Refinitiv SDC code: K05a Source: Refinitiv SDC code: K06b

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BONDS FIG

trade came a bit wider than where Clarion’s to keep its lnances sound and avoid stock US$5bn, US$bn type transaction,” one am  Year note last weeK at bP oVer dilution. syndicate oflcial noted. Gilts. The hybrid lnancing is one of the three “It’s really just been a monumentally 4his was .ottinG (ill’s lrst Visit to the funding channels it will use to relnance a underwhelming FIG month so far.” public debt markets since it merged with õ5bn one year bridge loan signed in Away from the large money centre banks, Genesis Housing Association in April 2018. November for the acquisition of European several regional banks also issued deals that Barclays, HSBC and Santander were the assets from US based 0raxair. underwhelmed, including PNC FINANCIAL leads for Notting Hill. The other two channels are regular bank SERVICES, REGIONS FINANCIAL, FIFTH THIRD BANCORP, That is also encouraging news for loans and corporate bonds. The bank loans CAPITAL ONE FINANCIAL and KEYBANK NA. MORHOMES, the borrowing Vehicle for not for could be in euros, while the bonds will be Market participants have been forecasting prolt social housing proViders waiting in issued in yen. The hybrid loans will also be lower volumes from US banks this year, as the pipeline. It wrapped up its roadshow last in yen. they have met total loss absorbing capacity Tuesday for a £250m Social bond (A–) with a Mizuho, Mitsubishi UFJ Morgan Stanley and (TLAC) rules that came into effect in January. 15 year to 20 year tenor. Nomura are lead managers for the 5 year But even amid more modest expectations, A third banker, familiar with MORhomes, non call lve tranche, while MiZuho and investors and bankers have been surprised said leads would discuss how to proceed MUMSS led the 40 year non call 10 tranche. by the extent of the scale back and the with it next week. The bonds are rated BBB/A– (R&I/JCR). smaller average deal sizes. “They weren’t setting a timeframe on “We have seen a reduction in overall when to come to market,” he said. funding, which could be due to a lack of “The sector has been active and it’s been NON-CORE CURRENCIES economic growth,” Richard Wolff, head of quite well received, so it’s a good time to be US bond syndicate at Societe Generale, told coming to market. They’re a new issuer so UED SEEKS BOND AMENDMENTS IFR. “Less issuance tends to create demand they really wanted to establish the credit and provides a nice technical near term bid and do a lot of work with investors.” UNITED ENERGY DISTRIBUTION, rated A– (S&P), has to the market, as expectations were for A "rexit related challenge for bond buyers held an investor call, arranged by Westpac, to higher levels of supply.” is that MORhomes is linked to government discuss a consent solicitation involving The scarce supply has helped ensure deals social housing policy. A$920m of outstanding bonds due in 2023 go well. The issuer has grand plans to revamp the and 2024. Books on both the JP Morgan and Bank of way smaller housing associations fund The affected notes are the A$350m 3.5% America trades were not disclosed, but price developments, though its proposed September 2023s, A$420m 3.85% October progression was decent and the new issue inaugural trade is meant to be a relatively 2024s and A$150m February 2023 FRNs. concessions were in the single digits or mat to conservative dip in the primary waters. The consent solicitation seeks to amend the curve because there has not been enough Barclays, JP Morgan and Morgan Stanley are two terms and conditions in order to align supply to lll demand, one banker said. lead managers on MORhomes’ transaction. the notes with the guarantor group’s other JP Morgan priced its deal at Treasuries "orrowers are being advised to front load senior unsecured facilities. plus 132bp, which was pulled in from initial their 2019 funding programmes before the price thoughts of 150bp area. Bank of UK potentially crashes out of the EU without America priced its deal at 78bp over, which a deal and, with sterling investors holding was inside IPTs of 95bp 100bp. good cash levels, more deals are expected. Strong investor demand helped secondary FIG market performance, especially for Bank of America’s deal, which was trading 8bp YEN tighter the day after pricing. JP Morgan’s US DOLLARS deal weakened a bit initially, before edging TAIYO NIPPON SANSO SELLS HYBRID 1bp inside its reoffer level. US BANKS CURB DEAL SIZES AFTER New issues last week traded 5.9bp tighter TAIYO NIPPON SANSO raised ¥108bn (US$987m) MEETING TLAC NEEDS on average in the secondary market from from a dual tranche hybrid bond to their pricing spreads, according to BAML relnance the acquisition of 0raxair’s JP MORGAN CHASE and BANK OF AMERICA became Global Research. European businesses, falling short of the the latest US money centre banks to issue ¥150bn target on a $ecember lling. bonds following earnings, but supply overall PIECEMEAL The lnancing is split between a ¥100bn remains below expectations. Goldman Sachs is now the only one of the 5 year non call lve and a ¥8bn 0 year non JP Morgan raised US$2bn from an eight “Big Six” not to hit the market following its call 10. The larger tranche carries a 1.41% year non call seven T,AC eligible deal its earnings release. Goldman has not issued in coupon for the lrst lve years and will lrst in this format since November last year, dollars since it priced a US$1bn 3.20% bond change to six month ,ibor plus 240bp if not according to IFR data while Bank of in June 2018, according to IFR data. called. The 40 year non call 10 pays 1.87% America raised US$500m from a rare Social “We expect holdco issuance to decline for the lrst 10 years and, if not called, will bond. meaningfully on a year over year basis,” change to six month ,ibor plus 270bp. The deals take the year’s supply from US CreditSights analyst Pre de Silva wrote. “The The industrial gas company was looking banks so far to US$37.2bn, which is far focus has now shifted towards maintaining to issue up to ¥150bn, according to an behind the US$54.85bn of issuance from the a balance between TLAC compliance and amended shelf registration statement lled same period a year ago, IFR data show. funding costs.” in December, but may have to depend more ”MORGAN STANLEY (on January 17) was a big JP Morgan, for example, has maturity gaps on hybrid loans. deal for US$3bn; JP Morgan did an 8NC7 that from 2025 to 2027, one banker noted, which Taiyo Nippon Sanso plans to raise about was a big deal; but we would have liked to may explain why the bank issued its lrst ¥250bn of hybrid lnancing in total, in order see something like a dual tranche US$4bn, 8NC7.

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Generali blows the doors off in Italian job well done

„ FINANCIALS Change in fortunes for the country’s borrowers

The nightmarish funding environment for The lack of subordinated supply - both from “I don’t think anyone thinks the Italian Italian borrowers seemed a distant memory last Italy and other jurisdictions - was a clear reason volatility has completely gone, but it’s certainly Monday as Generali’s first subordinated trade for the deal’s success. At that point, Spanish been something that people have sold out since 2016 met with colossal demand, enabling lender Abanca’s sub-benchmark €350m 6.125% of and are now a bit more happy to add,” the the no-grow €500m 10-year to launch inside 10NC5 Tier 2 was the only other euro capital banker said. “It got the point where people were fair value. raised since late November. adding in secondary, so anything with a bit of It is 11 months since Unipol priced a €500m Generali’s scarcity was another: it had been concession was going to look good.” 10-year Tier 2, the last euro subordinated absent since May 2016 and has minimal funding 92% of the deal was allocated to international benchmark sold out of Italy. Subsequent capital needs. Monday’s deal was part of its capital investors. The bond was trading above par, at trades were blocked as the anti-EU stance and management ahead of an upcoming Tier 2 call, 110.30, by Friday. spending plans of a populist government saw but it recently outlined plans to reduce its debt Generali picked a bullet over callable bonds sell off, leaving investors nursing heavy by €1.5bn-€2bn by 2021. structure, sacrificing the ratings benefit at S&P losses. “It’s a trade a lot of people have been waiting for to avoid an estimated premium of at least 50bp Issuance conditions have turned a corner for quite a while [and] we’ve seen a complete change for the extension option. in 2019, however, with the Italian sovereign in tone in the broader market; it’s clearly risk-on at “Increasingly S&P and their requirement for a and several banks already taking advantage the moment,” said a banker close to the deal. 30NC10 (or derivative) structure is an expensive of the rally in spreads after parliament passed Generali’s €850m 5% 2048NC2028 had luxury,” said a second banker. its budget. Earlier this month UniCredit was rallied around 100bp since mid-November when He pointed out that recently rated insurers inundated with demand for its first public US it was quoted as wide as swaps plus 480bp, such as Rothesay, Phoenix and Just Group have dollar bond sale deal since 2017. according to Tradeweb. prioritised Fitch or Moody’s ratings instead. ASSICURAZIONI GENERALI joined that number on Insurance sub, which suffered heavy losses Goldman Sachs and HSBC were global Monday. The €5bn-plus book continued to grow in 2018, has generally outperformed this year, coordinators. They were also bookrunners even as leads revised the 4.625% area IPTs by posting 2.27% in excess returns year-to-date with BNP Paribas, Mediobanca, Santander and a massive 75bp to land at 3.875%, through fair compared with 0.78% by legacy bank Tier 2, UniCredit. value around or just north of 4%. according to a CreditSights note last week. Alice Gledhill

Bank of America’s debt maturities are “Banks have met their TLAC minimums, but ING Group and BNP Paribas both facing now outpacing new issuance, as the bank’s over time they have to maintain TLAC ratios,” steep issuance targets paid new issue Long term debt has decLined bY 53bn, Stuart Plesser, senior director at S&P, told IFR. concessions upwards of 20bp to raise senior according to fourth Quarter earnings “From a credit standpoint, you would like holdco and senior non preferred euro debt “We are comfortably in compliance with to see TLAC maturities evenly distributed so earlier this month. the TLAC rules that became effective in that all outstanding debt is not coming “It’s a quality issuer and there is a lot of January, especially in light of the recent through all at once.” scarcity value in there,” said a lead banker reduction in our -ethod ) ' 3)B,v 0aul on the deal. $onofrio, Bank of America’s chief lnancial “KBC doesn’t have a big funding need so oflcer, said on the earnings call EUROS they can be a bit more aggressive. And “Given our robust funding levels, we investors have seen a bit of performance expect our parent debt issuances in 2019 KBC TIGHTENS SCREWS ON SENIOR, both in ING and BNP Paribas, so they’ve will likely be less than maturities.” CONFIRMS AT1 CALL made a bit of money there and that’s fed To that end, the company did not make a into their optimism.” big splash in the bond market following its KBC GROUP made a dent in its MREL funding plan BNPP’s €2.25bn January 2027 was trading earnings announcement as it issued a 4NC3 last Monday, and also said it would exercise an over 20bp tighter than its swaps plus 180bp structured Social bond. upcoming AT1 call on March 19 bringing into reoffer level. Proceeds will fund community stark relief the call option one week earlier of a Prior to Monday, KBC had available MREL development initiatives such as lnancing much scrutinised Santander bond for which of 2.4 of risk weighted assets RWAs affordable housing, economic development the extension risk is considerably higher. above its target of 25.9%, which applies from projects, community facilities and small The Belgian lender is a relatively rare face May 1 2019 and can be met with both holdco businesses in low income and historically in the bond market and investors placed and eligible opco instruments. It intends to under served communities. more than €2.8bn of orders for the €750m relnance the opco portion with holdco Banks waited out the volatility in the lve year senior holdco issue Baa1A A . senior as it matures. fourth quarter, but even with markets At its reoffer spread of swaps plus 95bp stabilising in early 2019, lnancials do not 20bp inside its initial marketed level the SERIAL REFINANCER? appear to be in a rush to jump back in. Still, note offered just 5bp of new issue The new issue emerged just as KBC the hope is that they will remain fairly concession, the lowest yet this year for an announced it would call the €1.4bn 5.625% steady issuers. MREL eligible senior bond. PNC5 AT1 it raised in March 2014.

34 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

BONDS FIG

The Belgian lender, which has a healthy CET1 a generous order book allowed leads to subordinated supply not just from insurers ratiO OF 1, Partly relnanced this redeMPtiOn whittle down the concession in a further but also Banco Comercial Portuguese, which with a €1bn 4.25% PNC7.5 sold last April. sign of the primary market’s strength. sold the year’s lrst euro Additional Tier 1. The 5.625% bond is callable one week The French insurer started marketing the A second banker said 2019 is shaping up after the call date of SANTANDER’s €1.5bn no grow Tier 2 transaction rated A3BBB to be a reversal of 2018, which he believes is 6.25%, which many market participants at swaps plus 250bp area, but that was underpinning investor appetite. belieVe will be the lrst AT1 left oUtstanding revised to 225bp area after books passed “[Last year] we started very tight and beyond its initial call date. This would be a €2.6bn. moved wider, but this year we’re starting at new test for the sector that has so far taken $emand had Jumped to €3.3bn pre really attractive levels. Each time investors coupon skips and the wipe out of the Banco reconciliation) by the time the deal have dipped their toe back in whether it’s Popular AT1 in its stride. launched at 215bp via joint lead managers Generali, Abanca or BCP it’s been a The 6.25% bond was bid at a % yield to BNP Paribas, Citigroup, Morgan Stanley, Natixis, generally positive experience.” call on -onday, according to 2elnitiV Eikon. Nomura and UBS. The Italian insurer’s €500m 10 year pulled )nVestors must be notiled of 3antander’s )nvestors have been snapping up 10 year in more than €4.25bn of orders despite decision to redeem between 30 and 60 days paper across the credit market as the view pricing inside fair value, at 3.875%. It was bid ahead of the call date. BBVA recently waited grows that rates will stay low for longer. above par at 100.25 on Friday, according to right until the end of the call notice before Over the past two months, the market has Tradeweb prices. saying it would redeem its €1.5bn 7% note, but pushed out the European Central Bank’s BCP’s €400m 9.25% PNC5 also traded up at it had already called and relnanced older AT1s. lrst 10bp rate hike until June 2020, 100.25, though Abanca’s €350m 10NC5 Tier Santander is as yet untested. The AT1 asset according to Barclays analysts. 2 has slipped just below par, according to class has rallied strongly in recent weeks, Six 10 year covered bonds priced last Tradeweb prices on Friday. with Santander’s €1bn 5.25% PNC2023s, for week, with Rabobank’s €2bn transaction After so little subordinated supply since example, tightening to 7.67% from 9% on garnering a massive €5.7bn plus in orders at 13 2018, it can be diflcult for the buyside to January 4. Still, a new issue would almost swaps plus 15bp. But 10 year bullet Tier 2 sit out trades such as those from Generali certainly cost more than the 6.25%’s reset bonds from Generali earlier in the week and CNP. spread of lVe year swaps plus 541bp. and subseQuently CNP offered not only “I think [investors] want to be price Gary Kirk, a portfolio manager at duration but also yield. disciplined, but some of these trades you TwentyFour Asset Management, believes “It’s exactly what a lot of the insurance can’t afford to miss,” said a third banker. “If the way in which banks manage the buyers in particular want at the moment something is coming at these yields and it’s callability of their securities will ultimately 10 year, investment grade and spready,” performing and you’re not involved, then create a two tier AT1 market. said a banker at one of the leads. you’re going to be behind your peer group.” “Those that are considered proactive in “The 10 year bullet, whether bank or High grade funds managed to record an relnancing will sit in one tier, and those insurance, has been undersupplied and we inmow the week before last, according to that are considered to be purely looking at are receiving a lot of requests for this Bank of America Merrill Lynch analysts an the immediate economic viability will sit in particular format of issuance.” encouraging sign after 10 weeks of outmows. another,” he wrote in a recent note. He reckoned the deal launched with a They nonetheless sounded a note of “Our view is that over time the broader minimal concession, arguing that the swaps warning. implications of being serial relnancers will plus 282bp trading level of CNP’s “With slower primary and tighter spreads turn out to be economically benelcial for 2047NC2027 implied fair value for a new over the past weeks, spreads rallied and thus such issuers over the longer term.” 30NC10 at around 300bp. Discounting for mow stabilised and turned positive for the the bullet structure implied fair value of lrst time in 11 weeks,” they wrote. CNP’S 10-YEAR BULLET HITS BULLSEYE swaps plus 215bp   5bp), he said. “However, we are sceptical for how long markets can keep ignoring the continuing The response to CNP ASSURANCES’ €500m 10 HARD TO SIT OUT deterioration in macro.” year bullet had echoes of Generali’s highly After a tentative start, the primary market successful transaction earlier in the week, as has gained in conldence, unlocking CITIGROUP PUTS ROOTS DOWN IN GREEN MARKET ALL FINANCIAL INSTITUTION BONDS IN EUROS ALL SUBORDINATED FINANCIAL INSTITUTION BOOKRUNNERS: 1/1/2019 TO DATE BONDS (ALL CURRENCIES) CITIGROUP returned to the European bond Managing No of Total Share BOOKRUNNERS: 1/1/2019 TO DATE market to price a debut Green bond less bank or group issues €(m) (%) Managing No of Total Share than a week after a comeback sterling trade, 1 BNP Paribas 7 3,204.25 16.9 bank or group issues US$(m) (%) generating robust demand despite the slim 2 Credit Agricole 4 2,035.15 10.7 1 HSBC 2 258.70 14.6 concession. 3 Natixis 3 1,965.43 10.4 2 BNP Paribas 2 140.88 8.0 Sole bookrunner Citigroup opened books on 4 UBS 8 1,719.33 9.1 3 JP Morgan 1 113.05 6.4 the three year senior Baa1BBB A), both the 5 HSBC 6 846.73 4.5 =3 Banco Comercial 1 113.05 6.4 lrst Green bond from a 5S lender in euros and 6 Citigroup 3 833.29 4.4 =3 Credit Suisse 1 113.05 6.4 the lrst Green bond from any bank in euros 7 UniCredit 4 817.12 4.3 =3 UBS 1 113.05 6.4 year to date, at swaps plus 75bp area. 8 Deutsche Bank 3 723.00 3.8 7 Mediobanca 1 94.70 5.4 Books were over €3.25bn as guidance was 9 SG 2 697.79 3.7 =7 UniCredit 1 94.70 5.4 revised to swaps plus 60bp 65bp, slipping 10 ABN AMRO Bank 1 498.64 2.6 =7 Goldman Sachs 1 94.70 5.4 back only slightly to €3.1bn as the issue was Total 21 18,982.90 =7 Santander 1 94.70 5.4 launched at 58bp. Including banks, insurance companies and finance companies. Excluding Total 5 1,769.13 “It looked like a second very strong deal in equity-related and covered bonds. Excluding publicly owned institutions. the European market from Citi,” said a Source: Refinitiv SDC code: N11 Source: Refinitiv SDC code: J3a banker away from the deal.

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4HEû53ûBANKSûaMûlVE YEAR ûWHICHû subsidiaries guaranteed by UBS Group AG benchmark transaction in a lve year tenor. priced at Gilts plus 175bp the previous UBS Group Funding (Jersey) and The Belgian bank mandated ABN AMRO, WeeK Was its lrst trade iN the curreNcY subsequently UBS Group Funding BNP Paribas and Morgan Stanley to arrange since 2009. (Switzerland) AG. It has previously issued European investor meetings from The book was not disclosed due to the capital instruments from UBS Group AG. Wednesday 23. issues 3%# reGistered ForMat but deMand Swiss regulation requires systemically The bond is expected to be rated A by was clearly strong given the 15bp move important banks to raise TBTF instruments S&P. from IPTs. It had since rallied to 166bp as at the group parent company from January 1 Denmark’s SYDBANK (rated A2) is also in the the euro hit screens, according to Tradeweb. 2020. The group parent company then pipeline, with a second senior non preferred Citigroup’s Green bond framework spans transfers the funds internally to those group transaction. renewable energy, energy eflciency, companies that require capital. It met European investors between sustainable transport, water quality and But this increases the prolt tax burden on Tuesday and Friday last week, having conservation and green building. lnancial interest revenue for the group mandated BNP Paribas, Danske Bank, JP Morgan Despite the large book, it was sized at €1bn, parent company, leading to lower capital and Nykredit for the no grow €500m short the available asset pool effectively acting as a which is inconsistent with the TBTF dated transaction. cap. The duration of green assets similarly legislation’s aims. dictated the bond’s three year maturity. The Swiss government announced in There has been no shortage of €1bn plus February 2018 that TBTF instruments’ YEN lnancial bonds sold so far this year, but many interest expense should no longer be part of issuers have paid up to do so. BNP Paribas’ lnancing expenses funds, while the funds RABOBANK ENDS YEN ABSENCE €2.25bn NC7 senior non preferred came from TBTF instruments transferred to group around 20bp cheap to its curve, for example. companies are to be excluded from the RABOBANK returned to the Japanese bond Citigroup, however, paid just 5bp in group parent company’s consolidated market last week after an absence of more concession on its three year, which priced statement of lnancial position. than three years, but its tight spreads left roughly 8bp inside the bank’s US dollar The bank reported total loss absorbing some investors unimpressed. secondary curve. Demand was helped by the capacity of US$84bn on Tuesday. Its TLAC The Dutch lender sold ¥72bn (US$655m) short dated maturity an attractive place for ratio remained more or less stable at 31.9%, of loss absorbing senior bonds in two investors to park cash and its green format. and well above the 26.3% required level Euroyen tranches. The ¥63.5bn lve year The bond was quoted inside reoffer at based on risk weighted assets. priced at 55bp over yen offer side swaps, and swaps plus 55bp by Friday, according to It returned to the senior market last week the ¥8.5bn 10 year at 65bp over. Tradeweb. to price a SFr350m (US$367m) 6NC5 holdco Despite the issuer’s scarcity value and its senior at mid swaps plus 105bp, the tight high credit ratings of Aa3/A+/AA–, the UBS LINES UP AT1, SENIOR ISSUANCE end of 105bp 110bp guidance. The self led substantial reduction in spreads from the FROM HOLDCO bond, rated A A , was issued out of UBS similar deals from BNP Paribas and BPCE Group Funding (Switzerland) and is earlier this month kept some Japanese UBS plans to issue Additional Tier 1 and guaranteed by UBS Group AG. investors away, resulting in a smaller deal senior unsecured debt from its holding It priced roughly 30bp inside the bank’s size than for the two French issuers. company, UBS Group AG, once tax changes euro curve and 5bp 10bp inside its dollar “I know Rabobank’s spreads should be aiming to ease the burden of so called too curves, after adjusting for currency. tighter than those on the French banks big to fail (TBTF) instruments have been “The deal got upsized to SFr350m on the implemented. back of strong demand, driven by more than ALL GLOBAL AND EUROMARKET YEN BONDS The Swiss parliament in December 2018 80% of real money demand, illustrating an BOOKRUNNERS: 1/1/2019 TO DATE approved changes to eliminate the attractive opportunity for issuers from a Managing No of Total Share additional tax burden imposed on price and demand perspective,” said a bank or group issues ¥(m) (%) systemically important banks as a result of banker close to the deal. 1 Daiwa Securities 1 35,050.00 25.0 required issuance of TBTF instruments out =1 BNP Paribas 1 35,050.00 25.0 of holding companies. ARGENTA AND SYDBANK JOIN PIPELINE =1 Mizuho 1 35,050.00 25.0 “Once the change is effective, we will =1 Sumitomo Mitsui Finl 1 35,050.00 25.0 issue new loss absorbing Additional Tier 1 ARGENTA SPAARBANK met investors last week Total 1 140,200.00 (AT1) capital instruments and total loss ahead of an expected senior preferred Excluding equity-related debt. Including preferreds. absorbing capacity (T,AC) eligible senior Source: Refinitiv SDC code: K10 unsecured debt directly out of UBS Group ALL INTERNATIONAL YEN BONDS AG,v the bank said in its fourth quarter 2018 BOOKRUNNERS: 1/1/2019 TO DATE ALL SAMURAI BONDS results on Tuesday. Managing No of Total Share BOOKRUNNERS: 1/1/2019 TO DATE UBS Group AG is the holding company set up bank or group issues ¥(m) (%) Managing No of Total Share in 2014 to improve the bank’s ability to wind 1 Daiwa Securities 9 133,550.00 27.0 bank or group issues ¥(m) (%) itself down in an orderly way in accordance with 2 Sumitomo Mitsui Finl 8 116,050.00 23.5 1 Daiwa Securities 8 98,500.00 27.8 the Swiss regulator’s requirements. 3 Mizuho 7 93,450.00 18.9 2 Sumitomo Mitsui Finl 7 81,000.00 22.9 Following the tax change, it also expects 4 Mitsubishi UFJ MS 3 57,600.00 11.7 3 Mizuho 6 58,400.00 16.5 UBS Group AG to assume outstanding 5 Natixis 5 40,900.00 8.3 4 Mitsubishi UFJ MS 3 57,600.00 16.3 capital and debt instruments previously 6 BNP Paribas 1 35,050.00 7.1 5 Natixis 5 40,900.00 11.6 issued by UBS Group Funding (Switzerland) 7 Citigroup 1 17,500.00 3.5 6 Citigroup 1 17,500.00 4.9 AG as a means to manage the tax burden. Total 9 494,100.00 Total 8 353,900.00 All of UBS’ T,AC eligible senior debt so far Including all Euro, foreign and global issues. Excluding equity-related debt. Excluding equity-related debt. has been issued by wholly owned Source: Refinitiv SDC code: K12 Source: Refinitiv SDC code: K11

36 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

BONDS COVERED BONDS

because of Rabo’s higher credit, but I just Japanese regional investors actively Investors clamoured for the deal even don’t feel happy with this level if I compare participated in the deal. Buyers of the lve though it offered no new issue premium. it with what we saw lately,” said a Japanese year tranche were city banks, asset The deal was priced mat to Rabobank’s asset manager. managers, specialised banks, life insurers, interpolated mid curve, according to ".0 0aribas on January  printed siX and regional investors, with about half of Tradeweb lgures. year non call lve senior non preferred the tranche going to regionals. The 10 year Bankers explained the deal’s appeal as bonds at bp over yen offer swaps and  piece went mainly to regional investors. coming from a combination of factors. year non call nine at bp over for Daiwa, Mizuho, MUFG, Nomura and SMBC “Investors are comfortable where levels ¥140.2bn in total. A week later, BPCE sold Nikko were joint lead managers for the are as a whole, Rabo has probably the lve year 3.P at 120bp and 10 year at 12bp unrated deal. The bonds will be issued off broadest investor following of any FIG issuer for a total of ¥141.2bn. the bank’s GMTN programme. The out there, and 10 years have been under “Investors seemed confused by the severe programme for SNP notes is rated A– by S&P issued,” said the DCM. drop from the triple digit spreads,” said a and AA– by Fitch. banker on the deal. “4he spread on the 10 DURATION BACK WITH A BANG year is almost half BPCE’s bonds.” The long end had been out of favour in Rabobank is an experienced Samurai covered bonds until last week. bond issuer going back to 2008, but A syndicate banker at one of Rabobank’s unfavourable cross currency basis swaps COVERED BONDS leads said that investors’ views on rate rises had made it too expensive to tap the market this year are changing due to a rowing back since 2015. of rhetoric from Federal Reserve chair After basis swaps improved last year and EUROS Jerome Powell and slow growth in Europe. the $utch parliament passed a senior non (e noted this is also remected in the SSA preferred law last month, the bank had good RABO’S DURATION PLAY WINS €6bn BOOK market, where a succession of 10 year trades reason to look to the yen market to help have attracted massive books. meet European reQuirements for bail in RABOBANK won an exceptional €6bn book for “I think the perception is rates are not debt. a €2bn 10 year covered bond last Thursday, going anywhere,” he said. “In a steady or capitalising on changing perceptions on falling rate environment, credit spreads SIMPLER DOCUMENTATION rates and standing out even in a week of tend to compress and people want duration, In light of recent market turbulence, blowout supply. so that’s why all of the duration trades have Rabobank chose to issue Euroyen paper, Rabobank’s deal came in the second gone well.” which comes with less onerous busiest week in the history of the euro Bankers added that 10 year covereds also documentation requirements than the covered bond market, in which €16bn of look especially attractive versus Bunds at traditional Samurai format. benchmark supply was launched. current spread levels. “We used Euroyen to avoid market The Dutch bank had the market to itself volatility of late December to early January on Thursday, but while supply abated, CAFFIL READIES FRENCH SOCIAL so we could move quickly when the demand did not. COVERED FIRST opportunity arose,” said Kazuhide Tanaka, Leads BNP Paribas, Deutsche Bank, HSBC, head of long term funding at Rabobank NatWest Markets and Rabobank opened books CAISSE FRANCAISE DE FINANCEMENT LOCAL (Cafll) Tokyo. with guidance of mid swaps plus 20bp area will meet investors in February to market an Bankers on the deal claimed the pricing and were quickly mooded with orders, as inaugural Social covered bond that will levels were fair and should still be attractive books were reported above €2.5bn lnance loans to hospitals. for relative value investors as the issuer was (excluding JLMs) within just 45 minutes. The French issuer announced last paying a new issue premium. According to a Guidance was subsequently revised to Thursday that it had mandated BayernLB, market source, Rabobank paid roughly 10bp 16bp area (  1bp) with books in excess of BNP Paribas, Credit Agricole, ING and Societe to 20bp over its secondary curve in euros. €5bn (excluding JLMs), before the spread Generale for a roadshow starting on February Rabobank responded to investors’ was lxed at 15bp and the size set at €2bn. 4 to present its new Social note framework. feedback, widening the guidance range for Books closed at €6bn with around 250 Credit Agricole and Societe Generale are the lve year tranche to 50bpn55bp when it accounts in (excluding JLMs and pre joint structuring advisers. started marketing on Tuesday from soft reconciliation). guidance of 50bp–53bp area on Monday. The “That is the fastest and biggest book that I ALL COVERED BONDS (ALL CURRENCIES) spread ultimately landed at the wider end of can recall [in the covered bond market] and BOOKRUNNERS: 1/1/2019 TO DATE the range. I’ve been in this business a long time,” said a Managing No of Total Share The 10 year tranche was sounded at 5bp DCM banker at one of the leads. bank or group issues US$(m) (%) area and then marketed at 65bp, initially on “It’s just a brilliant trade across every 1 Barclays 13 2,969.74 6.9 a reverse enquiry basis. single metric.” 2 HSBC 10 2,804.86 6.5 A second banker on the deal said The book is the largest seen in the 3 Credit Agricole 12 2,693.20 6.2 Rabobank felt no urgency to issue SNP covered bond market since 2013, according 4 LBBW 14 2,500.15 5.8 bonds, which also explained the narrower to market participants. 5 UniCredit 15 2,436.03 5.6 spreads. Indeed, the bank plans to issue only Bankers away said the deal was the 6 Natixis 8 2,322.35 5.4 õ3bn to õ5bn of non preferred senior bonds strongest covered bond of the year so far, 7 Deutsche Bank 9 2,244.38 5.2 per year, according to its website. BNP embodying a week of unexpectedly 8 SG 10 1,961.78 4.5 Paribas, on the other hand, plans to sell successful supply. They too highlighted the 9 NatWest Markets 8 1,886.26 4.4 õ14bn of non preferred senior bonds this size of the book as being exceptional. 10 Credit Suisse 8 1,769.53 4.1 year alone, according to its latest debt “That’s getting towards an SSA book,” Total 48 43,264.69 presentation. said a syndicate banker away. Source: Refinitiv SDC code: J15a

International Financing Review January 26 2019 37 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

!ûDEBUTûEUROû3OCIALûPUBLIC SECTORû obligation fonciere with an intermediate tenor is expected to follow, subject to Investors buy covereds like market conditions. 4he deal would be the lrst sustainable covered bond issued out of France, and used there’s no tomorrow to lnance a portfolio of public hospital loans originated by the SFIL group since 2013. „ COVERED BONDS Sector posts busiest week since beginning of 2011

The covered bond market roared into life with its to move spreads well inside initial guidance levels busiest week in eight years and investors bought - in contrast to more workmanlike deals in the like there was no tomorrow, throwing €36.7bn first two weeks of the year - and in some cases HIGH-YIELD after €16bn of supply. But with concessions price deals with no new-issue concession. “collapsing”, the party may soon end. A €2bn 10-year deal for RABOBANK best The covered bond market was transformed demonstrated the depth of demand, attracting €6bn UNITED STATES last week. It was the second busiest week in the of orders from around 250 accounts, the biggest book history of the euro covered bond market - behind in six years. It priced flat to interpolated fair value. US JUNK BONDS BACK IN VOGUE, only the first week of January 2011 - with €16bn of “The level of supply that has been absorbed BUT WORRIES LINGER benchmark supply printed across 17 deals. (See is phenomenal,” said a DCM banker that worked pricing table for details.) on Rabobank’s trade. “We are in a place where (igh yield issuers are taking advantage of This came after Brexit uncertainties and the market is virtuous - people are being sensible stronger US dollar primary markets to sell blackout periods had held back benchmark both on the issuer side and buyside.” debt while they can, as cash rich investors issuance to just €1bn in the previous week. On Wednesday, DZ HYP launched a rapid stock up on risk assets despite longer term However, it was not the volume of supply €750m 10-year Pfandbrief. Books closed at more headwinds. that was the biggest surprise, but the volume than €2.1bn within just one hour and 25 minutes, ALBERTSONS, healthcare operator TENET, real of demand. Combined books added up to more even though the deal paid just 1bp concession at estate investment trust MGM GROWTH than €36.3bn. a spread of 10bp. PROPERTIES and energy company VISTRA got “It’s turned 180 degrees,” said a syndicate banker. On the same day, a €1.25bn 10-year for the ball rolling by raising US$4.15bn in total “People are buying like there’s no tomorrow.” SPAREBANK 1 BOLIGKREDITT was twice subscribed on 4uesday through drive by deals that were All deals were, at a minimum, comfortably despite being arguably priced inside fair value. all upsized. subscribed, with some more than three times Syndicate bankers that worked on last Issuers that followed on their heels saw subscribed. This allowed issuers and their leads week’s deals, taken by surprise at the sudden similar success. The strong reception for the slew of trades, following a roughly six week of another bout of volatility or a slowdown And even towards the end of the week, shutdown in primary in December and into in the economy. deals were still going strong, with ALTICE the New Year, has given the market a jolt of “Those companies that have deals to do upsizing its 10NC5 trade to US$1.5n from conldence. are looking at the risk rally and saying this US$1bn. But bankers are wary that conditions may maybe isn’t a permanent state of affairs,” “There is clearly cash on the sidelines worsen again amid uncertainty about Brexit said another high yield banker. ready to be put to work, and investor and the US government shutdown, among “There’s still a lot of macro risks out appetite remains lrm despite adverse other things, that could easily spark there. You’re one tweet away from a sell off, geopolitical events and persistent concern renewed volatility. and I think issuers are looking to take about an impending economic downturn,” “The issuers wanted to take advantage of advantage of the window they have before Pierre Beniguel, portfolio manager at an opportunity to lock in long term rates lnancials go stale or they have to go into TwentyFour Asset Management, wrote in a before they move higher,v one high yield blackout periods.” note to clients. banker involved in several of last week’s “Our outlook is generally not so robust for “We continue to favour short duration for deals told IFR. “You’ve got to take advantage risk taking right now,” said Michael our credit exposure and are not getting too while you can.” DePalma, CEO at PhaseCapital and portfolio carried away with this short term Funding conditions have improved manager of the high yield ETF. exuberance.” signilcantly over the past month, with “7e have a mat yield curve, widening A credit investor study by Bank of spreads rallying 94bp on average since the credit spreads, tightening lnancial America Merrill Lynch also suggested start of the year, according to ICE BAML conditions, low conldence in the political portfolio managers were more cautious on data. environment, a government shutdown this the longer term outlook than the market Another high yield banker said investors is a set of conditions that are not normally currently suggested. were also more mush with cash because conducive to risk taking.” The report showed investors have January 15 was a heavy coupon payment date. increased their preference for higher rated /ther specilc events that will potentially MORE HURDLES Single B names, with fewer thinking Triple reduce the size of the high yield bond Still, issuers continue to line up. C debt will outperform. market, such as the recent upgrade of HCA Offshore drilling company TRANSOCEAN “We have taken steps to move up in and the acQuisition of junk rated First Data jumped into the market on Wednesday with quality and capital structure and to shorten by investment grade Fiserv, have also a US$550m eight year non call three senior maturity, the idea being that over the next helped create a bid for junk bonds. secured bond that launched with a 6.875% couple of years we’ll see material widening Beyond these technical supports, coupon and 99.25 reoffer. That level was of spreads and a lot of debt coming due,” however, investors and issuers are still wary tighter than the 7% coupon price talk. said DePalma.

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BONDS HIGH-YIELD

transformation in the market, said the results had Some investors had been waiting for the left, and said shrinking new-issue concessions - far exceeded their expectations. euro covered bond market to stabilise before with some of last week’s deals priced just above “Let’s keep riding this wave as long as it lasts,” stepping up their participation - in the first two or even inside secondaries - could end the party said a second syndicate banker. weeks of the year, secondary spreads continued a before long. widening trend as new issues came with sizeable “I think this window of opportunity might be CONFLUENCE OF CAUSES concessions. closing again, because there has been so much Many market participants confessed to having The lack of supply in the third week of January, [supply] and we have almost no remaining new- little idea why demand was quite so abundant. enforced by Brexit headlines, then eased the issue premiums,” said the fund manager. Investors and bankers theorised that it was widening pressure and caused demand to build “Speaking for our company, we don’t feel that because of a combination of factors. up. we should still participate in the same degree Investors came back to their desks last Monday as we participated in the market yesterday … BLOWOUTS to find covered spreads stable following the because of these collapsed premiums we start to BIGGEST WEEKS FOR COVERED BOND ISSUANCE repricing and at their widest levels in years, become much more hesitant now.”

€bn No. of deals looking newly attractive versus SSAs and other A second investor agreed that demand would

20 20 markets. With Brexit risk kicked down the road, inevitably normalise, but suggested it could be they then decided to put the cash they were sustained a little while longer by investors that sitting on to use on the sudden deluge of supply. are compelled to buy covereds for regulatory

15 “[Covered bond investors] realised they were reasons and are therefore less price-sensitive. 15 missing out,” said a fund manager. “This is why “I could imagine that we’ll see another week there was this huge difference.” like this one,” he said.

10 This was largely driven by bank investors. Book Supply is also expected to ease heading statistics show that bank treasuries have been towards the end of the month as blackout periods

10 taking larger shares of new issues, moving cash take effect. into covereds from the SSA market. “The last two days are really at the upper end 5 But some big asset managers also doubled of any historical experience we have as of now,” their participation last week, syndicate bankers said the fund manager. said. “This dynamic obviously can’t be driven much 0 5 2/1/2011 - 20/1/2019 - 8/1/2006 - 1/1/2012 - 30/1/2011 - further ahead. I would assume supply will calm 8/1/2011 26/1/2019 14/1/2006 7/1/2012 5/2/2011 RETURN TO NORMALITY? down a little bit and, to be outspoken, I would Amount raised €bn (LHS) — No of deals (RHS) However, investors and syndicate bankers alike really welcome that return to normality.” Source: SDC questioned how much more cash investors had Tom Revell

ARCONIC BONDS DROP AFTER LBO would have made it one of the largest LBOs PG&E’s 6.05% 2034 bonds were the most FALLS THROUGH since the lnancial crisis. heavily traded in the US corporate market Financing for the deal was fully last Thursday, Jumping lve points to 87 by Bonds of aluminium company ARCONIC sold committed and being led by Deutsche Bank, Friday morning, according to MarketAxess. off on Tuesday after it dropped plans to sell CreditSights said. )ts 3.50% 2020s rose lve points to 85, while the business following weeks of speculation Closing had been held up by shaky its 2.40% 2022s jumped about four points to that priVate eQuity lrm !pollo was close to lnancing conditions in recent weeks and 82. The company’s stock soared 75%. lnalising what would haVe been one of the concerns about the company’s contingent PG&E skipped an interest payment on one largest leveraged buyouts in recent years. liabilities relating to the 'renfell Tower lre of its bonds earlier this month and said it John C. Plant, chairman of Arconic, said in London in 2017, CreditSights said. planned to lle for Chapter 11 bankruptcy the company had considered a sale over the Morningstar analysts estimated that the before February hits. past year, but that it “did not receive a company was worth US$24 per share more )t has not changed plans to lle for proposal for a full company transaction that than what Apollo was reportedly offering. bankruptcy despite the new report we believe would be in the best interests of They wrote on January 16 that the reported absolving it of a large portion of the 2017 Arconic’s shareholders and other share price in Apollo’s offer “would represent lre liabilities, the company said in a stakeholders”. great value for the acQuirer while being sub statement. The BaBBB rated company’s . optimal for Arconic shareholders”. “Regardless of today’s announcement, 2024 bonds fell three points to 97.75, while PG&E still faces extensive litigation, its 5.95% 2037 bonds dropped 5.5 points to PG&E BONDS RALLY BUT BANKRUPTCY signilcant potential liabilities and a 91, according to MarketAxess. They moved REMAINS IMMINENT deteriorating lnancial situation, which was up to 99 and 94 on Thursday, respectively. further impaired by the recent credit agency Arconic shares dropped more than 25% on PG&E bonds rallied sharply last Thursday downgrades to below investment grade,” Tuesday to US$16.73, recovering slightly to after regulators said the California utility the company wrote in the statement. US$18.40 by Thursday’s close. was not responsible for the 2017 Tubbs lre. “Resolving the legal liabilities and lnancial The Wall Street Journal reported as The California Department of Forestry challenges stemming from the 2017 and recently as two weeks ago that Apollo was and Fire Protection said it had determined 2018 wildlres will be enormously complex close to lnalising a deal to buy Arconic for that the 2017 Tubbs lre was caused by a and will require us to address multiple US$21 $22 per share. private electrical system close to a stakeholder interests, including thousands of At US$22, the sale would have valued the residential structure, Reuters reported. wildlre victims and others who have already company at around US$16bn, CreditSights That clears the troubled utility of liability made claims and likely thousands of others analysts wrote in a note on January 18. That for the deadly blaze. we expect to make claims.”

