Debt Capital Markets Update

London Exchange

Fourth quarter and full year 2018 Macroeconomic Landscape makes comeback

Markets outlook highly dependant on US and China performance Volatility returns to highs of Q1 2018

Date Event 19 Dec CPI inflation 19 Dec 20 Dec Interest rate 21 Dec GDP 21 Dec GDP 27 Dec Unemployment, CPI inflation 28 Dec CPI inflation

Sovereign Curves Global equity markets downturn extends into 2019

3.5

3

2.5

2

1.5 YTM 1

0.5

0 1M 2M 3M 6M 9M 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y 12Y 15Y 20Y 25Y 30Y -0.5

-1 JPY Japan Sovereign GBP UK Sovereign EUR German Sovereign EUR Sovereign US Actives

Source: FactSet, Bloomberg, as at 9th January 2019 2 DCM Market Activity Reduced global issuance volumes in 2018

— Heightened volatility in 2018 has led to lower issuances with c. $11tn less capital raised compared to 2017. — Hard currencies have seen more issuance with c. 45% of 2018 issuance denominated in USD. — The end remains the preferred tenor with over 75% of issuance maturing in 3 years or less.

YoY Global Capital Raised ($tn) 2018 by Currency (%)

11% 4.5 1% 1% USD 1% RMB

4.0 11% JPY 45% EUR 3.5 INR CAD 3.0 14% GBP 2.5 16% Other

2.0 2018 by Tenor (%) 3% 2%

1.5 7% 0% 0-3y Capital Raised ($tn)RaisedCapital 1.0 3% 4-5y 8% 6-8y 0.5 9-10y 0.0 11-29y Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 30-99y 77% 2017 2018 Perpetual

Source: Bloomberg, January 2019 Note: Based on individual tranches issued. Duplicates for 144A and RegS are consolidated. Structured Products are excluded. 3 in Listings Continues The strongest year for bond issuance in the past five year period

— 1,068 bonds were issued on London in 2018 and accounted for $452bn in debt capital raised. — This amounts to the strongest year - in terms of bonds issued - in the past 5 year period. — LSE ranks second in debt capital raised among leading global bond venues in 2018.

No. of Bonds Issued on LSE since 2013* Capital Raised by Leading Bond Listing Venues in 2018

1,200 1,200 1,068 990 972 1,000 932 1,000 897 864 902 800 800

600 600 452 400

No. Bonds IssuedNo.Bonds 400 315 Capital Raised ($bn)RaisedCapital 205 200 200

0 0 2013 2014 2015 2016 2017 2018 LUX LSE DUB SGX

No. of bonds issued

Source: Bloomberg, as of Jan 3, 2019 Note: Based on individual tranches issued. Duplicates for 144A and RegS are consolidated. Structured Products are excluded 4 Global Home of Capital Innovating in debt financing

1,179 74 $5.3tn 43 13,000 Issuers Countries Raised* Currencies Listed Debt Instruments

114 RMB 28 Masala 21 Komodo 96 Green 72

London Stock Exchange is a key London is the premier bonds bonds is home London Stock Exchange is home global venue for the issuance of trading hub outside Stock Exchange is home for 28 currently active Masala for 96 currently active Green Sukuk. To date over US$50bn China with 114 bonds currently to 21 active IDR denominated bonds from 10 issuers which bonds which have raised c. has been raised through 72 active from 16 global issuers bonds, raising over IDR 38bn. have raised over INR 339bn. $26bn in 12 currencies. issues of Shariah compliant raising RMB 35 billion. instruments.

London Stock Exchange is Dewan Housing Finance Following Jasa Marga’s ICBC issues largest ever Green The Kingdom of Saudi Arabia home to the first ever offshore Corporation picks London to success, PLN launches global bond on London Stock picks London Stock Exchange Chinese Sovereign RMB Bond launch INR10 billion Masala rupiah bond program in London Exchange raising $1.6bn for a $2.0 billion Sukuk in Bond in 2018, reinforcing our raising $2bn to finance September 2018, emphasising as a leading venue for Indonesia’s power development our continuous support for the Masala issuers Islamic Finance Industry