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!NALYSTSûATûINDEPENDENTûRESEARCHûlRMû That rally is contingent on appetite for UK B&M’s £250m 4.125% February 2022s have CreditSights, however, called Thursday’s risk returning on an agreement to leave the performed well since pricing in early 2017, development a gamechanger for bondholders. EU that does not have a hard outcome, a remaining consistently above par until the h)f Cal&ire lnds third party eQuipment fund manager said. November sell off. Now, investors have an solely caused the Tubbs lre, then 0ac'as Although it performed better than euro opportunity to buy a well performing name can’t be sued and their lre liability drops high yield, 2018 was a tough year for the at 98 instead of par. from about US$30bn to the low US$20bn,” sterling sector, especially due to the dismal Still, accounts will tread with caution CreditSights said. performance of UK retail be it HOUSE OF given the risk backdrop. One investor agreed that the liabilities FRASER’s default or poor trading from PIZZA Besides New Look’s debt for eQuity swap, stemming from the 20 lre are liKely too EXPRESS and NEW LOOK, the latter having the most painful situation being watched is high to keep the company out of announced a debt for eQuity swap. that of DEBENHAMS, which is in discussions bankruptcy. But the investors said that should not be with lenders to renew its bank facilities. “This may not be enough to keep them an obstacle to making potential future Moody’s revised the outlook on its Caa1 from lling for bankruptcy because the 20 returns on safer names. rating to negative on January 17, warning lre is much bigger, but it’s a positive “UK retail is still a pretty desperate and that the result of the negotiations could development that gives them a little more dangerous spot. But when you look at it, you ultimately lead to losses for creditors. meXibility,” he said. need to look at the benelts that can accrue “Unfortunately, these things can be self to survivors,” said the fund manager. MOODY’S WARNS DIA FINANCING fulllling. .ow that bankruptcy is on the table, Two names investors are watching are DETRIMENTAL TO BONDHOLDERS it’s going to take a lot to reverse course.” discount retailers MATALAN and B&M, with the conviction that consumers will move down Moody’s has downgraded DIA deeper into to these stores if the economic environment Triple C territory, warning that its recent EUROPE/MIDDLE EAST/ toughens. relnancing deal lowers bondholders’ AFRICA Matalan recently released results showing recovery prospects. decent performance despite diflculties in STERLING INVESTORS PRIMED FOR the market backdrop. Its £350m 6.75% ALL NON-DOLLAR DENOMINATED HIGH-YIELD BONDS HIGH-YIELD RALLY *anuary 2023 lrst lien bond is up nearly six 1/1/2019 TO DATE points since the start of the year, according Managing No of Total Share Investors are primed for a further rally in to Tradeweb data. bank or group issues €(m) (%) the sterling high yield market, especially if a 1 UniCredit 2 238.00 10.6 no deal "reXit comes off the table, and ALL US$ DENOMINATED HIGH-YIELD BONDS =1 Deutsche Bank 2 238.00 10.6 particularly from credits such as discount BOOKRUNNERS – 1/1/2019 TO DATE =1 Credit Agricole 2 238.00 10.6 retailers that can better navigate Managing No of Total Share =1 Santander 2 238.00 10.6 challenging economic conditions. bank or group issues US$(m) (%) 5 NatWest Markets 1 125.00 5.6 There is already optimism after the market 1 UBS 7 1,149.74 6.7 =5 MUFG 1 125.00 5.6 rallied into the New Year, despite the 2 Credit Suisse 7 1,138.20 6.6 =5 Barclays 1 125.00 5.6 signilcant risks that a no deal departure from 3 Citic 6 1,096.42 6.3 =5 HSBC 1 125.00 5.6 the EU could pose to a large segment of issuers. 4 JP Morgan 9 1,056.69 6.1 9 Mediobanca 1 113.00 5.0 “(igh yield credit investors came into the 5 Goldman Sachs 10 1,014.43 5.9 =9 Citigroup 1 113.00 5.0 year underweight UK risk,” said Basil 6 CEB Intl Invest Corp 4 871.46 5.0 =9 JP Morgan 1 113.00 5.0 Eggenschwyler, head of leveraged lnance 7 Morgan Stanley 8 846.40 4.9 =9 BBVA 1 113.00 5.0 trading and sector strategy at Credit Suisse. 8 Citigroup 8 775.14 4.5 =9 Banca IMI 1 113.00 5.0 “So far, we are seeing some short 9 Barclays 8 746.66 4.3 =9 ING 1 113.00 5.0 covering and tentative long addition in 10 BAML 8 735.14 4.3 =9 Sumitomo 1 113.00 5.0 some UK names that underperformed in Total 27 17,269.64 Total 2 2,242.95 2018,” he said. Including US domestics, Euro, foreign, globals. Excluding equity-related debt. Excluding equity-related debt. The Bank of America Merrill Lynch Source: Refinitiv SDC code: B5 Source: Refinitiv SDC code: B6 sterling high yield indeX has tightened to 6.88% from 7.39% at the start of the year, ALL ASIAN HIGH-YIELD ISSUERS ALL EUROPEAN HIGH-YIELD ISSUERS while investors are looking for bargains on 1/1/2019 TO DATE 1/1/2019 TO DATE names that were deemed to have suffered Managing No of Total Share Managing No of Total Share excessive price drops last year. bank or group issues US$(m) (%) bank or group issues US$(m) (%) 1 Citic 6 1,096.42 14.3 1 UniCredit 2 271.52 10.6 PATIENCE PAYS OFF? 2 UBS 6 1,025.16 13.4 =1 Deutsche Bank 2 271.52 10.6 Among sterling issuers whose bonds have 3 Credit Suisse 5 978.20 12.8 =1 Credit Agricole 2 271.52 10.6 traded up signilcantly after a battering last 4 CEB Intl Invest 4 871.46 11.4 =1 Santander 2 271.52 10.6 year are retailers Matalan and Shop Direct, 5 Haitong Securities 9 521.04 6.8 5 NatWest Markets 1 142.25 5.6 chicken producer Boparan, and foreign 6 Goldman Sachs 4 363.86 4.8 =5 MUFG 1 142.25 5.6 exchange company Travelex. 7 Guotai Junan Securities 7 362.84 4.7 =5 Barclays 1 142.25 5.6 “Sterling is one of those parts of the 8 HSBC 5 349.40 4.6 =5 HSBC 1 142.25 5.6 market where you need to be defensive, but 9 Deutsche Bank 6 246.44 3.2 9 Mediobanca 1 129.27 5.0 you don’t need to disown it. There are really 10 JP Morgan 3 194.60 2.5 =9 Citigroup 1 129.27 5.0 good names in the market and there is a Total 16 7,646.33 Total 2 2,559.94 strong reason to believe you could see a Excluding equity-related debt. Excluding equity-related debt. rally,” said an investor. Source: Refinitiv SDC code: B06d Source: Refinitiv SDC code: B06c

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BONDS STRUCTURED FINANCE

It cut the troubled Spanish retailer one Its €625m 4% 2024 senior note lost more after it increased the tender consideration notch to Caa2, keeping the rating on review than seven points on Monday’s close, sinking to from a maximum of US$750m. for downgrade. S&P rates it CCC+ following around 68 bid on Tuesday morning, according The Japanese tech giant will pay a downgrade in December. to Tradeweb data. Most of the losses were US$969.9m to buy back the bonds, having h.ew loans benelt from a securitY recovered by the end of the week, with the bought some of the bonds at a discount. package that could potentially include the bonds bid around 74 as IFR went to the press. Prices were decided through a Dutch international assets of the group, which When Atalian last came to the bond auction process and were not disclosed. account for a sizable portion of DIA’s equity market in April 2018, it referred to the The company accepted US$75.87m of its since most of its debt, including bonds, is matter as a risk factor, stating that an 5.375% 2022s, US$142.082m of its 4.75% located at the parent’s level,” analyst investigation into its relationship with a 2024s, US$24.365m of its 6.00% 2025s, Vincent Gusdorf said in a note. subcontractor had led to the identilcation US$166.853m of its 5.125% 2027s, €59.678m DIA agreed a õm debt relnancing deal of delciencies in its internal controls, which (US$67.8m) of its 4.5% 2025s, €399.668m of with banks at the end of last year, which could expose it or its shareholder to liability. its 3.125% 2025s, and €60.144m of its 4.000% requires it to seek consent from bank The risk was reiterated in its Q3 results in 2029s. lenders to distribute dividends, sell its Clarel November, when the company announced Deutsche Bank was dealer manager. and Cash & Carry businesses, as well as a Julien was scheduled to appear before the €600m capital raise, for which DIA entered authorities. an underwriting agreement with Morgan “In our view, downside from the probe is Stanley in December prior to the deal. largely reputational for now, particularly for Around 20 of DIA’s %bitda for the lrst the shareholder,” analysts at Lucror STRUCTURED FINANCE nine months of 2018 was generated by Analytics said in a note. international subsidiaries, according to The analysts said they would become Moody’s. more concerned if Atalian itself were EMEA MBS DIA and primary shareholder ,etter/ne subject to a formal investigation. the investment vehicle controlled by Russian Benjamin Sabahi, head of credit search at MOODY’S APPROVES MORTGAGE tycoon Mikhail &ridman had previously said Spread Research, said he expects little PRISONERS’ ESCAPE the retailer would not be able to meet debt impact on Atalian, as the group has taken payments this year and communicated to the right measures to deal with the The UK regulator’s plans to help “mortgage creditors the need for them to take a haircut investigation so far, conducting an internal prisoners” is credit positive for more than 60 on the debt, according to a report in Spanish investigation into the invoices and UK RMBS that contain pre crisis mortgages, daily %l Conldencial in December. cooperating with the authorities. according to Moody’s. &ridman, via lnancial advisor P*4 But the potential of a weakening of the The FCA is considering changes to its Partners, told creditors a haircut would be group’s relationship with Julien raises responsible lending rules, which currently necessary before a further investment in the questions about future lnancial support for prevent some borrowers relnancing if they company, that report said. the highly leveraged company, according to fail strict affordability tests. Borrowers may It is not clear what Fridman’s next move Sabahi. be trapped in older mortgages that were will be. The shareholder had previously Atalian’s bonds have already been in originated to less stringent criteria, paying opposed the €600m raise as he was looking trouble since last year, as leverage crept up high rates of interest and unable to to take control of the company, according to thanks to its acquisition of UK peer Servest relnance. an %l Conldencial report from earlier in and weaker than expected earnings. S&P The FCA proposes to allow such January. If LetterOne doesn’t participate in downgraded the company one notch to B in borrowers to relnance even if they do not the capital raise, its stake in DIA would be November, while Moody’s has its B2 rating meet existing affordability tests, as long as substantially diluted, Moody’s analysts said. on a negative outlook. the new mortgage costs are cheaper than The rating agency also said the conditions The company said in December it could their current one. of the underwriting commitment create bring another shareholder into its capital The changes will only apply to borrowers uncertainties given the company’s poor structure, according to analysts, with seeking a cheaper mortgage, rather than performance and weak governance. support from the main shareholder. those wanting to borrow more money, and “Management recently somewhat dashed borrowers will need to be up to date with ATALIAN PLUMMETS ON SHAREHOLDER investors’ hopes of a rights issue and we payments. INVESTIGATION believe that this has to be connected to the “This could create some positive current investigation concerning its momentum for UK RMBS,” said Douglas French cleaning and facilities management controlling shareholder,” Sabahi said. Charleston, portfolio manager at company ATALIAN’s bonds plummeted early The other option is for it to sell its stake in TwentyFour Asset Management, speaking in last week on its announcement of an Getronics, an information and a video blog. investigation into its principal shareholder. communications technologies company, “If the FCA plan does realise and Its leading shareholder, Franck Julien, has according to analysts. borrowers are able to escape and repay early been placed under formal investigation by that creates some upside potential,” French authorities for misuse of corporate Charleston said. assets in connection with the payment by ASIA-PACIFIC Increased relnancing would mean higher Atalian of invoices related to work at a Brussels than expected pre payments, boosting building owned by the shareholder, the SOFTBANK BUYS BACK US$1bn BONDS returns particularly for bonds bought at company said in a statement. Two employees discount in the widening market of the past of the company are also under investigation. SOFTBANK GROUP CORP has agreed to buy back few months. Atalian and its oflcers are not the subJect US1bn equivalent in principal amount of It is already possible for some existing of proceedings, it added. its dollar and euro bonds in a tender offer, borrowers to relnance with existing lenders

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without meeting tightened affordability as well as by the series’ servicer. criteria. The proposal was rejected by the issuers EMEA ABS But the FCA estimates there are around who said they saw no obligation to put 120,000 borrowers unable to switch whose though the amendment. DBRS PREDICTS YEAR OF TWO HALVES eXisting mortgage is held by lrms that are Clifden had previously made an unauthorised to lend, and a further 20,000 ultimately unsuccessful attempt to take Securitisation issuance this year will be a who haVe mortgages with lrms that control of the securitisations via a hostile story of two halves, according to rating currently choose not to lend. tender offer for outstanding bonds. agency DBRS’s 2019 outlook. Moody’s says most mortgage prisoners’ The RMACS deals are serviced by Paratus Regulatory uncertainty will keep volumes instalments accrue interest at relatively AMC, formerly 'MAC RFC. 'MAC RFC in the lrst half limited, but “the second half high moating rates, which will increase if the originated the lve series of RMACS bonds of the year is expected to be busy as issuers base rate increases, potentially causing between 2006 and 2007. look to meet funding needs driven by the additional defaults. A further series of RMAC bonds was also removal of QE.” 2elnancing would see the mortgages part of Clifden’s tender offer last year, but DBRS predicts distributed issuance to be leave securitisation pools early, increasing they had originally been structured with stable, forecasting €100bn equivalent credit enhancement and reducing future optional calls. compared with €101.3bn in 2018. losses. Up until that point Paratus had chosen There will be a change in the overall “The exemption will have the greatest not to call, but it quickly did so in response dynamic, with the bumper year for positive effect for more recent to the tender offer. European CLOs unlikely to be repeated. securitisations of pre crisis mortgage loans Clifden had said in September it would go “If primary deal spreads continue to because the majority of recent to court if its proposed call option was not widen then relnancing or reset activity will securitisations of legacy assets have been added to the RMACS deals. ultimately tail off until the next cycle is cleaned of arrears loans,” Moody’s says. The application is dated January 16 and triggered by the movements in spreads of Deals from before 2009 are usually gives Intertrust 14 days to comply. either the underlying collateral or primary smaller and have a high proportion of loans The application was lled under Part  of liabilities.” in arrears, so redemption of performing the Civil Procedure Rules. Part 8 is typically European CMBS is expected to continue loans would concentrate bondholder used where there is no disagreement on its slow return, with auto and consumer exposure to borrowers with real facts but rather on matters of interpretation. sectors remaining stable. affordability problems. The four defendants are Intertrust DBRS says the ECB’s pullback from Lenders will not be forced to offer Management, Intertrust Corporate Services, quantitative easing “does offer an mortgages to these borrowers but many RMAC Securities Holdings and RMAC opportunity for an increase in issuance, could be willing to do so. Securities No.1. particularly in mortgages, but this will likely “Most of these borrowers have had loans Clifden’s assault on another legacy be split between covered bonds and RMBS.” for a period where house price inmation has securitisation, a ground rent CMBS called On the macro side, overall low levels of been positive and wage inmation has also Fairhold Securitisation, was rebuffed in unemployment should help keep been positive,” said TwentyFour’s the High Court in August where the judge delinquency levels low. Inmation and slow Charleston. “So even borrowers who had a called its scheme an “unprincipled asset wage growth in some countries could high LT6 ratio or an interest only loan will grab”. squeeze borrowers, making debt now generally be less levered.” repayments harder. THIRD-PARTY TENDER OFFER DBRS notes house prices were positive CLIFDEN CONTINUES RMACS RMBS FIGHT ON BMF CMBS across Europe with two exceptions, Italy and Sweden. The highest price rises last year Activist investor CLIFDEN is continuing its A third party tender offer has been came from Ireland (12%), Portugal (11%), the lght over RMAC SECURITIES NO.1 (RMACS) a announced for four pre crisis U+ non Netherlands (9%) and Spain (7%). series of the pre crisis legacy 5+ non conforming CMBS issues from the Business Rising house prices of course improve conforming RMBS, lling a (igh Court claim Mortgage Finance series. mark to market LTVs in securitisation pools, earlier this month to replace directors of the The deals are Business Mortgage Finance and for some legacy transactions – securitisation SPVs. 4, 5, 6 and 7. particularly in Ireland and Spain – can The claim argues that directors provided The offeror is Greencoat Investments Ltd, reduce negative equity levels. by Intertrust Management are in breach of which says it wishes to establish a holding their duties towards the SPVs and are not in each series of notes. capable of performing their required duties Greencoat is linked to activist investor EMEA CLO in relation to any restructuring proposed by Clifden, which brought similar, Clifden. controversial third party tender offers last CSAM TO REOPEN CLO PRIMARY Clifden wants to replace the directors year. with ones who would, presumably, take a Greencoat Investments shares the same CREDIT SUISSE ASSET MANAGEMENT was expected more favourable view of its earlier attempt Isle of Man oflce address as Clifden and to print 2019’s lrst European leveraged loan to introduce call options to the according to the Isle of Man Companies CLO new issue late on Friday as IFR was securitisations. Registry its registered agent is a company going to press. The deals are not callable until they reach linked to Clifden, called Mann Made The €408.5m deal, CADOGAN SQUARE XIII, is their 10 clean up calls, which cannot yet Corporate Services. lead managed by Barclays. It was announced be triggered. The tender offer, which was released to with both the Class A and the equity shown But last year Clifden proposed an the Irish Stock Exchange on Friday as “not available”, although market amendment to the deals’ documentation to afternoon, expires on February 25. The early participants said pricing at the senior level introduce a call option exercisable by itself tender deadline is February 8. did not appear lxed in advance.

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Syndicate ABS bankers gloomy on Q1 supply

„ ASSET-BACKED SECURITIES Issuers unwilling or fearful of paying up. Regulatory uncertainty bites investors

The European securitisation pipeline – with the may work into a slipstream once the first deals Those US accounts have not suddenly turned exception of leveraged loan CLOs – remains firmly have emerged.” away from the UK but syndicate bankers expect shut and syndicate bankers fear their dry January The bankers canvassed by IFR blamed them to want to be paid more for UK risk. could extend into an abstemious February. uncertainty about new securitisation regulations That won’t stop UK securitisers touting their Seven syndicate bankers canvassed by IFR and about Brexit for suppressing both supply programmes to investors on the other side of predicted that the first quarter will bring just and demand. the Atlantic. Established names will be joined by nine new issues, excluding CLOs. others preparing dollar debuts at the February Their predictions average out to indicate a REGULATIONS BITE ABS conference taking place in Vegas. no-deal January, three deals in February and six New securitisation regulations mean only new “Pretty much all of the UK community is going for March. Last year there were eight in January, issues that meet STS (simple, transparent and there,” said a syndicate banker. eight in February and 11 in March. standardised) criteria can be included in bank “This is the most broken I’ve seen the market treasuries’ liquid coverage ratio books. Inclusion REPERCUSSIONS for a very long time,” said a syndicate banker. gives banks better capital treatment for the A closed securitisation market has repercussions “Issuers just aren’t mandating yet,” he said. “It’s bonds, without which they are reluctant to invest. down the supply chain, and buy-to-let specialist not for lack of trying on our side, but issuers are a lot But those STS criteria still aren’t finalised, Fleet Mortgages raised eyebrows when it pulled more circumspect, they want a lot more execution leaving issuers uncertain how to actually its entire product range on January 8. certainty, which we’re not able to give them.” structure an STS-eligible deal. Fleet said it had filled up a £400m funding line Syndicate desks may be sitting on a handful “These [bank] investors aren’t buying but and didn’t have a replacement lined up in time, but of mandates held over from 2018 but originators it’s not because they’re on strike, it’s because is now in the final stages of securing a new funder. remain unwilling to dip their toes into the market. the idiot authorities have put this massive The exact reasons for the dislocation are “We’re having conversations about prime impediment in their way,” said an investor. unclear but market participants say it highlights trades in the works,” a second syndicate banker Without treasury accounts in the book, prime the role of a functioning RMBS market. said, “but I don’t think any of us feel there’s issuers fear they would have to pay over the odds “If you can’t get the wholesale markets going, enough confidence to put a trade out there.” to place their Triple As, and so are holding back. you can’t originate as much,” a banker said. Many prime issuers have other funding Some asset managers could also join them on Complicating the 2019 supply picture is the options, notably a red-hot covered bond market, the sidelines. volume of redemptions coming up, with more than while some non-banks front-loaded with extra “All asset managers are watching corporate £5bn of 2.0 non-conforming and buy-to-let UK deals or pre-funding last year to avoid being high grade, where they’re getting paid larger RMBS due to repay. There is a further £6bn of bonds forced into a difficult market this quarter. and larger new issue premiums,” said the first backed by legacy Northern Rock RMBS securitised “Buy-to-let and non-conforming levels would syndicate banker. by Cerberus in 2016 and also coming due this year. definitely be past the pain threshold for where They may also perceive bank treasuries’ absence Despite the gloom over supply, hopes are high quite a few issuers would be willing to print,” the as a material withdrawal of liquidity from the sector. that the market will pick up later in the year, which second syndicate official said. Brexit uncertainty is of course a problem for DBRS said last week will be a “story of two halves”. That means issuers that don’t need to come UK originators, and syndicate bankers say it is “This is not such an unusual situation,” stressed one to market won’t come, and any who do risk being weighing more heavily now on US investors than sanguine syndicate head. He said the European market seen as desperate for funding. it did last year. is always seasonal and often gets off to a slow start. “There are some issuers who would like US buyers played a crucial role in 2018, “I can tell you when there will be the largest to be more front-footed but who recognise buying US$6.5bn of UK paper and easing number of deals, it will be May and June – as they’re perhaps not the best issuers to open the pressure on an always thin and often fickle usual,” he said. market,” said another syndicate banker. “They sterling buyer base. Chris Moore

Pricing further down the stack was also The deal was shown with its main Triple lining up debut deals. There is also a supply widening on Thursday, with talk on the A tranche already subject, as well as the overhang from the end of 2018, when Triple Bs going to 375bp from 360bp, equity. spreads widened sharply and issuance dried according to one CLO trader. The second CLO is CARLYLE EURO CLO 2019-1, up. The deals non call period ends in !pril from CELF ADVISORS. Lead managed by BNP But primary activity remains a little 0 and the re inVestment period runs Paribas, it was announced with €240m Class muted this month compared with last year until October 2023. A1 already subject and around 25% of the January. By the end of that month there had Also seen marketing earlier this month equity available. been two new issues and four rels and was BILBAO CLO II from GUGGENHEIM PARTNERS. Both new deals have the same two year resets sold into a very strong market keen to Citigroup is lead manager. non call and 4.5 year re investment get hold of new paper. Two more new CLOs were announced last structures. This year, investors report a much more week. BLACKSTONE/GSO is bringing CROSTHWAITE Market participants say plenty of CLO sluggish secondary market backdrop, PARK CLO via joint arrangers and joint supply is waiting in the wings, with last although spreads have recovered since placement agents GreensLedge and NatWest. year’s managers returning and new ones December.

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This only mildly outperformed the Rating agencies have accelerated US MBS broader Triple B minus CRT sector which upgrades in recent years, which Chen said also rallied by 9bp in the same week, while led to some magnitude of the rating action INVESTORS BET ON CRT UPGRADES Triple B corporates tightened 8bp. being already been priced in. “Because investors anticipated that many About half of the CRT bonds that Rating upgrades have become so frequent in would get upgraded, the price action was Brandywine owns were upgraded with the credit risk transfer bonds issued by Fannie already baked into a lot of those securities,” latest ratings blast from Fitch. and Freddie that prices are only marginally said Mike Reynolds, Freddie Mac vice reacting to the positive action. president of Credit Risk Transfer, told IFR. VALUE IN HIGH-GRADE CRT paper is issued by Freddie and Fannie “As these deals season, they tend to Of the many types of mortgage bonds born to reduce taxpayer exposure to the bailed tighten and ratings will move with them.” out of the lnancial crisis, CRT has become out mortgage giants’ huge home loan A few years ago CRT bonds migrating to one of the sector’s most predictable. portfolios. Some investors have bet that, in investment grade from junk could spark a Issuance is regular and telegraphed to the the Wake of the lnancial crisis, rating rally of 100bp. But fewer surprises are seen market, rising from US$13.2bn to a new agency caution on the nascent asset class now that CRT has lve years under it belt and record of US$19.2bn in 2018, according to would result in upgrades as performance multiple rounds of broadly positive rating Bank of America Merrill Lynch data. played out. actions. The data also shows that each vintage sold And so when Fitch Ratings raised its It also doesn’t hurt that US home prices between 2013 and 201 has now benelted ratings on more than 50 CRT securities this have increased more than 5% for several from some upgrades. month its most sweeping ratings action in years in a row without let up. But the most valuable boost comes when the sector yet – the reaction was subdued. “We already have our forecast upgrade a bond jumps over the line to investment Bonds that were upped to Triple B minus candidate list,” said Tracy Chen, head of grade status. from Double B plus tightened 16bp on the structured credit at Brandywine, which has “If you have an upgrade from investment week of the ratings increase, according to been investing in CRT since the sector got grade to another investment grade class, Bank of America Merrill Lynch data. off the ground in 2013. those don’t matter as much,” said Harkaran

NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 25/1/2019 Issuer Amount (m) WAL Coupon (%) Bookrunner(s) Rating Asset type EART 2019-1 US$253.29 0.61 3.200 Wells Fargo/Barclays Aaa/AAA/NR ABS EART 2019-1 US$75.26 1.79 3.450 Wells Fargo/Barclays Aa1/AA/NR ABS EART 2019-1 US$81.05 2.51 3.820 Wells Fargo/Barclays Aa3/A/NR ABS EART 2019-1 US$89.45 3.45 4.130 Wells Fargo/Barclays Baa1/BBB/NR ABS EART 2019-1 US$50.95 4.12 5.200 Wells Fargo/Barclays NR/BB/NR ABS EVGRN 2019-1 US$1,000 1.96 1mUSL+48bp TD Securities/JP Morgan/Citigroup NR/AAA/AAA ABS EVGRN 2019-1 US$42.78 1.96 3.590 TD Securities/JP Morgan/Citigroup NR/A+/A ABS EVGRN 2019-1 US$26.74 1.96 3.980 TD Securities/JP Morgan/Citigroup NR/BBB/BBB ABS FREMF 2019 K-BF3 US$671.277 9.76 1mL+53bp Wells Fargo/Citigroup NR/NR/NR CMBS FREMF 2019 K-87 US$70.86 5.99 3.59 Morgan Stanley/Barclays NR/AAA/NR CMBS FREMF 2019 K-87 US$988.91 9.81 3.77 Morgan Stanley/Barclays NR/AAA/NR CMBS FREMF 2019 K-87 US$56.80 9.90 3.83 Morgan Stanley/Barclays NR/AA-/NR CMBS FREMF 2019-K87 Mortgage Trust US$51.93 9.90 4.32 Morgan Stanley/Barclays NR/A-/NR CMBS FREMF 2019-K87 Mortgage Trust US$32.46 9.90 4.32 Morgan Stanley/Barclays NR/BBB/NR CMBS GOODG 2019-1 US$207.337 5.6 3.860 Deutsche Bank/Natixis NR/AA/NR ABS MBALT 2019-A US$265 0.24 IntL-1bp SMBC/BAML/ TD Securities P-1/A-1+/NR ABS MBALT 2019-A US$479 0.85 EDSF+28bp SMBC/BAML/ TD Securities Aaa/AAA/NR A B S MBALT 2019-A US$479 1.64 EDSF+38bp SMBC/BAML/ TD Securities Aaa/AAA/NR A B S MBALT 2019-A US$94.110 2.20 IntS+55bp SMBC/BAML/ TD Securities Aaa/AAA/NR ABS STACR 2019-DNA1 US$215 3.00 1mL+90bp Barclays/Wells Fargo NR/BBB+/NR RMBS STACR 2019-DNA1 US$327 1.10 1mL+265bp Barclays/Wells Fargo NR/B+/NR RMBS STACR 2019-DNA1 US$86 0.60 1mL+465bp Barclays/Wells Fargo NR/B-/NR RMBS STACR 2019-DNA1 US$86 0.10 1mL+1,075bp Barclays/Wells Fargo NR/NR/NR RMBS TPMT 2019-1 US$921.550 3.97 3.75 BAML/JP Morgan NR/NR/AAA RMBS TPMT 2019-1 US$11.00 10.66 3.75 BAML/JP Morgan NR/NR/AA RMBS TPMT 2019-1 US$26.987 12.31 3.75 BAML/JP Morgan NR/NR/A RMBS TPMT 2019-1 US$21.467 13.79 3.75 BAML/JP Morgan NR/NR/BBB RMBS WOART 2019-A US$210 0.23 2.73 BAML/Barclays/MUS/TD Securities NR/A-1+/F1+ ABS WOART 2019-A US$348 1.10 3.02 BAML/Barclays/MUS/TD Securities NR/AAA/AAA ABS WOART 2019-A US$347 2.64 3.04 BAML/Barclays/MUS/TD Securities NR/AAA/AAA ABS WOART 2019-A US$82.95 3.92 3.22 BAML/Barclays/MUS/TD Securities NR/AAA/AAA ABS WOART 2019-A US$31.50 3.96 3.34 BAML/Barclays/MUS/TD Securities NR/AA/AA ABS

44 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

BONDS STRUCTURED FINANCE

US ASSET-BACKED SECURITIES GLOBAL STRUCTURED FINANCE IN US$ STRUCTURED FINANCE – ALL INTL ISSUERS BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE Managing No of Total Share Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues US$(m) (%) 1 TD Securities 4 1,310.27 10.8 1 JP Morgan 9 2,893.12 13.6 1 JP Morgan 8 2,611.68 24.0 2 BAML 4 1,262.27 10.4 2 BAML 7 2,880.60 13.5 2 Citigroup 6 1,032.81 9.5 3 Citigroup 5 1,140.06 9.4 3 Wells Fargo 9 2,774.80 13.0 3 BAML 3 869.49 8.0 4 RBC 3 1,107.84 9.1 4 Barclays 7 2,032.18 9.5 4 RBC 3 868.25 8.0 5 Barclays 3 937.61 7.7 5 Citigroup 8 1,666.12 7.8 5 Wells Fargo 4 723.19 6.6 6 Wells Fargo 3 931.94 7.7 6 TD Securities 4 1,310.27 6.2 6 Goldman Sachs 4 663.96 6.1 7 JP Morgan 4 879.04 7.2 7 RBC 3 1,107.84 5.2 7 Deutsche Bank 5 637.52 5.9 8 SG 3 757.36 6.2 8 Deutsche Bank 6 935.19 4.4 8 TD Securities 2 616.23 5.7 9 Sumitomo Mitsui Finl 2 698.76 5.8 9 Morgan Stanley 3 780.67 3.7 9 SG 2 459.69 4.2 10 MUFG 2 563.51 4.6 10 SG 3 757.36 3.6 10 Barclays 2 397.29 3.6 Total 16 12,148.74 Total 31 21,295.68 Total 20 10,889.34

Excludes MBS. Including securitisations (Euro, foreign, global and domestics, excluding Includes securitisations, PFI bonds, self-funded issues and credit-linked CDOs) and PFI bonds. notes. Excludes US global ABS/MBS and CDOs.

Source: Refinitiv SDC code: F14 Source: Refinitiv SDC code: B16b Source: Refinitiv SDC code: J10c

ALL INTL ISSUERS (EXCLUDING SELF-FUNDED) Talwar, a portfolio analyst at Angel Oak BOOKRUNNERS: 1/1/2019 TO DATE Capital. US ABS Managing No of Total Share “An upgrade has the biggest impact on bank or group issues US$(m) (%) spreads when a below inVestment grade EXETER GIVES SHOT OF CONFIDENCE 1 JP Morgan 7 2,255.18 24.3 bond moves to investment grade.” TO RISKIER ABS 2 BAML 3 869.49 9.4 The trickier part to nail down is the 3 Wells Fargo 4 723.19 7.8 value of a bond’s upgrade to investment EXETER FINANCIAL cut its borrowing costs 4 Citigroup 5 676.31 7.3 grade in isolation from other positive on much of its new 53m sub prime 5 Goldman Sachs 4 663.96 7.2 factors that also have occurred in the CRT auto A"3 last week giving a shot of 6 Deutsche Bank 5 637.52 6.9 market. conldence to riskier parts of the 7 SG 2 459.69 5.0 “It’s a hard one to quantify,” Reynolds securitisation market. 8 Barclays 2 397.29 4.3 said, noting that CRT delevers over time and 3ub prime auto paper has been slower to 9 Nomura 2 331.75 3.6 that spreads have dramatically rallied since recover than bonds tied to prime borrowers 10 RBC 2 318.25 3.4 the sector’s inception. after volatility in the fourth quarter sparked Total 18 9,269.83 “We know there is more money available a sell off. Includes securitisations, PFI bonds and credit-linked notes. Excludes US to invest in CRT if its rated investment Exeter reducing its costs while still global ABS/MBS, CDOs and self funded issues. grade,” he said. “That bigger pool of money attracting investors was seen as a positive Source: Refinitiv SDC code: J10d represent larger demand.” sign for the sector.

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“I think the market was still trying to do Its .1 year $ouble " class priced at “I think they have good momentum some price discovery coming into the new 260bp over interpolated swaps, or 65bp behind them,” the banker said of Exeter. year,” said a banker on the deal. “What we tighter than the Double Bs sold a week prior “They’ve certainly turned things around in saw on %Xeter was some prooF oF a boUnce by CONSUMER PORTFOLIO SERVICES. the past two to three years and separated back.” During the depths of the December turmoil, themselves from the pack.” Its . year 4riple ! class held steady at electric carmaker TESLA saw its Double B class Its owners last summer explored a sale of %$3& plUs bp, versUs gUidance oF bp price at a whopping 515bp over interpolated the company, according to a Reuters report. 50bp range. swaps for a prime lease securitisation. But as of mid January there were new plans The tightening occurred in its four for a US$100m IPO. subordinate classes, which narrowed by IPO PLANS “I think they are exploring all options,” 5bp 5bp and saw order books subscribed at Exeter was founded in 2006 and originates said an investor who closely tracked the new least three times, the banker said. mostly used car loans with 20 plus rates of ABS sale. Blackstone declined to comment “There delnitely was a lot of interest in interest to borrowers with poor lnances, a on the bond sale and the IPO. Blackstone this deal,” he said. segment dubbed “deep” sub prime. owns Relnitiv, the parent company of IFR. 'eneric three year Triple " sub prime auto Blackstone put its weight behind the sector Still, a successful Exeter IPO would be a paper has rallied recently by about 13bp to in 2011 after several of its funds acquired an milestone in a sector that some have called around 1bp from its 5 week high in early indirect majority stake in Exeter. the “next big short.” January, according to Wells Fargo data. The lender operated at a loss in 2014 and Only two sub prime auto ABS bonds have Exeter often prices wider than 2015, but has been proltable each year ever defaulted. Although sub prime auto benchmark names in the sector, but its since 2016, according to S&P, which tied the ABS issuance hit a record US$32.3bn last Junk rated bonds now will be the ones to gains to improving yields and stabilised year, only Honor Finance currently has rated match or beat. credit performance. bonds in danger of default.

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 25/1/2019 Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%) SSAR US DOLLARS Jan 22 2019 NRW US$1.5bn Jan 29 2021 3mL+5 100 3mL+5 - Jan 23 2019 ADB US$3.5bn Jan 30 2024 2.625 99.498 MS+7 / T+14.9 2.733

Jan 23 2019 FMS WM US$2bn Jan 30 2024 2.75 99.963 MS+9 / T+16.9 2.758

Jan 24 2019 OKB US$1.5bn Jan 31 2022 2.625 99.771 MS+5 / T+16.65 2.705

EUROS Jan 21 2019 EIB ECOOP €250m incr Sep 15 2036 1.125 98.265 MS-4 / B+74.5 1.235 (€2.3bn) Jan 22 2019 Saxony Anhalt €1bn Jan 29 2029 0.75 99.799 MS-2 / B+52.9 0.771

Jan 22 2019 Spain €10bn Apr 30 2029 1.45 99.889 MS+65 / B+122.2 1.462

Jan 23 2019 Bremen €800m Jan 30 2034 1.2 99.422 MS+10 / B+76.7 1.241 Jan 23 2019 CEDB €1bn Jan 30 2029 0.625 98.981 MS-5 / B+48.6 0.731

Jan 23 2019 Rentenbank €400m incr Mar 16 2026 0.375 100.119 MS-10 0.358 (€2.15bn) Jan 24 2019 NRW €800m incr Jun 16 2048 1.55 99.927 MS+22 / B+74.3 1.553 (€2.8bn)

Jan 25 2019 Cades €2.5bn incr Oct 25 2023 0.125 100.269 OATs+19 0.068 (€3.75bn) STERLING Jan 22 2019 Alberta £250m Dec 15 2022 1.5 99.924 G+65 1.515 Jan 22 2019 EDC £700m Jan 31 2022 Sonia+29 100 Sonia+29 - Jan 22 2019 KfW £1bn Dec 9 2024 1.375 99.71 G+43 1.422

Jan 23 2019 ADB £500m Feb 1 2022 Sonia+26 100 Sonia+26 - Jan 24 2019 World Bank £1bn Sep 7 2023 1.25 99.757 G+40 1.301

Jan 25 2019 Rentenbank £250m Dec 16 2024 1.375 99.8 G+43 1.406

46 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

BONDS SUMMARY DETAILS

ALL INTL AUSTRALIAN DOLLAR BONDS AUSTRALIAN DOMESTIC BONDS BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE ASIA-PACIFIC MBS Managing No of Total Share Managing No of Total Share bank or group issues A$(m) (%) bank or group issues A$(m) (%) PEPPER MARKETS MULTI-CURRENCY 1 TD Securities 6 947.24 27.7 1 CBA 1 2,497.45 41.8 RMBS 2 Deutsche Bank 4 789.09 23.1 2 Westpac 1 2,249.16 37.6 3 Nomura 5 672.29 19.7 3 National Australia Bank 2 596.01 10.0 Non bank lender PEPPER GROUP has mandated 4 RBC 4 582.96 17.0 4 Macquarie Group 1 244.00 4.1 Citigroup, CBA, NAB, Societe Generale CIB, Standard 5 JP Morgan 2 160.78 4.7 5 ANZ 1 196.81 3.3 Chartered and Westpac to arrange RMBS investor 6 CBA 1 135.02 3.9 =5 UBS 1 196.81 3.3 meetings in Australia and Europe in the week 7 ANZ 1 52.40 1.5 Total 5 5,980.23 commencing February 4. 8 Daiwa Securities 1 28.40 0.8 Source: Refinitiv SDC code: AJ02 The banks will market a potential non 9 MUFG 1 26.50 0.8 conforming RMBS, including Australian 10 Mizuho 1 25.80 0.8 ,osses on 30s sUB prime index cLimBed dollar, euro and US dollar notes in both Total 14 3,420.47 to a  month high of . in .oVemBer, 144A and Reg S formats. Including preferreds. Excluding equity-related debt. thanks to the outsized presence of these The euro tranche will also be in Green Source: Refinitiv SDC code: K1 high Loss issuers, 30 said. format. But that loss rate plunged to 7.08% for Pepper Group issued an upsized A$1.25bn 4OûBEûSURE ûDEEPûSUB PRIMEûISSUERSû û November when ACA, Exeter and SDART US$895m eQuivalent triple currency American Credit Acceptance, Exeter and bonds are stripped out. And by either Pepper PRS 22 RMBS issue last November 3antanderS 3$A24 prOGramme HaVe Been metric, losses are still far below the 13.63% that included a US$370m standard tranche a major drag on performance in the sector. peak for the index in January 2009. and €110m Green tranche.

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

3mL+5 area (I/G) - - Aa1/AA-/AAA BAML/Barc/CA-CIB/DB - MS+10 area, -1.5 >US$5.7bn Aaa/AAA/AAA GS/JPM/Miz/RBC Asia 44%, EMEA 41%, Amers 15%. Bks MS+9 area 36%, CB/OI 54%, FM 9%, Ins 1%. MS+11 area, 0 >US$3.4bn Aaa/AAA BAML/Citi/CMZ/CA-CIB/TD Asia 46%, N.Amer 27%, EMEA 27%. MS+10 area CB/OI 60.3%, Bks 32.3%, FM/Ins 4.2%, Other 3.2%. MS+7 area, 1 >US$2.2bn, >60acs Aaa1/AA+ Barc/DB/JPM/RBC Amers 43%, Eur 30%, Asia 27%. CB/OI MS+6 area 74%, Bks 18%, AM 6%, Ins/PF 2%.

MS-4 area - - Aaa/AAA/AAA JPM/MS/SG -

MS flat area, 2.5 >€2.25bn Aa1/AA+/AAA CMZ/Deka/DB/LBBW/NordLB Ger 44%, CEE 10%, Fr/It 10%, Aus/Switz MS-1 area 9%, Benelux 7%, Asia 6%, UK 6%, RoEur 8%. Bks 31%, CB/OI 24%, FM 21%, Ins 12%, SavingsBks 12%. MS+70 area, 1.5-3 >€46.5bn Baa1/A-/A-/A BBVA/Citi/CA-CIB/HSBC/JPM/SG Fr/It 18.8%, Sp 18.4%, UK/Ire 15.9%, MS+67 (+/-2) Ger/Aus/Switz 10.5%, Asia 11.8%, Nordics 9.1%, US/Can 6.5%, Other 9%. Ins/PF 24.6%, Tsy 23%, FM 22.4%, CB/ OI 14.4%, Bks 8.7%, HF 5%, Other 1.9%. MS+10 area - >€1.1bn -/-/AAA BLB/Deka/DZ/HSBC/TD - MS-3 area, 1 >€1.8bn, 71acs Aa1/AA+/AA+ BAML/CA-CIB/HSBC/TD Fr 43%, UK 20%, Ger/Aus/Switz 15%, MS-4 area Benelux 15%, It/Sp 4%, Asia 3%. Bks 62%, FM 23%, CB/OI 8%, Ins/PF 6%, Other 1%. MS-10 1.5 - Aaa/AAA/AAA BAML/Deka/Uni -

MS+24 area, - >€1.2bn Aa1/AA-/AAA DZ/JPM/LBBW Ger/Aus 39.4%, UK 16.9%, It 14.5%, MS+23 (+/-1) Switz 8.6%, Fr 6.5%, Benelux 3.7%, Sp 3.6%, Ire 3.4%, Nordics 1.3%, Asia 0.8%, Other 1.3%. FM 47.1%, Bks 31.4%, Ins/PF 10.8%, Broker 12%, CB/OI 9.5%. OATs+20 area 2 >€3.7bn Aa2/-/AA CA-CIB/NatWest -

G+65 area (I/G) - - Aa1/A+/AA BAML/RBC - Sonia+30 area (I/G) - >£700m Aaa/AAA Barc/HSBC/RBC - G+45 area, 0-1bp >£1.5bn, 59acs Aaa/AAA/Scope Citi/DB/NatWest UK 70%, Eur 22%, Asia 8%. Bks 66%, G+44 area AAA CB/OI 13%, AM 11%, Ins/PF 9%, Other 1%. Sonia+26 area - >£500m Aaa/AAA/AAA HSBC/RBC/TD - G+40 area (I/G) - >£1.2bn, 45acs Aaa/AAA Barc/Citi/NatWest UK 78%, EMEA 20%, Asia 2%. Bks/Tsy/ Corp 74%, AM/Ins/PF 19%, CB/OI 7%. G+43 area - - Aaa/AAA/AAA HSBC/NatWest/RBC -

International Financing Review January 26 2019 47 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 25/1/2019 (CONTINUED) Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Jan 25 2019 NRW £450m incr Oct 29 2021 3mL+6 99.869 3mL+11 - (£750m) SWISS FRANCS Jan 23 2019 KB Luzern SFr110m incr Oct 4 2041 2.125 124.89 MS+9 / Eidg+60 0.906 (SFr272m) Jan 24 2019 Kanton Basel-Stadt (Green) SFr100.38m Feb 22 2023 0 101.902 MS-9 / Eidg+22.7 -0.47 Jan 24 2019 Kanton Basel-Stadt (Green) SFr100m Feb 22 2034 0.5 100.549 MS-14.3 / 0.562 Eidg+37.6 NON CORE Jan 21 2019 Muni Fin SKr300m incr Oct 4 2022 3mS+150 - - - (SKr800m) Jan 22 2019 Manitoba A$30m incr Aug 22 2028 3.5 104.065 ASW+61 / ACGB+71 3.008 (A$225m) Jan 23 2019 Muni Fin SKr300m incr Oct 4 2022 3mS+150 - - - (SKr1.1bn) Jan 24 2019 NIB Blue Bond SKr2bn Feb 1 2024 0.375 99.664 MS-2 0.443 CORPORATES US DOLLARS Jan 22 2019 Penske Truck Leasing US$500m Jul 29 2021 3.65 99.93 T+110 3.679

Jan 22 2019 Penske Truck Leasing US$400m Jan 29 2026 4.45 99.73 T+185 4.495

Jan 24 2019 Experian Finance US$500m Feb 1 2029 4.25 99.92 T+155 4.26 Jan 24 2019 CubeSmart US$350m Feb 15 2029 4.375 99.36 T+175 4.455 EUROS Jan 21 2019 Immofinanz €500m Jan 27 2023 2.625 99.161 MS+277.1 / 2.85 B+330.8

Jan 22 2019 Auchan €500m Jan 30 2024 2.625 99.686 MS+250 / B+304.2 2.693

Jan 22 2019 Vonovia €500m Jun 29 2025 1.8 99.836 MS+145 / B+203.4 1.828

Jan 22 2019 EDP Green €1bn Apr 30 2079 (Apr 2024) 4.496 100 MS+428.7 / 4.5 B+478.8

Jan 23 2019 Scania €100m incr Mar 17 2021 3mE+45 - - - (€500m) Jan 24 2019 ACCOR €600m Feb 4 2026 1.75 99.661 MS+140 / B+194.7 1.802

Jan 24 2019 ACCOR €500m Perpetual (Apr 2024) 4.375 99.445 MS+431.1 / B+481.5 4.5

Jan 24 2019 IBM €1.75bn Jan 31 2023 0.375 99.55 MS+45 / B+97.4 0.489

Jan 24 2019 IBM €1bn Jan 31 2025 0.875 99.397 MS+70 / B+127.7 0.979

Jan 24 2019 IBM €1bn Jan 29 2027 1.25 99.495 MS+80 / B+141.2 1.317

Jan 24 2019 IBM €1.25bn Jan 31 2031 1.75 98.954 MS+95 / B+166.7 1.848

Jan 24 2019 VW Bank €500m Aug 1 2022 3mE+147 100 3mE+147 -

Jan 24 2019 VW Bank €500m Aug 1 2022 1.25 99.646 MS+137 / B+188.6 1.355

Jan 24 2019 VW Bank €850m Jan 31 2024 1.875 99.981 MS+172 / B+226.1 1.879

Jan 24 2019 VW Bank €850m Jul 31 2026 2.5 99.819 MS+207 / B+262.2 2.528

STERLING Jan 21 2019 United Utilities Water £100m incr Feb 14 2025 2 98.346 G+127 2.296 Finance (£450m) Jan 24 2019 Notting Hill Genesis £250m Jan 31 2029 2.875 99.183 G+173 2.97

NON CORE Jan 23 2019 Klovern Green SKr1bn incr Apr 4 2022 3mS+400 - - - (SKr1.9bn)

48 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

3mL+11 area - - Aa1/AA-/AAA Barc/HSBC/Nomura -

- - - -/AA KBLuz -

MS-9 - - AAA/ZKB AAA BCG/KBBL/KBBS/Raiff/ZKB - MS-14.3 - - AAA/ZKB AAA BCG/KBBL/KBBS/Raiff/ZKB -

- - - Aa1/AA+ Danske -

ASW+61 - - Aa2/A+ TD -

- - - Aa1/AA+ Nordea -

- - - Aaa/AAA SEB -

T+140 area, - US$2.2bn Baa2/BBB/BBB+ BAML/JPM/MUFG/USB/WFS - T+110 (the #) T+200 area, 5 US$900m Baa2/BBB/BBB+ BAML/JPM/MUFG/USB/WFS - T+185 (the #) T+180 area - US$2.35bn Baa1/A- BAML/BNP/Miz/SG - T+200 area -2 US$1.85bn Baa2/BBB Barc/JEFF/WFS -

2.875%/3%, - ~€750m -/BBB- DB/JPM/SG/Uni UK/Ire 36%, Ger 26%, Aus 20%, Nordics 2.85% 7%, Fr 6%, S.Eur 1%, Benelux 1%, Other 3%. AM 72%, Bks/PB 16%, Ins/PF 10%, CB/Agcy 2%. MS+280 area, 17 >€2.9bn -/BBB DB/HSBC/Natx/Santan/SG/ Fr 54%, Ger/Aus 16%, S.Eur 12%, Switz MS+255 (+/-5) SMBCNikko 7%, UK/Ire 5%, Benelux 3%, Other 3%. AM 68%, Ins/PF 21%, Bks/PB/CB 10%, Other 1%. MS+175 area, 5 ~€4.3bn -/BBB+ CMZ/CS/JPM/MS Ger/Aus 30%, UK/Ire 26%, Fr 17%, MS+150/155 Benelux 10%, S.Eur 6%, Switz 6%, Nordics 4%, Other 1%. FM 76%, Ins/PF 10%, Bks/PB 10%, Sov 3%, Other 1%. 4.875% area, 37.5 >€2.9bn Ba2/BB/BB Barc/CA-CIB/DB/HSBC/MUFG/ UK/Ire 33%, Fr 23%, Ger 13%, It 9%, 4.5%/4.625%, NatWest/Santan/Uni Benelux 8%, Switz 6%, Iberia 4%, Other 4.5% 4%. AM 81%, Bks 10%, Ins 7%, Other 2%. - - - -/BBB+ DB -

MS+165 area, 25 ~€2.9bn -/BBB-/BBB- GCs BNPP/CA-CIB, JBs BAML/Natx/ - MS+145/150 Uni 4.75%/4.875%, - >€2.25bn -/BB/BB GCs BNPP/Citi, JBs BAML/MUFG/ - 4.5%/4.625%, NatWest/Santan 4.5% MS+70 area, - - A1/A/A Barc/BNPP/Citi/DB/JPM/Uni - MS+50/55 MS+90/95, - - A1/A/A Barc/BNPP/Citi/DB/JPM/Uni - MS+75/80 MS+105/110, - - A1/A/A Barc/BNPP/Citi/DB/JPM/Uni - MS+85/90 MS+125 area, - - A1/A/A Barc/BNPP/Citi/DB/JPM/Uni - MS+105/110 3mE+165 area, - >€1.1bn A3/BBB+ BLB/CA-CIB/DB/Santan/SMBCNikko - 3mE+150 (+/-3) MS+155 area, - >€1.9bn A3/BBB+ BLB/CA-CIB/DB/Santan/SMBCNikko - MS+140 (+/-3) MS+190 area, - >€2.7bn A3/BBB+ BLB/CA-CIB/DB/Santan/SMBCNikko - MS+175 (+/-3) MS+225 area, - >€3bn A3/BBB+ BLB/CA-CIB/DB/Santan/SMBCNikko - MS+210 (+/-3)

G+130 area - >£135m A3/A-/A- RBC -

G+185/190, 8 - -/A-/A Barc/HSBC/Santan - G+175 (+/-2)

- - - - Danske/Nordea/Swed -

International Financing Review January 26 2019 49 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 25/1/2019 (CONTINUED) Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Jan 23 2019 Vasakronan SKr500m Aug 1 2022 0.93 - - - Jan 24 2019 SFF SKr200m Feb 5 2021 3mS+100 100 3mS+100 - FINANCIALS US DOLLARS Jan 22 2019 Bank Of America Corp US$500m Jan 25 2023 3.335 100 T+78 3.335 Jan 22 2019 JPMorgan Chase US$2bn Jan 29 2027 3.96 100 T+132 3.96

Jan 22 2019 Liberty Property US$350m Feb 1 2029 4.375 99.74 T+168 4.407

Jan 23 2019 Fifth Third Bancorp US$1.5bn Jan 25 2024 3.65 99.81 T+110 3.691

Jan 23 2019 Regions Financial Corp US$500m Aug 14 2023 3.8 99.95 T+123 3.811

Jan 24 2019 Brookfield Finance US$1bn Mar 29 2029 4.85 99.82 T+215 4.871

Jan 24 2019 Capital One Financial US$1.25bn Jan 29 2024 3.9 99.78 T+140 3.948

Jan 24 2019 KeyBank National US$600m Feb 1 2022 3.3 99.56 T+78 3.316 Association Jan 24 2019 KeyBank National US$400m Feb 1 2022 3mL+66 100 3mL+66 3mL+66 Association EUROS Jan 21 2019 Generali T2 €500m Jan 29 2029 3.875 100 MS+307.1 / 3.875 B+361.8

Jan 21 2019 KBC €750m Jan 25 2024 1.125 99.85 MS+95 / B+149.6 1.156

Jan 22 2019 Citigroup (Green) €1bn Jan 29 2022 0.5 99.911 MS+58 / B+106.8 0.53

Jan 24 2019 BCP €400m Perpetual (Jan 2024) 9.25 100 MS+941.4 9.25

Jan 25 2019 CNP Assurances T2 €500m Feb 5 2029 2.75 98.842 MS+215 / B+268.9 2.885

SWISS FRANCS Jan 23 2019 UBS Group holdco snr SFr400m Jan 30 2025 (Jan 2024) 0.875 100.391 MS+105 / Eidg+130 0.795

YEN Jan 25 2019 Rabobank (SNP) ¥63.5bn Jan 31 2024 0.6 100 OS+55 0.6

Jan 25 2019 Rabobank (SNP) ¥8.5bn Jan 31 2029 0.858 100 OS+65 0.858

NON CORE Jan 21 2019 Sparebanken Sjuhard SKr300m Jul 22 2021 0.714 100 MS+60 0.714 Jan 25 2019 Islandsbanki NKr250m incr Jan 25 2022 3mN+128 - - - (NKr1bn) COVERED BONDS EUROS Jan 21 2019 pbb €500m Jan 29 2024 0.25 99.812 MS+8 / B+63.2 0.288 Jan 21 2019 SG SFH $1bn Jan 29 2027 0.75 99.815 MS+19 / B+80.8 0.774

Jan 22 2019 CM-CIC €1bn Apr 30 2024 0.25 99.447 MS+13 / B+67.8 0.357

Jan 22 2019 CM-CIC €1bn Jan 30 2029 1 99.82 MS+23 / B+83.2 1.019

Jan 22 2019 RLB Noe-Wien €500m Jan 30 2029 0.875 99.08 MS+18 / B+72.8 0.972

50 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

- - - A3 Danske - - - - - Nordea/Swed -

T+95/100 6 - Aa3/A+/AA- BAML - T+150 area, 4 - A2/A-/AA- JPM - T+135 (+/-3) T+190 area, 2 US$1.8bn Baa2/BBB/BBB Citi/GS/WFS - T+170 (+/-2) T+low 130s, 5 US$4.2bn Baa1/BBB+/A- FITB/GS/MS/RBC - T+112.5 (+/-2.5) T+low 140s, 5 US$1.6bn Baa2/BBB+/BBB+ Barc/CS/GS/Regions/UBS - T+125 (+/-2) T+235 area, 4 US$1.9bn Baa2/A-/A Citi/HSBC/SMBC - T+215 (the #) T+160 area, 6 US$3.9bn Baa1/BBB/A- COSC/Citi/CS/MS/WFS - T+140 (the #) T+95 area, 5 US$2.7bn A3/A-/A- GS/JPM/Key/MS - T+80 (+/-2) 3mL equiv, - US$800m A3/A-/A- GS/JPM/Key/MS - 3mL equiv

4.625% area, 0 >€4.25bn, >450acs Baa3/-/BBB/AM GCs GS/HSBC, JBs BNPP/Medio/ Fr 29%, Nordics 19%, Ger/Aus 15%, UK/ 4.125% (+/-0.125%), Best A- Santan/Uni Ire 10%, Switz 8%, It 8%, Benelux 5%, 3.875% RoEur 3%, Other 3%. FM 62%, CB/OI 14%, Ins/PF 14%, Bks/PB 8%, Other 2%. MS+115 area 5 >€2.8bn Baa1/A-/A BNPP/GS/ING/KBC/UBS Fr 31%, UK/Ire 21%, Ger/Aus/Switz 18%, Nordics 10%, Benelux 9%, S.Eur 6%, Asia 3%, Other 2%. FM 57%, CB 18%, Ins/PF 9%, Bks/PB 8%, Other 8%. MS+75 area, 5 >€3.25bn Baa1/BBB+/A Citi UK 32.4%, Fr 23%, Ger/Aus/Switz MS+60/65 20.4%, Sp 6.8%, RoEMEA 6.2%, Benelux 4.2%, Finl 3.0%, Can 2.5%, Asia 1.5%. AM 70.2%, Bks 14.8%, Ins/PF 10.6%, CB/OI 3.2%, Other 1.2%. 9.5% area, - >€750m Caa1/CCC+/B-/BL CS/JPM/BCP/UBS UK/Ire 50.7%, Port 16%, Ger/Aus/Switz 9.25% 11.7%, RoS.Eur 7.7%, Fr/Benelux 6.8%, Other 7.1%. AM 53.2%, HF 27.1%, Bks/PB 11%, Ins/PF 8.7%. MS+250 area, - >€3.3bn A3/BBB+ Natx(GC)/BNPP/Citi/MS/Nomura/ - MS+225 area UBS

MS+105/110(I/G) Inside $/€ SFr400m, >50acs -/A-/A+ UBS Switz 100%. AM 43.4%, PB 18.5%, Ins 17.7%, PF 16.9%, Tsy 3.6%.

OS+50/55, - - -/A-/AA- Daiwa/Miz/MUFG/Nomura/SMBC - OS+53/55 Nikko OS+65 - - -/A-/AA- Daiwa/Miz/MUFG/Nomura/SMBC - Nikko

- - - -/A- SEB - - - - -/BBB+ Danske -

MS+9 area 4 >€1.6bn Aa1 CA-CIB/DB/Erste/NordLB/Uni - MS+23 area 2-Mar >€3bn Aaa/-/AAA BcaIMI/LBBW/Nordea/NatWest/ Ger/Aus/Switz 39%, Benelux 15%, Fr Rabo/SG 13%, UK/Ire 13%, Nordics 12%, Asia 6%, S.Eur 2%. Bks 45%, FM 29%, CB/OI 17%, Ins/PF 9%. MS+17 area, 3 >€2.8bn, 110acs Aaa/AAA/AAA Barc/Citi/HSBC/Natx Ger/Aus 42%, UK/Ire 17%, Benelux 16%, MS+14 (+/-1) Fr 11%, Nordics 11%, Other 3%. Bks/PB 52%, CB/OI 26%, AM 21%, Ins 1%. MS+27 area, 3 >€1.9bn, 80acs Aaa/AAA/AAA Barc/Citi/HSBC/Natx Ger/Aus 61%, Fr 14%, Benelux 8%, S.Eur MS+24 (+/-1) 6%, Nordics 4%, UK/Ire 3%, Asia 2%, Switz 2%. Bks/PB 40%, CB/OI 30%, AM 19%, Ins 11%. MS+21 area, 5 >€1.6bn, 101acs Aaa BNPP/Erste/LBBW/HSBC/RBI Ger 59%, Aus 2%, It 6%, Nordics 5%, MS+19 (+/-1) RoEur 9%, Other 1%. Bks 59%, AM 25%, Ins/PF 9%, CB/OI 4%, Others 3%.

International Financing Review January 26 2019 51 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 25/1/2019 (CONTINUED) Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Jan 22 2019 NAB €1.25bn Jan 30 2026 0.75 99.783 MS+33 / B+93.9 0.782

Jan 22 2019 LF Hypotek €500m Jan 29 2026 0.625 99.707 MS+22 / B+77.2 0.668

Jan 22 2019 RBC €1.75bn Jan 29 2024 0.25 99.485 MS+16 / B+71.1 0.354

Jan 23 2019 Banca Monte Dei Paschi di €1bn Jan 29 2024 2 99.61 MS+190 / B+242.9 2.083 Siena

Jan 23 2019 De Volksbank €500m Jan 30 2026 0.5 99.398 MS+14 / B+74.1 0.588

Jan 23 2019 DZ HYP €750m Jan 30 2029 0.875 99.943 MS+10 / B+63.8 0.881

Jan 23 2019 FCDQ (CCDJ) €750m Jan 30 2024 0.35 99.886 MS+18 / B+71.9 0.373

Jan 23 2019 La Banque Postale €750m Jan 30 2026 0.5 99.357 MS+15 / B+74.7 0.594

Jan 23 2019 SpareBank 1 Boligkreditt €1.25bn Jan 30 2029 1 99.943 MS+23 / B+76.8 1.006

Jan 24 2019 Rabobank €2bn Feb 1 2029 0.875 99.829 MS+15 / B+69.4 0.893

Jan 25 2019 Eika Boligkreditt €500m Feb 1 2029 0.875 99.363 MS+22 / B+76 0.942

Jan 25 2019 Helaba €500m incr Mar 20 2028 0.875 101.418 MS+8 / B+65.2 0.714 (€1bn) SWISS FRANCS Jan 22 2019 PfZ SFr210m incr Jan 27 2027 0 98.722 MS+6 / Eidg+51.7 0.162 (SFr480m) Jan 22 2019 PfZ SFr100m Jan 29 2031 0.55 100.341 MS+5 / Eidg+56.6 0.521 Jan 22 2019 PfZ SFr120m incr Dec 11 2035 0.6 97.486 MS+5 / Eidg+54.5 0.76 (SFr513m) Jan 23 2019 Mun Hyp SFr125m Feb 19 2024 0.001 101.062 MS+5 / Eidg+39.7 -0.21

NON CORE Jan 23 2019 SCBC SKr6bn Mar 28 2024 0.75 99.712 MS+29 0.807

HIGH YIELD US DOLLARS Jan 18 2019 Acrisure US$750m Feb 1 2024 8.125 100 - 8.125 Jan 22 2019 MGM Growth Properties US$750m Feb 1 2027 5.75 100 T+305 5.75 Operating Jan 22 2019 Vistra Operations Company US$1.3bn Feb 15 2027 (Feb 2022) 5.625 100 T+294 5.625

Jan 22 2019 Albertsons Companies US$600m Mar 15 2026 (Mar 2022) 7.5 100 T+484.4 7.5

Jan 22 2019 Tenet Healthcare Corp US$1.5bn - 6.25 100 - 6.25 Jan 23 2019 Lamar Media Corp US$250m Feb 01 2026 5.75 102 T+261 5.289 Jan 23 2019 Transocean Poseidon US$550m Feb 1 2027 (Feb 2022) 6.875 99.25 T+438 7.026

Jan 24 2019 Lions Gate Capital Holdings US$550m Feb 1 2024 (Feb 2020) 6.375 100 - 6.375 Jan 24 2019 CSC Holdings US$1.5bn Feb 1 2029 (Feb 2024) 6.5 100 T+377 6.5

52 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

MS+37 area, 5 >€2.25bn, 78acs Aaa/-/AAA CS/DB/JPM/NAB Ger/Aus 59%, Benelux 18%, RoEur 15%, MS+34 (+/-1) UK/Ire 6%, Asia 2%. Bks 50%, AM 30%, CB/OI 11%, Ins/PF 8%, Brokers 1%. MS+25 area 2 >€1.5bn, 70acs Aaa/AAA CA-CIB/LBBW/Swed/UBS Ger/Aus 63%, Nordics 21%, Fr 4%, UK/ Ire 4%, Benelux 3%, S.Eur 2%, Switz 2%, Other 1%. Bks 64%, FM 21%, Ins/PF 8%, CB/OI 7%. MS+20 area, 1 >€2.75bn Aaa/-/AAA/AAA CA-CIB/DB/ING/Lloyds/RBC/Scotia - MS+17 (+/-1) MS+low 200s, 25 >€2.25bn, 134acs A1/-/A+/AAL Barc/BNPP/CS/MPS/NatWest/Uni UK/Ire 10.5%, It 31.6%, Ger/Aus 22.2%, MS+200 area Switz 3.0%, Nordics 23.6%, Benelux 2.7%, Iberia 3.2%, Other 3.2%. AM 35.7%, OI 10.9%, Bks/PB 38.5%, Ins 12.1%, Other 2.8%. MS+18 area 3 €1.5bn, ~65acs Aaa/-/AAA CS/Rabo/SG/Uni Ger/Aus 48%, Benelux 31%, Nordics 7%, Switz 4%, UK/Ire 4%, Asia 2%, Fr 2%, Other 2%. AM 36%, Bks 29%, CB/OI 29%, Ins/PF 6%. MS+13 area, 2 >€2bn, 87acs -/AAA ABN/DZ/LBBW/NordLB/SG Ger 70.3%, Nordics 12.5%, Benelux 7.0%, MS+11 (+/-1) Aus/Switz 3.7%, UK 3.7%, Asia 1.6%, Fr 1.1%, Other 0.1%. Bks 52.2%, AM/FM/PF 36.9%, CB 5.7%, Agcy 4.9%, Other 0.3%. MS+20 area 2 >€1bn Aaa/-/AAA BNPP/Barc/CMZ/Natx Ger/Aus 36%, Benelux 24%, Fr 12%, Nordic 9%, Switz 6%, CEE 6%, UK/Ire 5%, S.Eur 2%. Bks 72%, CB/OI 15%, FM 9%, Ins 4%. MS+17 area 1 >€1.7bn, >70acs -/AAA Barc/BNPP/CMZ/JPM/UBS/Uni Ger/Aus 41%, Fr 28%, Nordics 11%, Benelux 9%, UK/Ire 4%, S.Eur 4%, Switz 2%, Asia 1%. Bks/PB 52%, AM 30%, CB/ OI 9%, Ins 7%, Other 2%. MS+27 area, 0 >€2.5bn, 90acs Aaa Citi/CA-CIB/LBBW/Nordea Ger/Aus 69%, Benelux 15%, Nordics 6%, MS+24 (+/-1) Fr 5%, Switz 2%, UK 2%, Other 1%. Bks 43%, FM 35%, CB/OI 13%, Ins/PF 9%. MS+20 area, 1 >€5.7bn, ~220acs Aaa BNPP/DB/HSBC/NatWest/Rabo Ger/Aus 55%, Neth 8%, Nordics 8%, MS+16 (+/-1) Belg/Lux 8%, UK/Ire 5%, Fr 5%, S.Eur 4%, Switz 3%, Asia 2%, Other 2%. Bks 46%, AM 32%, CB/OI 18%, Ins/PF 1%, Other 3%. MS+25 area, 0.5 €900m Aaa CA-CIB/LBBW/Natx/Nordea/Uni - MS+23 (+/-1) MS+10 area - €900m Aaa/-/AAA CMZ/CA-CIB/DB/DZ/Hel/NordLB/ - Uni

MS+6 area - - Aaa SKB -

MS+5 area - - Aaa SKB - MS+5 area - - Aaa SKB -

MS+5 area - SFr125m Aaa CS Switz 100%. Bks 81.20%, AM 17.20%, Ins 0.80%, PF 0.80%.

MS+31 area, -3.5 >SKr14bn Aaa Danske/SEB/Swed Swe 90%, Nor 6%, Den 3%, Other 1%. MS+29 (+/-1) FM 41%, Bks 24%, Ins/PF 31%, Other 4%.

8.25% area - - B2/B JPM/MS/RBC/STRH - - - - B1/BB- JPM/Barc/BAML/BNP/Citi/Citizens/ - CA-CIB/FITB/Scotia/SMBC - - - Ba3/BB/BB JPM/Citi/Barc/BNP/CA-CIB/CS/DB/ - GS/Miz/MS/MUFG/Natx/RBC 6.375% area - - B3/B+ BAML/CS/GS/Citi/MS/Barc/DB/ - RBC/WFS/MUFG 6.375% area - - B2/B Barc - - - - Ba2/BB JPM - 7% area (coupon) @ - - B1/B+ MS/WFS/Citi/GS/DNB/CA-CIB - 99.00 6.5% area - - B2/B- JPM - 6.5%/6.75%, - - Ba2/BB- CS/JPM/Barc/BNPP/Citi/CA-CIB/ - 6.5% DB/GS/MS/RBC/Scotia/TD

International Financing Review January 26 2019 53 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

GLOBAL DEBT: SOVEREIGN FOREIGN CURRENCY LONG-TERM RATINGS (25/1/2019)

Moody’s S&P Fitch Moody’s S&P Fitch Sovereign 1 2 3 4 5 6 Sovereign 1 2 3 4 5 6

Abu Dhabi Aa2 AA AA+ AA AA+ Kyrgyzstan B2 Ba3 Albania B1 Ba2 B+ BB Latvia A3 Aaa A AAA A– AAA Andorra W BBB AAA BBB p A– Lebanon Caa1 d B2 d B– B+ B– B– Angola B3 B1 B– B– B B Lesotho B+ BB+ Argentina B2 B1 B B+ B nB Liechtenstein Aaa AAA AAA Armenia B1 p Ba2 B+ p BB– Lithuania A3 Aaa A AAA A– p AAA Aruba BBB+ BBB+ BBB– nBBB Luxembourg Aaa Aaa AAA AAA AAA AAA Australia Aaa Aaa AAA AAA AAA Macau Aa3 Aa2 AA AAA Austria Aa1 Aaa AA+ AAA AA+ pAAA Macedonia (FYR) BB– BB BB p BB+ Azerbaijan Ba2 Ba2 BB+ BB+ BB+ BB+ Malaysia A3 A1 A– A+ A– A Bahamas Baa3 n Baa1 BB+ BBB– Maldives B2 Ba3 B+ BB– Bahrain B2 Ba3 B+ BB– BB– BBB– Malta A3 p Aaa A– p AAA A+ AAA Bangladesh Ba3 Ba2 BB– BB– BB– BB Mauritius Baa1 A2 Barbados Caa3 Caa2 B- B- Mexico A3 A1 BBB+ A+ BBB+ nA Belarus B3 B3 B B B B Moldova B3 B2 Belgium Aa3 Aaa AA AAA AA– AAA Mongolia B3 B1 B B+ B B+ Belize B3 B1 B– B– Montenegro B1 Ba1 B+ AAA Bermuda A2 Aa3 A+ pAA+ Montserrat BBB– BBB– Bolivia Ba3 Ba2 BB– BB– BB– BB– Morocco Ba1 Baa2 BBB– n BBB+BBB– BBB Bosnia Herzegovina B3 B3 B BB– Mozambique Caa3 n Caa2 SD CCC RD B– Botswana A2 Aa3 A– A+ Namibia Ba1 n Baa2 BB+ BBB– Brazil Ba2 Ba1 BB– BB+ BB – BB Netherlands Aaa Aaa AAA AAA AAA AAA Bulgaria Baa2 A3 BBB– A– BBB A– New Zealand Aaa Aaa AA AAA AA AAA Cambodia B2 B1 Nicaragua B2 p B1 B- n B- B- n B- Cameroon B2 Ba2 B BBB– B BB+ Nigeria B2 B1 B B B+ B+ Canada Aaa Aaa AAA AAA AAA AAA Norway Aaa Aaa AAA AAA AAA AAA Cape Verde B BB– B B+ Oman Baa3 n Baa2 BB BB+ BB+ BBB- Cayman Islands Aa3 Aa2 Pakistan B3 n B2 B B B- B- Chile A1 Aa1 A+ AA A AA Panama Baa2 p A3 BBB p AAA BBB A China A1 Aa3 A+ A+ A+ A+ Papua New Guinea B2 n B1 B BB– Colombia Baa2 A3 BBB– BBB+ BBB BBB+ Paraguay Ba1 Baa3 BB BB+ BB+ BB+ Congo (DR) B3 n B3 B- BBB- Peru A3 A1 BBB+ A BBB+ A– Congo (Rep) Caa2 n B2 CCC+ BBB– CC B+ Philippines Baa2 A3 BBB p BBB+ BBB BBB+ Cook Islands B+ AAA Poland A2 Aa3 BBB+ pA A– AA– Costa Rica B1n Ba2 B+n BB B+n d BB- d Portugal Ba1 p A1 BBB– p AAA BBB AA Cote d’Ivoire Ba3 Baa3 B+ BBB– Qatar Aa3 n Aa3 AA– n AA AA– AA Croatia Ba2 Baa3 BB+ BBB+ BB + p BBB Ras al–Khaimah A AA+ A AA+ Cuba Caa2 Caa2 Romania Baa3 A3 BBB– A– BBB– BBB+ Curacao A– A– Russia Ba1 p Baa3 BBB- BBB BBB– p BBB– Cyprus Ba3 p A3 BBB- AAA BBB – A Rwanda B2 B1 B p B B+ B+ Czech Rep A1 Aa2 AA– AA+ AA- AAA St Vincent & Gren B3 Ba3 Denmark Aaa Aaa AAA AAA AAA AAA San Marino BBB– BBB+ Dominican Rep Ba3 Ba1 BB– BB+ BB– BB– Saudi Arabia A1 A1 A– A A+ AA Ecuador B3 n B2 B– B– B –n B – Senegal Ba3 Baa1 B+ p BBB– Egypt B3 p B2 B B B p B Serbia Ba3 Ba1 BB BB+ BB BB+ El Salvador B3 B1 CCC+ p AAA B– B Seychelles BB– BB Estonia A1 Aaa AA– AAA A+ pAAA Singapore Aaa Aaa AAA AAA AAA AAA Ethiopia B1 B1 B B B B Slovakia A2 p Aaa A+ AAA A+ AAA Fiji Ba3 Ba3 B+ B+ Slovenia Baa1 Aa1 A+ p AAA A– AAA Finland Aa1 Aaa AA+ AAA AA+ pAAA Solomon Islands B3 B2 France Aa2 p Aaa AA AAA AA AAA South Africa Baa3 A3 BB BBB– BB+ BBB– Gabon B3 n Ba3 B BB+ South Korea Aa2 Aa1 AA AAA AA– AA+ Georgia Ba2 Baa3 BB– BB+ BB – p BB Spain Baa1 Aa1 A– AAA A– AAA Germany Aaa Aaa AAA AAA AAA AAA Sri Lanka B2 Ba2 B B B B Ghana B3 B1 B B+ B B Suriname B2 n Ba3 B B+ B– Greece B3 p Ba2 B+ p AAA BB- BBB- Sweden Aaa Aaa AAA AAA AAA AAA Guatemala Ba1 Baa3 BB– BB+ BB BB+ Switzerland Aaa Aaa AAA AAA AAA AAA Honduras B1 Ba2 BB– BB Tanzania B1n Ba3 Hong Kong Aa2 Aaa AA+ AAA AA+ AAA Taiwan Aa3 Aa2 AA– AA+ AA– Hungary Baa3 Baa1 BBB– p BBB+ BBB– p A– Thailand Baa1 A2 BBB+ A BBB+ A– Iceland A3 A3 A A A A Trinidad & Tobago Ba1 Baa3 BBB+ n A India Baa2 Baa1 BBB– BBB+ BBB– BBB– Tunisia B2 n Ba2 B+ BB– Indonesia Baa2 A3 BBB– BBB BBB BBB Turkey Ba3n B2 B+ BB- BBn BB+ Iraq Caa1 B3 B– B– B– B– Turks & Caicos BBB+ AAA Ireland A2 Aaa A+ AAA A+ AAA Uganda B2 Ba3 B B B+ B+ Israel A1 Aa3 AA- AA+ A+ AA Ukraine Caa1p B3 B– B– B– B– Italy Baa3 Aa3 BBB n AAA BBB n AA UAE Aa2 Aa2 Jamaica B3 Ba3 B B+ B B UK Aa2 Aaa AA n AAA AA n AAA Japan A1 Aaa A+ pAA+ A AA USA Aaa Aaa AA+ AAA AAA AAA Jordan B1 Ba1 B+ BB Uruguay Baa2 A2 BBB A– BBB– n BBB+ Kazakhstan Baa3 Baa2 BBB– BBB– BBB BBB+ Venezuela C Ca SD CC RD CC Kenya B2 Ba3 B+ BB–B+ BB– Vietnam Ba3 Ba2 BB– BB– BB BB Kuwait Aa2 Aa2 AA AA+ AA AA+ Zambia B3 B1 B B B-n B 1 Moody’s Government Bonds 5 Fitch Government Bonds n Negative outlook/on watch * Taken off positive watch/ c Improvement in ratings, 2 Moody’s Country Ceilings 6 Fitch Country Ceilings for downgrade outlook outlook or watch status 3 S&P Government Bonds p Positive outlook/on watch N New rating ** Taken off negative watch/ d Deterioration in ratings, 4 S&P Transfer and for upgrade W Rating withdrawn outlook outlook or watch status Convertibility Assessments SD Selective default

54 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS EMERGING MARKETS China 56 Hong Kong 56 India 59 Indonesia 60 Mongolia 60 South Korea 62 Egypt 62 Kenya 63 Russia 63 Qatar 64 UAE 64 Argentina 65

„ FRONT STORY CEE Turkey flies solo in helpful winds Sovereign eats into funding target

TURKEY was the only CEEMEA issuer to “It was smart to come again quickly and Pricing was cut for a launch at 4.75%, offering pounce on supportive conditions last week reduce their funding needs by nearly 20%,” a lnal premium of around 20bp. as it hit the market for the second time said a banker familiar with the matter. The notes, which priced at 99.36, climbed this year. Turkey Ba3/-/BB raised õ1.25bn through up to par on the break. The sovereign put out initial price the latest transaction, with books over three The supportive backdrop during the week guidance on Thursday at 5% area for a times subscribed. More than 200 accounts left syndicate oflcials frustrated that other euro-denominated March 2025 note. The placed orders for the deal, with the UK issuers had not followed Turkey’s example timing coincided with a grind lower in the taking 47% and the US 21%. Just 6% was in taking advantage of a helpful yields on the sovereign’s bonds thanks to allocated to Turkish investors. environment. mows mooding into emerging markets. The sovereign has been an active issuer in “It’s all gone quiet despite favourable Turkey’s US$2bn 7.625% April 2029s, recent months, having hit the international conditions,” said one banker. “It’s a shame we’ve sold on January 10, were trading at over bond markets four times since October. It not been able to get more guys in because the four points above their reoffer price by has a sizeable funding target of US$8bn for window looks fantastic. As a syndicate banker I Thursday. 2019, and has already raised US$3.4bn so far. should be optimistic, but you have to question It was a similar story for the euro deal Berat Albayrak, Turkey’s lnance minister, how long these periods will last.” that was placed in .ovember. The õ1.5bn was speaking in Davos last week and said Citigroup analysts said that hard currency 5.20% February 2026s have performed well that the country is continuing to work on emerging markets funds witnessed the since pricing, quoted at a bid price of yen-denominated bonds, as well as euro and largest January inmow according to the 101.76 to yield 4.90%. dollar issues. bank’s records, which go back to 2004. EM That performance comes despite those Initial marketing for the latest bond came sovereign credit was 14bp tighter last week. bonds falling three-quarters of a point on about 50bp back of Turkey’s outstanding euro The bookrunners for Turkey were BNP the break, after some investors grumbled 3.25% June 2025s, which opened on Thursday Paribas, Deutsche Bank and JP Morgan. at the time that it was too big. morning at 4.51%, according to Relnitiv data. Robert Hogg Colombia joins sovereigns rushing to market Andean nation pays relatively slim concession

COLOMBIA joined the string of sovereign Order books on the 30-year reached an target of 2.4% will require further lscal issuers coming to what appears to be a very impressive US$7.4bn, which could partly be adjustments. receptive Latin American primary market explained by the 45bp pick-up to the 10-year. The migrant crisis caused by Venezuelans with a US$2bn two-part bond that saw books Mexico’s 10/30s curve, for instance, is tighter meeing their country for a better life has put top US$12bn last week. at around 34bp, according to 2elnitiv data. pressure on Colombia’s lscal accounts, the The Andean country priced a US$1.5bn 30- Either way, Colombia’s deal was seen as a president has argued. year bond at Treasuries plus 170bp and a success for the country despite uncertainty Gross general government debt was US$500m tap of its 4.5% 2029s at plus 215bp. about its ratings status and long-term lscal around 41% of GDP last year - around the Colombia follows bond deals from Mexico consolidation following the passage of what median for Triple B countries - though that is and Uruguay the week before, and could spur was seen as a watered-down tax reform last nearly 10 percentage points higher than Chile, Brazil and Paraguay, which have all been year. when Colombia was upgraded to BBB from expected to take a run at the bond markets. hThey have a lnancing gap that wasn’t BBB- in 2013, Fitch said. At the lnal spread, the new 30-year that met with the tax reform and the lscal “A lscal adjustment of about 1% of GDP anchored the trade is seen offering a new- situation is not particularly sustainable if oil would be needed to begin to reduce Colombia’s issue concession as tight as 5bp depending prices continue on a downward trajectory,” debt burden,” the rating agency said. on where bankers valued the extension on said one investor. Despite the deteriorating debt ratios, the existing 2045s, which were trading at “I do think a downgrade is within the investors still like the credit for its track around 205bp over. realm of possibility.” record of prudent policies. The tap of the 2029s, which had been Recently elected right-wing President Ivan “The new president is willing to spend his trading at a G-spread of around 161bp-162bp, Duque has been a market favourite, but he political capital to lnd a tenable solution x offered a 8bp-9bp concession. faces a deeply divided Congress, making it and the country has always been rational in The bonds jumped on the break with the diflcult to pass through vital reforms. terms of spending,” said Bryan Carter, head new 5.2% 2049 changing hands at 100.85 on Fitch said this month that while Colombia of emerging markets lxed-income at B.P Thursday morning, according to will meet its 2018 central government delcit Paribas Asset Management. MarketAxess data, a good point over reoffer. target of 3.1% of GDP, achieving this year’s Paul Kilby

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Sino-Ocean Land Treasure IV is the issuer and Yuanyin Securities is the placing agent of the Hong Kong-listed parent is the guarantor. the Reg S notes. ASIA-PACIFIC The Reg S issue has expected ratings in The securities, due January 22 2020, were line with the guarantor. priced at par and issued last Friday. Proceeds will be primarily used for debt Ever Diamond Global, a company owned CHINA repayment. by its controlling shareholder Huang HSBC, UBS, Goldman Sachs and China Citic Yanping, will provide a guarantee to the SINO-OCEAN MAKES WAVES Bank International were global coordinators. notes. They were also lead managers and The Hong Kong-listed company, which Property developer SINO-OCEAN GROUP HOLDING, bookrunners with China International Capital focuses on developing and managing REITs, rated Baa3/BBB– (Moody’s/Fitch), has printed Corp, CMB International, DBS Bank, Morgan said proceeds will be used for general US$500m of senior unsecured notes after Stanley, Silk Road International, Bank of East Asia, corporate purposes. draWinG more than US$3Bn in lnal orders Haitong International and Guotai Junan from 203 accounts. International. REWARD MISSES BOND The 5.25% 3.25-year notes were priced at INTEREST PAYMENT 99.495 to yield 5.413%, or Treasuries plus CHINA MOLYBDENUM EYES 2.5Bp, the tiGht end of lnal Guidance of OFFSHORE DEBUT REWARD SCIENCE AND TECHNOLOGY INDUSTRY GROUP, 290bp (+/–2.5bp), well inside initial guidance which failed to redeem a maturing onshore of the 330bp area. CHINA MOLYBDENUM has picked banks for a bond last month, has, as widely expected, Of the notes, 83% went to Asia and 17% proposed debut offering of US dollar senior also failed to pay interest on offshore bonds. to EMEA. By investor type, 53% went to bonds. In a stock exchange lling, the Chinese fund managers, 36% went to banks and Industrial Bank Hong Kong branch, Standard dairy producer has said it cannot make the lnancial institutions, 7% went to private Chartered, China Everbright Bank Hong Kong interest payment on time for its US$200m banks, and 4% to insurance and sovereign branch, China Minsheng Banking Corp Hong Kong 7.25% senior unsecured January 2020 notes, wealth funds. branch and Ping An of China Securities (Hong which was due on January 25. Mizuho Securities’ trading desk saw fair Kong) are joint global coordinators on the Reward failed to redeem Rmb300m 7.5% value at Treasuries plus 275bp, translating Reg S unrated issue. They are also joint 365-day commercial paper due on December to a yield to maturity of around 5.3%. And bookrunners and joint lead managers with 6. The default triggered a cross default on even at that level, it said the deal would Bank of China, CMB International, CNCB HK Rmb300m of 8.00% three-year medium-term offer value from a short/medium-term Capital and Yuanyin Securities. notes issued in August last year as well as perspective, given the pick-up versus other The Chinese non-ferrous metals producer the 7.25% three-year dollar bonds due 2020 low-BBB rated China developers. started to meet investors in Hong Kong on it issued in 2017. Lucror Analytics said its fundamental January 24. Moody’s on January 23 withdrew its Ca credit bias on Sino-Ocean is “stable”, given Wholly owned subsidiary CMOC Capital is ratings on Reward and its 7.25% dollar its satisfactory credit metrics and substantial the issuer of the notes and the Hong Kong bonds, citing inadequate information, after exposure to higher-tier cities, especially and Shanghai-listed parent is the guarantor. downgrading the ratings from B3 on Beijing. China Molybdenum on December 26 said December 7. The company’s credit prolle also benelts it planned to issue bonds for up to US$500m Fitch on December 7 lowered Reward’s from implied support from its state-owned for debt relnancing and general corporate rating to RD (restricted default) from B and its shareholder China Life insurance, Lucror purposes. dollar bonds’ rating to C from B with added. recovery rating of RR4, following the default. The newly priced bonds traded well in the ZH INTL PLANS SHORT-TERM NOTE RR4 rated securities have characteristics aftermarket. They were quoted at consistent with securities historically 99.689/99.792 or a spread of ZH INTERNATIONAL HOLDINGS plans to issue recovering 31%–50% of current principal and 280.6bp/277.4bp on Friday morning, US$100m of 8.00% notes due 2020, related interest, according to Fitch’s according to Tradeweb. according to a stock exchange lling. delnition. The 7.25% 2019s were quoted at ALL INTL EMERGING MARKETS BONDS ALL INTL EMERGING MARKETS BONDS 27.00/29.00 on Friday, according to Relnitiv. BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE Asia-Pacific Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) HONG KONG bank or group issues US$(m) (%) 1 JP Morgan 16 4,200.45 9.0 1 UBS 15 2,085.63 9.3 2 Citigroup 18 4,031.52 8.6 HK AIRLINES PAYS PERP COUPON 2 HSBC 19 1,891.42 8.4 3 HSBC 23 3,848.96 8.2 3 Citigroup 13 1,555.31 6.9 4 BNP Paribas 8 3,808.75 8.1 HONG KONG AIRLINES, part of the debt-laden 4 Credit Suisse 9 1,543.44 6.9 5 BAML 12 2,260.90 4.8 H.A Group, said it had made a US$24.33m 5 Citic 10 1,289.54 5.8 6 Barclays 6 2,190.75 4.7 interest payment on its US$683m 7.125% 6 Standard Chartered 12 1,214.14 5.4 7 UBS 16 2,185.96 4.7 perpetual notes and would continue to fulll 7 JP Morgan 9 1,199.89 5.4 8 Goldman Sachs 10 2,052.15 4.4 its obligations, in a bid to quell speculation 8 Goldman Sachs 8 951.04 4.2 9 Morgan Stanley 7 1,823.68 3.9 over its lnancial health. 9 CEB Intl Invest 4 871.46 3.9 10 Natl Comml Bank Saudi Arabia 2 1,604.15 3.4 In a stock exchange lling last Thursday, 10 Haitong Securities 12 627.49 2.8 Total 65 46,752.56 the airline said it made the payment on Total 48 22,407.46 Excluding equity-related debt. January 22, with the money expected to be Excluding equity-related debt. transferred to the holders by the end of last Source: Refinitiv SDC code: L4 Source: Refinitiv SDC code: L1 week, in accordance with the bond terms.

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EMERGING MARKETS ASIA-PACIFIC

The 7.125% perp is issued by Blue Skyview and guaranteed by Hong Kong Airlines International Holdings, HKA Group China clears path for #oMpany and Hong Kong Airlines. The lrst call date is on July 26 2020. The airline’s bonds came under heavy new-look AT1 selling pressure early in January on concern over its lnancial health. „ SUBORDINATED DEBT Bank of China’s first perpetual to benefit from PBoC support The 7.125% perp plunged to as low as 55.00 on January 2 and were quoted at BANK OF CHINA started bookbuilding for up to for the format, which is designed to absorb losses 75.5/78.75 on Friday, according to Tradeweb. Rmb40bn (US$5.90bn) of perpetual capital in the event of a crisis. HK Airlines also redeemed US$550m of bonds on Friday, a day after China’s central bank BOC’s perps come with deferrable coupons 6.9% guaranteed notes due on January 20. unveiled a liquidity facility to support the new and can be written down in whole or in part. format. The distribution rate on the perp non-call five HSIN CHONG WOES CONTINUE BOC is offering undated Additional Tier 1 will be fixed, based on a spread over the five-year securities in the onshore interbank market benchmark Chinese government bond yield. If Debt-laden HSIN CHONG GROUP HOLDINGS said it at an indicative yield range of 4.2%–5.2%, not called, the rate will reset to the prevailing could not redeem US$150m of 8.50% bonds according to a filing on Chinamoney.com.cn. The five-year Chinese government bond yield plus due January 22, according to a stock bonds, callable after five years, will be the first the initial spread. eXchange lling on the same day. perpetuals from a Chinese commercial bank. The bonds will be subordinated to the claims The Hong Kong-based construction The offering comes after People’s Bank of of depositors, general creditors and subordinated company had already failed to repay its China said late on Thursday it would set up a creditors but rank in priority to the claims of US$300m of 8.75% bonds due May 18 2018 central bank bills swap facility, allowing primary shareholders. and triggered an event of default on the dealers to swap perpetual bank capital bonds for The issuer has the right to cancel distributions 2019 bonds and on certain loan agreements. central bank bills. on the bonds in whole or in part without Hsin #hong said in the lling that it had In a separate announcement, the China Banking triggering an event of default. recently met with certain holders of the and Insurance Regulatory Commission also said If the issuer’s Core Tier 1 capital adequacy ratio 2019 notes and their advisers to discuss a that insurance companies would be allowed to falls to 5.125% or below, with the approval of CBIRC, potential consensual restructuring of the invest in Tier 2 bonds and perpetual bonds issued the bonds will be written down in whole or part. notes. by banks, giving the deal a further boost. BOC’s offshore AT1 bonds, issued in 2014 in In an earlier lling, Hsin #hong said it had Chinese banks were not previously allowed to the form of preference shares, convert into equity appointed Edmund Yeung and Glen Ho, sell undated bonds, and had to raise AT1 capital if its Tier 1 capital ratio drops too low, but there is both of Deloitte Touche Tohmatsu, and in the form of preference shares, which are off- no mention of equity conversion in the terms of Rachelle Frisby of Deloitte, as joint limits to many debt investors. the new perpetual offering. provisional liquidators of the company, BOC’s AT1 perps will also be available to As at end-September 2018, the issuer’s effective on January 18. offshore investors through the Bond Connect common equity Tier 1 capital adequacy ratio, Tier The lling also said that 6MS Investment link. Settlement will be on January 29. Proceeds 1 capital adequacy ratio and capital adequacy Group, a creditor and shareholder of the will be used to replenish the bank’s AT1 capital. ratio stood at 11.14%, 11.99% and 14.16%, company, had lled a winding up petition in Both the issuer and the bonds have AAA respectively. relation to the company with the Bermuda ratings from Golden Credit Rating International. The bonds will also be written off if the CBIRC Court on January 17. The petition has been The PBoC in December pledged to promote decides that the issuer would become non-viable listed for hearing by the Bermuda Court on the issuance of perpetual bonds by commercial without a write-off, or the relevant authorities February 15. banks to support capital raising. decide that a public sector injection of capital or Moreover, Synergis Holdings, a creditor of Thursday’s announcement said bank equivalent support is necessary. the company, on January 18 delivered a perpetual bonds with ratings no lower than BOC International (China) is the lead petition to the Court of First Instance of AA will be included as eligible collateral for a underwriter and bookrunner on the offering High Court of Hong Kong against Hsin medium-term lending facility (MLF), a targeted with CICC as joint lead underwriter. Other Chong seeking an order to wind-up the medium-term lending facility (TMLF), a standing underwriters on the transaction include Citic company. lending facility (SLF) and re-lending, according Securities, China Merchants Securities, CSC to a statement on the PBoC website. Financial, HSBC (China), Ping An Bank, Bank of JOHNSON ELECTRIC REVS UP DEBUT The PBoC’s move to accept AT1 perpetuals as Jiangsu and Guosen Securities. collateral will be seen as a signal of state support Carol Chan JOHNSON ELECTRIC HOLDINGS, rated Baa1/BBB (Moody’s/S&P), has printed a debut US$300m senior unsecured bond after managers, 18% to banks, 15% to private 170bp, after adding a 5bp–10bp new issue drawing in eXcess of US$1.1bn in lnal banks, and 7% to insurers. premium on the view that Johnson Electric orders from more than 80 accounts. Proceeds will be used for general is a lrst-time issuer. The 4.125% 5.5-year notes were priced at corporate purposes, relnancing and to “We view the company as a solid BBB 99.402 to yield 4.248%, or Treasuries plus extend its debt maturity prolle. credit considering its decent market 165bp, 30bp tighter than initial 195bp area The Hong Kong-listed company position as an auto-parts supplier, guidance. manufactures motors, solenoids, switches improving R&D capability to gradually The Reg S notes have expected ratings of and mexible interconnects. evolving into a Tier 1 supplier and its Baa1/BBB (Moody’s/S&P). .omura’s trading desk suggested that prudent lnancial management,v .omura Of the notes, 95% went to Asia and 5% to investors participate in the deal with lnal wrote in the note. Europe. By investor type, 60% went to fund guidance of no less than Treasuries plus Citigroup and HSBC were bookrunners.