Source: LSE, Bloomberg, as of Jan 3, 2019 *Based on individual tranches issued. Duplicates for 144A and RegS are consolidated. Structured Products are excluded 5 Global Deals on the LSE in 2018 Broadening Depth and Geo Coverage

ICBC, London Branch Kazakhstan Fiji Kenya Tabreed

USD 500 Million due 2021 EUR 525 Million due 2023 FJD 20 Million due 2022 USD 1 Billion due 2028 USD 500 Million due 2023 USD 500 Million due 2025 EUR 525 Million due 2028 FJD 40 Million due 2030 USD 1 Billion due 2048 EUR 500 Million due 2021

International Securities Market Main Market International Securities Market Main Market Main Market

June 2018 November 2018 April 2018 February 2018 October 2018

Largest Green Bond in LSE Debut EUR Sovereign Bond 1st Green EM Sovereign Bond Debut Sovereign Bond on LSE Debut Sukuk on LSE

Angola Saudi Arabia CCB, HK Branch Lloyds EXIM Bank of India

USD 1.75 Billion due 2028 USD 2 Billion due 2029 USD 1 Billion due 2021 GBP 750 Million due 2021 USD 1 Billion due 2028 USD 1.25 Billion due 2048

Main Market Main Market International Securities Market Main Market International Securities Market

May 2018 September 2018 September 2018 September 2018 January 2018

Debut Sovereign Bond on LSE Debut Sovereign Bond on LSE 1st Sustainability Bond on ISM 1st SONIA linked bond Debut bond on ISM

IFC Ghana BBVA Wijaya Karya Persero IDB

USD 1 Billion due 2029 GBP 350 Million due 2024 EUR 1 Billion due 2025 IDR 5.4 Billion due 2021 USD 4 Billion due 2021 USD 1 Billion due 2049

Main Market Main Market Main Market International Securities Market Main Market

July 2018 May 2018 May 2018 February 2018 April 2018

Debut Green Sterling Bond Debut Sovereign Bond on LSE Debut Green Bond Debut Komodo Bond Largest ever Bond for IDB

Selected milestone deals in London in 2018 6 2018 Listings Summary Breakdown of London Stock Exchange listings

Currency split of LSE 2018 listings Industry split of LSE 2018 listings

4% Financials EUR 3% 10% 2% USD 3% 2% Government 2% 3% 2% 28% GBP 4% SEK Utilities 2% CNY Consumer Staples 6% NOK 24% Consumer Discretionary JPY 61% TRY Communications 20% 24% AUD Other Others

Geographical split of LSE 2018 listings Tenor split of LSE 2018 listings

2% UK 9% 0-3y 23% 12% 26% EU (ex UK) 3-5y 13% Oceania 19% 5-8y Supranational 8-10y North America 4% 17% 10-30y 14% Asia 17% Africa 30y+ 16% 28%

Source: LSE, Bloomberg, January 2019 Currently listed bonds are captured only 7 Based on individual tranches issued. Duplicates for 144A and RegS are consolidated. Structured Products are excluded Top 60 Issuers - Q4 Listings Summary Financials lead the way in London in Q4