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GLOBAL EMERGING MARKETS BOND DETAILS: WEEK ENDING 25/1/2019 Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Jan 21 2019 Land Transport Authority S$1.5bn Jan 30 2059 3.38 100 SOR+65.5 3.38 Jan 21 2019 PKO Bank Hipoteczny Polish €500m Nov 23 2021 0.25 99.933 MS+34 / B+83.4 0.274 covered

Jan 22 2019 China Evergrande US$1.1bn incr Mar 23 2020 7 98.627 - 8.25 (US$1.6bn) Jan 22 2019 China Evergrande US$875m incr Jun 28 2021 6.25 93.096 - 9.5 (US$1.473bn) Jan 22 2019 China Evergrande US$1.025bn Mar 23 2022 8.25 94.054 - 10.5 incr (US$2.025bn) Jan 22 2019 AC Energy (Green) US$225m Jan 29 2024 4.75 99.451 - 4.875

Jan 22 2019 Central China Real Estate US$200m Jan 27 2020 7.325 100 - 7.325

Jan 22 2019 Johnson Electric US$300m Jul 30 2024 4.125 99.402 T+165 4.248

Jan 22 2019 Suhyup Bank US$300m Jan 29 2024 3.625 99.71 T+110 3.689

Jan 22 2019 Mongolian Mortgage US$250m Jan 29 2022 9.75 100 - 9.75

Jan 22 2019 Qatar National Bank Rmb500m Jan 29 2022 4.35 100 - 4.35 Jan 23 2019 CAF €750m Jan 30 2024 0.625 99.603 MS+52 / B+99.5 0.706

Jan 23 2019 Peking University Founder US$150m Jan 28 2021 7.5 100 - 7.5 Group Jan 23 2019 KEB Hana Bank US$300m Jan 30 2022 3.375 99.78 T+87.5 3.454 (Sustainable) Jan 23 2019 KEB Hana Bank US$300m Jan 30 2024 3.5 99.46 T+102.5 3.619 (Sustainable) Jan 23 2019 Yankuang Group US$215m Jan 30 2022 6 100 - 6

Jan 23 2019 Colombia US$500m Mar 15 2029 4.5 100.429 T+170 4.446

Jan 23 2019 Colombia US$1.5bn May 15 2049 5.2 99.705 T+215 5.22

Jan 23 2019 Termocadelaria US$410m Jan 30 2029 7.875 100 - 7.875

Jan 24 2019 ESR S$150m Feb 1 2022 6.75 100 SOR+474.7 6.75

Jan 24 2019 Sino-Ocean Group US$500m Apr 30 2022 5.25 99.495 T+287.5 5.413

Jan 24 2019 NWS Holdings US$800m Perpetual (Jul 2024) 5.75 100 T+320.5 5.75

Jan 24 2019 Korea Western Power SFr200m Feb 27 2024 0.125 100.012 MS+40 0.123

Jan 24 2019 Turkey €1.25bn Mar 31 2025 4.625 99.36 MS+446 / B+499.7 4.75

Jan 25 2019 Greentown China US$400m Perpetual (NC3) 8.125 100 T+557.8 8.125

Jan 25 2019 Chongqing Banan Economic S$150m Dec 1 2021 4.35 100 - 4.35 Park (SBLC: SPDB HK branch)

ROAD KING TENDER EXCEEDS TARGET Road King will use the proceeds from the GLP CHINA EYES DUAL-CURRENCY ISSUE offering of US$400m of 7.75% two-year and ROAD KING INFRASTRUCTURE, rated B1/BB– three-month senior unsecured bonds it GLP CHINA HOLDINGS, an active Panda bonds (Moody’s/S&P), has announced the result of priced on January 9 to fund the tender. issuer in China’s onshore bond market, is a tender offer for its US$450m 5.00% notes The tender price is par. The outstanding now looking to issue bonds offshore with its due 2019. amount of the 5.00% 2019s was reduced debut senior unsecured bonds denominated A total of US$224.743m of the notes were US$225.257m following settlement on in US dollars and/or Hong Kong dollars with validly tendered, which the Hong Kong- January 23. medium-to-long maturity. listed property developer and toll-road HSBC and JP Morgan were dealer managers Bank of China, Bank of China (Hong Kong), Bank operator accepted in full, exceeding its on the tender offer. DF King was the tender of Communications, China Construction Bank (Asia) original target of US$150m. and information agent. and Industrial Bank Hong Kong branch are joint

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EMERGING MARKETS ASIA-PACIFIC

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

3.38% area - - Unrated DBS/UOB - MS+37 area 2 >€1.08bn, 66acs Aa3 HSBC/LBBW/PKO/RBI/SG/Uni Ger 59.5%, Nordics 14.8%, CEE 13.8%, Aus/Switz 5.1%, Benelux 4.5%, S.Eur 2%, Other 0.3%. AM 44.3%, Bks 32.2%, Ins/PF 18.3%, CB/OI 5.2%. 8.25% # - - B2/-/B+ CS(B&D)/CEB Intl/CNCBI/UBS -

9.5% # - - B2/B/B+ CS(B&D)/CEB Intl/CNCBI/UBS -

10.5% # - - B2/-/B+ CS(B&D)/CEB Intl/CNCBI/UBS -

5.125% area, - - Unrated HSBC/BAML/CLSA Phil 80%, Asia 20%. Tsy 77%, FM/Ins 4.875%/5%, 14%, PB 9%. 4.875% 7.625% area, - US$890m Unrated CS/Haitong /MS Asia 100%. FM 53%, Bks/FI 33%, PB 7.375% (+/-5) 14%. T+195 area - US$1.1bn Baa1/BBB Citi/HSBC Asia 95%, Eur 5%. FM 60%, Bks 18%, PB 15%, Ins 7%. T+140 area - US$2.25bn A2/A Citi/ING/SG/StCh Asia 89%, EMEA 11%. FM 65%, Bks 20%, Ins 9%, CB 5%, PB 1%. 10% area, - US$650m B3/B CS Asia 63%, Eur 19%, US 18%. FM 82%, Ins 9.75%/9.875% 7%, PB 6%, Bks/Sec 5%. 4.35% (the #) - - Aa3 StCh - MS+low/mid 50s, 10 >€820m Aa3/AA-/AA- Barc/BNPP/JPM - MS+54 area, MS+54 (+/-2) 7.5% # - - Unrated CICC/BoC/Central Wealth Securities/ - Silk Road/HSBC/Haitong T+110 area, 1.5 US$1.2bn A1/A+ BAML/HSBC/JPM/KEB/UBS Asia 84%, EMEA 15%, US 1%. FM/AM T+90 (+/-2.5) 45%, Bks 47%, Ins/PF 3% T+130 area, 1.5 US$1bn A1/A+ BAML/HSBC/JPM/KEB/UBS Asia 74%, Eur 9%, US 17%. FM/AM 33%, T+105 (+/-2.5) Bks 33%, ins/PF 30%, PB 4%. 6% yield - - -/BB GS/JPM/CCBI/CEBI/China CitiC/ - CICC/Industrial HK T+190 area, 8-Sep - Baa2/BBB+/BBB+ BAML/BNPP/MS - T+175 (+/-5) T+240 area, 5 US$7.4bn Baa2/BBB+/BBB+ BAML/BNPP/MS - T+220 (+/-5) Low 8%, - - -/BB+/BB+ BAML/Scotia - 7.875% 6.75% area, - S$215m - CS/BAML/DBS/Stanchart/UOB/UBS Asia 100%. PB 81%, Bks 14%, FM 5%. 6.75% T+330 area, - US$3.7bn Baa3/-/BBB- HSBC/UBS/GS/CNCBI/CICC/CMBI/ Asia 83%, EMEA 17%. FM 53%, Bks/FI T+290 (+/-2.5) DBS/MS/Silk Road/BEA/Haitong/ 36%, PB 7%, Ins/SWF 4%. Guotai Junan 6.3% area, - US$4bn - HSBC/Miz/MS/ UBS/JPM Asia 97%, Eur 3%. PB 56%, FM 28%, Bks 5.75% 7%, Corp 6%, Ins 3%. MS+43/45, 0 >42acs Aa2/AA BNPP/UBS Switz 100%. Tsy 41.5%, AM 40%, PF MS+40/43 8.5%, Ins 7%, PB 3%. 5% area, 20 >€3.75bn, >200acs Ba3/-/BB BNPP/DB/JPM UK 47%, US 21%, Ger 6%, Switz 5%, 4.8% (+/-5), RoEur 12%, Turk 6%, Other 3%. 4.75% 8.625% area, - >US$5.4bn Ba3 CS/HSBC - 8.125% 4.35% area, - - Baa2 Haitong Sec/StCh/Guotai Junan/ - 4.35% SPDB/CNCBI/CLSA /Ping An global coordinators as well as joint lead “Investors need more time to study the mainly be used for debt relnancing and for managers and joint bookrunners with China potential issue and get credit lines given general corporate purposes. International Capital Corp, DBS Bank and Morgan that it is a lrst-time issuer,v the banker said. Stanley on the Reg S issue. The proposed bonds will be issued off a GLP China, a Hong Kong-incorporated newly established HK$20bn (US$2.55bn) INDIA subsidiary of Singapore-based GLP, formerly senior unsecured multi-currency medium- known as Global Logistic Properties, is the term note programme. OIL INDIA HITS THE ROAD largest logistics space provider in China. The The notes have an expected BBB– rating company met investors in Hong Kong on from S&P, one notch below GLP China’s BBB OIL INDIA on January 24 began meetings with January 23 and is likely to launch the deal issuer rating. investors in Singapore, Hong Kong and this week, according to a banker on the deal. Proceeds from the proposed deal will London, ahead of a proposed Reg S offering

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of US dollar senior unsecured bonds with a tenor of up to 10 years. IFR reported earlier that the oil and gas company had appointed Barclays, HSBC and Arpeni Pratama charts Standard Chartered Bank as global coordinators, as well as Mizuho Securities and new course MUFG as joint lead managers. The issue size is expected to be around US$500m. „ INDONESIA Shipping firm close to sealing second workout The Indian government holds a direct 63.2% stake in Oil India, which is rated Baa2/ Indonesian shipping company ARPENI PRATAMA OCEAN 144A bonds, with maturities in June 2021 and BBB– (Moody’s/Fitch). LINE is poised to seal its second debt restructuring in amortisation beginning in 2015. seven years, after holders of more than two-thirds of its There were no interest payments on the LODHA TO BUY BACK BONDS dollar bonds pledged to support its plan. restructured bonds for the first three years, The company plans to restructure US$427.9m- but when interest payments were due to start Property company LODHA DEVELOPERS, rated equivalent of secured and unsecured debt in US in March 2015, the company found it had not B2/B (Moody’s/Fitch), said it would buy back dollars and rupiah, including accrued interest. recovered as it had predicted and implemented up to US$65m of its US$325m 12% senior It expects to cut its debt to around US$104.6m an informal standstill with financial creditors. notes due 2020. after the multi-part transactions, giving it APOL’s previous restructuring was conducted JP Morgan will repurchase the bonds on its headroom to pursue new areas of business. through Indonesia’s PKPU process, but the behalf. The buyback will be lnanced from On January 23, APOL announced that holders current proposal makes use of a provision in the available funds. of 69.9% of the dollar bonds had entered into a old scheme stating that the old plan could be The bonds traded up half a point on the restructuring support agreement to support the amended. Amending the plan requires majority news and were bid at 89.1 on Wednesday, plan, following approval from the rupiah creditors consent from more than half of creditors by based on Relnitiv data. They were trading at in November. The scheme, which still requires number, holding at least two-thirds of the par as recently as October, but a liquidity a US Chapter 11 filing and formal approval at principal amount of debt. squeeze in India’s non banking lnancial a general meeting of shareholders, will hand companies has put pressure on the bonds. creditors a majority stake in the business. DEBT TO EQUITY Lodha has also agreed to sell a 28% stake In 2012, APOL restructured more than Rupiah creditors were addressed first. They in its UK business and intends to use the US$700m of debt and raised US$75m from were given the option to convert to shares or to proceeds to reduce debt. a private placement of equity, following a mandatory convertible zero-coupon bonds, since Chapter 15 filing in New York. It restructured or some Indonesian banks are not allowed to hold renegotiated domestic bonds, sukuk and loans, equity for long periods. INDONESIA and conducted an exchange and tender offer for After some Islamic banks asked for another US$140.85m of 8.75% senior secured notes due option that met sharia criteria, APOL offered LIPPO KARAWACI DOWNGRADED 2013 plus almost US$100m of secured loans. them a long-term amortising subordinated Following a reverse Dutch auction, APOL security with a 0.5% profit rate and quarterly LIPPO KARAWACI’s dollar bonds dropped issued US$84.5m of Reg S and US$29.5m of repayments calculated on factors including the further after S&P downgraded the ratings of the issuer and its bonds to CCC+ from B–, citing the company’s weakening liquidity. Last .ovember, Fitch cut the ratings on subsidiaries. Sritex is rated Ba3/BB– The Indonesian property developer’s Lippo Karawaci’s dollar bonds to CCC+ with (Moody’s/Fitch), as are the bonds. dollar bonds due 2026 were quoted at a a negative outlook, from B. Moody’s rates Citigroup and HSBC were dealer managers. cash price of 69.1 on Friday, implying a the developer B3 with a negative outlook. The tender will be funded by a US$350m yield of 13.2%, from 71.5 on Thursday, syndicated loan. according to Tradeweb. HOT DEMAND FOR SRITEX TENDER S&P warned that liquidity at the holding company level would not be enough to SRI REJEKI ISMAN (Sritex) has closed a tender MONGOLIA cover the developer’s needs. offer for its US dollar bonds due 2021 ahead Lippo Karawaci has a US$50m of schedule after drawing a strong early MONGOLIAN MORTGAGE MAKES DEBUT syndicated loan due in April and a US$75m response. bond maturing in June 2020. It has been The Indonesian textile manufacturer had MONGOLIAN MORTGAGE beat expectations last trying to sell Puri Mall in Jakarta to its capped the buyback at US$185m of its US$350m week on its debut US dollar bond, the lrst listed REIT, Lippo Malls Indonesia Retail 8.25% senior notes due 2021, but at the early bird offshore issue of the year from one of Asia’s Trust, but S&P warned that the sale would deadline of January 17 bondholders had frontier markets. not bolster the company’s liquidity beyond tendered US$271.198m of bonds. The issuer on Tuesday priced US$250m of 12 months and would not cover the June As a result, it will close the offer ahead of three-year senior unsecured bonds at par to 2020 maturity. the deadline of February 11 and scale back yield 9.75% through sole global coordinator and “We expect the company to face modest the bondholders who tendered. bookrunner Credit Suisse. This was at the tight operating cashmows, high lnancial Sritex offered to pay US$1,012.50 per end of lnal guidance of 9.750%–9.875%, and charges, maturing debt, and a depleting US$1,000 in principal amount under the well inside initial guidance of the 10% area. cash balance,” wrote S&P on Thursday. tender offer, plus an extra cash payment of .o size was indicated in the offering “This would keep the company highly US$30 per US$1,000 of bonds for those who circular, but the issuer was thought to be dependent on external fundraising that met the early bird deadline. targeting around US$200m. A lnal order can be challenging and susceptible to Golden Legacy issued the bonds in 2016 book in excess of US$650m allowed it to external market conditions.” with a guarantee from parent Sritex and its beat that target.

60 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

EMERGING MARKETS ASIA-PACIFIC

company’s Ebitda, with the balance to be repaid APOL’s major shareholder, Oentoro Surya, will require the publication of the company’s at the end of year 20. In the end, some sharia controls an 83% stake through investment latest financial statement. creditors chose equity conversion instead. vehicles Mandiri Sanni Pratama and Ayrus Prima. “With a bit of luck, the trading suspension can The rupiah bondholders approved APOL’s This will drop to around 38%–39% after the be released after that during 2019, albeit there proposal in November, allowing the company to restructuring, not accounting for the warrants. has been internal political resistance at IDX – this launch a restructuring support agreement in January Creditors will hold around 53%–54% of the also now hopefully is reduced as there is a new to seek the backing of the US dollar bondholders. shares, with the public float set to be at least IDX chairman,” said Kardachi. Dollar creditors were sounded on a choice 7.7%. BLT, the IDX and regulator OJK did not of equity or mandatory convertible bonds, but respond to questions about why the company’s opted for share conversion. On January 23, APOL PUBLIC LISTING shares had not yet resumed trading. announced that holders of 69.9% of the dollar It was important to preserve a public float of at Hadi Surya, president commissioner of BLT, is bonds had entered into a restructuring support least 7.5% in order to comply with IDX rules and the older brother of APOL’s Oentoro Surya. agreement to support the plan, and said it ensure the company retained its listing to create expected to be able to proceed with the scheme. liquidity in the shares. LOOKING AHEAD The offshore bonds comprise US$113.9m in This is still not certain: the IDX is understood APOL’s restructuring will not touch vessels or principal amount or around US$135m including to have provided numerous terms and conditions certain strategic trade creditors, while other accrued interest. with which APOL must comply, and if APOL fails assets will go into a pool to be divided between Rupiah creditors who opted for equity to implement its proposed restructuring plan, the secured and unsecured creditors. conversion will receive an estimated 19,288 IDX could delist it. The company had cash and cash equivalents shares for every Rp10m of debt. Secured Trading in APOL’s shares has been suspended of Rp52.3bn at the end of September. In the creditors, including dollar bondholders, will since March 2015, but the company is thought event of administration, recovery for creditors is receive 32,843 shares per US$1,000 of debt, to have a good chance of avoiding delisting if it estimated to be at most 1.2 cents in the dollar. while other creditors holding US dollar debt will completes its restructuring in a timely manner. Under the proposed restructuring, the recovery receive 28,795 shares. That is not a foregone conclusion, however. rate is estimated at 10 to 13 cents, with potential Creditors will also receive four detachable Another shipping company, BERLIAN LAJU TANKER, upside if the shares perform well. warrants, which can be exercised within three has been suspended since January 2012 despite The company plans to acquire larger vessels so years to buy more shares. completing its restructuring and debt-to-equity that it can win longer contracts with higher margins Under a restructuring support agreement, swap in 2015. A group of Indonesian bondholders and greater sector diversity. It no longer owns cranes, dollar bondholders who grant forebearance will mounted several legal challenges against the tugs and barges, which have lots of competing receive a fee equivalent to 1% of their principal, restructuring but were ultimately unsuccessful. supply. Once its financial health has improved, and those who consent to an exchange offer will Jason Kardachi, managing director at Borrelli it is expected to be able to enter joint venture receive a further 1%. Walsh, which advised on the BLT restructuring agreements with large foreign trading companies. The deadline to sign the consent solicitation until July 2016, said that BLT had met the Fulcrum Partners is advising APOL on the agreement is January 29, and the next step is to requirements for trading to resume, but the IDX restructuring scheme, while Makes & Partners and file for Chapter 11 in the US for a pre-packaged had requested an updated share valuation report Paul Hastings are the company’s legal advisers. restructuring scheme. in order to release the trading suspension. That Daniel Stanton

Asia took 63% of the 144A/Reg S notes, programme and selling RMBS, mainly to the The bonds traded up to 100.25 in Europe 19% and the US 18%. By investor central bank – a fairly low-risk business as it secondary on Wednesday. type, fund managers booked 82%, insurers does not retain any paper. 7%, private banks 6%, and banks and It will use the proceeds from the new seCurities lrms a Combined %. issue to expand into the higher-margin PHILIPPINES The notes will be guaranteed by Mongolia- business of buying mortgage pool listed parent MIK Holding, with letters of receivables from commercial banks. AC ENERGY PRINTS GREEN FIRST support from the Ministry of Finance and the The dollar bonds have a change-of-control central bank, the Bank of Mongolia. The terms put at 101% of face value if speciled holders AC ENERGY, the energy arm of conglomerate of Mongolia’s package with the International including BoM, DBM and Ulaanbaatar City Ayala, priced US225m of lve-year Green Monetary Fund did not allow a full guarantee, Bank cease to hold at least 50.1% of MIK bonds on Tuesday in a lrst for the but oflcials from the MoF and BoM Joined the Holding. They currently have 67.5%. Philippines. roadshow to show their support. .omura’s sales and trading desk noted Some Philippine issuers have sold Green The bonds have expected ratings of B3/B that government-owned banks DBM, BoM dollar bonds in private placements to the (Moody’s/S&P), in line with the issuer. and State Bank could technically sell their likes of International Finance Corp, but this .omura’s sales and trading desk wrote 19.3% holding to other existing bank was the lrst such public deal from a that Mongolian Mortgage should trade at shareholders in the group without triggering Philippine corporate issuer. least 350bp over the sovereign, given the the CoC clause, even though it would weaken The 4.75% bonds priced at 99.451 to yield lower level of government support and the issuer’s links with the state. 4.875%. This was at the tight end of lnal weak change-of-control language. “It is worth pointing out that a failure of a guidance of 4.875%–5.000%, and inside Mongolia’s dollar bonds due December Mongolian bank is not a completely remote initial guidance of 5.125% area. 2022 were quoted at 6.2%, pointing to fair event,v wrote .omura. “In *uly 2013, The senior unsecured bonds are unrated, value of high 9%. Savings Bank, the lfth largest bank, was but the issuer is thought to be equivalent to Mongolian Mortgage’s main activity at declared insolvent after being hit by .P,s a solid Double B credit. This was AC Energy’s present is origination securitisations related from its parent Just Group, and had to be lrst offshore bond, though parent Ayala has to a government subsidised mortgage merged with State Bank.” printed dollars before.

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/UTSTANDINGûlVE YEARû53ûDOLLARûBONDSû The average ticket size was under SFr5m South Korea’s major airline lled the from Philippine corporate credits were with 42 accounts taking part, all Swiss, and statement on January 8 aiming to price seen at around 4.50%–4.75%, and AC mostly comprising bank treasuries and asset three-year bonds on January 24. The bonds Energy was expected to pay a premium to managers. were to have a guarantee from Export- that since it is a subsidiary, meaning that it Proceeds are likely to go to relnance the Import Bank of Korea. priced mat to fair Value. issuer’s maturing SFr200m 1.625% deal due The securities registration statement was A source close to the deal said the Green in March, issued in 2013. pulled on Wednesday afternoon, one of the format attracted interest from dedicated The bonds have an SPO from sources told IFR. investors, but it was hard to pin the tight Sustainalytics. “The deal is not cancelled,” the other pricing on the environmental label alone. source said. “Hopefully, Korean Air will relle “It got a pricing advantage for the rarity KEB HANA THINKS SUSTAINABLY the statement soon to issue by the end of the of Philippine corporate credit,” said the lscal year, or next month at the earliest.” source. “They just trade tight. It’s an KEB HANA BANK (A1/A+/A–) on Wednesday BNP Paribas, Daiwa, Mitsubishi UFJ Morgan extremely strong outcome when you look priced US$600m of dual-tranche Sustainable Stanley and Mizuho are mandated as joint lead how Asian high-yield has traded lately.” bonds in an offering that was more than 3.6 managers for the deal, which has an Philippine issuers benelt from high 53 times subscribed. expected rating of AA– by R&I. dollar liquidity onshore, driven by offshore A US$300m 3.375% three-year tranche remittances, which was seen in the order was priced at 99.777 to yield 3.54%, book. Philippine buyers took 80% of the Reg S equivalent to Treasuries plus 87.5bp. This notes, while offshore Asian investors bought was at the tight end of lnal guidance of 20%. By investor type, bank treasuries booked 90bp area, plus or minus 2.5bp, and well EUROPE/AFRICA 77%, fund managers and insurers a combined inside initial guidance of Treasuries plus 14%, and private banks 9%. 110bp area. AC Energy produces renewable and A US$300m 3.50% lve-year tranche was EGYPT thermal energy in the Philippines, priced at 99.46 to yield 3.619%, equivalent to Indonesia and Vietnam. Last year it took a Treasuries plus 102.5bp, the tight end of lnal REPUBLIC TESTS THE WATERS 50% stake in UPC Renewables Australia, guidance of 105bp area, plus or minus 2.5bp, which is developing wind and solar and inside initial guidance of 130bp area. EGYPT has sent a request for proposals to banks projects in Tasmania and .ew South The new issue concession for each for an international bond issue, sources told Wales. tranche was estimated at around 1.5bp. IFR, as it gears up for a busy quarter. The notes will be issued by wholly Final orders were over US$1.2bn from One source said that the sovereign is owned subsidiary AC Energy Finance more than 60 accounts for the three-year. considering a US dollar and/or euro- International and guaranteed by AC Asia took 84% of the 144A/Reg S bonds, denominated transaction. Energy. EMEA 15% and the US 1%. By investor type, Finance minister Mohamed Maait has They have received pre-issuance fund managers and asset managers booked previously said Egypt would seek to raise certilcation as climate bonds under the a combined 45%, bank treasuries 47%, about US$5bn in the lrst quarter of 2019. Climate Bonds Standard. insurers and pension funds 3% in total, In December, Maait said it was aiming for HSBC was sole global coordinator and while private banks and others took a at least two foreign currency bond issues in Bank of America Merrill Lynch was sole green combined 5%. the period. structuring agent. The two were also The lve-year tranche drew over US$1bn in Egypt could potentially look at issuance in an bookrunners and lead managers with orders from more than 50 accounts. Asia took Asian market, although it has not set a date nor CLSA. BPI Capital, BDO Capital and China Bank 74%, Europe 9%, and the US 17%. Fund decided the amount and currency, the lnance Capital were domestic lead managers. managers and asset managers booked a ministry said. The sovereign has also moated the The bonds gained 0.25 points in trading combined 33%, bank treasuries also took 33%, idea of debut sukuk issuance in 2019. on Wednesday morning. insurers and pension funds a combined 30%, Egypt raised õ2bn in April from the sale of and private banks and others booked 4%. eight-year and 12-year Eurobonds at 4.75% The senior unsecured bonds are expected and 5.625%, respectively. SOUTH KOREA to be rated A1/A+ (Moody’s/S&P). The sovereign had a successful outing in Bank of America Merrill Lynch, HSBC, JP US dollars last February, raising US$4bn KOWEPO LANDS FIRST SWISS EM OF 2019 Morgan, UBS and KEB Hana Global Finance were through lve, 10 and 30-year notes. joint bookrunners. Hana Financial The US$1.25bn 5.577% 2023s are bid at a KOREA WESTERN POWER brought the lrst Management was co-manager and HSBC was yield of 6.49%, the US$1.25bn 6.588% 2028s emerging markets deal in the Swiss franc in also sustainability structuring adviser. are at 7.63%, and the US$1.5bn 7.903% 2048s 2019 on Thursday, pricing a lve-year Proceeds will lnance or relnance eligible are at 8.68%. Sustainable bond issue at the tight end of Green or social projects in accordance with Egypt is rated B3/B/B. revised guidance. the South Korean bank’s sustainable Leads BNP Paribas (Suisse) and UBS sounded lnancing framework. the transaction at 43bp to 45bp over mid- KAZAKHSTAN swaps, before opening books at 40bp–43bp KOREAN AIR POSTPONES SAMURAI DEAL over, lnally pricing its maximum siZe KAZAGRO TAKES A SHOT AT 2023 of SFr200m at 40bp over with a 0.125% KOREAN AIR LINES has pulled the securities coupon. registration statement for its planned KAZAGRO’s announcement of a tender offer It came in line with comparable South Samurai bond offering for internal reason, and consent solicitation around its Korean names in the Swiss franc, and inside according to two sources familiar with the US$961.5m 4.625% 2023s sent the notes its own dollar curve. deal. climbing by 5pts in the secondary.

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EMERGING MARKETS EUROPE/AFRICA

The company is looking to buy back any and The sovereign sent a request for proposals Turk Telekom has received approval all of its 2023s, and is seeking consent for the to banks for a euro-denominated bond issue from the Capital Markets Board to sell mandatory early redemption of the notes. The last year. foreign currency denominated debt of an bonds jumped to 101.44 by Friday on the bid Romania was last in the international amount up to US$500m. side, according to 2elnitiV %ikon prices, haVing markets in June, when it sold US$1.2bn of One source said that Turk Telekom (-/BB-/ been 96.80 at the beginning of the week. 5.125% 30-year bonds. The transaction was BB+) has appointed banks to lead the issue. ).' analysts say that the proposal, which looked at as a potential sign that market In December, a group of banks took is to reduce the company’s hard currency sentiment was turning positive at the time, majority ownership of Turk Telekom in a denominated debt, should garner a although the notes were bashed about once fully consensual US$4.75bn lnancial participation rate close to 100%. free to trade. restructuring of Turkish holding company The early bird premium is US$20 per The 2048s are bid at 96.242 to yield 5.38%, Otas, which owns a 55% stake in Turk US$1,000 of principal amount. The early according to Tradeweb. Telekom. participation deadline is February 4. The sovereign is rated Baa3/BBB–/BBB–. Otas, which was set up by Dubai- Citigroup is the dealer manager. headquartered Oger Telecom in 2005 to buy the stake in Turk Telekom, failed to RUSSIA make at least three US$290m loan KENYA repayments since September 2016 on a ISSUERS PREPARE PRIMARY THAW US$4.75bn loan which backed the AFRICAN ISSUERS DRAW UP PLANS acquisition of the stake. Russian issuers are inching towards the lrst Under the terms of the debt for equity KENYA and GHANA have been busy laying the international deals of the year from the restructuring, lenders have taken control groundwork for international bond issues. country, with ALFA-BANK naming leads for a of Otas and the underlying stake in Turk Kenya, which is considering a US dollar three to lve-year Eurorouble deal. Telekom, making them the majority bond, has sent an RFP to banks sources told Egor Fedorov, senior credit analyst at I.G owners of the business. Three of the banks IFR. The banks are waiting to hear the for Russia and the CIS, questioned whether – Garanti Bank, Isbank and Akbank – own outcome of the selection process. it would be cheaper for the private bank to around 85% of the stake. Kenya raised US$2bn last February place bonds in the local market. Turk Telekom made its bond debut in through a dual-tranche offering of 10 and Alfa’s rouble-denominated 9.25% 2014 with US$1bn dual-tranche offering of 30-year notes. Eurobond due February 2022 is yielding a US$500m 3.75% 2019 note and a The US$1bn February 2028s are bid at around 9.13% on the bid side, according to US$500m 4.875% 2024 tranche. The 2019s 97.2 to yield 7.68%, according to Tradeweb Relnitiv data, while the 9.20% local bond mature in June. The 2024s are bid at 90.985 prices, while the US$1bn February 2048s due June 2022 is yielding 9.05%. to yield 6.91%, according to Tradeweb. yield 8.79%. “Many foreign funds are interested in Turkish conglomerate Koc has sent a Kamau Thugge, the principal secretary at Alfa, but Alfa doesn’t need US dollars,” said request for proposal to banks about a the ministry of lnance, told Reuters in a banker familiar with the matter. He said potential international bond offering, December that Kenya (B2/B+/B+) was that if the investors are willing to take according to sources. considering issuing a Eurobond as part of roubles then this offers a way to gain In statement to IFR, the company said: efforts to raise KSh272bn (US$2.65bn) in net exposure to the bank. “We are continuously analysing our eXternal lnancing for the year’s budget. “This also has the advantage of not using funding options. Currently, no decisions Further African supply is also expected up the domestic lines of Alfa.” that require disclosure have been taken.” from Ghana. The country’s ministry of The lender has a track record in Koc, which is Turkey’s biggest industrial lnance has reQuested written proposals Euroroubles, having sold two of the bonds and services group, was last in the from lnancial institutions to act as in 2017. international market in March 2016 when bookrunners and lead managers for its 2019 Alfa (Ba1/BB+/BB+) is meeting lxed it priced US$750m 5.25% 2023 bonds at a international funding programme, income investors in London on Monday. yield of 5.40%. Those bonds are now bid at according to a statement on its website. Alfa-Bank and JP Morgan are the leads. 6.08%, according to Relnitiv Eikon data. Ghana’s 2019 Budget Statement and GAZPROM, meanwhile, plans to issue Economic Policy outlined the government’s Eurobonds worth up to õ3bn this year, with ALL INTL EMERGING MARKETS BONDS intention to raise up to US$3bn from the various currency options on the table. BOOKRUNNERS: 1/1/2019 TO DATE international capital markets. Europe/Africa The sovereign also wishes to hear Managing No of Total Share proposed strategies around a liability TURKEY bank or group issues US$(m) (%) management exercise, including but not 1 Citigroup 3 876.87 16.2 limited to its 2023s, 2026s and 2030s. CORPORATES JOIN COMEBACK TRAIL 2 JP Morgan 2 793.70 14.6 Ghana is rated B3/B/B. 3 Deutsche Bank 1 663.70 12.2 The resurgence of Turkish issuers on the 4 HSBC 2 380.87 7.0 international bond scene looks set to 5 Commerzbank 1 286.23 5.3 ROMANIA continue with TURK TELEKOM and KOC HOLDING =5 Abanka dd 1 286.23 5.3 laying foundations for debt transactions. =5 Credit Agricole 1 286.23 5.3 SOVEREIGN NEARS EXECUTION DATE The sovereign and banks have both =5 Barclays 1 286.23 5.3 returned to international markets after =5 BNP Paribas 1 286.23 5.3 ROMANIA has mandated banks for an being shut out for a large part of 2018. The 10 UniCredit 2 224.64 4.1 international bond issue, according to last Turkish corporate to issue was real Total 5 5,425.31 sources, as it readies itself for a return to the estate company Ronesans, which sold a Excluding equity-related debt. market. US$300m lve-year in April. Source: Refinitiv SDC code: L2

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The company also has US$750m 3.50% In an emailed statement, COMMERCIAL BANK EMAAR PROPERTIES and state-owned developer April 2020s outstanding, which are bid at said: “We have a US dollar bond maturing in NAKHEEL have put plans to issue US dollar- 5.10%. Q2 2019 (June 2019) and plan to do a denominated bonds on hold, Emaar and It is rated BB- (stable) by S&P. replacement issuance around the maturity sources familiar with the bond issues told date of this bond.” Reuters. The people said some of the banks had The lrms had planned dollar- UZBEKISTAN been holding off from tapping bond markets denominated sukuk and would have had to as they seek to secure a more favourable pay a premium to attract enough investors UZBEKNEFTEGAZ NAMES BOOKRUNNER price, and hope for more clarity on the trade due to concerns about Dubai’s property FOR DEBUT row between the US and China and Britain’s price slide and emerging market volatility, departure from the European Union. three sources said. UZbeK state energy lrm UZBEKNEFTEGAZ has Q.B and Qatar Islamic Bank didn’t Emaar, developer of the world’s tallest appointed Russia’s Gazprombank as one of immediately respond to a request for building Burj Khalifa, told Reuters it had put two global coordinators and bookrunners comment. on hold a planned bond issue, blaming for its planned debut Eurobond issue, It has been a relatively quiet start to the rising interest rates, while .akheel declined Uzbekneftegaz said on Thursday. year for regional bond markets. Saudi to comment. The company’s statement provided no Arabia, First Abu Dhabi Bank and Dubai Dubai property prices have fallen since a further details of the planned deal and did Islamic Bank are the only main issuers to mid-2014 peak, hurt by weaker oil prices not name the second bank, reports Reuters. date, with the latter two issuing sukuk. and muted sales, although the slide has not Any trade would likely come after the Qatari banks have moved to widen their come close to the more than 50% drop in sovereign’s own debut. Uzbekistan (-/BB-/ funding sources since a political dispute 2009-2010, which pushed Dubai close to a BB-) is expected to try its hand in the coming erupted in June 2017 between Qatar, Saudi debt default. weeks with a potential US$500m, lve to 10- Arabia, the UAE, Bahrain and Egypt, opting Residential prices fell 6%-10% in 2018 and year bond. for private placements in different are expected to drop 5%-10% more this year, currencies, alongside more traditional Savills says. public bond issues. This has hit earnings, with a 29% fall in ,ast week, Q.B priced Rmb500m (US$7m) Emaar’s third quarter last year and a 68% three-year Dim Sum bonds at par to yield drop at Dubai’s second-largest listed MIDDLE EAST .35%, in line with lnal guidance. Standard developer Damac. Chartered was sole arranger for the Reg S trade. The lnancial sources said Emaar and .akheel hired banks a few months ago to QATAR issue Islamic bonds but shelved the plans. UAE “The bond was considered more than a BANKS WEIGH DOLLAR ISSUANCE year ago and was put on hold due to DIP ADDRESSES UPCOMING MATURITY increasing interest rates. The decision was Qatari banks are expected to issue US not based on market conditions,” a dollar bonds from this quarter onwards, DUBAI INVESTMENTS PARK has announced a spokesperson for Emaar, which is partly hoping to take advantage of any easing in roadshow for a forthcoming US dollar lve- owned by Dubai’s government, said. global volatility caused by geopolitical year sukuk as supply from the Middle East .akheel, developer of palm shaped tensions, three people familiar with the continues to tick over. islands off Dubai, was one of the worst hit matter told Reuters. DIP (BB+/BB+), which is a residential, by Dubai’s 2009-2010 real estate crash, QATAR NATIONAL BANK, the largest bank by commercial and industrial development, forcing it into a massive debt restructuring. assets in the Middle East and Africa, and was last in the market with a US$300m lve- It has not issued public debt since it nearly QATAR ISLAMIC BANK have held talks with year sukuk in 2014. The outstanding sukuk defaulted in 2009. banks about potential issues during the is due to mature in February. The market downturn has put pressure lrst quarter, the people said. Fitch analysts said that liquidity is tight on property companies’ existing bonds, due to the upcoming maturity, but the which investors use to establish the price of ALL INTL EMERGING MARKETS BONDS successful issue of a US$500m bond due in new debt sales. Yields of bonds issued by BOOKRUNNERS: 1/1/2019 TO DATE 2024 would offset the risk. Dubai developers have risen sharply in Middle East “DIP has no direct peers due to its mix of recent months, underperforming other Managing No of Total Share revenue streams,” wrote Fitch analysts. “DIP sectors. bank or group issues US$(m) (%) is smaller than most rated property Yields on Damac’s US$500m sukuk due in 1 BNP Paribas 2 2,440.52 20.4 companies in EMEA; however, its portfolio 2022 and US$400m Islamic paper due in 2 Natl Comml Bank Saudi Arabia 2 1,604.15 13.4 value is comparable with Emirates REIT 2023 have spiked since early .ovember by 3 HSBC 2 1,576.67 13.2 (BB+) and Ronesans Gayrimenkul Yatirim more than 250bp. =3 JP Morgan 2 1,576.67 13.2 (BB-).” BAML last week forecast weaker booked 5 Citigroup 1 1,482.92 12.4 DIP began its roadshow on Friday with sales and gross margin for Damac, saying it 6 Goldman Sachs 1 957.60 8.0 meetings in Hong Kong and Singapore. The was likely to be pressured by the property =6 Barclays 1 957.60 8.0 company lnishes its meetings in ,ondon on market and upcoming debt and land 8 Standard Chartered 3 288.43 2.4 Monday. payments. 9 Kuwait Finance House 2 214.98 1.8 Citigroup, Dubai Islamic Bank, Emirates NBD Amr Aboushaban, Damac’s head of =9 First Abu Dhabi Bank 2 214.98 1.8 Capital, First Abu Dhabi Bank and HSBC are the investor relations, said it is comfortable it Total 5 11,959.47 leads. will meet its debt commitments when they Excluding equity-related debt. A couple of Dubai property lrms, are due and continues to have strong Source: Refinitiv SDC code: L5 however, have put the brakes on their plans. liquidity.

64 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

EMERGING MARKETS AMERICAS

“Market conditions are expected to improve in the next two years, ahead of our 2022 and 2023 maturities and we remain Qatar throws Lebanon conservative from a leverage perspective,” he told Reuters. US$500m lifeline

„ MIDDLE EAST Move seen, though, as kicking can down the road

AMERICAS Qatar will invest US$500m in Lebanese brief visit to an Arab economic summit in Beirut government US dollar bonds to support on Sunday, during which he met Lebanese LEBANON’s struggling economy, the Qatari President Michel Aoun. ARGENTINA Ministry of Foreign Affairs said on Monday. Qatar is at the heart of a bitter row among Lebanon has one of the world’s highest levels Gulf Arab countries, which pits it against Saudi MARKET PRICES IN ARGENTINA RISK of public debt compared to GDP and stagnant Arabia - historically a backer of Lebanese Prime EVEN AS SOVEREIGN OUTPERFORMS growth. Minister-designate Saad al-Hariri. The International Monetary Fund, World Bank Hariri, who has Saudi citizenship, was While ARGENTINA bonds have outperformed and politicians have warned in recent months summoned to Riyadh a year ago, briefly detained Latin American peers this year, the market that reforms are urgently needed to put the debt and compelled to resign as prime minister until continues to price in considerable risks as on a sustainable footing. But more than eight France intervened to free him. Saudi Arabia the country heads into presidential months after an election, politicians have been denied that, but its relationship with Hariri and elections. unable to agree a new government needed to Lebanon is seen as less strong than before. Average spreads on the country’s bonds enact change and boost investor confidence. Saudi Arabia, the United Arab Emirates, have tightened 180bp since the beginning of Comments from Lebanon’s finance minister 10 Bahrain and Egypt cut diplomatic, trade and the year to January 18, outpacing the days ago about the public debt led to a sell-off transport ties with Qatar in June 2017. They region’s other sovereigns in what has been a in the country’s dollar-denominated sovereign accuse Qatar of supporting terrorism, which it good start for the asset class, according to bonds, though they have partially recovered. denies. ICE BAML data. “Qatar’s US$500m purchase of Lebanese “We wish stability and prosperity for the Yet despite the rally, Argentina, rated B2/ bonds is a welcome step, but a short-term fix Lebanese republic and the Lebanese people, B/B, still trades a good 100bp wide to Single as it will only kick the can down the road given and that the Lebanese economy will recover. B peers, remecting market uncertainty Lebanon’s challenges are structural,” said Ehsan The region needs a strong and prosperous around the credit. Khoman, head of MENA research at MUFG bank. Lebanon,” Qatari Foreign Minister Mohammed “I am not reading too much into the year “It will take a coherent and credible fiscal bin Abdulrahman Al Thani said in a statement. to-date [performance],” said Alejo consolidation strategy to offer markets and Lebanon’s dollar-denominated bonds rose Czerwonko, an emerging markets credit rating agencies more solid comfort and across the curve on the news, with the March economist at UBS Wealth Management. ultimately put the country on a more sustainable 2027s and March 2037s climbing over 5pts on “When you look at the spreads you are only trajectory,” he told Reuters. the week, according to Tradeweb, to 79.62 and back to late .ovember levels.” Doha’s decision to invest came after Qatar’s 77.50 respectively. The government’s ability to stick to Emir Sheikh Tamim bin Hamad Al Thani made a Davide Barbuscia, Eric Knecht targets set by the International Monetary Fund, which provided a record-breaking US$57bn funding package last year, may Siobhan Morden, head of Latin America “.ew and existing challenges for justify some of the spread tightening. lxed-income strategy at .omura Securities. Argentina are being underpriced by the CDS But some analysts think that yields are “Single B credits with IMF programmes market,” its analysts wrote. still pricing in considerable risks, and the trade close to 8%.” Whoever wins the election will start his pace of gains is likely to slow given all the Argentina’s 7.5% 2026s were trading last or her term with just US$5.9bn of IMF imponderables surrounding the October week at 88.25-89.00 for a yield of 9.80%- funding left, and will soon have to begin presidential elections. 9.64%, rallying from 84.25-85.00 or paying interest and principal on the Fund’s Market-friendly President Mauricio Macri 10.66%-10.49% on January 4, according to a US$57bn package, the bank said. still needs to fulll IMF austerity measures broker. Market participants largely think that the that have pushed the country into a In contrast, the 5.8% 2028s, 6.75% 2024s IMF will allow the country to renegotiate the recession while also winning a second term and 6.875% 2024s from Iraq (Caa1/B–/B–), debt and postpone payments, but a win for a that hinges in part on an improving Egypt (B3/B/B) and Kenya (B2/B+/B+) – all of president whose policies clash with the economic outlook. which have IMF eligible programmes – were Fund’s could upset such assumptions. Fitch, which has a negative outlook on trading at bid yields of 7.349%, 6.24%, and For now, that is the market’s worst-case Argentina, warned on Tuesday that while 7.17%, according to Relnitiv data. scenario, with few predicting a win for the government has complied with the IMF, Even so, some shops think that even at former president Cristina Fernandez de the risks of not hitting future targets are current levels the market is failing to price Kirchner (CFK), who had turbulent signilcant given lost revenues from the in challenges faced by Argentina in the relationship with the market and the IMF. recession and spending pressures in an coming years. “It’s diflcult to imagine a scenario of a election year. In a report released on Tuesday, B.P CFK victory, but we continue to monitor all “We have unresolved event risks that will Paribas cites a number of concerns, not least potential negative and positive surprises slow gains. Argentina is still trading at the potential of between US$50bn and over the next few months,” wrote Morden. distressed levels, and that is why everyone is US$98bn of funding needs between 2020 The prospects for a reduction in policy still long. It is near a 10% yield,” said and 2023. uncertainty and an economic recovery will

International Financing Review January 26 2019 65 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

be important factors in Argentina’s ability to last week, overshadowed by the remove that structural subordination, re-access the global markets in 2021 when sovereign’s US$2bn two-parter, but Fitch said. the IMF funds run out and repayments are nonetheless enjoyed a decent book and “Although the transaction implies a due, Fitch said. price progression on its US$410m 2029 leverage increase, the debt maturity bond. prolle is more manageable, and it also TPL, Colombia’s largest non-hydro removes structural subordination and COLOMBIA generation company, tested the waters liquidity constraints from the current with initial price thoughts of low 8% area capital structure,” the rating agency said. TPL PRINTS DEBUT BOND but was quick to tighten pricing before Following the deal, TPL’s leverage will landing the deal at 7.875% on the back of a hit 2.5x, up from 1.7x as of December 2017 Power company TERMOCANDELARIA POWER US$1bn book. Bank of America Merrill Lynch and Scotiabank (TPL) slipped in under the radar somewhat Despite proceeds being slated in part for acted as leads. distributions to shareholders, investors ALL INTL EMERGING MARKETS BONDS took to the trade, rated BB+/BB+. BOOKRUNNERS: 1/1/2019 TO DATE “They are using a lot of the proceeds REGIONAL Latin America to pay dividends to the parent and I Managing No of Total Share suspect that is the biggest sensitivity that CAF READIES DOLLAR BOND bank or group issues US$(m) (%) people have,” said a banker away from the AFTER TAPPING EUROS 1 BAML 4 1,633.79 25.6 deal. 2 Morgan Stanley 2 1,328.45 20.8 The deal came at a premium to regional CORPORACION ANDINA DE FOMENTO (CAF), 3 BNP Paribas 1 665.91 10.4 comparables such as Orazul Energy Egenor rated Aa3/AA-/AA-, will start meetings this 4 Barclays 1 662.55 10.4 (BB) and Kallpa Generacion (BBB-) whose week to market a US dollar three-year 5 JP Morgan 3 630.19 9.9 2027s have been trading at around 7% and bond. 6 Scotiabank 2 618.44 9.7 5%, respectively. HSBC and JP Morgan have been mandated 7 Itau Unibanco 1 413.44 6.5 TPL’s capital structure compares to arrange a series of meeting and calls 8 Wells Fargo 1 116.42 1.8 favourably against Orazul, whose medium- among lxed-income investors in the US =8 Citigroup 1 116.42 1.8 term leverage forecast of above 5x is at the this week. 10 Deutsche Bank 1 100.34 1.6 high end of its rating level, Fitch said. This comes after the regional Total 6 6,386.28 TLP’s debt ranks below its operating development bank raised õ750m in the Excluding equity-related debt. subsidiaries but this deal, which is also euro market last week when it priced a Source: Refinitiv SDC code: L3 being used for relnancing, is expected to lve-year bond at 52bp over swaps.

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66 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS LOANS

Australia 68 China 68 Hong Kong 69 Philippines 70 Vietnam 70 Belgium 70 Finland 71 UAE 72 United States 72 Canada 74 Leveraged Loans 74 Restructuring 80

„ FRONT STORY EUROPEAN LEVERAGED MARKET Investors sweat over weakening docs Moody’s European covenant quality indicator hit record low in Q4 Pressure on ratings agencies do more to halt growing market risk

Investors are calling on ratings agencies to “Our credit ratings are based on the “On their own covenants are rarely enough downgrade leveraged loans with overly analysis of issuers’ fundamentals, whereas to move issuer default ratings, which capture aggressive documentation, as weak lender the covenant scores focus purely on the the relative default risk of credit based on protection continues to cause concern. details of a specilc bond’s documentation,” business model, execution risk and cash mow Moody’s European covenant quality said ,isa 'undy, chief covenant oflcer at and leverage metrics,” said Ed Eyerman, indicator hit a record low in the fourth Moody’s. managing director at Fitch. quarter of ., which is the lowest lgure “Flexible covenants, allowing the ability “Covenants can also impact recovery since the ratings agency established the to distribute cash, remove security assumptions, especially if collateral value monitor in 2012. The statistic focuses on protection or increase debt, can be a can be diluted or stripped out.” high-yield bonds but analysts say loans are remection of an aggressive lnancial policy.” While some would like to see covenants in a similar state. factored more heavily into individual LOST IN TRANSLATION ratings, ratings agencies’ role in the market Financial data company REFINITIV, the parent makes it diflcult to curb risk. company of IFR, scored 4.77 on Moody’s “Rating agencies are paid by issuers, so Our frustration is that they indicator. It was the lowest ranked covenant they might be hesitant on that account, package in the European market in 2018 since they’re not paid for by investors. talk a good game, but and one of the biggest deals of the year. They’re not independent,” an analyst said. you’re not seeing that The score was linked to cash leakage, A second investor said: “I do not think reflected in the actual mexibility on investments, leveraging and rating agencies are very useful when it ratings” structural subordination. The company comes to risk analysis. A rating is a scored a B2/B/BB from ratings agencies and probability of default and in my view loose the dollar and euro loan tranches priced at docs reduce chances of defaults.” 375bp and 450bp over Libor/Euribor respectively. BLOW UP Covenant-lite loans, which offer 0rivate equity lrms prioritise the An inmux of cash into separated managed little protection for lenders, have mexibility in credit documentation highly. accounts in addition to record issuance of become established as the market norm. The freedom gives them options to reach CLO funds in 2018 – US$128bn in the US and Several services, including Moody’s, Fitch- high return targets and managed credits US$27.29bn in Europe – means that owned Covenant Review and Debt through a downturn. investors have very little room to be more Explained have been established to analyse Many have taken active buy and build selective about credits. documentation and inform investors on strategies with acquisitions which see “Investors have lacked bargaining power individual deals. sponsors tapping the loan market regularly over the past few years and they turn to Some investors would like to see ratings and investors and lenders are willing to give ratings because they can have an impact on agencies go further in assessing the risks mexibility to sponsors on good credits. arranger distribution strategies,” said that mexible documentation poses to For banks, repeated add-on lnancings Eyerman. lenders and downgrade loans with provide a reliable revenue stream. But the Few see the trend of covenant-lite loans offending documents, particularly loose frustration remains that looser restrictions reversing. While the summer saw a number restricted payment tests and the ability to are not being factored into ratings. of deals mex on documentation, the hope for take dividends from day one. “If loans with weak documents are issued a bigger shift in market sentiment was “I think the agencies have talked a bit then they ought to be rated substantially short-lived. about the impact of [covenant-lite] and below what a normal loan would be rated and But barring a blow up on an individual what they think the recovery rates are. Our I would hope to see more price distinction deal, many see market conditions frustration is that they talk a good game, around that,” the senior investor said. continuing to favour sponsors for now, as but you’re not seeing that remected in the The lack of lender protection in covenant investors are penalised for holding cash and actual ratings,” a senior investor said. lite loans is expected to hit recovery rates. have few opportunities to invest due to a Flexible document packages raise Recoveries in the leveraged market have thin pipeline in early 2019. several unknowns around individual averaged below 60% since 2015, according to “Liquidity is chasing very few assets. But the companies and the actions that their Fitch, in roughly the same period that senior more marginal credits will be found out and private equity owners could take in a range debt to Ebitda levels have risen to 4.5 the banks will lose money. That will temper of scenarios, and is therefore not weighted times-5 times, remecting the risk of the banks’ behaviour,” said one banker. heavily in the lnal rating. weakening covenants in the last few years. David Brooke

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mandated lead arrangers and bookrunners waste, hazardous and construction waste, of the latest lnancing, which was launched waste-water and sludge treatment services ASIA-PACIFIC on Wednesday. in the PRC. The interest margin is 140bp over Libor or Hibor and the average life is 2.775 years. CEC TO AMEND NANJING PANDA AUSTRALIA Banks have been invited to join with US or Hong Kong dollars. Lead arrangers with NANJING CEC PANDA FPD TECHNOLOGY is in talks WORLEYPARSONS SEEKS BRIDGE commitments of US$50m-equivalent or with lenders about amending a term loan TAKE-OUT more have been offered top-level all-in signed at US$1bn in *une 2014. pricing of 160.18bp based on an upfront fee Guaranteed by state-owned parent company %NGINEERINGûlRMûWORLEYPARSONS is of 56bp. Arrangers with tickets of US$20m– China Electronics Corp, the unsecured facility RElNANCiNG A !M 53M BRiDGE $49m earn an all-in of 155.14bp through a has a 10-year tenor with a lve-year put option, loan it raised last year for the acquisition of fee of 42bp, while managers committing which will kick in in *une this year. the energy, chemicals and resources US$10m–$19m receive an all-in of 147.93bp The borrower is looking to encourage Businesses of 53 lrm *acoBs %ngineering based on a 22bp fee. existing lenders to keep their holdings until Group, sources said. The pricing is marginally higher than Far the end of the loan’s 10-year maturity. HSBC, Standard Chartered and Wells Fargo East Horizon’s US$1.12bn-equivalent three- The amortising facility was not fully are the leads of the relnancing, Which Was year loan signed in March 2018, which paid drawn. launched in New York and Sydney in top-level all-in pricing of 155bp based on an Agricultural Bank of China Hong Kong branch December. interest margin of 130bp over Libor or and Bank of China (Hong Kong) were the WorleyParsons announced the US$3.3bn Hibor. mandated lead arrangers and bookrunners acquisition in October and funded it with Last March, Far East Horizon also closed of the 2014 deal. BOCHK is the facility agent. shares worth US$700m and US$2.6bn in an onshore 2mb1.23bn US$194m then Top-level all-in pricing was 277bp based cash. The cash consideration was funded via three-year loan. on an interest margin of 270bp over Libor a A$2.9bn entitlement offer and the bridge Six months later, it completed a US$515m and an average life of 4.025 years. loan. two and three-year term loan with The MLABs brought BOC Macau branch, BOC The take-out of the bridge is likely to be relationship banks. Seoul branch and lve other banks into the completed before the close of the Funds are for relnancing and working 2014 deal. acquisition, which is slated for between late capital. Funds were to set up new production lines February and April, according to a Hong Kong-listed Far East Horizon, rated for thin-llm transistor liquid crystal display WorleyParson update in December. BBB¦BBB¦ SPFitch , is about 23-owned panels. The production lines are now by Sinochem Group. operational. The guarantor makes semiconductors, CHINA CHINA TIANYING FUNDS URBASER BUY consumer electronics and their components, as well as telecommunications FAR EAST HORIZON PAYS UP FOR REFI Shenzhen-listed waste treatment company equipment. CHINA TIANYING has launched a õ300m lve- Financial services company FAR EAST HORIZON year facility to back its indirect takeover of LUYE PHARMA CLOSES US$300m BRIDGE is paying slightly higher pricing on a global environmental giant Urbaser. US$580m-equivalent three-year term loan Deutsche Bank is the mandated lead LUYE PHARMA HONG KONG has closed syndication launched last week compared with its arranger and bookrunner of the lnancing. of a US$300m 364-day bridge loan to back th previous widely syndicated loan completed In late 2017, China Tianying announced e acquisition of a drug’s sales and licensing in March last year. that it will buy 100 of *iangsu Dezhan rights. China Everbright Bank Hong Kong branch, CMB Investment, which wholly owns Spain’s Sole mandated lead arranger and Wing Lung Bank, CTBC Bank, Hang Seng Bank, Urbaser through holding company Ying bookrunner UBS brought eight banks into MUFG and Westpac Banking Corp are the :han Investment HK . the lnancing, which was launched into The latter owns Urbaser’s immediate limited syndication in early August. UBS had ASIA-PACIFIC LOANS BOOKRUNNERS – FULLY parent Firion Investments. initially signed the deal on *une 21 last year SYNDICATED VOLUME (INCLUDING JAPAN) China Tianying said in *uly last year that and pre-funded it. BOOKRUNNERS: 1/1/2019 TO DATE the acquisition will cost about Rmb8.88bn Mandated lead arrangers are China Managing No of Total Share US$1.308bn and it will issue shares in Minsheng Banking Corp, MUFG and State Bank of bank or group issues US$(m) (%) *iangsu Dezhan Investment to 26 Chinese India. Lead arrangers are CTBC Bank, Siemens 1 Mizuho 4 920.34 12.1 investors. The takeover has been completed. Bank, KDB Asia, Sumitomo Mitsui Trust Bank and 2 HSBC 4 473.72 6.2 A group of Chinese investors, which held Yuanta Commercial Bank. 3 DBS 3 447.63 5.9 Firion Investments, bought Urbaser from The loan paid top-level all-in pricing of 4 Indl & Comm Bank China 2 398.08 5.2 Spanish construction company Actividades 181.6bp based on an interest margin of 140bp =4 China Merchants Bank 2 398.08 5.2 de Construccion y Servicios in December over Libor and a remaining life of 0.72 years. 6 Comm Bank of Australia 1 397.83 5.2 2016. The deal backs the US$538m purchase of =6 ING 1 397.83 5.2 Urbaser provides waste treatment, and the rights to Seroquel and Seroquel XR in =6 Westpac 1 397.83 5.2 street and beach cleaning services, and the UK, China and other markets from =6 Morgan Stanley 1 397.83 5.2 manages landscaped urban areas mainly in pharma giant AstraZeneca. The drug is 10 CTBC Financial 4 328.54 4.3 Europe. It also owns waste treatment plants mainly used to treat bipolar disorder. Total 24 7,632.01 in Chile and Mexico. Luye Pharma Hong Kong is a subsidiary of Proportional credit China Tianying operates waste-to-energy Hong Kong-listed pharmaceutical company Source: Refinitiv SDC code: S3a and biogas power plants and provides food Luye Pharma Group.

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LOANS ASIA-PACIFIC

COGARD UPS LOAN TO US$1bn interest margin of 100bp over Libor for China Overseas Holdings, a unit of state- Tranche A, and Tranche B if it is guaranteed, owned China State Construction Hong Kong-listed property developer COUNTRY and 126bp based on a margin of 110bp over Engineering Corp, is the borrower’s GARDEN HOLDINGS has increased a dual-tranche Libor for Tranche B if it only has a keepwell controlling shareholder. loan to US$1.005bn-equivalent from US$931m. deed. China Merchants Bank Hong Kong branch has Tranche A is for Shanghai LOGAN INCREASES REFI TO HK$1.61BN joined as a mandated lead arranger and Pharmaceuticals HK Investment to buy bookrunner with US$60m. about 51 of Cardinal Health L from Property developer LOGAN PROPERTY HOLDINGS China Minsheng Banking Corp and JP Morgan, Shanghai Pharma Century Global, another has increased a 3.5-year term loan to which each lent about US$93m as MLABs in wholly owned subsidiary of Shanghai HK$1.61bn from HK$1.2bn. December, increased their allotments to Pharmaceuticals Holding. Tranche B will Hang Seng Bank was the original mandated lead US$100.498m and US$99.998m respectively. relnance a bridge loan signed by Cardinal arranger and bookrunner of the borrowing, Mandated lead arrangers and bookrunners Health HK on *anuary 27 2018 and for the which attracted lve other lenders, including are Industrial and Commercial Bank of China, Tranche B borrower’s general corporate Bank of East Asia, as MLABs before the launch. HSBC, Hang Seng Bank, China Merchants Bank purposes. Agricultural Bank of China is mandated lead Offshore Banking Centre, China Merchants Bank No commitment fee applies during the arranger, while Nanyang Commercial Bank, Hong Kong, China Minsheng Banking Corp and JP three-month availability period. Shanghai Pudong Development Bank and Luso Morgan. Lead arranger is China Everbright Bank. Financial covenants require the International Banking are arrangers. The entire deal now comprises a guarantor’s consolidated tangible net worth The deal had a greenshoe option to US$160m two-year tranche and a three-year to be a minimum of 2mb25bn US$3.7bn , increase it up to HK$2.5bn. portion of about US$845m-equivalent. the ratio of consolidated total net Top-level all-in pricing was 503.47bp Currency splits are now HK$3.47bn borrowings to consolidated Ebitda to be based on an interest margin of 395bp over US$445m and around US$560.496m. capped at 4.5 times and the ratio of Hibor, an average life of 2.95 years and an HSBC and Industrial & Commercial Bank of consolidated Ebitda to consolidated lnance early bird fee of 10bp. China (Asia) were the coordinators and costs to be a minimum of 3.5 times. A commitment fee of 50bp applies during MLABs. The facility offered top-level all-in Ownership covenants require Shanghai the six-month availability period. pricing of 350bp and 380bp based on Industrial Investment Holdings SIIC to Financial covenants require the interest margins of 265bp and 295bp over remain at least 51%-owned by and under the borrower’s consolidated tangible net worth Libor/Hibor and average lives of 1.95 years administrative leadership of the Shanghai to be a minimum of 2mb15bn US$2.21bn , and 2.7 years for the respective tranches. Municipal People’s Government. SIIC must a ratio of consolidated PRC borrowings to Country Garden is rated Ba2/BB+/BBB–. also continue to own at least 20% of and consolidated total assets capped at 60%, a control Shanghai Pharmaceuticals Holding, ratio of current assets to current liabilities at CARDINAL HEALTH REFI ATTRACTS EIGHT which must in turn continue to wholly own a minimum of 1.2x, a ratio of Ebitda to the borrowers and Cardinal Health L , and lnance charges at a minimum of 2x and an Hong Kong and Shanghai-listed Shanghai control the Tranche A borrower. annual dividend payout ratio capped at 50%. Pharmaceuticals Holding has closed a Logan must also maintain ratios of US$655m three-year term loan, which will consolidated net borrowings to consolidated be partially used to relnance a bridge loan HONG KONG tangible net worth at a maximum of 1.2 times used to buy Cardinal Health L . full-year 2018 , 1.15 times *anuary 1 2019 to Mandated lead arrangers, bookrunners COLI INCREASES LOAN BY HALF *une 30 2019 , 1.1 times *uly 1 2019 to and underwriters ANZ, DBS Bank, MUFG and December 31 2019 , 1.05 times *anuary 1 Natixis brought in eight banks. MUFG is the CHINA OVERSEAS LAND & INVESTMENT has increased 2020 to *une 30 2020 and 1 times thereafter . facility and security agent. a self-arranged lve-year term loan to According to a stock exchange lling, Mandated lead arrangers and HK$30bn US$3.85bn from HK$20bn. ownership covenants require Perenna Kei, her bookrunners are Export-Import Bank of China, Bank of China (Hong Kong) was the spouse and any of her children under the age Industrial & Commercial Bank of China, coordinator of the unsecured lnancing, of 18 years old to own at least 51% combined Agricultural Bank of China and Mizuho. which attracted 19 other lenders. BOCHK is of Logan, Kei Hoi Pang to have management Mandated lead arrangers are CMB Wing Lung also the facility agent. control over the company and Kei Hoi Pang or Bank and Nanyang Commercial Bank. Lead Mandated lead arrangers are DBS Bank, *i *iande to be chairman of Logan. arranger is United Overseas Bank, while Agricultural Bank of China, Bank of China, Bank The Hong Kong-listed borrower develops arranger is Sumitomo Mitsui Trust Bank. of Communications and Industrial & Commercial properties in Shenzhen, Shantou and The bullet deal is split between a US$315m Bank of China. Nanning. It is rated Ba3/BB–/BB–. loan for SHANGHAI PHARMACEUTICALS (HK) INVESTMENT Lead arrangers are HSBC, China Merchants Tranche A and a US$340m loan for CARDINAL Bank, Nanyang Commercial Bank, Hang Seng HEALTH (HK) Tranche B . The borrowers are Bank, Industrial Bank, Mizuho Bank, Shanghai INDIA wholly owned units of the listed company. Pudong Development Bank, United Overseas Bank, Shanghai Pharmaceuticals Holding is the SMBC, Chong Hing Bank, Bank of East Asia, OCBC POWER GRID DEBUTS WITH LONG guarantor for Tranche A. It will guarantee Bank, OCBC Wing Hang Bank, China Construction SAMURAI Tranche B if this portion receives SAFE Bank and China Everbright Bank. approval. Otherwise, the company will All lenders received the all-in pricing of State-owned electricity utility POWER GRID provide a keepwell agreement for Tranche 145bp based on the interest margin of CORP OF INDIA has launched a ¥22bn B, which will be secured by shares in 125bp over Hibor. US$201m 12-year term loan at two levels, Cardinal Health HK . The Hong Kong-listed company, which marking its debut international borrowing Based on a remaining life of 2.81 years, develops residential, retail and oflce and the longest unsecured lnancing for an the top-level all-ins are 116bp based on an properties in China, is rated Baa1/BBB+/A¦. Indian borrower.

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SMBC is the sole mandated lead arranger The deal comes more than two weeks and bookrunner of the Samurai loan, which after ICTSI Middle East won a 20-year VIETNAM pays an interest margin of 98bp over yen concession to operate, manage and Libor and has an average life of 9.75 years. develop the South Port Container Terminal VINMEC SEEKS UP TO US$300m Lenders receive top-level all-in pricing of at Port Sudan in the Republic of the Sudan. 110.8bp and the lead arranger title for ¥2bn Proceeds raised from the new loan are VINMEC INTERNATIONAL GENERAL HOSPITAL, a or more via a participation fee of 125bp, or for general corporate purposes and capital Vietnamese healthcare provider and an all-in of 105.7bp and the arranger title for expenditure requirements. subsidiary of Vingroup, is seeking a three- ¥1bn–¥1.9bn via a fee of 75bp. The loan agreement was signed on year term loan of up to US$300m. Power Grid joins a growing list of *anuary 9 and comes under ICTSI’s Deutsche Bank is the sole mandated lead borrowers that are tapping liquidity among innovative loan programme aimed at arranger and bookrunner of the bullet lenders in *apan. streamlining loan origination and transaction, which has been launched into Government-owned NTPC, India’s largest harmonising covenants and terms across limited syndication. The lnancing is said power utility company, has mandated MUFG, its capital structure. ICTSI had set up this to pay an interest margin of 300bp over Mizuho Bank and SMBC on a US$300m- bond-style programme in *uly 201. Libor. equivalent 10-year facility denominated in At the time ICTSI had raised US$350m Vingroup and several of its subsidiaries yen, while state-owned Power Finance Corp from a lve-year revolving credit facility. act as guarantors. has mandated Mizuho and MUFG on a The deal, which had an original base size Proceeds will be used for relnancing, US$150m-equivalent lve-year bullet of US$250m, paid top-level all-in pricing of acquisition of hospital properties, capital Samurai loan. 223bp based on a margin of 195bp over expenditure, working capital and general In !pril, .4PC signed a ¥39.2bn then Libor. corporate purposes. US$370m 10-year facility – the lrst Two years later, its Australian unit, Vinfast Trading and Production was the unsecured decade-long offshore loan for an Victoria International Container Terminal, last Vingroup subsidiary to tap the Indian borrower. completed a A$398m US$300m then syndication loan markets, raising a In September, Indian Railway Finance multi-tranche loan with a a guarantee US$400m lve-year loan last *uly. The facility Corp, another state-owned borrower, from Finnish export credit agency paid top-level all-in pricing of 370.38bp completed a ¥26.231bn 10-year Samurai Finnvera. It was ICTSI’s lrst project based on an interest margin of 350bp over loan, which attracted three banks in general lnancing in Asia and its lrst loan with the Libor and an average life of 3.925 years. syndication. Mizuho, MUFG and SMBC were backing of an ECA. Vinmec operates under a non-prolt the MLABs of the bullet deal, which offered The lnancing has tranches of seven, 10 model. It runs hospitals and clinics in top-level all-in pricing of 100bp based on a and 16 years. All-in pricing on the seven- Vietnam including a pediatric clinic and margin of 80bp over yen Libor and a year piece was below 300bp based on a operates the Vinmec Research Institute of remaining life of 9.5 years. margin of around 275bp over Libor. Stem Cell and Gene Technology. Power Grid, a regular borrower in the Indian bond market, IRFC and NTPC are all PNB JAPAN LAUNCHES US$200m DEBUT rated Baa2BBB¦BBB¦. PHILIPPINE NATIONAL BANK JAPAN BRANCH has launched a US$200m three-year debut term EUROPE/MIDDLE PHILIPPINES loan into general syndication. EAST/AFRICA ANZ, CTBC Bank, Mega International ICTSI RETURNS AFTER 2-1/2-YEAR HIATUS Commercial Bank and MUFG are the mandated lead arrangers. BELGIUM Port operator INTERNATIONAL CONTAINER TERMINAL Potential lenders such as *apanese SERVICES has launched a €260m term loan into regional banks and the Tokyo branches of SOLVAY GOES GREEN general syndication, returning to the international banks attended a bank syndication loan market after 2-1/2 years. meeting held in the *apanese capital on Chemicals group SOLVAY has agreed new Citigroup and Standard Chartered Bank are Tuesday. terms on its existing €2bn revolving credit the original mandated lead arrangers and “We are interested in the deal as it is a facility, linking the cost of the loan to the bookrunners of the facility, which has a rare Philippine name,” a source said. company’s reduction in greenhouse gases. tenor of around four years and has been pre- “(aving the *apan branch as the borrower The lnancing, which is for general funded. adds to the deal’s appeal.” corporate purposes, matures in 2023 with The borrowing pays an interest margin of The loan pays an all-in of 110bp via a the possibility to extend to 2024. 100bp over Euribor and has a remaining life margin of 90bp over Libor. The positive incentive loan is provided by of 3.66 years. Funds are for general corporate purposes. existing lenders BNP Paribas Fortis, Citigroup, Lenders receive top-level all-in pricing of PNB last tapped the syndicated loan Commerzbank, Credit Agricole CIB, HSBC, ING 121.86bp and the MLAB title for market in 2015, when it raised a US$150m Bank, JP Morgan, KBC Bank and MUFG. commitments of €30m or more via a three-year bullet term loan that paid a top- BNP Paribas Fortis is sustainability participation fee of 80bp, an all-in of level all-in of 154.7bp based on a margin of coordinator and facility agent on the 119.67bp and the MLA title for tickets of 138bp over Libor. That loan was the lrst in transaction. €20m–€29m via a fee of 72bp, or an all-in of more than 15 years for PNB. Solvay said in September 2018 that it was 117.76bp and the lead arranger title for Manila-listed PNB, controlled by business committed to cutting greenhouse gases €10m–€19m via a fee of 65bp. tycoon Lucio Tan, is the lfth-largest private from its own operations by one million Dubai-based ICTSI Middle East is the domestic bank in the country. In *apan, the tonnes by 2025 relative to 2017 levels, borrower of the lnancing, while ICTSI is the bank has a branch in Tokyo and a sub- decoupling its new targets from its earnings guarantor. branch in Nagoya. growth.

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LOANS EMEA

The company intends to achieve the reduction by further improving energy eflciency and energy miX and by investing ECB publishes benchmark in clean technologies. fallback guidance FINLAND „ EUROPE Changing key terms on existing contracts could prove challenging FINNAIR SIGNS €175m REFI The European Central Bank has published means they are often governed by English law, Airline FINNAIR has signed a €175m guidance on fallback provisions on new contracts so the level of market harmonisation is high, syndicate revolving credit facility, for euro-denominated cash products, including potentially making changes easier to implement. replacing an existing €175m facility syndicated loans, ahead of the phasing-out of The LMA published a revised replacement originally agreed in *une 1. the Euribor benchmark rate. screen rate clause on May 25 2018. The revised The lnancing, Which is for reserve The ECB warned that if new contracts clause allows lenders to put a replacement rate funding, has a three-year maturity referencing Euribor or euro overnight index in place without unanimous consent, and can be with two additional one-year extension average (Eonia) are agreed without robust triggered even if Euribor/Libor is still available. options. fallback provisions, the risk to the financial LMA also addressed the transition period Nordea Bank is coordinating bookrunner system may increase. between reference rates by including pricing and mandated lead arranger on the But changing key terms on existing contracts adjustments to reduce the gap between Libor lnancing. Danske Bank, OP Corporate Bank, or implementing alternative language on new and its successor via amendments and waivers SEB and Swedbank were bookrunners and contracts could prove challenging. that do not need 100% lender consent. mandated lead arrangers. Any material changes to existing contracts After various scandals involving market The facility has one lnancial covenant - will need to be agreed either among all parties, manipulation of quote-based interest rate adjusted gearing of 175%. or with the consent of the borrower and a certain benchmarks, Europe’s Financial Stability Board Terms are substantially the same as the proportion of lenders - up to 100% in some cases recommended the development and adoption of previous facility, including the lnancial - which could prove problematic. more appropriate near Risk-Free Rates (RFRs) as covenant of 175% maximum adjusted The guidance suggests that participants alternatives to existing interest rate benchmarks. gearing. may wish to consider including reference to In September 2017, the ECB, the Belgian The previous facility, which was the recommended euro short-term rate Ester Financial Services and Markets Authority (FSMA), unutilised, was coordinated by SEB, with alternative rate or a term structure based on the European Securities and Markets Authority Danske Bank, Nordea Bank, OP Corporate Ester as a potential fallback rate. (ESMA) and the European Commission launched Bank and Swedbank joining on equal Participants should enhance the robustness the private sector working group of euro risk-free tickets. of fallback language in new contracts, while rates (RFRs) to identify and adopt RFRs as an retaining a willingness to change the language alternative to current benchmarks. GLASTON LINES UP €107m used in new contracts over time in light of In September 2018, the working group developments. recommended the euro short-term rate Ester as Glass processing machinery company The ECB also said the introduction of an an alternative to euro overnight index average GLASTON is backing its €68m acquisition of adjustment spread should be considered for the (Eonia), as a first step in the replacement of Swiss-German Bystronic glass with €107m fallback rate, to minimise the difference in value Euribor, which is used as a basis to calculate the of loans. between existing benchmarks and the fallback interest rates on euro-denominated syndicated The lnancing includes €75m of senior rate. loans. secured loans comprising a €40m term Ester will not be available until October 2019 loan and a €35m revolving credit facility, WORK IN PROGRESS at the latest, as the working group finalises a both with a three-year maturity from the Most syndicated loans are based on standardised recommended term structure, although the closing of the acquisition. documentation, such as that produced by the ECB has already published preliminary figures, There is also a €32m six-month bridge Loan Market Association. In addition, the cross- referred to as pre-Ester. loan to a rights issue, expected to be border nature of many euro-denominated loans Alasdair Reilly launched during the second quarter. Cornerstone investor Ahlstrom Capital is providing a guarantee for the bridge ICBC, Intesa Sanpaolo, JP Morgan and loan. FRANCE Mizuho Bank were mandated lead The loans, which will also relnance arrangers. Glaston’s existing bank facilities and AIR LIQUIDE SIGNS €2bn RCF Previously, Air Liquide had a €1.3bn provide general working capital, are being syndicated credit facility maturing in provided by Nordea and OP Corporate AIR LIQUIDE has signed a €2bn lve-year November 2020. Bank. multicurrency revolving credit facility. The company also had access to €1.8bn Glaston is acquiring Bystronic The lnancing will be used for general of bilateral credit facilities. Maschinen and Bystronic Lenhardt and corporate purposes. Air Liquide acquired US-based Airgas in their subsidiaries from Switzerland-based BNP Paribas, Citigroup, Credit Agricole CIB, 2016, backing the acquisition with a Conzzeta Group. Bystronic glass is a MUFG, Natixis, Societe Generale and SMBC US$12bn bridge loan. The company started machinery, systems and services provider were bookrunners and mandated lead relnancing the bridge loan in *une 2016 for the processing of glass. arrangers. with the issue of €3bn of bonds with The acquisition is expected to close by Bank of America Merrill Lynch, Barclays, maturities of two, four, six, eight and 12 the end of the lrst quarter. Commerzbank, Goldman Sachs, HSBC, years.

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In September 2016 the company issued US$4.5bn of bonds with maturities of three, UAE lVe, seVen, 10 and 0 years. In /ctober the NORTH AMERICA company completed a €3.3bn capital EMIRATES GLOBAL ALUMINIUM SET increase. TO CLOSE Remaining amounts were repaid through UNITED STATES asset sales. EMIRATES GLOBAL ALUMINIUM is expected to !ir ,iQuide is rated ! by S0 and !3 by close a US$6.5bn seven-year loan within a BRISTOL-MYERS TAKES US$8bn TL Moody’s. couple of weeks. The amortising facility will be used BRISTOL-MYERS SQUIBB has agreed a US$8bn partly to relnance E'A’s debt, which term loan that reduces the US$33.5bn SAUDI ARABIA includes a US$4.9bn seven-year loan that bridge loan facility that it had secured signed in March 2016, and a US$1.8bn earlier this month to back its US$74bn ARAMCO SEEKS ADVISERS seven-year loan signed by Dubai purchase of Celgene Corp in the biggest ever Aluminium Dubal in *anuary 2015. healthcare acquisition. SAUDI ARAMCO is seeking advisers to arrange The US$4.9bn loan included a three-year Morgan Stanley is administrative agent on debt lnancing needed for the acQuisition of grace period and a balloon payment of 30% the new term loan. MUFG is syndication a stake in SABIC. on maturity and was fully underwritten in agent. The Saudi oil giant could borrow as much 2016 by senior banks BNP Paribas, The term loan facility comprises a US$1bn as US$50bn from international investors to Citigroup, Dubai Islamic Bank, Emirates 364-day tranche, a US$4bn three-year fund the acquisition. NBD, ING, National Bank of Abu Dhabi and tranche, and a US$3bn lve-year tranche. A request for proposals was sent out on Natixis. The 364-day and three-year loans do not Wednesday and banks are expected to In *anuary 2015 Dubal closed a US$1.8bn amortise. submit proposals for the lnancing by seven-year loan, the lrst facility that the The lve-year starts amortising on the Monday. company had raised to fund its general third-year anniversary of the loan, and The world’s top oil producer plans to business purposes in two decades. It was amortises at 10% annually from the third issue its lrst international bonds in the underwritten by Citigroup, Emirates NBD anniversary for lve years. second quarter of 2019, likely worth about and Societe Generale and pays 145bp over Ratings-based pricing on the 364-day US$10bn, Saudi Energy Minister Khalid al- Libor. tranche ranges from 75bp to 112.5bp over Falih said this month. The bond issuance EGA, the product of a 2013 merger Libor, on the three-year from 878.5bp to could help lnance the SABIC acquisition. between two state-owned aluminium 125bp over Libor, and on the lve-year from Aramco is looking for advisers for both an companies - Dubal and Abu Dhabi’s 100bp to 137.5bp over Libor. international bond issue and bank Emirates Aluminium - is jointly owned by Bristol-Myers is rated A2 by Moody’s and lnancing. Abu Dhabi investment fund Mubadala and A by SP. Both rating agencies warned that The debt is needed to back the purchase state company Investment Corporation of they might downgrade the company by one of all, or nearly all, of the 70% stake in Dubai. notch, based largely on the increased debt SABIC held by the Public Investment Fund, Dubal is still an entity within EGA that taken on for the Celgene deal. the kingdom’s top sovereign wealth fund. can borrow money in its own right. Based on ratings, the 364-day opens at That implies a deal value of roughly 75bp over Libor with a 3bp commitment fee; US$70bn. the three-year opens at 87.5bp over Libor Aramco is working with *P Morgan and UK with a 4bp commitment fee; and the lve- Morgan Stanley on the stake purchase. year opens at 100bp over Libor with a 5bp The two banks, along with others, were WETHERSPOON AGREES £875m REFI commitment fee. working on the planned stock market Pricing grids are as follows: listing of Aramco before the move was put British pub chain JD WETHERSPOON has For the 364-day loan, for A+/A1 the on hold. Aramco’s new planned listing agreed an a875m lve-year revolving margin is 75bp over Libor and the date is 2021, Saudi oflcials have said. credit facility, replacing its existing commitment fee is 3bp; for A/A2 it is 87.5bp £820m RCF. and 4bp; for A-/A3 it is 100bp and 6bp; and The previous unsecured RCF was for BBB+/Baa1 it is 125bp and 9bp. EMEA LOANS BOOKRUNNERS – FULLY originally agreed in February 2015 for lve On the three-year loan, for A+/A1 the SYNDICATED VOLUME years via a syndicate of 11 banks margin is 87.5bp over Libor and the BOOKRUNNERS: 1/1/2019 TO DATE coordinated by HSBC and Royal Bank of commitment fee is 4bp; for A/A2 it is 100bp Managing No of Total Share Scotland as bookrunners and mandated and 5bp; for A-/A3 it is 112.5bp and 7bp; and bank or group issues US$(m) (%) lead arrangers. for BBB+/Baa1 it is 125bp and 10bp. 1 BNP Paribas 1 180.86 12.5 As of *uly 29 2018 Wetherspoon On the lve-year loan, for A+/A1 the =1 Danske Bank 1 180.86 12.5 had drawn £780m of the RCF. Although margin is 100bp over Libor and the =1 Nordea 1 180.86 12.5 the amount drawn varies - depending commitment fee is 5bp; for A/A2 it is =1 Swedbank 1 180.86 12.5 on the requirements of the business - 112.5bp and 6bp; for A-/A3 it is 125bp and =1 Sumitomo Mitsui Finl 1 180.86 12.5 the company expected that draw-downs 9bp; and for BBB+/Baa1 it is 137.5bp and =1 Credit Agricole 1 180.86 12.5 under the facility would not drop below 12.5bp. =1 DNB 1 180.86 12.5 £695m. Lenders are MUFG, Wells Fargo, Mizuho, =1 SEB 1 180.86 12.5 Wetherspoon expects lnancial SMBC, Bank of Nova Scotia, US Bank, Morgan Total 1 1,446.85 year-end net debt to be around £10m Stanley, Barclays, Credit Suisse, BBVA, BMO Proportional credit higher than for the previous lnancial Harris Bank, BNP Paribas, Credit Agricole, Source: Refinitiv SDC code: R17 year. Deutsche Bank, HSBC, SunTrust, Commerzbank,

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LOANS NORTH AMERICA

PNC Bank, Societe Generale, Standard Chartered, CIC, Svenska Handelsbanken and Northern Trust AFFILIATED MANAGERS AMENDS UniCredit, Santander, Bank of New York Mellon, each committed US$50m. AND EXTENDS Northern Trust and City National Bank. WEX INCREASES LOAN FOR ACQUISITION AFFILIATED MANAGERS has amended and WALGREENS SECURES US$2bn restated a lve-year senior unsecured multi- Financial technology services provider WEX currency revolving credit facility and a Drugstore chain WALGREENS BOOTS ALLIANCE has has increased its existing term loan and four-year term loan. agreed a US$2bn 364-day multi-currency revolving credit facilities to back the The US$1.25bn revolver, due *anuary 18 revolving credit. purchase of Discovery Benelts, an employee 2024, relnances a facility dated September Borrowings are available in US dollars, benelts administrator. 2015 and can also be used for general sterling and euros. Wex has added a US$275m incremental corporate purposes. Mizuho is administrative agent of the A3 Term Loan and an incremental US$25m There is also a US$450m four-year senior facility, which is being put in place for revolving credit facility that will be used to unsecured term loan due *anuary 18 2023, relnancing and general corporate purposes. fund Discovery Benelts. which amends and restates an agreement Mizuho, Bank of America Merrill Lynch, HSBC, The company will also add an additional dated October 2018. Intesa Sanpaolo, MUFG, Unicredit, JP Morgan, US US$300m in bank debt. Bank of America Merrill Lynch is Bank, National Westminster and TD are joint Bank of America Merrill Lynch is joint lead administrative agent. lead arrangers and joint book managers. arranger and bookrunner on the The revolver can be increased by up to Based on credit ratings of BBB by S0 and transaction. MUFG, SunTrust, Citizens Bank and US$500m and the term loan can be raised Baa2 by Moody’s, opening pricing is 95bp Wells Fargo were joint lead arrangers and by US$75m. over Libor. bookrunners. Bank of Montreal and Santander Pricing on the revolver is linked to There is a 10bp commitment fee. were named co-documentation agents. ratings. For A+/A1/A+ the margin is Pricing is linked to ratings. For A-/A3 it is Wex agreed to buy Discovery Benelts for 87.5bp over Libor with an 8bp 70bp over Libor, for BBB+/Baa1 it is 82.5bp, approximately US$425m, following its commitment fee; for A/A2/A it is 97.5bp for BBB/Baa2 it is 95bp, for BBB-/Baa3 it is purchase in October of electronic payment and 10bp; for A-/A3/A- it is 110bp and 120bp and for BB+/Ba1 it is 145bp. network Noventis for US$310m. 12.5bp; for BBB+/Baa1/BBB+ it is 125bp The company ended the third quarter of and 15bp; and for BBB/Baa2/BBB it is 150bp AMPHENOL UPS LOAN TO US$2.5bn 2018 with lve times leverage, down from and 20bp. 6.8 times a year earlier, according to a report AMG is rated A- by SP and A3 by %lectronic and lbre-optic connector maker from SP. Moody’s. AMPHENOL has amended its revolving credit The ratings agency said it expects Wex to Lenders are BAML, Citizens, MUFG, facility, increasing the lnancing by “digest” recent acquisitions and reduce Barclays, Citigroup, JP Morgan, Royal Bank US$500m to US$2.5bn. leverage to roughly lve times before of Canada, Wells Fargo, Deutsche Bank, Correspondingly the company’s US making any further purchases. Morgan Stanley, US Bank, Bank of commercial paper programme has also been NY Mellon, Huntington National and increased by US$500m to US$2.5bn. EAGLE BULK LINES UP US$208m LOAN Northern Trust. The RCF, which includes a US$100m On the term loan, pricing is 75bp over sublimit for the issuance of letters of credit, US-headquartered EAGLE BULK SHIPPING Libor for A+/A1/A+; 87.5bp for A/A2/A and has a renewed lve-year maturity with two subsidiary Eagle Bulk Ultraco, is lining up A-/A3/A-; 100bp for BBB+/Baa1/BBB+; and one-year extension options. an around US$208m lve-year senior 125bp for BBB/Baa2/BBB. BBB+/Baa1-rated Amphenol Corp is parent secured loan. BAML is providing the full term loan borrower and guarantor; Amphenol East The loan will be used to relnance debt commitment. Asia is Hong Kong borrower; Amphenol at Eagle Bulk Ultraco and Eagle Shipping, AMG is a global asset management Technologies Holding GmbH is German as well as for general corporate purposes company with equity investments borrower; Amphenol Benelux BV is Dutch including capital expenditures related to in boutique investment management borrower; and Amphenol Ltd is UK the installation of exhaust gas cleaning lrms. borrower. systems. Pricing, which is based on ratings, The lnancing, which pays a margin of AMERICAS LOANS BOOKRUNNERS – FULLY remains unchanged. 250bp over Libor, comprises an around SYNDICATED VOLUME For A/A2 the margin is 87.5bp over Libor US$153m term loan and a US$55m BOOKRUNNERS: 1/1/2019 TO DATE and the commitment fee is 7bp; for A-/A3 it revolving credit facility. The facility may Managing No of Total Share is 100bp and 9bp; for BBB+/Baa1 it is 112.5bp be increased by up to an additional bank or group issues US$(m) (%) and 10bp; for BBB/Baa2 it is 125bp and 15bp; US$60m for the acquisition of additional 1 BAML 12 1,858.33 21.1 and for BBB-/Baa3 it is 150bp and 20bp. vessels. 2 JP Morgan 5 1,090.67 12.4 Administrative agent JP Morgan along with The loan, which is expected to close by 3 Wells Fargo 5 953.33 10.8 syndication agents Wells Fargo, MUFG, the end of *anuary, will be provided by ABN 4 Natl Bank of Canada Finl 1 665.69 7.6 Citigroup and TD Bank each committed AMRO, Credit Agricole CIB, SEB, DNB Bank, =4 CIBC 1 665.69 7.6 US$240m to the increased facility. The lve Danish Ship Finance and Nordea. 6 RBC 2 404.00 4.6 banks are also each providing US$20m of After closing and the repayment of the 7 TD Securities 3 401.10 4.6 letter of credit commitments. relnanced debt, Eagle Bulk expects to 8 SunTrust Banks 2 333.33 3.8 Co-documentation agents Barclays, Bank of have US$65m of incremental liquidity. 9 Deutsche Bank 1 320.00 3.6 America Merrill Lynch, Commerzbank, HSBC and Eagle Bulk owns a meet of supramax/ 10 US Bancorp 2 242.33 2.8 Mizuho each committed US$170m. ultramax dry bulk vessels transporting a Total 19 8,806.25 Lenders BNP Paribas and US Bank each broad range of cargoes including coal, Proportional credit committed US$125m, while Bank of China, grain, iron ore, cement and fertiliser. Source: Refinitiv SDC code: R7