Bonds Amount Issued Bonds Amount Issued Rank Issuer Industry Rank Issuer Industry Issued (US$m) Issued (US$m) 1 BAT Capital Corp Consumer Staples 8 17,193.8 31 Yorkshire Financials 1 643.0 2 Group Communications 4 4,828.1 32 Motor Credit Corp Consumer Disc. 1 640.7 3 Bank of Nova Scotia Financials 8 4,240.6 33 QNB Finance Financials 7 591.0 4 Westpac Banking Corp Financials 12 4,012.7 34 Royal Financials 2 583.9 5 Nigeria Government Int’l Bond Government 3 2,868.4 35 Skipton Building Society Financials 1 577.5 6 -Dominion Bank Financials 2 2,692.9 36 ASB Finance /London Financials 1 574.0 7 ANZ Banking Group Financials 7 2,553.8 37 Finnvera OYJ Government 1 573.2 8 HSBC Holdings Financials 2 2,552.1 38 London Stock Exchange Group Financials 1 569.3 9 Finance Consumer Staples 3 2,293.8 39 InterContinental Hotels Group Consumer Disc. 1 565.8 10 Canadian Imperial Bank Financials 8 2,160.3 40 Legal & General Group Financials 1 518.0 11 Prudential Financials 3 2,123.6 41 Tabreed Sukuk Spc Financials 1 500.0 12 Financials 2 2,000.0 42 Inter-American Investment Corp Government 1 500.0 13 Corp Andina de Fomento Government 4 1,955.0 43 Western Power Distribution Utilities 1 461.5 14 British Telecommunications Communications 2 1,375.0 44 Israel Government Government 1 400.0 15 EBRD Government 26 1,279.6 45 NMC Healthcare Sukuk Health Care 1 400.0 16 Commonwealth Bank of Australia Financials 10 1,219.6 46 Heathrow Finance Industrials 1 394.5 17 IDB Trust Services Government 2 1,216.2 47 Southern Housing Group Financials 1 392.1 18 Kazakhstan Government Government 2 1,189.9 48 Anglian Water Services Financing Utilities 1 384.9 19 Hungary Government Government 1 1,155.1 49 Nationwide Building Society Financials 7 379.3 20 Municipality Finance Government 9 1,114.0 50 International Finance Corp Government 8 338.5 21 EUROFIMA Government 2 1,068.0 51 Karbon Homes Financials 1 318.7 22 ICBC/London Financials 2 1,000.0 52 Bank of Montreal/Toronto Financials 1 318.1 23 Sveriges Sakerstallda Obligationer Financials 5 998.5 53 CYBG Financials 1 314.2 24 Treasury Services Consumer Staples 1 854.5 54 Senaat Sukuk Financials 1 300.0 25 Financials 1 845.9 55 Hitachi Capital UK Financials 10 294.4 26 MDC-GMTN BV Financials 1 800.0 56 Oesterreichische Kontrollbank AG Government 3 290.8 27 Inter-American Development Bank Government 3 794.0 57 National Bank of Canada Financials 1 270.0 28 Financials 2 760.0 58 SSE Utilities 1 231.7 29 REC Financials 1 700.0 59 Cie de Saint-Gobain Materials 2 231.4 30 Coventry Building Society Financials 1 649.3 60 of Stockholm Sweden Government 1 221.0

Source: Bloomberg, January 2019 8 International Financial Institutions on LSE Australian and Canadian frequently choose London

International FIs $119bn 468 60 22 on LSE* Raised Bonds Issuers Countries

International FI bonds by geography (based on $ raised) Top 10 issuers for 2018 No. of Bonds Country 29% North America Commonwealth Bank of Australia 64 Australia Oceania Westpac Banking Corp 52 Australia 14% Asia Australia & New Zealand Banking Group 36 Australia 45% EU (ex UK) Hitachi Capital UK PLC 34 Japan 11% 1% Africa

Canadian Imperial Bank of Commerce 29 Canada International FI bonds by sub sector (based on $ raised) QNB Finance Ltd 27 Qatar Banks Bank of Nova Scotia 26 Canada Diversified Banks

Credit Agricole Corporate & Investment Bank 20 France Consumer Finance 65% 24%

Bank of Montreal 17 Canada Property & Casualty

5% Commercial Finance Royal Bank of Canada 14 Canada 4% 1%1% Real Estate

Source: Bloomberg, January 2019. Includes all bonds for 2018 (active and matured) *All figures on this slide reflect RegS and 144A consolidated numbers. 9 Focus: Australian and Canadian Issuers Top two international issuers for 2018 accounting for 26% of all issuance

7 $48bn 10 113

Issuers Raised* Currencies Listed Debt Instruments in 2018

7 $33bn 9 161

Issuers Raised Currencies Listed Debt Instruments in 2018

Key Issuers Split by currency type for 2018 listings Split by maturity spectrum for 2018 listings

60 80 50 CA AU 60 CA AU 40 30 40

20 No. of bonds of No. No. of bonds of No. 20 10 0 0 GBP EUR USD CNY ZAR HKD AUD CAD CHF NOK SEK 0-3y 3-5y 5-8y 10-30y

Source: Bloomberg, January 2019 10 DCM Focus: ISM Diverse range of issuers ISM - Innovative Solutions for our Clients One year anniversary