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Engie, CDPQ eye US$8bn LEVERAGED LOANS loans for Petrobras pipeline UNITED STATES

„ BRAZIL Financing to buy TAG pipeline expected to have a maturity of 8–10 years ATHENAHEALTH MARKETS US$3.66BN TL

French electric utility ENGIE and Canadian Singaporean sovereign wealth fund GIC and the Healthcare information technology pension fund Caisse de depot et placement Canada Pension Plan Investment Board. company ATHENAHEALTH has launched a du Quebec (CDPQ) are raising a loan of up to US$3.66bn term loan to back its buyout. US$8bn to back the purchase of a natural gas DIVESTMENT DRIVE Veritas Capital and Evergreen Coast pipeline system in Brazil from state-owned oil Petrobras CEO Roberto Castello Branco is Capital have agreed to buy it for US$5.7bn. company PETROBRAS. expected to push forward with divestment and JP Morgan is leading the lnancing with Engie and CDPQ are talking to at least eight partnership opportunities in the distribution and Deutsche Bank, Ares, KKR, Bank of America international banks including BNP Paribas, natural gas businesses after taking over from Merrill Lynch and Barclays. Mizuho and Sumitomo Bank. Brazilian banks Ivan Monteiro in January. Guidance opened in the 450bp over Itau Unibanco, Banco do Brasil and Bradesco are Petrobras is expected to be the highest Libor range with a 0 moor and a discount also expected to commit to the financing. spending oil and gas firm in South America until of 98. The term loan will mature in 2026 The financing package for the Transportadora 2025. and have soft call protection of 101 for six Associada de Gas pipeline unit is expected to Castello Branco will also prioritise investment months. have a maturity of eight to 10 years, and will into the more profitable deepwater oil and gas The new owners plan to merge probably be raised at the target company level. exploration and production segments. athenahealth with Veritas portfolio Loans for Latin American companies usually The Brazilian oil giant is estimated to need company Virence Health. The acquisition is have maturities of three to five years, and the about US$49.4bn over the next six years for expected to close during the lrst quarter. longer maturity shows confidence in the credit. almost 40 project opportunities. Data and analytics provider DUN & Petrobras was in exclusive talks with Engie The company’s exit from natural gas BRADSTREET launched a covenant-lite and CDPQ over the sale of TAG last year, before distribution started to take shape in September US$2.63bn term loan backing its buyout by a the sale was stalled by an injunction from Brazil’s 2016 when it sold Nova Transportadora do group of investors. Supreme Court in July, which required the Sudeste, a pipeline operator in Brazil’s south and The size of the seven-year term loan is country’s Congress to approve the sale of any south-east, for US$5.2bn to a group comprised smaller than the initial commitment for a state-owned asset. of Canadian investors Brookfield Asset US$3.13bn term loan, which was announced Brazil’s solicitor general overturned the Management and British Columbia Investment along with the buyout in August 2018. injunction in early January, allowing Petrobras to Management Corp, as well as Singapore’s GIC The commitments also included a reopen bidding for potential buyers interested in and the China Investment Corp. US$200m senior secured bridge loan and a buying TAG. Petrobras’s latest five-year investment plan, US$850m senior unsecured bridge loan. Before the injunction, Engie and CDPQ unveiled on December 5, seeks to raise close to The company has opted to increase the bond had submitted the highest bid for TAG, which US$27bn from divestments and partnerships. portion of the lnancing in the wake of strong operates natural gas pipelines in Brazil’s north Proceeds from asset sales will go towards demand for high-yield debt see Top News . and north-east. lowering Petrobras’s debt load, which is considered Bank of America Merrill Lynch leads with Other consortiums that also expressed one of the largest among oil and gas firms. Citigroup, Royal Bank of Canada, Credit Suisse, interest in the assets included a group Net debt was roughly R$291.8bn (US$77.5bn) MUFG, Mizuho, Natixis, HSBC, Jefferies, comprising EIG Global Energy Partners and the at the end of the third quarter, Petrobras said in Macquarie, Wells Fargo, Citizens, Houlihan and UAE’s sovereign wealth fund Mubadala and a its quarterly results presentation. SMBC. party made up of Australian investor Macquarie, Aaron Weinman Guidance opened in the 450bp–475bp over Libor range with a 0 moor and a discount of 98. A portion of the RCF is expected to be The corporate rating is B3/B–/B– while the CANADA syndicated to other banks or lnancial term loan is rated B2/B–/BB. institutions. CC Capital, Cannae Holdings, Thomas H SHAWCOR PREPS US$500m RCF The acquisition will also be lnanced Lee Partners and Black Knight agreed to buy through cash on hand. It is expected the company for US$5.38bn in cash. The Integrated energy services company to close early in the second quarter of deal includes US$1.5bn of debt, putting the SHAWCOR has lined up a US$500m 2019. enterprise value at US$6.9bn. Four year revolving credit Facility 2#& to ZCL has two plants in Canada, four in BAML, Citigroup and Royal Bank of BacK its around #$0m US$m the US and one in the Netherlands. The Canada provided the initial lnancing acQuisition oF lBreglass reinForced plastic company serves the fuel, water  commitments. underground storage tank maker ZCL wastewater, and oil and gas markets. CARROLL COUNTY ENERGY is seeking a Composites. Shawcor specialises in products US$460m Term Loan B. The senior unsecured RCF, which will be and services for the pipeline and pipe BAML, BNP Paribas and Credit Agricole are used to part-fund the acquisition and services segment of the oil and gas arranging the transaction. replace Shawcor’s existing credit facility, is industry and related products for The seven-year loan is being offered at being arranged by TD Bank and National the petrochemical and industrial 375bp over Libor with a 0 moor on the Bank of Canada. markets. benchmark and an OID of 99.

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LEVERAGED LOANS

The company will also be subject a minimum debt service coverage ratio. 0roceeds will be used to relnance #arroll Middle market investors look County Energy’s existing senior secured credit facilities and pay a distribution to shareholders. to senior direct lending funds Carroll County Energy owns a recently commissioned natural gas lred combined „ US Owl Rock raises its first fund focusing on first-lien debt cycle electricity generating facility with 700 megawatts in capacity. Middle market direct lending funds focusing on Goldstein, partner and co-head of the Ares Credit !dvanced 0ower 0rudential T)!! *E2! senior US leveraged loans are seeing a pickup in Group, in the statement. and Ullico own Carroll County Energy. Ethos demand as investors seek protection in less risky Energy Group is operating the power debt in the late stages of the credit cycle. FIRST-LIEN FOCUS generating facility. Platforms that lend to US mid-sized Owl Rock Capital Partners, another middle market companies have been attracting record levels of direct lending platform, filed a statement with the CIVITAS SEEKS US$1.2bn LBO DEAL capital across a range of strategies and funds, US SEC last year for a new fund targeting first-lien and hit a record US$87bn in 2018, as demand for loans. The fund will be Owl Rock’s fourth direct Home healthcare company CIVITAS SOLUTIONS senior loan funds increased amid a deteriorating lending fund since the firm launched in 2016, but has launched US$1.18bn of loans to support macroeconomic outlook. is the first to focus on first-lien debt. its US$1.bn buyout by investment lrm In the next 12 to 18 months, more direct The South Carolina Retirement System Centerbridge Partners. lenders are expected to raise funds focused Investment Commission said in its November 8 Goldman Sachs is leading with UBS, Royal on senior debt investments, according to John commission meeting agenda that it had invested Bank of Canada, Keybank, BMO and Fifth Third. Mahon, a partner in the investment management in the Owl Rock First Lien Fund. The lnancing comprises a US$8m lrst group at law firm Schulte Roth & Zabel. “There is a bias toward first-lien assets and a lien term loan, a US$200m privately placed Middle market funds typically invest in senior preference for investing higher up in the capital second-lien term loan, and a US$125m loans - which offer more protection as they are structure,” said a middle market investor, whose revolving credit facility. first in line for repayment - and riskier second- portfolio allocation has recently shifted to favour Guidance on the lrst-lien term loan lien loans with lower recovery rates. first-lien assets over a more even first-lien/ opened at 50bp over ,ibor with a 0 moor Boosting the allocation of senior debt is a second-lien split. and a discount of 98.5. The loan will have defensive move designed to offset the risk of Investors concerned about market disruptions soft call protection of 101 for six months. lending to smaller companies, which are more or economic conditions may find that first-lien The main lrst-lien term loan will vulnerable in an economic downturn, and to loans offer a more conservative risk profile, a amortise at 1% per year, though the letters improve recovery rates if companies run into direct lender said. of credit term loan will not amortise. difficulties. As Libor continues to rise – the three-month Civitas is a publicly traded company, but Ares Management closed its inaugural US benchmark to which companies peg interest private eQuity lrm 6estar Capital Partners senior direct lending fund in January, which payments has risen 63% since the start of 2018 owns a majority share. was heavily oversubscribed and raised around until Thursday – returns on first-lien loans Walk-in medical clinic operator FASTMED US$3bn in total commitments, exceeding an have also improved, which is making them URGENTCARE is in the market with a US$525m initial target of US$2bn. Including leverage, the increasingly attractive to investors on a risk- lrst- and second-lien loan package for its Ares Senior Direct Lending Fund is expected to adjusted return basis. merger with NextCare Holdings. have about US$5bn in total capital available, the The average yield for first-lien institutional Barclays leads the deal with Societe Generale firm said on January 2. middle market loans was 7.86% in the first and Antares Capital. The fund’s investor base includes pension quarter as of January 24, up from 6.2% in the The credit comprises a US$400m seven- funds, sovereign wealth funds, insurance first three months of 2018. Funds that employ year lrst-lien term loan and a US$125m companies, high net-worth individuals, family additional leverage can generate even higher eight-year second-lien term loan. offices, fund-of-funds, endowments and returns on first-lien loans. First-lien pricing is guided at 450bp-475bp foundations. “In theory a manager that has a good handle over ,ibor with a 0% moor and a 98-99 /)$. “In today’s market environment, we have on the relative risk profile can use leverage to Second-lien pricing is guided at 850bp-875bp witnessed increased demand for a floating- achieve higher returns from relatively lower- over ,ibor with a 0% moor and a 97-98 /)$. rate, senior secured loan fund where investors yielding assets that they otherwise would not The lrst-lien loan has 101 soft call of various sizes can access this durable and have been able to,” Mahon said. protection for six months, while the second- defensively positioned asset class,” said Mitch Leela Parker Deo, Kristen Haunss lien call schedule is 102/101/100. FastMed will acquire 100% of NextCare. Abry Partners and BlueMountain Capital The company is rated B3. The loan is 2024, supporting the acquisition of digital Management, FastMed’s lead investors, are rated B. coupon publishing business You Technology. the lnancial sponsors. Cole Haan lined up a US$350m term due Credit Suisse leads alongside Jefferies, Wells Shoe and clothing retailer COLE HAAN is in February 2020 to lnance a dividend Fargo and Deutsche Bank. relnancing its debt with a new US$290m recapitalisation. The loan priced at 400bp The new debt will be fungible with the six-year term loan. over Libor with a 1% moor. company’s existing loan and brings the size JP Morgan is leading. to US$986m. Pricing is expected to be 600bp over Libor INMAR LAUNCHES US$415m ADD-ON Guidance on the entire tranche opened at with a 0% moor and a discount in the 97.5 to 400bp over Libor with a 1% moor and a 98 range. The loan will have six months of Coupon processor INMAR launched a discount of 98, which is 25bp above the soft call protection at 101. US$415m add-on to its term loan due in May current loan’s price.

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Citizens leads the seven-year loan, which is guided at 475bp over Libor with a 98-98.5 OID. Leveraged loan risk remains Moody’s assigned lrst-time ratings to US Salt, including a B3 corporate family rating and B2 ratings to a proposed US$25m lrst- elevated lien senior secured revolving credit facility due 2024 and the US$285m lrst-lien senior „ US Regulators say overall credit quality has improved secured term loan due 2026. Kissner Holdings II, a newly established Leveraged loan risk remains elevated even as risk a single statement combing the findings from holding company, will own co-borrowers US in the overall portfolio of large syndicated bank the previous 12 months. Salt and NSC Minerals following the loans has improved, a review by US financial The report follows months of criticism of the completion of the NSC Minerals acquisition. regulators found, according to a report released asset class from former Fed Chair Janet Yellen, Kissner acquired NSC Minerals from an on Friday. Senator Elizabeth Warren, the International investor group led by Altas Partners. The level of loans examined with the lowest Monetary Fund and the Bank of England. Moody’s estimates pro forma leverage for supervisory ratings declined due to improving the acquisition in the mid six times as of economic conditions, particularly in the oil and LOOSER TERMS October 31. gas sectors, said the Federal Reserve, the Office The condemnation of the US$1trn US leveraged QUIRCH FOODS, a US based distributor and of the Comptroller of the Currency and the loan market has been focused on loosening exporter of protein and Hispanic food Federal Deposit Insurance Corp in the Shared underwriting terms including covenant-lite loans products, is shopping a US$165m term loan National Credit report, an assessment of loan that lack full lender protections and the ability B that backs Palladium Equity Partners’ underwriting standards. for companies to issue additional debt through investment in the company. But leveraged lending is the largest the use of incremental facilities. RBC Capital Markets is arranging the seven- contributor to the special mention and classified “These loans are generally poorly year loan. rate of assessed debt, those exhibiting potential underwritten and include few protections The loan is expected to pay 600bp over weaknesses. Leveraged loans made up 72.8% for lenders and investors,” Warren wrote in a Libor and is offered at a 99 OID. of special mention commitments, 87% of November letter to regulators. Palladium will partner with the Quirch substandard commitments, 44.8% of doubtful More than US$730bn of US institutional family and management team with the goal commitments, and 76.3% of non-accrual loans, loans were arranged in 2018 after a record of expanding the company’s market reach according to the report. US$923.8bn was issued in all of 2017. A 2018 via a series of growth initiatives including “The SNC review found that many leveraged high of 89% of loans arranged in February were expansion into new product offerings and loan transactions possess weakened transaction covenant-lite. That number dropped to just 55% geographies, and potential acquisitions in structures and increased reliance upon revenue on little issuance in December. the food distribution industry. growth or anticipated cost savings and synergies Leverage for buyouts, which measures debt Quirch’s portfolio of owned and licensed to support borrower repayment capacity,” the compared with earnings before interest, tax, brands includes Panamei Seafood, Mambo regulators wrote in the report. depreciation and amortization, fell to 6.4 times and Chiquita Frozen. Agent banks’ risk management and in the fourth quarter from 6.94 times in the underwriting practices have improved, the previous three months, which was the highest COMMSCOPE SEEKS US$3.9bn regulators noted, saying lenders are better level in four years. equipped to assess borrower repayment capacity While leverage dropped, it is still above the six Telecommunications equipment maker and enterprise valuations. times level that regulators warned about in 2013 COMMSCOPE is in the market for a US$3.87bn But the regulators warned that a downturn in when they updated leveraged lending guidance Term Loan B to lnance the acquisition of the economy could result in a jump in classified and said leverage that exceeds six times “raises set-top box maker Arris. exposures and higher losses. concerns”. It also highlighted concerns about Price guidance on the seven-year loan is “Banks engaged in originating and aggressive underwriting including covenant-lite set between 325bp-350bp over Libor with a participating in leveraged loans should ensure and said companies should be able to repay at 0 moor on the benchmark, an OID of 98 that risk management processes keep pace with least 50% of total debt within five to seven years. and 101 soft call protection for six months. changes in the leveraged lending market and Last year federal regulators, including JP Morgan is arranging the lnancing and a ensure that their risk management processes Comptroller of the Currency Joseph Otting, lender meeting has been scheduled for and limits fully consider the potential direct and signalled that the government was relaxing Monday. indirect risks associated with these loans,” the restrictions on leveraged loans. CommScope said in a press release in agencies wrote. In February, Otting said banks could November that it agreed to acquire Arris for The regulators noted that non-banks are underwrite loans as long as they had the capital approximately US$7.4bn, including the becoming a bigger part of the market and to do so in a safe manner. He reiterated the prepayment of Arris’ debt. The acquisition is present their own risks. comments in May, noting leveraged lending expected to close in the lrst half of 2019. Regulators conduct the SNC in the first and guidance was always meant to be guidance as PF CHANG CHINA BISTRO is readying a third quarters, with some banks receiving two opposed to a hard rule. US$485m loan backing the restaurant reviews and others receiving one. They then issue Kristen Haunss chain’s sale to private equity investors TriArtisan Capital Partners and Paulson  Co. The existing loan priced at 375bp over The deal includes soft call protection of Credit Suisse leads the deal, joined by KKR Libor in April 2017 and backed the issuer’s 101 for six months. The borrower is rated on the right. The bank meeting is set to take acquisition by OMERS Private Equity. The B2/B. The loan is rated B1/B. place in New York on Monday. company also lined up a US$175m second- US SALT is in the market with a US$285m The deal is split between a US$55m lien loan to back the buyout. lrst-lien acquisition term loan. revolver and a US$430m term loan.

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LEVERAGED LOANS

The seven-year term loan is governed by a total add-on to its term loan due in December The company, which has operations across net leverage covenant and has call protection of 2025 that will support acquisition activity. Europe, has grown from 289 clinics in 2016 102 in year one and 101 in year two. Credit Suisse was leading. to over 999 clinics as of September 2018. Last April, Moody’s downgraded PF The discount on the new money was Chang’s debt ratings, including its corporate expected to be 98.5. The add-on is fungible PROXISERVE EYES €395m LOAN family rating to Caa1 from B3 and probability with the existing lrst-lien loan and carries of default rating to Caa1-PD from B3-PD. the same pricing terms of 375bp over Libor Energy services provider PROXISERVE is The ratings agency also downgraded the with a 0 moor. The combined debt will planning to syndicate a €395m loan package. company’s existing US$325m term loan and continue to mature in December 2025. The company has selected Credit Agricole US$60m revolver to B1 from Ba3 and The debt will have soft call protection of CIB and Natixis as physical bookrunners on US$300m in senior unsecured notes to Caa2 101 through *une 10 2019 as is currently in the senior loan. from Caa1. The ratings outlook is negative. place. Bank of Ireland and CIC are also mandated “PF Chang is constrained by its weak Edgewater arranged a US$925m term loan on the deal. liquidity, high leverage and very modest in November 2018 to back its buyout by A bank meeting is set to take place in interest coverage with leverage on a debt to Starwood Energy. London in the next few weeks. [Ebitda] basis exceeding 8.0 times,” Moody’s The debt is rated Ba3/BB. Proxiserve specialises in providing sub- analysts wrote at the time of the downgrade. metering and maintenance services to residential properties across France. STANDARDAERO CUTS PRICING EUROPE/MIDDLE EAST/ Formerly a part of environmental AFRICA management services company Veolia, Aircraft engine services provider Proxiserve was spun out in 2011 and STANDARDAERO lowered pricing on IVC LAUNCHES £1.22bn REFI completed a management buyout in 2015. US$2.595bn of loans backing its buyout by private equity lrm Carlyle 'roup. UK veterinary care provider IVC has issued NETS SEEKS €100m ADD-ON The deal comprises a US$2.15bn lrst-lien pricing guidance on a £782m-equivalent term loan, a US$300m asset-based lending Term Loan B. Nordic payments technology group NETS has facility and a US$150m revolving credit facility. The seven-year covenant-lite loan is split launched a €100m add-on lnancing. Pricing on the covenant-lite term loan between a £432m tranche priced at 450bp The covenant-lite incremental Term Loan dropped to 00bp over Libor with a 0 moor over Libor and a £350m-equivalent euro- B is fungible with the existing €475m Term and a discount of 99.5 from guidance of denominated tranche guided at Loan B, offering pricing of 375bp over 25bp with a 0 moor and a discount in the 400bp-425bp over Euribor. Euribor with a 0 moor. The maturity of the 98-98.5 range. The rate will drop by 25bp Both facilities have a 0 moor and a 99.5 OID. lnancing is February 2025. when leverage drops by 0.5 times. A separate pre-placed £238m second-lien Proceeds will be used to relnance the revolving Credit Suisse led alongside Royal Bank of tranche is priced at 750bp. The total debt credit facility, for general working purposes, and Canada, Macquarie, Barclays, Jefferies, Nomura, package also includes a £200m revolving potentially fund future acquisitions. Goldman Sachs and Mizuho. credit facility. Deutsche Bank is the sole bookrunner on The seven-year loan has six months of soft Net leverage on the senior tranche is 5.4 the deal. call protection at 101. times and total leverage is 7.2 times. Corporate ratings of the lrm are B2/B/B , The borrower is rated B3/B, while the loan Proceeds on the total £1.22bn debt while issue ratings are B1/B/BB. SP rated the is rated B2/B. package will be used to relnance I6C’s recovery rating at 3, while Fitch rated it at 2. Auto repair shop CALIBER COLLISION cut existing debt. US lrm (ellman  Friedman acquired Nets pricing on a US$1.85bn term loan Bank of Ireland, Credit Agricole CIB, NatWest for DKr33.1bn US$5bn last year. The Denmark- supporting a relnancing and the purchase Markets, SEB and SMBC are physical based lrm subsequently completed acquisitions of equity from company shareholders. bookrunners. of other European payment players - Concardis The seven-year covenant-lite term loan I6C, owned by private equity lrm E1T since and Dotpay - earlier this month. priced at 350bp over Libor with a 0 moor 2016, merged in 2017 with Evidensia, which The acquisition will leave senior secured net and a discount of 99 with a 25bp stepdown has also been owned by EQT since 2014. leverage and total net leverage at Nets unchanged when net lrst-lien leverage drops to  times. at 5.0 times and 6.1 times respectively, based on Guidance initially circulated at 400bp US LEVERAGED LOANS lnancing Ebitda of €530m. over Libor with a 0 moor and a discount in BOOKRUNNERS: 1/1/2019 TO DATE the 98.5-99 range. Managing No of Total Share EUROPEAN LEVERAGED LOANS Bank of America Merrill Lynch led with bank or group issues US$(m) (%) BOOKRUNNERS: 1/1/2019 TO DATE Deutsche Bank, Jefferies, SunTrust Bank and BMO. 1 BAML 6 816.67 22.3 Managing No of Total Share Corporate ratings are B2/B. The loan is 2 JP Morgan 3 540.00 14.8 bank or group issues US$(m) (%) rated B1/B. 3 Wells Fargo 2 461.67 12.6 1 BNP Paribas 1 180.86 12.5 In December, Caliber and the Auto Body Repair 4 Deutsche Bank 1 320.00 8.8 =1 Danske Bank 1 180.86 12.5 of America ABRA announced plans to merge. =4 RBC 1 320.00 8.8 =1 Nordea 1 180.86 12.5 The company plans to buy back equity 6 Goldman Sachs 2 161.67 4.4 =1 Swedbank 1 180.86 12.5 from OMERS Private Equity, Leonard Green 7 SunTrust Banks 1 120.00 3.3 =1 Sumitomo Mitsui Finl 1 180.86 12.5  Partners and other Caliber shareholders. =7 MUFG 1 120.00 3.3 =1 Credit Agricole 1 180.86 12.5 In addition, the proceeds will back the 9 Citizens Financial 1 70.00 1.9 =1 DNB 1 180.86 12.5 purchase of ABRA equity not owned by 10 Citigroup 1 20.00 0.5 =1 SEB 1 180.86 12.5 maJority shareholder (ellman  Friedman. Total 8 3,655.00 Total 1 1,446.85 Power generator EDGEWATER GENERATION was Excluding Project Finance. Excluding project finance. Western Europe only included. scheduled to close on Friday a US$100m Source: Refinitiv SDC code: P2 Source: Refinitiv SDC code: P10

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The Ebitda is based on Nets’ standalone third-quarter last-12-month Ebitda as reported pro forma for its Concardis and Dotpay acquisitions. Asian leveraged finance Nets last tapped the loan marKet in *uly 2018 when it secured a €475m Term Loan B perks up to bacK the lrm’s merGer with 'erman peer Concardis and its €73m acquisition of „ LEVERAGED LOANS Region begins year on a positive note after lacklustre 2018 Poland’s Dotpay. Leveraged finance is off to a promising start in “This year the level of leveraged finance WITTUR WRAPS €55m ADD-ON Asia Pacific in 2019, with a handful of big-ticket activity seems busier than 2018. A lot of PE private equity buyouts set to hit the loan market clients raised new funds in the past few years, German lift components maker WITTUR has despite high levels of economic uncertainty. but last year was flattish as far as new buyouts completed a €55m add-on. The strong deal flow in Asia stands in were concerned,” said James Horsburgh, head The OID on the covenant-lite loan allocated contrast to the US and European markets, of leveraged and acquisition finance for Asia at par from original guidance of 99-99.5. where concerns over growth prospects and Pacific at HSBC. The deal is fungible with Wittur’s existing lending standards are hobbling activity. While PE-backed M&A reached a record €464m Term Loan B and is set at 400bp over In Australia, three leveraged buyouts US$101bn in Asia (including Japan) in 2018, very Euribor with a 1 moor. The loan is due to are in the works for healthcare company few of those led to leveraged financings. mature in March 2022. HEALTHSCOPE, adult education provider NAVITAS The biggest disappointment was a ¥825bn Corporate ratings are B3/B- and the loan is and accounting software maker MYOB. The (US$7.5bn) loan backing Bain Capital’s LBO of rated B2/B- with a recovery rating of 3. three LBOs could add up to debt financings of Toshiba’s chip unit in Japan. Even though that The lnancing will be used to repay A$3bn–$4bn (US$2.13bn–$2.85bn) combined. loan was the biggest LBO financing from Asia, it existing loan notes, cover related expenses Other promising deals elsewhere in the was not syndicated widely and was sold to only and for general corporate purposes. region include KKR-owned Japanese auto four banks. Credit Suisse, Deutsche Bank, Goldman Sachs, parts maker CALSONIC KANSEI’s acquisition of Another missed opportunity was the Barclays and Royal Bank of Canada are the high-tech car parts unit of Fiat Chrysler rejection, last August, of a US$17.6bn bid for arrangers on the deal. Automobiles and Baring Private Equity fast-food group Yum China Holdings. Lenders Wittur has also secured a €10m increase Asia’s bid for Indian information technology were looking to support Chinese investment to its revolving credit facility. company NIIT. firm Hillhouse Capital Group and its consortium Bain acquired the lift components maker in 2015 and in December sold a 32% stake in the company to Canada’s Public Section PETRUS HK is the borrower on the loan, trusts of Clyde, Helen, Roger and David Wu Pension Investment Board. which comprises a HK$6.5bn nine-month – holds 36.9% of Hopewell Holdings. This followed a push from Bain for a sale cash bridge Facility ! , a HK$7.5bn three- Hopewell invests in and develops in the company in October for more than year term loan Facility B , a HK$8.2bn residential, retail and hotel properties in €1bn, Reuters reported. Bain has also lve-year loan Facility C and a HK$3bn Hong Kong and China, and power plants in considered moating the company. lve-year revolving credit facility Facility China. Its Hong Kong properties include D . Facility ! was not syndicated. Hopewell Centre and QRE Plaza in The interest margins are 95bp over Wanchai and Panda Place in Tsuen Wan. ASIA-PACIFIC Hibor for the three-year tranche and 120bp over Hibor for the lve-year portions. There BREWERY MBO LOAN MAY BE CLUBBED NO GENERAL FOR HOPEWELL was also an early bird fee of 10bp. Banks joining with HK$5bn or more as Nomura Capital Partners and Carlyle ! (+25.2bn 5S3.23bn loan backing the MLABs were offered 12.5bp in sub- Group are raising a ¥47.7bn loan to back buyout of Hong Kong-listed HOPEWELL underwriting fees and 45bp in their ¥57bn management buyout of HOLDINGS has closed in the senior participation fees for blended all-in pricing Okinawa-based ORION BREWERIES. syndication phase following an of 127bp, while MLABs with take-and-hold Mizuho Bank and Nomura Capital overwhelming response from the market. commitments of HK$2.5bn–$4.99bn only Investment have equally underwritten the Fourteen banks joined sole mandated received the 45bp participation fees for a loan, which is likely to be closed as a club lead arranger and bookrunner Citigroup on blended all-in of 124bp. deal. the lnancing, which supports a group Hopewell, the target company, is a The total ¥47.7bn lnancing is split into mainly comprising the family of Hopewell guarantor. a ¥8bn seven-year amortising term loan, a chairman Gordon Wu in the take-private Petrus will buy 63.1% of the target ¥22bn seven-year bullet term loan and a deal. company for about HK$21.256bn in cash. ¥17.7bn six-month bridging loan. No general syndication will be launched The scheme document for the acquisition NCAP and Carlyle are investing and signing is currently taking place by is expected to be dispatched by end- ¥11.067bn and ¥10.633bn in equity, circulation. February. respectively. Mandated lead arrangers and Wu’s family members will be the main Ocean Holdings, owned by NCAP 51% bookrunners are Citi, Bank of China, Bank of shareholders in Petrus after the deal is and Carlyle 49% , will launch a ¥79,200 Communications, BNP Paribas, China completed, while Hopewell’s vice- offer per share for Orion Breweries on Construction Bank, DBS Bank, HSBC, Mizuho chairman Eddie Ho will own an 8.7% stake Thursday. The offer ends on March 22. Bank, MUFG, OCBC Bank, SMBC, Bank of East in Petrus. Orion’s president Yoshio Kadekaru is part Asia, Chong Hing Bank, Hang Seng Bank and Part of the group that will own Petrus – of the buying consortium and will remain Industrial & Commercial Bank of China. Gordon, Ivy, *une, Carol and Guy Wu, and with the company.

78 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

LEVERAGED LOANS

partners with up to US$8bn of debt, including REGIONAL DYNAMICS “Sponsors have enjoyed more flexibility on a senior loan of around US$6.5bn–$7bn and a Banks in Asia remain liquid and are eager to financing structures with many securing longer mezzanine financing of US$1bn–$1.5bn. support leveraged buyouts, and the growth of average lives and slightly better covenant The debt would have set a record in Asian institutional participation in Asian leveraged terms.” leveraged finance with leverage of around 6x, loans is adding another pool for financial CLO funds, the biggest buyers of leveraged and a senior portion accounting for 4.8–5.2 sponsors to tap into. loans in the US, are almost absent in Asia. In times. Although this could lead to looser lending 2018, CLO issuance in the US reached a record standards, bankers are not overly concerned US$128bn. DRY POWDER about Asia mirroring aggressively structured Abundant pools of institutional investor Market participants, however, point to several leveraged loans in Europe and the US. liquidity in the US and Europe has led to factors providing ideal conditions for Asian “Asia has seen only a handful of high- many financings with covenant-lite structures, leveraged finance dealmaking in 2019. quantum, aggressively structured leveraged whereas in Asia’s bank-dominated buyside, Lower equity valuations, due to the economic financings in recent times, although as an Asia- such financings find few takers. slowdown in China, its trade dispute with wide phenomenon there has certainly been Sponsors seeking cov-lite structures have the US, or Britain’s impending exit from the a watering down of terms such as covenants typically tapped the Term Loan B market in the European Union, present opportunities for M&A relating to debt-service coverage ratios,” said US, but that product is only available to a select and LBOs and put public-to-private buyouts Lyndon Hsu, global head of leveraged and few borrowers from the more mature Australian back on the table. structured solutions at Standard Chartered. and Japanese markets. PE firms are also sitting on a record “The DSCR covenant has now become almost Unitranche financings – a blended structure US$336bn of ‘dry powder’ as of mid-December, redundant in Asian leveraged finance deals that offers sponsors greater leverage and is according to data provider Preqin, having largely because of the near-bullet maturities with often cheaper than traditional LBO financings – raised US$445bn in new funds for Asia average lives stretching to longer than 4.5 years.” have also yet to take off in Asia. since 2015. HSBC’s Horsburgh also resisted comparisons In the US, unitranche facilities raised “There have been several PE acquisition with other regions. US$27bn in 2018, 13% higher than 2017 deals involving minority stakes and very little “The Asian leveraged finance market is totally levels. Asia has seen only five unitranche use of leverage,” said the head of leveraged different from the US and Europe and is in good loans totalling A$1.69bn since the product finance for Asia at a US bank. “Capital has shape on the back of strong bank and non-bank made its debut in the region nearly 18 never been a constraint in Asia. It is more a institutional liquidity and credit appetite,” he months ago. question of willing sellers than willing buyers.” said. Prakash Chakravarti

INTERPLEX SEEKS REFI FOR LBO LOAN CTBC Bank were the MLABs of that The interest margins are 124% of the amortising facility, which comprised a PBoC rate on the onshore piece and 235bp An eight-bank group has launched a US$405.75m term loan and a US$50m over Hibor on the offshore portions. 53M lVe-Year loan that relnances a revolving credit. Banks are being invited to join as MLAs leveraged buyout loan backing Baring That transaction paid an interest margin with HK$470m-equivalent or above for all-in Private Equity Asia’s purchase of INTERPLEX of 425bp over Libor tied to a gross leverage pricing of 130% of the PBoC rate or 264bp via HOLDINGS in 2016. grid. The margin dropped to 350bp and a participation fee of 87bp for the onshore Bank Sinopac, Cathay United Bank, CTBC 275bp if gross total leverage was between and offshore pieces, respectively. Lead Bank, DBS, E. Sun Commercial Bank, HSBC, 2.5 times and 3.5 times and less than 2.5 arrangers coming in with HK$235m–$469m- Standard Chartered and Sumitomo Mitsui times, respectively. The facility, which had equivalent receive all-in pricing of 128% of Banking Corp are the mandated lead an average life of 4.25 years, paid a fee of the PBoC rate or 255bp via a fee of 60bp, arrangers and bookrunners on the 250bp. respectively. transaction, which comprises a US$325m Interplex, which operates more than 30 Lenders committing by February 1 will term loan and a US$75m revolving credit plants in 14 countries, caters to a wide receive a 15bp early bird fee on the facility. range of sectors, including automotive, offshore Tranche A. The transaction pays an interest margin networking and enterprise server, and Funds are for relnancing and to back ranging from 225bp to 400bp over Libor industrial product businesses. the dividend recapitalisation to D* tied to a gross leverage grid. The opening Industrial Real Estate Investment, which margin is 350bp and the average life of the D&J SEEKS HK$2.3bn RECAP LOAN owns Shanghai Innov Star, a commercial lnancing is 4.65 years. property consisting of three 11-storey MLAs joining with US$30m or more D&J INDUSTRIAL REAL ESTATE INVESTMENT is oflce buildings located in :hangjiang, will receive all-in pricing of 385.5bp seeking a HK$2.266bn-equivalent Shanghai. over Libor via a 165bp participation US$289m three-year bullet loan to fund Shanghai Vimicro Hi-Tech Co Ltd, owner fee, while lead arrangers committing its dividend recapitalisation and of Shanghai Innov Star, is the borrower on US$20m–$29m will obtain 380.1bp all-in relnancing. the onshore piece, while Vimicro VMF via a 140bp fee. Arrangers with US$10m– Standard Chartered(Hong Kong) and Shanghai Corp, which directly owns $19m will earn an all-in of 373.7bp via a Standard Chartered (China) are the mandated Shanghai Vimicro Hi-Tech, is the borrower 110bp fee. lead arrangers and bookrunners of the on the offshore portions. Both onshore and )n *une 2016, Baring Private Equity Asia transaction, which comprises a Rmb316m offshore borrowers are wholly owned raised a US$455.75m leveraged buyout US$47m onshore tranche, an offshore subsidiaries of D* Industrial Real Estate loan backing its purchase of Interplex portion Tranche A of up to HK$1.63bn Investment, a provider of integrated Holdings. DBS Bank, Standard Chartered, US$204m , and another offshore portion industrial properties and services founded United Overseas Bank, Cathay United and of HK$250m Tranche B . by Warburg Pincus in China.

International Financing Review January 26 2019 79 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

lnancial statements for 2017 and 2018 by EUROPE/MIDDLE EAST/ April 18, subject to any delay caused by the RESTRUCTURING AFRICA challenge to the SEAG CVA. The company also expects to publish its MECHEL REFIS US$1bn PXF unaudited quarterly update by February 28 for UNITED STATES the three months ended December 31 2018, in Russian mining and metals company MECHEL line with the usual reporting timetable. PG&E SIGNS DIP FINANCING has relnanced its US$1bn syndicated pre- Steinhoff said that the sale of upholstery export facility. manufacturer Steinpol was agreed on Power utility PACIFIC GAS & ELECTRIC has signed The loan was relnanced with a euro *anuary 11. The business operates eight a commitment letter with four banks for credit line from VTB Bank. It matures in April factories in Poland and one factory in 53bn in debtor in Possession lnancing 2022 and has a grace period until April 2020. Hungary, and has an enterprise value of ahead of a planned Chapter 11 bankruptcy A debt buyback from lenders provided around €26.5m. The deal is expected to lling later this month Mechel with revenues totalling about Rbs13bn close by *anuary 31, subject to merger JP Morgan, Bank of America Merrill Lynch, US$195.7m , the company said in a statement. control clearance. Barclays and Citigroup will arrange the Mechel chief lnancial oflcer Nelli 'aleyeva lnancing under a senior secured super said hRelnancing the syndicated loan priority structure. enabled us to reduce the share of the group’s ASIA-PACIFIC The DIP package will comprise a unrestructured debt from 22% to 8%, decrease US$3.5bn revolving credit facility, a the number of foreign lenders in our overall MZI RESOURCES WINS WAIVERS US$1.5bn term loan, and a US$500m debt portfolio, synchronise the loan’s delayed draw term loan. *P -organ is also conditions and debt repayment schedule with Mineral sands company MZI RESOURCES expected to provide a US$250m senior current conditions of our loans lent by Russian has reached an in-principle agreement with secured bridge loan. banks, as well as reduce borrowing costs.” two of its lenders for short-term funding, The US$3.5bn revolving credit line will Mechel, at one point on the brink of extension of debt facility and waivers, as it pay 225bp over ,ibor if P'% draws on the bankruptcy, has been in restructuring talks explores a sale or debt restructuring to facility. The price will be 37.5bp if it is with its lenders for several years. The improve its capital structure. undrawn. The facility will mature in company borrowed extensively during the US private equity lrm Resource Capital December 2020 but the company has an commodities boom in the 2000s and its Funds, which has a 60.15% stake in MZI, is a option to extend the credit line for another lengthy restructuring following the 2008 lender for the majority of the company’s debt. year. The US$3.5bn facility will have a 25bp lnancial crisis was exacerbated by Russia’s RMB Australia Holdings is the other lender. extension fee on extended amounts. economic crisis in 2014. The in-principle agreement with The US$1.5bn term loan will be offered at The company said its net debt, excluding Resource Capital includes additional 250bp-275bp over Libor with an OID of 99.5 lnes and penalties on overdue amounts, funding of US$1.5m and extension of a and 101 soft call protection for six months. stood at Rbs464.2bn as of September 30. US$21m convertible loan to *uly 1 2020 The term loan will incur no ticking fees from May 26 2019. The loan carries an throughout the lrst 30 days, before STEINHOFF CREDITORS CHALLENGE CVA interest rate of 10%. increasing to 50% of the margin at days MZI also owes Resource Capital two 31-60 and then 100% of the margin at days LSW, the company challenging the company other loans – a US$61m three-year term 61-90. The term loan will also mature in voluntary arrangement proposed by STEINHOFF loan with an interest rate of 15% that December 2020 and comes with a one-year EUROPE AG, has claimed that the subsidiary of comes due on May 13 2021 and a US$8m extension option at 25bp. South African retailer Steinhoff International bridge facility paying an interest rate of P'%s US$500m delayed-draw tranche owes it around €291.4m. 10% and due on *une 5 2020. will pay the same price and feature the same Earlier this month, SEAG’s parent said The agreement with RMB Australia OID as the US$1.5bn term loan, but if the that LSW was unhappy with certain includes extension of waivers on debt facility remains undrawn the company will provisions of the CVA proposed by SEAG on covenants until *anuary 1 2020 and pay 50% of the margin for the lrst six December 14. deferment of principal repayment on a months of the loan and 100% thereafter. The implementation of SEAG’s CVA can US$32.5m senior debt facility by three P'%s liabilities could swell to as much now not take place until the challenge to months to *une 30 2019. as US$30bn because of wild lres in the CVA has been resolved. In addition, the This is the second time MZI has obtained a Northern California in 2017 and 2018. CVA proposed by another of Steinhoff’s repayment extension from RMB Australia on Earlier this month, the company provided subsidiaries - Steinhoff Finance Holding that senior loan. In September last year, it the 15-day advance notice required under GmbH SFHG - is also on hold until the negotiated to defer repayments slated for California law that it intends to lle for dispute has been resolved. September and December 2018 to March 2019. bankruptcy. P'E said it expects In December, SEAG’s CVA was approved As per MZI’s annual report for the year bankruptcy proceedings to take by around 94% of those creditors who voted ended *une 30 2018, it owed around US$32.5m approximately two years. while the SFHG CVA was approved by of a senior facility paying an interest rate of 7eil, 'otshal  -anges and Cravath, around 99% of creditors who voted. 535bp of Libor to RMB Australia. Swaine  -oore are legal counsel to P 'E, Steinhoff is undergoing a restructuring of The company’s gearing stood at 128.5% Lazard is its investment banker and its €10.7bn of debt following the discovery as of *une 30 2018 compared with 101.3% a !lixPartners is restructuring adviser to P'E. of accounting irregularities in December year earlier. P'E in November drew down in full on 2017 that triggered an 85% slide in the MZI has appointed Azure Capital as its US$300m revolving credit held by its group’s share price. lnancial adviser. MZI said that it is operating utility because liabilities In a statement last week, the group said investigating relnancing or restructuring increased as the wild lres grew. that it anticipates publishing its audited of existing debt along with exploring a sale.

80 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS EQUITIES

China  Hong Kong  India  Japan  South Korea  Belgium  Nigeria  Sweden  UK  United States  Canada 

„ FRONT STORY SINGAPORE Jubilant heads to US after SGX flop US appeal builds in India ahead of potential rule change

JUBILANT PHARMA is turning its attention to the /Verseas listings through gloBal SoMe )nDian coMpanies haVe alreaDY 53 MarKet aFter its PLans For the lrst DuaL DepositarY receipts or !Merican DepositarY starteD preparing For 5S listings E#- class listing on the Singapore Exchange receipts haVe Been possiBle But )nDian Bankers saiD logistics lrM DELHIVERY Which FaileD to entice inVestors 4he DrugMaKer a regulators haVe not approVeD anY such haD Been planning a 5SMnM suBsiDiarY oF )nDia listeD *uBilant ,iFe issues in recent Years on concerns that DoMestic )0/ is noW eYeing a 5S listing iF Sciences haD Been looKing to raise up to controlling shareholDers MaY Be using these the rules Materialise Citigroup Goldman 5SM in Singapore But coulD noW leaD routes to increase their stakes in local Sachs Kotak anD Morgan Stanley Were Working a WaVe oF 5S listings FroM )nDia coMpanies Without aDeQuate Disclosure on the local )0/ *uBilant 0harMa has Most oF its 6eDanta then calleD Sterlite )nDustries Was the /ther potential 5S issuers incluDe online operations in )nDia anD the 5S anD is last coMpanY to list !$2s raising 5SBn in  Marketplace Shop#lues anD Business hoping that a neW Venue Will Boost its )n )nDia a coMpanY has to Disclose its entire soFtWare DeVeloper &reshWorks Which haVe chances oF going puBlic shareholDing structure on a MonthlY Basis in also inDicateD plans For local )0/s h4he general perception is that )nDia is the contrast to Most MaJor gloBal Markets such as )nDian listings in the 5S are rare With the hoMe oF cheap generic Drugs But *uBilants (ong +ong Singapore anD the 5S Where last .9SE )0/ Being !Zure 0oWer 'loBals specialitY pharMaceuticals Business BaseD in shareholDers neeD onlY Disclose stakes oVer  5SM issue in  !Zure 0oWer is the 5S Will MaKe inVestors taKe notice v a incorporateD in -auritius BanKer WorKing on the transaction saiD CHANGE OF HEART (#, 4echnologies anD -phasis haD 4he tiMing oF the oFFer has not Yet Been 4he regulator anD the goVernMent in )nDia inDicateD in the past that theY Were DeciDeD Because oF the goVernMent shut are shoWing signs oF a change oF heart ,ast interesteD in selling !$2s But no Work Was DoWn in the 5S anD it is not clear at this Year a coMMittee ForMeD BY the Securities Done stage iF *uBilant Will Keep its Dual class share anD Exchange "oarD oF )nDia recoMMenDeD *uBilant 0harMa generateD reVenues oF structure !t the tiMe oF Writing *uBilant alloWing unlisteD )nDian coMpanies to list 5SM in the three Months to *une  ,iFe Sciences haD not responDeD to a reQuest aBroaD SeBi has Yet to take a lnal Decision up FroM 5SM in the saMe Quarter oF For coMMent on the recoMMenDations  0rolt aFter tax rose to 5SM FroM #urrent regulations Do not alloW )nDian hSeBi still Worries aBout Misuse BY 5SM During the saMe perioD coMpanies to list their shares aBroaD proMoters But the goVernMent Wants to get Bank of America Merrill Lynch JP Morgan UBS Without lrst listing locallY But *uBilant Foreign exchange anD soMe concessions Credit Suisse DBS anD Jefferies are Working on 0harMas JoB is Much easier as the coMpanY MaY Be MaDe v saiD a person Who WorkeD the transaction is incorporateD in Singapore With the coMMittee S Anuradha ABN AMRO CEO expects state sell-downs

notice to shareholDers in -aY  4he iDea Full-year results could trigger resumption of sales of BuYing Back shares as part of a goVernment sell DoWn is not unhearD of ABN AMROs chieF executiVe expects the $utch )n late $ecemBer shares fell BeloW õ for With 2"S set to seek shareholDer permission state to resuMe long aWaiteD sell DoWns in the lrst time since .oVemBer  But theY to BuY some of the 5+ goVernments the Bank this Year FolloWing no sales in  haVe risen stronglY this Year touching remaining shares in the Bank on &eBruarY  he saiD on a $utch 46 shoW last SunDaY õ in traDing last &riDaY afternoon h4heoreticallY it WoulD make perfect sense ;to 7ith SepteMBer s state sell DoWn h0eople are feD up in the market theY Just Do a BuY Back= Because it helps De risk a sellDoWn sloWlY FaDing in the Markets MeMorY his Want it to happen v saiD one European E#- anD speeD up the process v the Banker saiD comments fuel hope that the upcoming Banker h4he full Year  results Will Be (oW QuicklY the Deal Will come is still up puBlication of !". !-2/s full Year results opening the WinDoW for the $utch for DeBate 'eneral loW sentiment in the coulD create an opportune WinDoW for a goVernment to start the sale processv European Banking sector is a factor But further Block traDe 4he results Will Be !ccorDing to an ).' report puBlisheD last DemanD itself shoulDnt Be an issue puBlisheD on &eBruarY  Week the forecast for !". !-2/ results h7hen the results come out if theYre 4he last sale BY $utch state holDing implies shareholDers are set for increaseD taken Well BY the market there Will alreaDY companY .,&) came at a price of õ per returns in the form of DiViDenD paYouts Be suflcient reVerse enQuirY from long onlY share anD reacheD a Deal siZe of õBn rather than BuY Backs giVen its historical anD heDge funDs )t is then a case of going Bringing the states stake DoWn to  "ut preference for the former anD the complex Back to the $utch goVernment With clear shares traDeD at or BeloW õ for seVeral process inVolVeD With approVal for BuYBacks siZes anD prices for the Blocks 4hats hoW it months in  anD further sales neVer !". !-2/ alluDeD to the possiBilitY of Works for these Well maggeD Dealsv came BuY Backs as part of a capital Decrease in a Lucy Raitano

International Financing Review January 26 2019 81 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

WEEK IN NUMBERS Hansoh has  MaIn pRoDUcts focUsIng on ASIA-PACIFIC the centRal neRVoUs sYsteM oncologY antI 75% InfectIVes anD DIaBetes Ð 4he coMpanY posteD a net pRolt of „ GLOBAL EQUITY AND EQUITY- 2MBBn 5SM foR the sIx Months RELATED ISSUANCE, EX A-SHARES, IS CHINA enDeD *Une   Up  YeaR on YeaR DOWN 75% FOR THE YEAR TO-DATE TO accoRDIng to a RegUlatoRY llIng )ts  net JUST US$11bn TIANQI ABOUT TO START PRE-MARKETING pRolt Was 2MBBn Hansoh foUnDeR :hong HUIJUan anD heR 3HENZHEN LISTEDûTIANQI LITHIUMûISûCONSIDERINGû DaUghteR SUn 9Uan oWn a  stake In the PRE MARKETINGûAû(ONGû+ONGû)0/ûASûEARLYûASû coMpanY :hong Is the WIfe of SUn 0IaoYang SFr6bn &EBRUARY Who oWns a  stake In ShanghaI lIsteD „ SWISS SPECIALITY CHEMICALS GROUP 4IANQIûGAINEDûAPPROVALûINû.OVEMBERûFROMû *IangsU HengRUI -eDIcIne the laRgest SIKA ATTRACTED A BOOK OF MORE THEû#HINAû3ECURITIESû2EGULATORYû phaRMaceUtIcal coMpanY In ,IanYUngang THAN SFr6bn FOR ITS SFr1.3bn #OMMISSIONûTOûSELLûUPûTOûMûSHARESûINû In *IangsU pRoVInce (US$1.3bn) MANDATORY CONVERTIBLE ITSû(ONGû+ONGûLISTING BONDS. MANDATORY CONVERTIBLES "ASEDûONûTHEûCOMPANYSû! SHAREûCLOSEûOFû CSTONE PHARMA TO PRE-MARKET IPO ARE NO LONGER THE SOLE PRESERVE 2MBûLASTû4HURSDAY ûTHEû(ONGû+ONGû OF HEDGE FUNDS, BUT THEY ARE STILL mOATûCOULDûRAISEû2MBBNû53BN û CSTONE PHARMACEUTICALS a BIotech coMpanY A NICHE PRODUCT SO SUCH A BROAD (OWEVER ûIFû4IANQIûISûSELLINGûSHARESûATûAûû plans to staRt pRe MaRketIng on -onDaY foR BOOK OF DEMAND FROM AROUND 90 DISCOUNTûTOûITSû! SHARES ûTHEûSAMEûASûWHATû a planneD )0/ of aBoUt 5SM accoRDIng ACCOUNTS IS NOTABLE. DEMAND WAS 3HENZHEN LISTEDû'ANFENGû,ITHIUMûOFFEREDû to people close to the Deal SFr3bn ON THE STRENGTH OF THE WHENûITûLISTEDûINû(ONGû+ONGûLASTû/CTOBER û 4he clInIcal stage BIotech lRM has PRE-SOUNDING THEûDEALûWILLûRAISEûABOUTû53M secUReD lIstIng appRoVal fRoM the Stock 4IANQISûPROPOSEDûLISTINGûCOMESûAFTERûITû Exchange of Hong Kong the people saID AGREEDûAû53BNûPURCHASEûINû-AYûOFûAûû &oUnDeD In  #Stone DeVelops canceR STAKEûINû#HILESû3OCIEDADû1UIMICAûYû-INERA theRapeUtIcs anD has  DRUg canDIDates In Ï400% 4HEûMAJORITYûOFûTHEûPROCEEDSûWILLûBEûUSEDû the pIpelIne „ JEFFERIES HAS HIRED OLIVER DIEHL TOûRElNANCEûTHEû31-ûPURCHASE ûACCORDINGûTOû #Stone has BRoUght In soMe RenoWneD TO RUN CONTINENTAL EUROPEAN ECM AûDRAFTûPROSPECTUS InVestoRs thRoUgh pRIVate lnancIngs 7UxI FROM BERENBERG. UNDER DIEHL’S CLSAûANDûMorgan StanleyûAREûJOINTû 6entURes HIllhoUse #apItal "oYU #apItal LEADERSHIP, BERENBERG RANKED SPONSORS anD ')# aRe aMong Its shaReholDeRs 14TH IN EUROPEAN ECM IN 2017 WITH Goldman Sachs anD Morgan Stanley are the ISSUANCE OF US$4.2bn UP MORE THAN HANSOH PHARMA PLANS IPO IN JoInt sponsors WhIle China Merchants 400% YEAR-ON-YEAR FEBRUARY Securities anD UBS are JoInt gloBal coorDInators for the Deal $RUGMAKERûHANSOH PHARMACEUTICAL plans to laUnCH a (onG +onG )0/ oF aBoUt 53Bn In MAOYAN ADDS CORNERSTONE 20 days &EBRUaRY aCCoRDInG to pEoplE ClosE to tHE INVESTORS „ GOSSAMER BIO IS THE FIRST US DEal CORPORATE TO OPT TO PROCEED WITH (ansoH 0HaRMa llED a lIstInG applICatIon 4encent BackeD MAOYAN ENTERTAINMENT AN IPO WITHOUT SEC APPROVAL FOR to the Stock Exchange of Hong Kong last #hInas BIggest onlIne seller of llM tIckets ITS DOCUMENTATION IN RESPONSE SepteMBeR WIth Citigroup anD Morgan Stanley has aDDeD three More cornerstone InVestors TO THE LONG-RUNNING GOVERNMENT as JoInt sponsoRs to Its Hong Kong )0/ of Up to HKBn SHUTDOWN. GOSSAMER CAN PRICE ITS Hansoh lRst planneD to lIst foR Up to 5SM  FIXED-PRICE IPO 20 DAYS AFTER THE 5SBn In  VIa -oRgan StanleY anD #hInese sMartphone Maker 8IaoMI RELEVANT FILING LAST WEDNESDAY. 5"S 4he Deal hoWeVeR DID not pRoceeD throUgh UnIt 'reen "etter has pleDgeD THE BIOTECH IS RAISING US$230m AND ITS LEAD DRUG IS IN PHASE IIB ASIA-PACIFIC EQUITIES ASIA-PACIFIC EQUITIES (EX-JAPAN) TRIALS BOOKRUNNERS: 1/1/2019 TO DATE BOOKRUNNERS: 1/1/2019 TO DATE Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues US$(m) (%) 1 Citic 3 426.80 8.7 1 Citic 3 426.80 11.6 T+3 2 Sumitomo Mitsui Finl 4 383.06 7.8 2 UBS 2 326.91 8.9 „ HONG KONG EXCHANGES AND 3 UBS 2 326.91 6.7 3 Shenwan Hongyuan Securities 1 192.39 5.2 CLEARING IS PLANNING TO CONSULT 4 Credit Suisse 1 272.73 5.6 4 CIMB 3 150.10 4.1 ON SCRAPPING PAPER-BASED 5 Mizuho 4 228.89 4.7 5 Krung Thai Bank 1 140.89 3.8 SUBSCRIPTIONS FOR IPOs. HONG 6 Daiwa Securities 2 202.25 4.1 6 Goldman Sachs 1 139.17 3.8 KONG CURRENTLY OPERATES ON A T+5 7 Shenwan Hongyuan Securities 1 192.39 3.9 =6 Morgan Stanley 1 139.17 3.8 SETTLEMENT CYCLE COMPARED WITH 8 Goldman Sachs 2 181.44 3.7 8 Sinolink Securities 1 123.70 3.4 T+3 IN LONDON AND NEW YORK. A 9 CIMB Group Holdings Bhd 3 150.10 3.1 9 Bank of China 2 115.37 3.1 MOVE TO ELECTRONIC SUBSCRIPTION IS 10 Krung Thai Bank 1 140.89 2.9 10 Deutsche Bank 2 103.07 2.8 EXPECTED TO ENABLE A SHORTENING Total 75 4,881.87 Total 69 3,691.72

OF THE SETTLEMENT CYCLE BY AT LEAST Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues 1-2 DAYS Source: Refinitiv SDC code: C4a1 Source: Refinitiv SDC code: C4a2

82 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

EQUITIES ASIA-PACIFIC

53MûTOûTHEûDEALû3HANGHAI LISTEDû(YLINKû last WeeK for a (onG +onG )0/ of aBout Written )0/ approVals from the #hina $IGITALû3OLUTION ûVIAû(YLINKû)NVESTMENT û 53mnm people close to the Deal 3ecurities 2eGulatorY #ommission on COMMITTEDû53Mû0RESTIGEûOFû4HEû3UNûHASû saiD 4he companY plans to start pre *anuarY  AGREEDûTOûINVESTû(+M marKetinG this WeeK if approVal is GranteD JIANGSU LIHUA ANIMAL HUSBANDRY, a poultrY 4OGETHERûWITHûTHEûORIGINALûINVESTMENTSûOFû !s of *une last Year the DeVeloper haD BreeDer aims to sell m ! shares a  )-!8û(ONGû+ONGû53M ûANDû7ELIGHTû completeD  propertY proJects With  free moat to raise 2mBBn from a #APITALû53M ûTHEûDEALûHASûATTRACTEDû unDer construction anD  in the pipeline )t 3henZhen #hi.eXt )0/ accorDinG to its ABOUTû53MûINûCORNERSTONEûINVESTMENTS has total lanD reserVes of m sQuare prospectus 4HEûBOOKûISûCOVERED ûACCORDINGûTOûPEOPLEû metres nearlY  of Which are locateD in 4he proceeDs Will Be useD to replenish CLOSEûTOûTHEûDEAL :heJianG WorKinG capital anD eXpanD poultrY anD -AOYANûHASûALSOûREVISEDûITSûLISTINGûTIMETABLEû )t posteD a  half Year prolt of feeD proDuction to lVe aDDitional cities in )NSTEADûOFûPRICINGûONû*ANUARYûûANDûLISTINGûONû 2mBm 53m on reVenue of #hina *ANUARYûûASûINDICATEDûINûAûTERM SHEETûONû 2mBBn compareD With a prolt of Zhongtai Securities is the sponsor *ANUARYû ûTHEûDEALûWILLûNOWûPRICEûONû*ANUARYû 2mBm anD reVenue of 2mBBn in the (onG +onG listeD FLAT GLASS GROUP plans to ûANDûTENTATIVELYûLISTûONû&EBRUARYû same perioD a Year earlier offer mnm ! shares to raise -AOYANûISûSELLINGûMûPRIMARYûSHARES û (u 9ipinG Who founDeD the companY in 2mBm from a 3hanGhai )0/ GF FORûANûûFREE mOAT ûINûANûINDICATIVEûPRICEû  controls  of $eXin #hina With his Securities is the sponsor RANGEûOFû(+nûEACH son (u 3hihao 4HEûRANGEûREPRESENTSûAûû0%ûOFûn CCB International is the sole sponsor for the FANG MULLS IPO FOR RESEARCH UNIT ûANDûAûû%6SALESûOFûn moat Bank of America Merrill Lynch ANDûMorgan .93% listeD &anG (olDinGs a real estate StanleyûAREûTHEûJOINTûSPONSORSûOFûTHEûDEAL POULTRY BREEDER CUTS IPO SIZE internet portal has suBmitteD a -AOYANûOPERATESûTHEûPOPULARûMOVIE conlDential llinG to the 3ecurities anD TICKETINGûAPPSû-AOYANûANDû'EWARAûANDûALSOû JIANGSU LIHUA ANIMAL HUSBANDRY plans to sell %XchanGe #ommission for a proposeD spin DISTRIBUTESûlLMS feWer shares in its 3henZhen #hi.eXt )0/ off of its research unit CHINA INDEX HOLDINGS !CCORDINGûTOûTHEûlLING ûTHEûCOMPANYû accorDinG to its latest prospectus &anG formerlY KnoWn as 3ou&un POSTEDûAûLOSSûOFû2MBMû53M ûFORûTHEû 4he issuer Will noW sell not more than (olDinGs is eXplorinG a ranGe of options lRSTûHALFûOFû ûWIDERûTHANûAûLOSSûOFû m shares or  of its enlarGeD capital for its suBsiDiarY incluDinG a potential 2MBMûAûYEARûEARLIER insteaD of the oriGinallY planneD m at the priVate sale DistriBution of #hina )nDeXs 0RE )0/ û#HINESEûINTERNETûGIANTû4ENCENTû reQuest of the #hina 3ecurities 2eGulatorY shares to &anGs eXistinG shareholDers or HASûAûûSTAKEûANDûONLINEûFOODûDELIVERY #ommission an )0/ TO TICKETINGûSERVICESûPROVIDERû-EITUANû 4he poultrY BreeDer plans to raise 4he companY saiD an )0/ coulD taKe $IANPINGûOWNSûûOFûTHEûCOMPANY 2mBBn 53m to replenish WorKinG place on a global stock exchange or a capital anD eXpanD poultrY anD feeD #hinese Domestic exchange but DiD not BANK OF XIAN SETS IPO PRICE proDuction to lVe aDDitional cities in #hina specifY the number of shares on offer nor )t Was set to conDuct pricinG consultation its funDraising target in the statement BANK OF XIANûAIMSûTOûRAISEûUPûTOû2MBBNû on *anuarY  anD the price Will Be &ang posteD net income of 53m in the 53M ûATû2MBûPERûSHAREûFROMûAû announceD on *anuarY  "ooKs Will open thirD Quarter of  on reVenues of 3HANGHAIû)0/ for a DaY on *anuarY  53m 4op line reVenues fell  from "OOKBUILDINGûFORûTHEûDEAL ûCOMPRISINGû Zhongtai Securities is the sponsor 53m from a Year ago Due to Declining Mû! SHARES ûWILLûRUNûFORûAûDAYûONû serVices in listings anD e commerce &EBRUARYûûINSTEADûOFû*ANUARYûûASû GOLDWIND S&T TRIMS RIGHTS ISSUE SIZE (oWeVer it generateD 53m in ORIGINALLYûPLANNED reVenues from Value aDDeD serVices such as !TûTHEûISSUEûPRICE ûTHEûHISTORICALûû0%û XINJIANG GOLDWIND SCIENCE & TECHNOLOGY saiD it Database anD research serVices a  RATIOûISû ûHIGHERûTHANûTHEûINDUSTRYû has reDuceD the siZe of a proposeD riGhts increase from 53m in  AVERAGEûOFûûINûTHEûPASTûMONTHû!SûAû issue to up to 2mBBn 53m from RESULT ûUNDERû#HINESEûREGULATIONS ûTHEûISSUERû 2mBBn KEPEI RAISES HK$876m FROM IPO has to post three special announcements for 4he cut partlY remects a loWer planneD three WeeKs to Warn inVestors of potential inVestment in the companYs 3tocKYarD (ill CHINA KEPEI EDUCATION GROUP a proViDer of risKs Before openinG the BooKs 7inD &arm 0roJect priVate higher eDucation has raiseD 4he local lenDer saYs the )0/ Will help 4he (onG +onG anD 3henZhen listeD (+m 53m after pricing a (ong strenGthen its capital Base 0roceeDs Will not #hinese WinD turBine maKer plans to issue a +ong )0/ aboVe the miD point of the Be inVesteD in real estate inDustries With total of aBout m riGhts shares inDicatiVe range eXcess capacitY or lnancial anD hiGhlY comprisinG m ! shares anD m 4he companY solD m primarY leVeraGeD companies ( shares on a  for  Basis 4he initial shares or  of the enlargeD share #anaDas 3cotiaBanK currentlY oWns plan approVeD BY the BoarD last -arch Was capital at (+ each Versus an  of "anK of 8ian as a strateGic for up to m riGhts shares inDicatiVe price range of (+n inVestor 4he GoVernment of 8ian is the 4he companY Will use the proceeDs to 4he lnal price represents a  0% of controllinG shareholDer funD tWo WinD farm proJects replenish  Citic Securities is the sponsor WorKinG capital anD repaY DeBt 4he shares openeD mat at (+ apiece last &riDaY on their Debut 4heY then rose as DEXIN CHINA SEEKS LISTING APPROVAL TWO WIN CSRC APPROVAL FOR IPO high as (+ anD closeD at (+ up  DEXIN CHINA a propertY DeVeloper BaseD in 4Wo companies planninG to raise a !s of 3eptember  the southern :heJianG proVince souGht listinG approVal comBineD 2mBBn 53m receiVeD #hina baseD companY haD   stuDents

International Financing Review January 26 2019 83 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

ENROLLEDûATûTHEûTWOûSCHOOLSûITûOPERATES û 4he )0/ coMprises 2sBn of priMarY representing a  DiscoUnt to *anUarY NAMELYû'UANGDONGû0OLYTECHNICû#OLLEGEûANDû shares anD M seconDarY shares anD s close at c  after DeDUcting an :HAOQINGû3CHOOL Will Be open for sUBscription BetWeen eXpecteD DiViDenD of c  VersUs a )TûPOSTEDûAûPROlTûOFû2MBMû53M û *anUarY  anD *anUarY  DiscoUnt range of n FORûTHEûlRSTûEIGHTûMONTHSûOFû ûUPûû 4he coMpanY originallY planneD an )0/ 4he BooK Was close to  tiMes coVereD YEAR ON YEAR of Up to 2sBn BUt VolatilitY in the local With VerY high roaDshoW conVersion 4HEûCOMPANYûWILLûUSEûTHEûPROCEEDSûTOû MarKet proMpteD it to scale BacK its accorDing to a person close to the Deal #lose ACQUIREûSCHOOLSûANDûIMPROVEûEXISTINGû targets to  of the international tranche Was OPERATIONSû4HEûREMAINDERûWILLûBEûUSEDûTOû 4he Deal WoUlD Be the lrst MaJor )nDian allocateD to long onlY anD real estate REPAYûLOANSûANDûFORûWORKINGûCAPITALûANDû )0/ since !aVas &inanciers 2sBn specialist fUnDs With the top  inVestors GENERALûCORPORATEûPURPOSES offering in 3epteMBer /nlY 8elpMoc MaKing Up aBoUt  of the offering CitigroupûANDûCCB International WEREûJOINTû $esign anD 4ech has laUncheD an )0/ since !pproXiMatelY  of the Deal siZe Was SPONSORS then With its far sMaller 2sM )0/ DUe shifteD froM DoMestic portion to the to close last &riDaY international tranche as a result of the 4he VenDors of #halet seconDarY shares strong DeManD the person aDDeD HONG KONG are 2aVi 2aheJa .eel 2aheJa + 2aheJa !Bout  of the offering Was eVentuallY #orp 0alM 3helter %state anD )VorY allocateD to oVerseas inVestors anD  to TAI HING SEEKS HONG KONG IPO 0roperties BuYers in *apan coMpareD With the split of 4he coMpanY reporteD a net prolt of n originallY planneD TAI HING GROUP ûAû(ONGû+ONG BASEDûCASUALûDININGû 2sBn in the lnancial Year enDing 4here is a greenshoe of up to   units RESTAURANTûGROUP ûISûLOOKINGûTOûRAISEûABOUTû -arch   reVersing a loss of representing  of the total Base siZe 53MûFROMûAû(ONGû+ONGû)0/ ûACCORDINGûTOû 2sBn in  4he issuer is suBJect to a nDaY locKnup PEOPLEûWITHûKNOWLEDGEûOFûTHEûTRANSACTION #halet (otels is part of the + 2aheJa 0roceeDs Will Be useD for siX acQuisitions 4HEûCOMPANYûHASûSUBMITTEDûAûLISTINGû #onstrUction 'roUp anD oWns foUr hotels incluDing three neW properties anD three co APPLICATIONûTOûTHEû3TOCKû%XCHANGEûOFû(ONGû+ONG Which are operateD BY -arriott (otels oWnership interests )NûADDITIONûTOûITSûmAGSHIPû4AIû(INGûCHAIN û Axis JM Financial Morgan Stanley are the Daiwa Nomura anD SMBC Nikko are the THEûCOMPANYûHASûACQUIREDûORûISûAûLICENSEEûOFû BooKrUnners Joint gloBal coorDinators on the Deal SEVENûOTHERûCUISINEûBRANDSû)TûRUNSûû RESTAURANTSûINû(ONGû+ONG ûMAINLANDû#HINAû DLF MEETS INVESTORS FOR RECRUIT BLOCK FETCHES ¥29bn ANDû-ACAU SHARE ISSUE &ORûTHEûNINEûMONTHSûENDEDû3EPTEMBERû û 4oppan 0rinting has raiseD cBn 4AIû(INGûPOSTEDûAûPROlTûOFû(+Mû53M û 0ropertY DeVeloper DLF has coMMenceD 53M froM the sale of a staKe in ONû(+BNûOFûREVENUEû)TûREPORTEDûANûANNUALû WorK on a QUalileD institUtional teMporarY staflng coMpanY RECRUIT HOLDINGS PROlTûOFû(+MûINû placeMent of Up to 2sBn 53M anD 4he Deal Was VerY Well receiVeD accorDing BoCom International is the sole sponsor of has starteD holDing preliMinarY Meetings to a person close to the process $eManD the trAnsACtion With international inVestors people With caMe froM a BroaD MiX of neW anD eXisting KnoWleDge of the transaction saiD long onlY DoMestic anD international 4he coMpanY has shareholDer approVal inVestors 4here Were aBout  accounts in INDIA to sell Up to M shares at a price that the BooK With the top  BuYers taKing Will Be DeterMineD later !t last -onDaYs arounD  of the Deal VODAFONE IDEA BOARD APPROVES close of 2s the transaction Will total 4he Deal coMprising M shares or RIGHTS a MaXiMUM 2sBn 4he tiMing of the aBout  of the shares outstanDing offer has not Yet Been lrMeD Up priceD at c  at the MiD point of the 4he BoArD of VODAFONE IDEA hAs ApproVeD the 4he coMpanY is raising the fUnDs to inDicatiVe price range of c nc  per teleCoM CoMpAnYs plAn to rAise Up to reDUce its DeBt share 4he price represents a Discount of 2sBn 53Bn froM A riGhts issUe JP Morgan Kotak anD Morgan Stanley are  to the pre Deal close of c  on 4he ControllinG shAreholDers 6oDAfone WorKing on the transaction 4he sYnDicate *anuarY  'roUp AnD !DitYA "irlA 'roUp hAVe has not Yet Been lnaliseD 2ecruits shares fell  last 4hursDaY inDiCAteD to the BoArD thAt theY WoUlD %QUitY issUances froM real estate closing at c  each ContriBUte Up to 2sBn AnD 2sBn DeVelopers haVe Been rare in recent Years 4oppan 0rinting reMains 2ecruits largest respeCtiVelY As pArt of the riGhts issUe BecaUse of the sUBDUeD )nDian propertY corporate shareholDer With aBout a  staKe 6oDAfone 'roUp AnD !DitYA "irlA 'roUp MarKet after the Dea l 4here is a nDaY locK up on MerGeD their teleCoM BUsinesses lAst YeAr to the VenDor lGht CoMpetition froM 2eliAnCe *io )n the Credit Suisse Was the sole BooKrunner lrst QUArterlY eArninGs After the MerGer JAPAN 6oDAfone )DeA reporteD A net loss of 2sBn JAPAN HOTEL TO EXERCISE GREENSHOE AnD reVenUe froM operAtions of 2sBn for MITSUI FUDOSAN PRICES FOLLOW-ON the seConD QUArter enDeD 3epteMBer  JAPAN HOTEL REIT INVESTMENT CORPORATION is set to MITSUI FUDOSAN LOGISTICS PARK a real estate fullY eXercise the greenshoe in an CHALET HOTELS SETS PRICE RANGE inVestMent trUst has raiseD cBn international folloW on offering of units FOR IPO 53M froM a gloBal offering of Units lifting the siZe of the funDraising to cBn after pricing the Deal at the narroW enD of 53M  CHALET HOTELS has set the price range for an an inDicatiVe DiscoUnt range !n aDDitional   units or  of the )0/ of Up to 2sBn 53M at 2sn 4he Deal consisting of   Units Base Deal Will Be issueD at the offering price 2s accorDing to a pUBlic annoUnceMent Was priceD at c  per Unit of c  per unit representing a 

84 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

EQUITIES EMEA

DISCOUNTûTOûTHEû*ANUARYûûCLOSEûOFûc  û recharGeable batteries anD semiconDuctor sale 5S anD 6 beloW the VERSUSûANûINDICATIVEûDISCOUNTûOFûn materials 5S66 Pre launch leVel 3HARESûOFû*APANû(OTELû2%)4ûCLOSEDûATû Hana Investment & Securities Was the leaD 4he offerinG eQuateD to a heftY  of c ûLASTû-ONDAY manaGer outstanDinG anD 0 DaYs traDinG Volume so 4HEûBASEûDEALûCOMPRISEDû ûUNITSû some concession Was eXPecteD !BOUTûûOFûTHEûOFFERINGûWASûALLOCATEDûTOû 5roGen Which raiseD 5S6m last OVERSEASûINVESTORSûANDûûTOûBUYERSûINû *anuarY also at 5S a share estimateD it *APAN lnisheD 0 With 5S0m of cash 4HEû2%)4ûINTENDSûTOûUSEûTHEûPROCEEDSûTOû EUROPE/MIDDLE 4he comPanY is hoPinG to commercialise PARTûFUNDûTHEûACQUISITIONûOFûNEWûASSETSû EAST/AFRICA its lrst DruG later this Year unDer neWlY INCLUDINGû(ILTONû4OKYOû/DAIBAûANDû(OTELû aPPointeD C%/ %liZabeth "arrett /RIENTALû%XPRESSû3HINSAIBASHI "arrett formerlY heaD of oncoloGY at Daiwa ûMizuhoûANDûSMBC Nikko AREûWORKINGû BELGIUM .oVartis anD 0lZer took oVer on *anuarY  ONûTHEûDOMESTICûPORTION ûANDûAREûALSOû rePlacinG 2on "entsur bookrunners on the international tranche BIOCARTIS RAISES €55M IN UPSIZED ABB 5roGen submitteD a rollinG .$! in the With Goldman Sachs fourth Quarter anD is eXPecteD to comPlete -olecular DiaGnostics business BIOCARTIS 0hase ))) trials in the seconD Quarter for launcheD anD uPsiZeD an intraDaY !"" on 5'. 0 MALAYSIA 7eDnesDaY raisinG õm in funDs for the 5'. 0 is a Gel like formulation of eXPansion of its raPiD samPle testinG the chemotheraPY Generic DruG CIMB PRICES IHH BLOCK AT BOTTOM sYstem -itomYcin C 4he Deal Was almost coVereD at launch h)m holDinG this VerY tiGhtlY to shoW #)-" has PriceD a -M 53M block from a Wall cross that beGan the PreVious that hoPefullY Within a short PerioD of of 60m shares in IHH HEALTHCARE at the bottom &riDaY anD mainlY centreD on eXistinG time Youll see that it starts to turn into a of a -6n6 ranGe shareholDers Gel v "arrett tolD attenDees at its 4he shares solD rePresent 0 of the 4Wo larGer than eXPecteD anchor orDers Presentation at *0 -orGans healthcare share caPital anD the lnal Price translates from Wall crosseD inVestors took more than conference on *anuarY 0 siX DaYs into the into a  Discount to the Pre Deal close of 0 of the  line book anD ultimatelY leD Job h7ere VerY PleaseD to saY that We haVe -6 to the uPsiZe Due to eXcess DemanD a receiVeD both fast track DesiGnation as Well !rounD 0 accounts ParticiPateD in the banker WorkinG on the Deal saiD as breakthrouGh DesiGnation from the &$! transaction anD the toP lVe Were allocateD 4he book Was multiPle times oVer 0 of the Deal oVersubscribeD anD DominateD bY lonG onlY )(( shares DiPPeD to - in earlY names NIGERIA traDinG last &riDaY before recoVerinG to ! total of m shares Were solD  of -6 the comPanY &inal PricinG came at õ0 LAFARGE AFRICA EXTENDS Sole bookrunner CIMB acQuireD the Per share anD rePresents an  Discount SUBSCRIPTION PERIOD shares from an unDiscloseD institutional to Where shares Were traDinG aheaD of the inVestor Deals launch Cement ProDucer LAFARGE AFRICA has 4raDinG Was susPenDeD Just before eXtenDeD the subscriPtion PerioD on its Pm ,onDon time When shares Were PriceD .bn 5S66m riGhts issue SOUTH KOREA at arounD õ0 after closinG 4uesDaY at SubscriPtion Will noW enD on -onDaY õ ! coVereD messaGe folloWeD an hour *anuarY  as the oriGinal enD Date of CHUNBO SET TO RAISE W100bn FROM IPO later anD after initiallY tarGetinG õm the SaturDaY *anuarY 6 is not a business DaY Deal Was uPsiZeD Just after Pm ,afarGe is issuinG bn shares on 6 for  Chemical materials maker CHUNBO is set to Berenberg, KBC anD Kempen Were Joint basis at . each 0ricinG rePresents a raise 700bn 5Sm from a +28 )0/ bookrunners on the offerinG "iocartis is 0 Discount to close on $ecember  the after PricinG the Deal at the toP of an lockeD uP for 0 DaYs DaY before the recorD Date inDicatiVe ranGe 4he lrm last raiseD cash in .oVember 4he Deal comPrisinG m shares PriceD 0 in an õ0m uPsiZeD !"" run bY Joint EMEA EQUITIES at 70 000 a share Versus the ranGe of bookrunners $eGroof 0etercam *0 -orGan BOOKRUNNERS: 1/1/2019 TO DATE 7 000n70 000 4he lnal Price GiVes the +"C anD +emPen Managing No of Total Share comPanY a market caPitalisation of bank or group issues US$(m) (%) 700bn 1 Baader Bank 1 229.20 14.0 4he books Were Well coVereD With all the ISRAEL 2 ING 1 162.85 9.9 orDers at or aboVe the toP of the ranGe =2 BAML 1 162.85 9.9 accorDinG to a Person close to the Deal UROGEN SOLIDIFIES FUNDING =2 ABN AMRO Bank 1 162.85 9.9 !bout 0 of the offerinG Was allocateD to FOR COMMERCIAL ROLLOUT 5 Investec 1 130.64 8.0 institutional inVestors 0 to retail 6 Barclays 1 129.28 7.9 inVestors anD 0 to an emPloYee stock UROGEN PHARMA a clinical staGe 7 Jefferies 2 70.04 4.3 oWnershiP Plan bioPharma PaiD a heftY Price for the 8 Commerzbank 2 66.07 4.0 4he retail tranche Will be oPen for 5S0m secureD throuGh a stock sale on 9 Goodbody Stockbrokers 1 64.45 3.9 subscriPtion on *anuarY   4he shares 4uesDaY =9 Numis 1 64.45 3.9 Will start traDinG on &ebruarY  Goldman Sachs JP Morgan anD Jefferies Total 17 1,642.15 4he comPanY intenDs to use the ProceeDs PlaceD m shares after one DaY of Including all domestic and international deals and rights issues to eXPanD businesses relateD to marketinG at 5S a 6 Discount to last Source: Refinitiv SDC code: C4cr

International Financing Review January 26 2019 85 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

,AFARGESûSHAREûPRICEûDIPPEDûBELOWûTHEû "IoMeDIca WIll FolloW the rIghtS attacheD to DeMaND For the NeW ShareS accorDINg to RIGHTSûISSUEûPRICINGûATûTHEûBEGINNINGûOFû û theIr receNtlY acQuIreD ShareS oNe BaNKer WorKINg oN the Deal 4he M CLOSINGûASûLOWûASû.ûONû*ANUARYûû)Tû 4he rIghtS ISSue WIll See   ! ShareS ShareS eQualleD arouND  DaYS traDINg aND RECOVEREDûBYû*ANUARYûûANDûHASûCLOSEDû ISSueD aND M NeW " ShareS 4he " ShareS repreSeNteD a capItal INcreaSe oF  4he ABOVEû.ûSINCE are lISteD WhIle the uNlISteD ! ShareS carrY ShareS Were INItIallY proVIDeD BY  tIMeS the VoteS oF the " ShareS )NDuStrIFoNDeN Handelsbanken Capital Markets IS aDVISer oN 4he caNcer treatMeNt DeVeloper lauNcheD SAUDI ARABIA the rIghtS ISSue the prIMarY raISe JuSt aFter MarKet cloSe !DDlIFe reporteD %BIta oF 3+rM For the alreaDY coVereD WIth INDIcatIoNS FroM a ALHOKAIR’S MALL UNIT FILES FOR Q2 IPO NINe MoNthS to 3epteMBer  up  FroM Wall croSS !N oFlcIal coVereD MeSSage 3+rM IN  )tS SuBSIDIarIeS Sell FolloWeD halF aN hour later aND BooKS cloSeD 4HEûMALLûUNITûOFû3AUDIû!RABIASûFAWAZ eQuIpMeNt INStruMeNtS aND MeDIcal at pM ,oNDoN tIMe ABDULAZIZ ALHOKAIR GROUP û!RABIANû#ENTRESû DeVIceS acroSS healthcare acaDeMIa aND the &INal prIcINg For the NeW ShareS caMe at #OMPANY ûHASûAPPLIEDûTOûTHEû#APITALû-ARKETû FooD aND pharMaceutIcal INDuStrY )tS 3+r repreSeNtINg a  DIScouNt FroM !UTHORITYûFORûAûLISTINGûONûTHEû2IYADHûSTOCKû actIVItIeS are MaINlY BaSeD IN the .orDIc 7eDNeSDaYS cloSe oF 3+r per Share EXCHANGE ûWITHûTHEû)0/ûPLANNEDûFORûTHEû regIoN But alSo SpaN the "eNeluX couNtrIeS 3hareS Fell oN 4hurSDaY But reMaINeD aBoVe SECONDûQUARTER %StoNIa )talY the 5+ aND #hINa the DIScouNteD leVel cloSINg DoWN  at !RABIANû#ENTRESûDIDûNOTûRESPONDûTOû 3+r REQUESTSûFORûCOMMENTû4HEûGROUPûISûWORKINGû OVZON WRAPS UP RIGHTS ISSUE DNB Markets, Carnegie aND Jefferies Were WITHûMorgan Stanley, Moelis, Samba Financial JoINt BooKruNNerS oN the !"" /NcopeptIDeS Group ANDûNational Commercial Bank ûTWOû 3atellIte telecoMS proVIDer OVZON poSteD IS locKeD up For  DaYS FolloWINg the PEOPLEûFAMILIARûWITHûTHEûMATTERûSAID  taKe up oF ItS FullY guaraNteeD SettleMeNt Date oF *aNuarY  -ORGANû3TANLEYûANDû-OELISûDECLINEDûTOû 3+rM 53M rIghtS ISSue 4he coMpaNY lISteD oN .aSDaQ 3tocKholM IN COMMENTû3AMBAû&INANCIALû'ROUPûANDû 3uBScrIptIoN WIthout rIghtS aMouNteD to &eBruarY  IN a 3+rM )0/ ruN BY !"' .ATIONALû#OMMERCIALû"ANKûDIDûNOTû a Further  oF the Deal ! total oF M 3uNDal #ollIer aND #arNegIe aS JoINt gloBal IMMEDIATELYûRESPONDûTOûREQUESTSûFORû NeW ShareS Were SuBScrIBeD WIth aND coorDINatorS WIth JoINt BooKruNNer $." COMMENT WIthout rIghtS 3hareholDerS oF )t laSt raISeD caSh IN the capItal MarKetS IN /VerhorIZoN WhIch IS /VZoNS largeSt -arch  gatherINg 3+rM through a ShareholDer Bought  oF the Deal placINg WhIch prIceD at 3+r per NeW SWEDEN 0rIcINg WaS Set at 3+r aND the Deal Share aND WaS leD BY !"' #arNegIe $." raN oN a oNe For three BaSIS aND *eFFerIeS ADDLIFE FINALISES SKR500M RIGHTS 4he proceeDS WIll Be uSeD to FuND the ISSUE TERMS coMpaNYS lrSt SatellIte /VZoN  WhIch WIll Be lauNcheD IN  at the earlIeSt aND TURKEY Healthcare group ADDLIFE haS Set lNal terMS WIll reQuIre INVeStMeNtS oF arouND For ItS 3+rM 53M rIghtS ISSue 3+rBN HalF WIll Be FuNDeD BY the rIghtS AKBANK POSTS 99.9% TAKE-UP OF TL3bn 4he FuNDraISINg WaS aNNouNceD at the ISSue WhIle eXterNal loaNS WIll coVer the RIGHTS ISSUE SaMe tIMe aS !DDlIFe agreeD to the other halF acQuISItIoN oF !uStrIaN "IoMeDIca 4he Full aMouNt WaS alreaDY guaraNteeD AKBANK poSteD a  taKe up oF ItS 4,BN -eDIZINproDuKte late laSt Year For õM IN through a coMBINatIoN oF uNDerWrItINg aND 53M rIghtS ISSue WIth the reMaININg caSh aND ShareS WIth proceeDS to coNtINue SuBScrIptIoN uNDertaKINgS FroM ShareS SolD oFF IN the prIMarY MarKet the StrategY oF groWth through acQuISItIoNS ShareholDerS aND eXterNal guaraNtorS ! total oF BN ShareS Were SolD !DDlIFe oWNS  operatINg SuBSIDIarIeS WhIch coVereD the reMaININg  INcreaSINg the BaNKS Share capItal BY  4he NeW ShareS WIll Be SolD oN a oNe For 4he M NeW ShareS MeaN /VZoNS 0rIcINg WaS Set at 4, repreSeNtINg a SeVeN BaSIS at 3+r each Share capItal INcreaSeS BY arouND   DIScouNt to the 4, 4%20 BaSeD oN 4he coMpaNYS Share prIce haS clIMBeD Carnegie WaS lNaNcIal aDVISer the $eceMBer  cloSe SteaDIlY aFter BrIemY DroppINg WheN the 3hareS Were traDINg at 3+r late oN 4he capItal INcreaSe WaS aIMeD at acQuISItIoN aND rIghtS ISSue Were aNNouNceD &rIDaY aFterNooN BooStINg the BaNKS reSIlIeNce agaINSt oN .oVeMBer  !DDlIFe ShareS cloSeD oN MarKet VolatIlItY aND protectINg It FroM loaN 4hurSDaY at 3+r each up  FroM ONCOPEPTIDES RAISES US$60m IN ABB paYMeNt DeFaultS aS Well aS Future groWth .oVeMBer  WheN ShareS cloSeD at 4he Full aMouNt WaS alreaDY FullY 3+r 0harMaceutIcal coMpaNY ONCOPEPTIDES raISeD guaraNteeD BY MaJor ShareholDer 3aBaNcI 4he capItal INcreaSe WaS approVeD at aN 3+rM 53M oN 7eDNeSDaY eVeNINg HolDINg WhIch proMISeD to coNtrIBute ItS %'- oN $eceMBer  IN aN accelerateD BooKBuIlD that WaS BacKeD pro rata Share oF  aS Well aS aNY 4he recorD Date IS *aNuarY  aND BY aNchor orDerS uNSuBScrIBeD rIghtS SuBScrIptIoN ruNS FroM &eBruarY   4he capItal INcreaSe WaS aIMeD at !KBaNK ShareS hoVereD arouND 4, 2eSultS are eXpecteD oN &eBruarY  DIVerSIFYINg the coMpaNYS ShareholDer BaSe laSt &rIDaY at pM IN ,oNDoN !DDlIFeS tWo BIggeSt ShareholDerS BY WIth INterNatIoNal aND lIFe ScIeNceS VoteS 4oM HeDelIuS aND 2ooS 'ruppeN SpecIalISt INVeStorS together WIth 3WeDBaNK 2oBur /DIN 4here Were aNchor orDerS FroM NeW aND UK &oNDer 3KaNDIa aND ,aNNeBo &oNDer SaID eXIStINg ShareholDerS aND the lNal BooK WaS theY INteND to SuBScrIBe For theIr pro rata MultIple tIMeS SuBScrIBeD GLOBAL SWITCH TO MEET BANKS FOR IPO Share IN the rIghtS ISSue #ollectIVelY theY ! FaIrlY IllIQuID StocK aND a lacK oF repreSeNt  oF the VoteS aND  oF ShareS SIMIlarlY SIZeD receNt DealS IN .orDIc lIFe 5+ BaSeD Data ceNtre operator GLOBAL SWITCH IN !DDlIFe 4he ForMer ShareholDerS oF ScIeNceS coMpaNIeS helpeD create StroNg WIll Meet BaNKS thIS WeeK IN ,oNDoN to