— ISM provides issuers with all the 52 bonds 27 issuers $17.2 billion 14 countries benefits of London’s extensive listed on London’s Sovereigns and raised on Diverse global experience as a global financial International corporates International reach centre, whilst offering an efficient Securities Market Securities Market admission process utilising an (ISM) innovative Rulebook — $17.2 billion has been raised on ISM since its launch, 82% of which was raised in 2018 Across multiple continents ($bn)* Across multiple sectors ($bn)* — Q3 was a record quarter for ISM with $4.7 billion raised — 2018 saw a number of ‘firsts’ for 1.0 0.5 0.7 0.7 ISM including: 1.3 Energy — CCB’s $1bn issuance, the 0.4 Africa first sustainability bond 1.5 Financials issued on ISM 5.1 APAC Government — The first JPY- denominated bond to be Europe Health Care admitted to ISM — Seplat Petroleum became 10.6 North Industrials the first Nigerian ISM America issuer 12.5 Utilities

Source: LSE Data, FactSet, January 2019 *Sector and region graphs are based on the capital raised 12 Asset-backed Securities Focus ISM is well equipped to support ABS issuers

An admission to trading on ISM delivers specific advantages for asset backed issuers, Issue Issuer Originator Maturity Highlights including: Size

― Derogations on financial disclosures for guarantors ― Variable Funding Note hardwired into the rules ― Up to USD 1bn variable funding notes ― Derogations on financial disclosures for SPVs due June 2020 with an initial hardwired into the rules Standard Outstanding Note Amount of USD Prunelli UK Chartered 150m Additional benefits: Asset Bank, UK $150m 1.5 years ― Trade Finance exposure Management Branch securitisation ― Local GAAP permissible ― Unique structure highlighting ISM’s ― Schedule 9 admission for issuers with existing flexibility for bespoke ABS regulated market listings – this means securities transactions can be admitted to ISM with reduced disclosure requirements ― Enhanced future incorporation by reference ― Variable Funding Note provisions ― Up to USD 1bn variable funding notes ― Enhanced flexibility around pricing supplements due June 2020 with an initial ― Debt listings in London are supported by a range of Standard Outstanding Note Amount of USD London Stock Exchange (LSE) marketing and PR Prunelli HK Chartered 337.5m initiatives, tailored to suit the needs of issuers, fully Asset Bank (HK) $338m 1.5 years ― Trade Finance exposure Management Limited securitisation integrating them into London’s financial ― Unique structure highlighting ISM’s ― Admission to LSE’s debt markets allows flexibility for bespoke ABS international governments and to access transactions a deep pool of liquidity

Source: London Stock Exchange, January 2019 13 DCM Focus: Sukuk Building Momentum Western Hub for Islamic Finance Over 20 banks offer Islamic financial services in the UK

International Sukuk on London Stock Exchange Leading 20 69 The UK is one of the Over 20 banks offer With around 69 leading western Islamic financial educational centres for Islamic services in the UK – institutions, the UK Finance double the number is by far the largest in the US provider of Islamic finance courses and degrees

72 1st $728M $53bn+ The UK was the first Net assets of Islamic To date, over $53bn western nation to Funds in UK has been raised issue a sovereign through 72 issues. Islamic bond

Key 2018 Sukuk Issuers 39% 50% 6% 3% 2% Financials Government Industrials Utilities Other

Source: Bloomberg, January 2019 15 DCM Focus: Events UK Debt Capital Markets Forum UK Debt Capital Markets Forum 2019 1 March 2019 | 8:30am – 1:30pm

London Stock Exchange Group is delighted to announce the date of its UK Debt Capital Markets Forum taking place in London.

Be sure to add this event to your calendar and join us for in-depth discussions on the challenges and opportunities in the UK debt market and network with key senior decision makers from the global DCM community.

Date: 1 March 2019 | 8:30am - 1:30pm Venue: London Stock Exchange Group, 10 , London EC4M 7LS

Topics covered will include: • Sterling opportunities • Financing China’s Growth through UK Debt Capital Markets • Scaling up the UK’s Green Bond Market • Transition to SONIA

Guest keynote speech: Rohan Churm, Head of Foreign Exchange Division, Bank of .

Speakers and event sponsors to be announced shortly.

Places are strictly limited and we encourage you to register your interest to make sure your is represented at this event.

Click here to register your interest.

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