86 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

EQUITIES AMERICAS

CHOOSEûARRANGERSûFORûAû(ONGû+ONGû)0/ûOFû TRITAX TARGETS £250m FOR moneY anD Was DominateD bY 5+ accounts ABOUTû53BNûINû ûACCORDINGûTOûPEOPLEû SYMMETRY STAKE as Well as seeinG DemanD From the 5S anD FAMILIARûWITHûTHEûSITUATION #ontinental Europe 4HEûCOMPANYûHASûBEENûDISCUSSINGû TRITAX BIG BOX REIT is raisinG am in a placinG !pproXimatelY halF oF the placinG THE POTENTIAL mOAT WITH BANKS IN THE PAST anD open oFFer to FunD the acQuisition bY proceeDs Will Go toWarDs GroWth plans With FEW WEEKS AND IS EXPECTED TO APPOINT WhollY oWneD subsiDiarY $"3 (olD#o oF an the balance beinG useD to strenGthen the BANKS ON THE )0/ AFTER THE BEAUTY CONTEST  stake in lanD oWner 3YmmetrY For balance sheet anD proViDe meXibilitY For neW IN ,ONDON am in cash anD am in shares opportunities 4HE (ONG +ONG LISTING COULD GIVE THE 4he issue comprises m neW shares 4he FunDraisinG is subJect to shareholDer COMPANY A VALUATION OF AT LEAST aBN at p a  Discount to the p close approVal at an E'- on &ebruarY  53BN EQUAL TO THE ONE IT ACHIEVED on *anuarY  anD a  Discount to the "lue 0rism shares openeD at a on WHEN IT SOLD SHARES TO A CONSORTIUM OF unauDiteD basic .!6 per share oF p as 4hursDaY morninG anD closeD the DaY up an !SIAN INVESTORS LAST *ULY 4HAT SALE OF A  oF *une  net oF the interim DiViDenD oF impressiVe  at a STAKE IN THE COMPANY WAS VALUED AT p per orDinarY share From !pril  to aBN *une  'LOBAL 3WITCH lRST REVEALED ITS INTENTION 4he neW shares Will rank pari passu anD FOR AN )0/ LAST *ULY )T SAID AT THE TIME IT Will be entitleD to the 1 DiViDenD Which is PLANNED TO LIST ON A LEADING INTERNATIONAL to be DeclareD but tarGeteD at p AMERICAS STOCK EXCHANGE IN %UROPE !SIA OR .ORTH accorDinG to an analYst note From *eFFeries !MERICA IF MARKET CONDITIONS ALLOWED 4he oFFerinG represents approXimatelY %STABLISHED IN  'LOBAL 3WITCH OWNS  oF eXistinG share capital 4he placinG UNITED STATES AND OPERATES ELEVEN DATA CENTRES CENTRALLY is subJect to claWback From the open oFFer LOCATED IN TIER ONE CITIES ACROSS %UROPE AND Which Will be Done on a three For  basis SHUTDOWN, EARNINGS HOBBLE ECM !SIA 0ACIlC OFFERING A TOTAL OF   4he recorD Date Was *anuarY  anD the AGAIN SQUARE METRES OF mOOR SPACE open oFFer runs until &ebruarY  With a 4HE COMPANY ANNOUNCED PLANS IN result eXpecteD on &ebruarY  5S E#- bankers are puttinG on a braVe Face $ECEMBER  TO BUILD A NEW (+BN Jefferies is sole bookrunner anD Joint as the 5S GoVernment shutDoWn continues 53M DATA CENTRE IN 4SEUNG +WAN / lnancial aDViser alonGsiDe Akur Lazard is to hamper the 5S )0/ market anD (ONG +ONG aDVisinG on the acQuisition contributes to soFt oVerall E#- conDitions 7hat Was supposeD to be the lrst )0/ oF DRAPER ESPRIT RAISES £100m BLUE PRISM RAISES £100m FOR  a 5Sm oFFerinG From ,.' start up FOR ACQUISITIONS GROWTH AND INVESTMENT NEW FORTRESS ENERGY proVeD a non starter ensurinG *anuarY Will probablY enD neXt $IGITAL TECH VENTURE CAPITAL lRM DRAPER 3oFtWare companY BLUE PRISM GROUP raiseD Week With no )0/s haVinG priceD ESPRIT RAISED aM IN AN INTRADAY PLACING am on 4hursDaY morninG For GroWth 4he onGoinG GoVernment shutDoWn noW ON -ONDAY TO lNANCE ACQUISITIONS OF FUNDS anD proDuct DeVelopment as Well as into its th DaY as oF &riDaY meant .eW FROM %ARLYBIRD potential inVestments &ortress Was unable to price because the SE# ! TOTAL OF M NEW SHARES WERE SOLD AT Sole bookrunner Investec placeD m is not DeclarinG reGistration statements P EACH REPRESENTING A  DISCOUNT primarY shares representinG  oF eFFectiVe DurinG this perioD TO THE *ANUARY  CLOSE OF P 3HARES FELL eXistinG share capital anD more than  .eW &ortress Was eXpecteD later on &riDaY  ON -ONDAY AFTER THE PLACING BEFORE DaYs traDinG 0ricinG oF a per share Was a to set lXeD terms anD take aDVantaGe oF CLOSING AT P  Discount to 7eDnesDaYs a close little useD proVisions that enable automatic 4HE FUND WILL ACQUIRE HOLDINGS IN TWO )nVestors Were Wall crosseD in aDVance oF eFFectiVeness but it Will haVe to Wait %ARLYBIRD FUNDS 4HE lRST IS A  STAKE IN the traDe anD a number oF others haD been another  DaYs assuminG the shutDoWn %ARLYBIRD )6 FOR AROUND aM AND THE FolloWinG the companY since it raiseD am continues until then beFore GoinG public SECOND IS A  INTEREST IN $IGITAL %AST &UND For GroWth almost a Year aGo to the DaY in "iotech 'ossamer "io on 7eDnesDaY FOR AROUND aM 4HE PROCEEDS WILL ALSO BE *anuarY  4hat Deal also incluDeD a became the lrst )0/ to set terms With the USED TO lNANCE FURTHER DIRECT AND seconDarY sale totallinG am 4he WorkarounD in place SECONDARY INVESTMENT OPPORTUNITIES companYs GroWth haD also GarnereD 4he 5Sm Deal Will launch neXt Week 4HE PLACING MANAGED BY JOINT interest For pricinG on &ebruarY  thouGh the bookrunners Goodbody AnD Numis WAs 4he capital raisinG came alonGsiDe Full companY has haD to settle on a lXeD price noT unDerWrITTen AnD WAs ConDITIonAL Year numbers For "lue 0rism shoWinG that cannot be chanGeD reGarDless oF on sHAreHoLDer APProVAL WHICH THe reVenue GroWth oF  to am For the  inVestor DemanD For the stock ! 5Sm CoMPAnY WILL seek AT A GenerAL MeeTInG months to /ctober  in E-E! its most insiDer commitment has at least reDuceD the on &ebruArY  establisheD GeoGraphY  to am in risk that the companY is unable to raise the &oLLoWInG ITs aM $ubLIn AnD the !mericas anD  to am in !0!# moneY ,onDon LIsTInG In *une  WHICH WAs )ts aDJusteD EbitDa loss WiDeneD to am &eW other companies in the )0/ pipeline bACkeD bY THe )rIsH GoVernMenT $rAPer From am are eXpecteD to FolloW the same path as Esprit has taken to the capital markets $urinG Full Year   customers Were 'ossamer anD .eW &ortress at least not at tWice to raise cash 4he last time Was in aDDeD to support GroWth the companY is this staGe -aY  When it raiseD am in an consiDerinG openinG oFlces in the -iDDle "ankers saY it is at least Fortunate that the intraDaY placinG 4he placinG Was also run East anD ScanDinaVia anD aDDitional locations shutDoWn anD its impact on Deal moW is bY 'ooDboDY anD .umis as Was its )0/ in the !mericas anD !sia occurrinG at a time When actiVitY is anD aDDitional am capital raise in *une 4he lnal book incluDeD stronG support DepresseD anYWaY bY the Fourth Quarter  From eXistinG inVestors as Well as neW earninGs season anD other calenDar issues

International Financing Review January 26 2019 87 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

ECM DEALS: WEEK ENDING 25/1/2019 Stock Country Date Amount Price Deal type Bookrunner(s) Biocartis Belgium 23/01/2019 €55.5m €11.10 Accelerated bookbuild (Primary) Berenberg, KBC, Kempen China Gas China 21/01/2019 HK$1.23bn HK$25.05 Follow-on (Secondary) Mirae Asset Daewoo Mitsui Fudosan Logistics Park Japan 23/01/2019 ¥34.8bn ¥313,986 Follow-on (Primary/Secondary) Daiwa, Nomura, SMBC Nikko Recruit Holdings Japan 24/01/2019 ¥29bn ¥2,762 Follow-on (Secondary) Credit Suisse UroGen Pharma Israel 23/01/2019 US$150.0m US$41.00 Follow-on (Primary) Goldman Sachs, JP Morgan, Jefferies IHH Healthcare Malaysia 25/01/2019 M$334m M$5.56 Follow-on (Secondary) CIMB Oncopeptides Sweden 23/01/2019 SKr546m SKr115 Accelerated bookbuild (Primary) DNB, Carnegie and Jefferies Ovzon Sweden 23/01/2019 SKr750m SKr29.70 Rights issue Carnegie Blue Prism UK 24/01/2019 £100m £11 Accelerated bookbuild (Primary) Investec Draper Esprit UK 21/01/2019 £100m 530p Accelerated bookbuild (Primary) Goodbody, Numis Akbank Turkey 23/01/2019 TL3bn TL250 Rights issue — Hexo Canada 24/01/2019 C$50.1m C$6.50 Follow-on (Primary) BMO Capital Markets, CIBC Casella Waste Systems US 22/01/2019 US$91.5m US$29.50 Accelerated bookbuild (Primary) Raymond James eHealth US 23/01/2019 US$116.4m US$48.50 Follow-on (Primary) RBC Capital Markets, Credit Suisse, Evercore PTC Therapeutics US 22/01/2019 US$202.9m US$30.20 Accelerated bookbuild (Primary) RBC Capital Markets Wave Life Sciences US 23/01/2019 US$150.0m US$38.00 Follow-on (Primary) Jefferies, SVB Leerink, Mizuho

h7EûFEELûPOSITIVEûABOUTûEARNINGSûANDûTHATû 4HeIr taSk WaS eaSeD BY e(ealtHS releaSe outStanDInG at 5S a SHare tHe mIDDle VOLATILITYûHASûCOMEûIN vûONEûSENIORû%#-û OF rOBUSt  GUIDaNce alONGSIDe tHe DealS oF tHe 5S  ranGe anD a  BANKERûSAID laUNcH INclUDING a reVeNUe FOrecaSt tHat DIScount to tHe StockS prIor cloSe oF 4HEû30ûûHASûNOTûMOVEDûUPûORûDOWNû WaS  aHeaD OF cONSeNSUS eStImateS 5S BYûMOREûTHANûûSINCEû*ANUARYû ûINû 4He StOck SUrGeD  ON tHe DaY OF 2aYmonD *ameS replaceD tHe bulGe CONTRASTûTOûTHEûHIGHûLEVELûOFûVOLATILITYûTHATû marketING aND  IN tHe aFtermarket bracketS tHat HanDleD #aSellaS laSt outInG In REIGNEDûINûTHEûFOURTHûQUARTERûOFûLASTûYEAR SeSSION traDING aS HIGH aS 53 %#- In  a Deal on WHIcH tHe lrm WaS a 4HEûEARNINGSûSEASONûMEANTûTHEREûWEREû cONtrarY tO tHe StOck DeclINeS tHat co manaGer FEWûFOLLOW ONSûINûTHEûPASTûWEEKûANDûAû accOmpaNY mOSt eQUItY OFFerINGS 4Hat earlIer Deal SaW #aSella raISe JuSt NUMBERûOFûTHOSEûTHATûDIDûPRICEûCAMEûATûWIDEû 'OING INtO tHe Deal tHe StOck WaS alreaDY 5Sm at 5S a SHare VIa "ank oF DISCOUNTSûANDûWITHûINDIFFERENTûAFTERMARKETû Up  tHIS Year aND HaD SOareD FrOm JUSt !merIca -errIll ,YncH anD *0 -orGan PERFORMANCE ûPARTICULARLYûINûTHEûCASEûOFûTHEû 53 laSt -arcH &ounDeD In  WItH a SInGle truck BIOTECHûSECTOR /Ne %#- BaNker SaID e(ealtH StOck WaS #aSella noW proVIDeS SolID WaSte SerVIceS In 4HEûSECTORûSUFFEREDûONEû%#-ûCASUALTYû relatIVelY UNDer OWNeD BY INStItUtIONS 4He SIX 5S StateS amonG tHem .eW 9ork DURINGûTHEûWEEKû.ASDAQ LISTEDûCANCERûDRUGû OFFerING preSeNteD aN OppOrtUNItY tO aDD -aSSacHuSettS anD 0ennSYlVanIa SPECIALISTû.U#ANAûWITHDREWûAû53Mû NeW INVeStOrS tO tHe reGISter tHe BaNker SaID #aSella oFFereD InVeStorS a broaD baSeD OFFERINGûEARLYûONû&RIDAYûAFTERûITSûSHARESû 4He cOmpaNY eXpectS ItS FOUrtH QUarter uSe oF proceeDS but analYStS eXpect tHe SLUMPEDûNEARLYûûONûNEWSûOFûTHEûDEAL reVeNUeS tO rISe n tO 53mn companY WIll uSe tHe FunDS raISeD to make 4HEûCOMINGûWEEKûISûALSOûLIKELYûTOûBEûSLOWû m leD BY tHe -eDIcare SeGmeNt aND more acQuISItIonS or reDuce Debt ONûTHEûSECONDARYûFRONTûDUEûTOûAûmOODûOFû tO repOrt aDJUSteD %BItDa OF 53mn 7ItH tHe oFFerInG proceeDS #aSellaS net EARNINGSûREPORTSû3OMEûû30ûû m FOr tHe Same perIOD Debt%bItDa ImmeDIatelY FallS to  tImeS COMPANIESûALONEûAREûEXPECTEDûTOûREPORTûANDû )tS tOp lINe NUmBerS FOr  Were alSO From  tImeS or bY a SImIlar maGnItuDe WILLûDOMINATEûINVESTORûATTENTION Well aHeaD OF preVIOUS reVeNUe GUIDaNce tHrouGH %bItDa GroWtH IF uSeD For h4HEûBUY SIDEûWANTSûTOûSEEûMOREûSTUFFûBUTû prOVIDeD IN /ctOBer at 53mnm acQuISItIonS 5"S analYStS SaID In a note WEûNEEDûTOûGETûTHROUGHûTHISûSETûOFûEARNINGS vû NOW VerSUS 53mnm preVIOUSlY THEûBANKERûSAID )t alSO eXpectS reVeNUeS tO GrOW arOUND  PTC THERAPEUTICS DE-RISKS US$200m tHIS Year tO aS mUcH aS 53m RAISE EHEALTH SOARS ALONGSIDE US$116.4m !NalYStS SaID tHe OFFerING prOceeDS WOUlD STOCK SALE Help FUND tHe cOmpaNYS DIGItal StrateGY PTC THERAPEUTICS SecureD 5Sm h;4He prOceeDS= SHOUlD GIVe maNaGemeNt oVernIGHt laSt 4ueSDaY aFter upDatInG )NûONEûOFûTHEûMOSTûIMPRESSIVEû%#-û meXIBIlItY tO INVeSt IN ItS DIGItal campaIGN InVeStorS at tHe *0 -orGan HealtHcare OUTCOMESûINûRECENTûMONTHS ûSHARESûOFûFAST WItH tHe GOal OF lOWerING memBer conFerence earlIer In tHe montH GROWINGûONLINEûHEALTHûINSURANCEû acQUISItION cOStS aND DrIVING FUrtHer Sole bookrunner RBC Capital Markets marketplace EHEALTH SUrGeD BeFOre aND aFter eNrOlmeNt v *eFFerIeS aNalYStS WrOte IN a oFmoaDeD ItS purcHaSe oF m SHareS at It prIceD aN UpSIZeD aND accelerateD NOte tO clIeNtS 5S tHe bottom oF a 5S  53m FOllOW ON StOck Sale late ON marketInG ranGe anD an  DIScount to tHe 7eDNeSDaY CASELLA COLLECTS US$91.5m FROM 5S laSt Sale -onDaY !Fter JUSt ONe DaY OF marketING e(ealtH STOCK SALE 04# cloSeD 4ueSDaY at 5S SOlD m SHareS Or  OF OUtStaNDING at !t *0- 04# reporteD prelImInarY 53 a  lle tO OFFer premIUm CASELLA WASTE SYSTEMS a 6ermONt BaSeD SOlID unauDIteD  lnancIal reSultS tHat put RBC Capital Markets Credit Suisse WaSte maNaGemeNt cOmpaNY maDe a lONG Year enD caSH leVelS at 5Sm aND Evercore ISI leD tHe OFFerING WHIcH aWaIteD retUrN tO %#- laSt 4UeSDaY raISING 4He companY SaID tHat It anD partner WaS UpSIZeD FrOm m SHareS at laUNcH 53m FrOm aN OVerNIGHt StOck Sale 2ocHe plan to lle a neW DruG applIcatIon aND prIceD a DaY earlIer tHaN INItIallY Sole bookrunner Raymond James leD tHe .$! WItH tHe &$! For ItS SpInal muScular plaNNeD Sale oF m #aSella SHareS or  oF atropHY DruG rISDIplam anD SImIlar

88 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

EQUITIES AMERICAS

APPROVALûFROMû%UROPEANûREGULATORSû)Tû !VEDROûlRSTûlLEDûCONlDENTIALLYûONû 4HEûOFFERING ûLEDûBYûBMO Capital Markets EXPECTSûTOûCOLLECTûPEAKûANNUALûROYALTIESûANDû .OVEMBERû ANDûCIBC ûWASûLAUNCHEDûLATEûONû-ONDAYûOUTû MILESTONESûOFûMOREûTHANû53M OFû#ANADAûWHILEû53ûMARKETSûWEREûCLOSED HEXO CROSSES BORDER, RAISES C$50m 4HEûDEALûPRICEDûAûDAYûAFTERû(EXOSûSTOCKû WAVE LIFE HIT AFTER UPSIZED OFFERING BEGANûTRADINGûONûTHEû.93%û!MERICANû3TOCKû HEXOûRAISEDû#MûLATEûONû4HURSDAYûFROMû %XCHANGEûASûOPPOSEDûTOûTHEû"IGû"OARD ûONû "IOTECHûWAVE LIFE SCIENCESûRAISEDû53Mû THEûSALEûOFûMûSHARESûATû#ûEACH ûAFTERû TOPûOFûITSûEXISTINGû438ûLISTING FROMûANûUPSIZEDûOVERNIGHTûSTOCKûSALEûBUTû THREEûDAYSûOFûMARKETING ûTAKINGûAûWIDEûû )FûUNDERWRITERSûWEREûHOPINGûTHEû53ûLISTINGû TOOKûAûBIGûDISCOUNTûANDûTHEûSHARESûTRADEDû lLE TO OFFERûDISCOUNTûINûTHEûPROCESS WOULDûLIFTûTHEûSTOCKûAHEADûOFûTHEûOFFERING û POORLYûPOST MONEY 4HEûOFFERING ûLEDûBYûBMO Capital Markets THATûDIDûNOTûHAPPENû(EXOûSHARESûFELLûINûEACHû 7AVEû,IFE ûWHICHûISûDEVELOPINGûDRUGSûTOû ANDûCIBC ûWASûLAUNCHEDûLATEûONû-ONDAYûOUTû OFûTHEûTHREEûSESSIONSûTHATûTHEûOFFERINGûWASû TREATûGENETICALLYûDElNEDûDISEASES ûSOLDû OFû#ANADAûWHILEû53ûMARKETSûWEREûCLOSED ONûTHEûROAD MûSHARESûORûABOUTûûOFûOUTSTANDINGûATû 4HEûDEALûPRICEDûAûDAYûAFTERû(EXOSûSTOCKû (OWEVER ûBANKERSûMAINTAINEDûTHEûOFFERINGû 53ûEACH ûANûûDISCOUNTûTOûLASTûSALE BEGANûTRADINGûONûTHEû.93%û!MERICANû3TOCKû WASûINDEPENDENTûOFûTHEûLISTINGûEVENT Jefferies ûSVR Leerink ANDûMizuho Securities LEDû %XCHANGEûASûOPPOSEDûTOûTHEû"IGû"OARD ûONû (EXOûISûAû#BNûMARKETûCAPû1UEBEC THEûOFFERING TOPûOFûITSûEXISTINGû438ûLISTING BASEDûMEDICALûCANNABISûSUPPLIERûTHATûLASTû /NEûBANKERûCLOSEûTOûTHEûDEALûSAIDû7AVEû )FûUNDERWRITERSûWEREûHOPINGûTHEû53ûLISTINGû YEARûFORMEDûAûJOINTûVENTUREûWITHûBREWERû ,IFEûHADûALWAYSûINTENDEDûTOûUPSIZEûTHEû WOULDûLIFTûTHEûSTOCKûAHEADûOFûTHEûOFFERING û -OLSONû#OORS OFFERINGûFROMû53MûATûLAUNCH THATûDIDûNOTûHAPPENû(EXOûSHARESûFELLûINûEACHû 4HEûPROCEEDSûOFûTHEûOFFERINGûWILLûFUNDûTHEû 4HATûDIDûNOTûSITûWELLûWITHûINVESTORS ûWHOû OFûTHEûTHREEûSESSIONSûTHATûTHEûOFFERINGûWASû COMPANYSûGLOBALûGROWTHûPLANSûANDû2$û CUTûTHEû7AVEû,IFEûSTOCKûPRICEûTOû53ûINû ONûTHEûROAD EFFORT 4HURSDAYSûAFTERMARKETûSESSION (OWEVER ûBANKERSûMAINTAINEDûTHEûOFFERINGû !CCORDINGûTOûAûROADSHOWûPRESENTATIONû 4HEûOFFERINGûPROCEEDSûBOOSTû7AVEû,IFESû WASûINDEPENDENTûOFûTHEûLISTINGûEVENT lLEDûWITHûTHEû3%# û(EXOûHOPESûTOûBECOMEû CASHûBALANCEûTOûABOUTû53M (EXOûISûAû#BNûMARKETûCAPû1UEBEC THEûhPREMIERûBRANDEDûINGREDIENTSûFORûFOODû 7AVEû,IFESûLASTûOFFERINGûINû!PRILûû BASEDûMEDICALûCANNABISûSUPPLIERûTHATûLASTû CANNABISûCOMPANYûINûTHEûWORLDv TOTALLEDû53MûATû53ûAûSHARE YEARûFORMEDûAûJOINTûVENTUREûWITHûBREWERû -OLSONû#OORS US EQUITIES AVEDRO JOINS BURGEONING IPO 4HEûPROCEEDSûOFûTHEûOFFERINGûWILLûFUNDûTHEû BOOKRUNNERS: 1/1/2019 TO DATE BACKLOG COMPANYSûGLOBALûGROWTHûPLANSûANDû2$ûEFFORT Managing No of Total Share !CCORDINGûTOûAûROADSHOWûPRESENTATIONû bank or group issues US$(m) (%) AVEDRO ûAû6# BACKEDûOPTHALMICûMEDICALû lLEDûWITHûTHEû3%# û(EXOûHOPESûTOûBECOMEû 1 Barclays 8 675.28 20.4 DEVICEûMAKER ûlLEDûPUBLICLYûONû*ANUARYûû THEûhPREMIERûBRANDEDûINGREDIENTSûFORûFOODû 2 JP Morgan 9 433.15 13.1 FORûANû53Mû.ASDAQû)0/ CANNABISûCOMPANYûINûTHEûWORLDv 3 RBC 4 370.10 11.2 "ACKEDûBYû/RBI-EDû!DVISORS û!VEDROûISû 4 Credit Suisse 7 319.33 9.6 COMMERCIALISINGûITSûSO CALLEDûhCORNEALû 5 Goldman Sachs 4 233.81 7.1 REMODELLINGvûPLATFORM CANADA 6 Citigroup 5 216.08 6.5 4HEûPLATFORMûAIMSûTOûSTRENGTHENûANDû 7 BAML 3 204.66 6.2 RESHAPEûTHEûCORNEAûUSINGûMINIMALLYû HEXO CROSSES BORDER, RAISES C$50m 8 Wells Fargo 2 131.51 4.0 INVASIVEûPROCEDURESûTOûTREATûCORNEALû 9 Raymond James Financial 2 99.79 3.0 DISORDERSûANDûCORRECTûSIGHTûCONDITIONSû HEXOûRAISEDû#MûLATEûONû4HURSDAYûFROMû 10 Cowen 3 96.33 2.9 CAUSEDûBYûCHANGESûINûTHEûSHAPEûOFûTHEûEYE THEûSALEûOFûMûSHARESûATû#ûEACH ûAFTERû Total 23 3,309.59 Bank of America Merrill Lynch ANDûJP Morgan THREEûDAYSûOFûMARKETING ûTAKINGûAûWIDEûû Including all domestic and international deals and rights issues LEADûAûlVE lRMûUNDERWRITINGûSYNDICATE lLE TO OFFERûDISCOUNTûINûTHEûPROCESS Source: Refinitiv SDC code: C3r

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„ FRONT STORY SWITZERLAND US$6bn book for Sika mandatory

Chemicals group raises SFr1.3bn for Parex acquisition

Swiss speciality chemicals group SIKA continued A pre-sounding process began on Monday initial minimum conversion price was the the positive start for 2019 in European equity- and the deal launched shortly after the delta reference pricing of SFr130, a 3.7% linked on Tuesday night, attracting a book of London market close on Tuesday with heavy discount to Tuesday’s close, with a more than SFr6bn for its SFr1.3bn (US$1.3bn) indicative demand. maximum conversion price of SFr146.25, mandatory convertible bonds due 2022. Unusually for a mandatory, the bonds are representing the 12.5% premium. Mandatory convertibles are no longer the sole not convertible for over two years – July 1 The lnal book was large at around 90 lines, preserve of hedge funds, but they are still a 2021 – subject to caveats on certain parity versus a more typical 30-40 names for a niche product, so such a broad book of demand events or shareholder distributions. That was mandatory. The split on allocation was from around 90 accounts is notable. Demand a function of Sika having limitations on around 65% hedge funds and 35% outrights. A was SFr3bn on the strength of the pre-sounding. diluting shareholders over the next two years. second banker said that some accounts were The company is rated A- (negative A banker involved said that there was a unable to participate as they already had outlook) by S&P, with the notes assigned a belief that non-convertibility would limit signilcant exposure from having bought into BBB rating by S&P shortly after the deal leverage for hedge funds from prime the SFr1.65bn of seven-year paper issued in launched. brokers, but instead they were very keen to May. While Sika has now issued twice in Proceeds will go towards Sika’s SFr2.5bn lend and funds hgot crazy lnancing termsv. eight months, it had been 20 years since acquisition of French rival Parex and for Another feature was the inclusion of a parallel Sika’s previous convertible in 1998. general corporate purposes. ratio or ‘booster’, where there is a call on the The mandatory was trading around Adopting the typical ‘happy meal’ upside for every put on the downside, allowing 101.5%-101.75% in the grey on Wednesday approach, the SFr1.3bn MCBs were launched for the same upside and downside prolle. The afternoon. Sika shares opened down 3.85% alongside an up to SFr900m delta placing, benelt is that offering more upside allowed for a at SFr129.80, dropping off just slightly for a with sizing dependent on outright demand smaller coupon than is typical for a mandatory. SFr129.70 Wednesday close. for the bonds. Guidance at launch was an up That was helpful as bankers said Sika was UBS, sole bookrunner on last year’s deal, to 5% discount to the SFr135 Tuesday close. looking for as tight a coupon as possible. was sole global coordinator and joint The bonds came with a 3.75%-4% coupon and Pricing was a 3.75% coupon and a 12.5% bookrunner with Citigroup for Tuesday premium of 12.5%-15% above the reference premium. The skew was .5 and the lnal night’s trade. price to come from the delta placing. delta placing was sized at SFr820m. The Robert Venes

A spike in volatility is helpful for equity- Increased optimism in Europe linked, especially if combined with long-awaited rising interest rates and widening spreads. Rising volatility provides opportunity Thierry Petit, head of equity-linked for EMEA at BNP Paribas, said the interest rate Uncertainty and volatility are anathema to “I’d expect the market to beat last year’s environment in Europe will remain “where equity capital markets, but could be an volumes comfortably and issuance may be it is for a longer period of time than we opportunity for equity-linked. more in line with lve-year average issuance would have expected or hoped for and that “With rising interest rates and volatility and levels,v said Aloke Gupta, head of equity- has been reinforced by a few messages from lower returns on bonds, a convertible bond is a linked for EMEA at JP Morgan. the ECB over the last few weeksv. really good instrument in this environment and So far in 2019, Spanish telecoms group Petit said that the market is now not a lot of clients will come back to the market or Cellnex returned a year to the day after its pricing in the lrst rate hike before 2020, as are rethinking asset allocation as straight bonds eight-year 1.5% €600m debut CB with a opposed to the back end of 2019. “Given the are not currently providing the returns they sizeable €200m tap; Dutch food delivery low inmation forecast and also the revision in want to see,v said Stephanie :wick, head of service Takeaway.com came to market 10 growth forecasts across Europe, no-one is convertible bonds at Fisch Asset Management. days later with a combo €430m equity expecting a rate hike in 2019 any more.v :wick wrote in a recent report on placing and a €250m lve-year 2.25% CB that The hope among equity-linked bankers is opportunities for CB investors in 2019 that priced at the mid-point; and last week Sika that issuance will return to 2016/2017 levels Fisch expects market volatility to increase priced SFr1.3bn of mandatory convertible (US$25.3bn from 59 deals in 2016), but the because the latest economic indicators out of bonds. belief is that the pipeline will build slowly. Europe and China are weaker. (owever, by this stage last year, lve deals “Rising interest rates will drive global EMEA equity-linked issuance in 2018 had been completed, including Cellnex, for a issuance,v said :wick. “That will probably be totalled US$12.7bn from 38 deals, slightly total haul of US$2.4bn. Conversely, there was more the case in the second half for more than half of the US$23.9bn from 61 no further issuance until a murry of deals in European issuance though.v deals in 2017. late February 2018. Robert Venes

International Financing Review January 26 2019 91 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

High-yield to be welcomed AUSTRIA FALL IN COUPON FOR IMMOFINANZ

back to equity-linked IMMOFINANZ last week secured an investment-grade rating from S&P, so the „ EUROPE Widening spreads could trigger CB issuance coupon on its €300m 2024 convertibles issued two years ago now falls by 50bp to European equity-linked bankers have easing in December, less liquidity injected by 1.5%. talked up potential rate rises as one of the key central banks will mean markets are more The seven-year bonds were issued in triggers for convertible bond issuance later this volatile.” *anuary 201 and include a put at year lve. year, but a shift in spreads is having an impact Widening of spreads has already had a small now. impact on European equity-linked. A banker “Looking at spreads, there is more room involved in the €200m tap of Spain’s Cellnex UNITED STATES to cheer,” said Thierry Petit, head of equity- earlier this month said at the time that spreads linked in EMEA at BNP Paribas. The iTraxx had widened enough between the original CONMED EXTRACTS FAVOURABLE Crossover Index was bid at just above 270bp issue in January 2018 and the tap that the TERMS ON US$300m CB at the end of September 2018, surged to just implied vol on the latter was one point above above 370bp by January 3, and had gone that of the original trade. CONMED secured through-the-range pricing back down to 321.25bp by the close on Friday, These market conditions may also influence and a slight upsiZe on its 5S300m lve- January 18. the types of convertible structures favoured year convertible bond, the lrst plain “That is an almost 100bp widening in three this year. vanilla offering of the year and just third months,” said Petit. “That shows how volatile “We will need higher interest rates, overall. this index has been over the past few weeks as more M&A and probably wider credit The medical device maker will pay a well as current investor nervousness.” spreads,” said Thomas Feuerstein, global coupon of just 2.625% with investors able While equity-linked was in the doldrums head of equity-linked at Societe Generale. “We to convert into the underlying at 27.5% for much of 2018, that shift in spreads had a are starting to see the latter, but with the year premium, through the friendly ends of negative impact on high-yield issuance in the that we just had, investors will favour vanilla 2.875%–3.375% and 22.5%–27.5% talk. last quarter of last year, with no deals pricing in deals.” JP Morgan, Barclays, Bank of America Merrill Europe in December. Takeaway.com’s €680m fundraising earlier Lynch and Wells Fargo bumped up the Telecom Italia opened the 2019 European in January ticked a number of boxes, providing offering size to US$300m from US$275m. high-yield market in the second week of a new name and a vanilla structure alongside hThis is the lrst deal to price at the best this year, attracting more than €4.5bn of an equity placing. The combo approach may ends or better since September,v said one investor demand, but had to pay up with a prove popular this year, said Gupte. “With banker involved in the underwriting. 4.125% yield. equity price levels where they are, some sellers “There hasn’t been a lot of new product High-yield bankers told IFR earlier this will look at an exchangeable alongside or and investors really want to put money to month that they estimated 20 to 30 mandates instead of an ABB.” work. ! lot of outright demand.v had been put on hold amid last year’s volatility Feuerstein added that issuers need to realise Conmed’s stock fell just 1.5% to and that those companies would look for that “we are in a world where the reference US$69.65 over the one day marketing opportunities to come to market. stock price is probably 20%-30% below where period Thursday, reversing a 5.9% run-up The hope is that they swerve high yield and it used to be”. Wednesday on the back of strong quarterly look instead at equity-linked. Widening spreads are positive for traditional results to set the conversion price at “High-yield was impacted by turmoil in the CB issuance but are likely to make non-dilutive US$88.80, an all-time high. The company bond markets at the end of last year, with a convertible bonds uneconomical for issuers. spent roughly US$18m of the proceeds on number of trades pricing much wider than Synthetic convertibles have been pitched to a call spread to offset dilution to a 65% expected and some not making the finish line,” issuers as straight bond alternatives, so the premium or US$114.92. said Aloke Gupte, head of equity-linked for combination of CB and repurchase of the call From a cost of capital perspective, the EMEA at JP Morgan. “That sentiment has not needs to be cheaper than the straight debt all-in cost of the CB is lower than the changed much since and that will be a factor option. 4.125% rate Conmed paid on its secured in encouraging issuers to evaluate an equity- “Investors will be much more selective on term loan (L+1.875%) in September. linked market with investors who are still cash equity-neutrals – unless they are structured in From a technical perspective, Conmed positive and keen to see new entrants.” such a way as to be attractive, they are usually realised 27 vol on the CB, above the low- Gupte said that in a choppy market, high- expensive and the delta is usually low,” said 20s marketed by the underwriters when yield issuers may find that bond markets are Petit. paired with a L+400bp (unsecured) implied challenging, while the equity-linked market is “Right now it is difficult to make the non- credit spread. That realised vol is above the more constructive with pricing based on both dilutive CBs work,” said Feuerstein. 25.7 200-day realised vol. credit spreads and stock volatility. “These Despite being fewer in number, Gupte said Conmed is using the proceeds to dynamics will drive issuance,” he said. that equity-neutral trades will be an important help fund the US$365m all-cash purchase “We’re expecting high-yield names to come aspect of the market, as current new-issue of Buffalo Filter, a maker of surgical to the EQL market,” said Petit, who added that premiums for bonds indicate the possibility of smoke evacuation equipment. The last year was the first since 2008 where returns cost savings, particularly for high-quality new purchase will elevate leverage to roughly from all four fixed income sub asset classes issuers. lve times %bitda but management plans to were negative. “With the end of quantitative Robert Venes reduce it to less than three times by the end of 2021.

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INTERNATIONAL FINANCING REVIEW INDEX

ABN AMRO 81 Colombia 55 Inmar 75 Philippine National Bank Japan branch 70 Accor 31 Commercial Bank 64 Int Container Terminal Services 70 Pizza Express 40 AC Energy 61 CommScope 76 Interplex Holdings 79 PNC Financial Services 33 Addlife 86 Conmed 92 Intesa Sanpaolo 14 Power Grid Corp of India 69 Affiliated Managers 73 Consumer Portfolio Services 46 IVC 77 Province of Alberta 29 Air Liquide 71 Corporacion Andina de Fomento 66 Japan Hotel REIT Investment 84 Proxiserve 77 Akbank 86 Council of Europe Dev Bank 26, 29 Japan Post Insurance 30 PTC Therapeutics 88 Albertsons 38 Country Garden Holdings 69 JD Wetherspoon 72 Qatar Islamic Bank 64 Alfa-Bank 63 CPPIB Capital 27 Jharkhand Road Projects Implementation 7 Qatar National Bank 64 Altice 38 Credit Suisse Asset Management 42 Jiangsu Lihua Animal Husbandry 83 Quirch Foods 76 Amphenol 73 Crosthwaite Park CLO 43 Johnson Electric Holdings 57 Rabobank 36, 37, 38 APRIL 9 CStone Pharmaceuticals 82 JP Morgan Chase 33 Recruit Holdings 84 Arconic 39 Debenhams 40 Jubilant Pharma 81 Refinitiv 67 Argenta Spaarbank 36 Delhivery 81 KazAgro 62 Regions Financial 33 Argentina 65 Dexin China 83 KBC Group 34 Rentenbank 27, 28 Arpeni Pratama Ocean Line 60 DIA 40 KEB Hana Bank 62 Republic of Italy 4 Asian Development Bank 25, 27 D&J Industrial Real Estate Investment 79 Kenya 63 Reserve Bank of New Zealand 19 Assicurazioni Generali 34 DLF 84 KeyBank NA 33 Reward Science and Technology Ind 56 Atalian 41 Draper Esprit 87 KfW 27, 29 RMAC 42 athenahealth 8, 74 Dubai Investments Park 64 Kingdom of Spain 4, 5 Road King Infrastructure 58 Auchan Holding 23 Dun & Bradstreet 8, 74 Koc Holding 63 Romania 63 Avedro 89 DZ Hyp 38 Korean Air Lines 62 RPC 9 Banca Carige 14 Eagle Bulk Shipping 73 Korea Western Power 62 Santander 14, 35 Banca Monte Dei Paschi di Siena 4 Edelweiss 21 Lafarge Africa 85 Saudi Aramco 72 Banco Comercial Portugues 4 Edgewater Generation 77 Land NRW 26 Shanghai Pharmaceuticals (HK) Inv 69 Banco Popular 14 Egypt 62 Lebanon 65 Shawcor 74 Bank of America 33 eHealth 88 Lippo Karawaci 60 Shenwan Hongyuan Group 10 Bank of America Merrill Lynch 17 Emaar Properties 64 Lodha Developers 60 Sika 91 Bank of China 57 Emirates Global Aluminium 72 Logan Property Holdings 69 Sino-Ocean Group Holding 56 Bank of Xian 83 Energias de Portugal 4, 30 Luye Pharma Hong Kong 68 Societe Generale 13 Barclays 6 Engie 74 Maoyan Entertainment 82 SoftBank Group Corp 41 Berlian Laju Tanker 61 Exeter Financial 45 Matalan 40 Solvay 70 Bharat Petroleum Corporation 21 Export Development Canada 27, 29 Mechel 80 SpareBank 1 Boligkreditt 38 Bilbao CLO II 43 Far East Horizon 68 Metro Bank 24 Sri Rejeki Isman 60 Biocartis 85 FastMed UrgentCare 75 MGM Growth Properties 38 StandardAero 8, 77 Blackstone/GSO 43 Fawaz Abdulaziz Alhokair Group 86 Mitsui Fudosan Logistics Park 84 State of Saxony-Anhalt 26 Blue Prism Group 87 Fifth Third Bancorp 33 Mongolian Mortgage 60 Steinhoff Europe AG 80 B&M 40 Financial Markets Authority 19 Montage Technology 21 Sydbank 36 BNG Bank 29 Finnair 71 Morgan Stanley 33 Tai Hing Group 84 Bristol-Myers Squibb 8, 72 Flat Glass Group 83 MORhomes 33 Taiyo Nippon Sanso 33 Cadogan Square XIII 42 FMO 26 Municipality Finance 29 Telepizza 9 Caisse d’Amortissement de la FMS Wertmanagement 25 Murata Manufacturing 30 Tenet 38 Dette Sociale. 27 Future Housing Group 32 MYOB 78 TermoCandelaria Power 66 Caisse Francaise de Financement Local 37 Gazprom 63 MZI Resources 80 Tesla 46 Caliber Collision 77 GF Securities 10 Nakheel 64 Tianqi Lithium 82 Calsonic Kansei 78 Ghana 63 Nanjing CEC Panda FPD Technology 68 Transocean 38 Capital One Financial 33 Glaston 71 Natixis 13, 17 Tritax Big Box REIT 87 Cardinal Health (HK) 69 Global Switch 86 Navitas 78 Tsesnabank 21 Carlyle Euro CLO 2019-1 43 GLP China Holdings 58 Nets 77 Turkey 55 Carroll County Energy 74 Goldman Sachs 14 New Fortress Energy 10, 87 Turk Telekom 63 Casella Waste Systems 88 Gossamer Bio 10 New Look 40 UBS 13, 21, 36 CELF Advisors 43 Guggenheim Partners 43 NIIT 78 United Energy Distribution 33 Chalet Hotels 84 Guosen Securities 10 Northern Territory Treasury Corp 28 Urogen Pharma 85 China Evergrande Group 12 Haitong Securities 10 Notting Hill Genesis 32 US Salt 76 China Index Holdings 83 Hansoh Pharmaceutical 82 NTPC 70 Uzbekneftegaz 64 China Kepei Education Group 83 Healthscope 78 NZX 19 Vinmec International General Hospital 70 China Molybdenum 56 Hexo 89 Oesterreichische Kontrollbank 25 Vistra 38 China Overseas Land & Investment 69 Hong Kong Airlines 56 Oil India 21, 59 Vodafone Idea 84 China Securities 10 Hong Kong Exchanges and Clearing 19 Oncopeptides 86 Volkswagen 29 China Tianying 68 Hopewell Holdings 78 Orion Breweries 78 Vonovia 23 Chunbo 85 House of Fraser 40 Osram Licht 9 Walgreens Boots Alliance 73 Citic Securities 21 Hsin Chong Group Holdings 57 Ovzon 86 Wave Life Sciences 89 Citigroup 35 Huatai Securities 10 Pacific Gas & Electric 80 Wex 73 City of Bremen 26, 27 IBM 29 Pepper Group 47 Wittur 78 Civitas Solutions 75 IHH Healthcare 85 Petrobras 74 WorleyParsons 68 Clifden 42 Immofinanz 31, 92 Petrus HK 78 Xinjiang Goldwind Science & Technology 83 CNP Assurances 35 Industrial Securities 10 PF Chang China Bistro 76 ZH International Holdings 56 Cole Haan 75 Infrastructure Leasing and Fin Services 7 PG&E 15, 39

96 International Financing Review January 26 2019 РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

THANK YOU JP MORGAN FOR TRANSFORMING Photo: Daphne Cook/Save the Children Daphne Cook/Save Photo: CHILDREN’S LIVES

Save the Children would like to Together we have helped more children to survive and thrive, such as two-year-old Monsur Ali thank JP Morgan for its fantastic (pictured) who receives ongoing support from donation of £500,000 through the Save the Children’s nutrition centre in Bangladesh. tombstone auction at the 2017 IFR When children suffer, we all lose out. Join us at the Awards Dinner. next IFR Awards Dinner on Tuesday 29 January 2019 so we can give them a future to Thanks once again to the generosity of the look forward to. investment banking industry, the event raised £1,010,000 – making a grand total of £26,631,621 Visit ifrawards.com to buy your tickets. raised for Save the Children since the IFR Awards Dinner’s inception 25 years ago. #ifrawards

Registered charity England and Wales (213890) Scotland (SC039570) РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS

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