APRIL 7 2018 ISSUE 2228 www.ifre.com

Spotify makes noisy NYSE debut: music streamer’s shares slump after direct listing

China rolls out the red carpet for tech firms and unicorns with preferential listing rules

Qatar hopes to leave regional squabble behind as it takes new bond on the road

PLUS: Q1 LEAGUE TABLES AND SSA SPECIAL REPORT

BONDS/LOANS LOANS PEOPLE & MARKETS EQUITIES Banks take losses Asset managers IMF seeks more Trio of Russian on struggling eye loan ETFs transparency companies shrug US junk deals as ahead of further from sovereign off row to launch investors say ‘no’ rate rises creditors ECM deals 04 08 09 10 INDONESIAN PROJECT BONDS ROUNDTABLE

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Good in parts 3ECRETIVEûSTATE TO STATEûLENDINGûMIGHTûSEEMûlNEûWHENû or Spotify, listing on a stock exchange was useful, but not times are good. But what will happen should a sovereign Fa burning ambition. owing such debt default? It wanted its stock to become easily and cheaply tradable, Will China claim it should be senior to other lenders? How but it didn’t need any new money, was largely happy with its about the China Infrastructure Investment Bank, the new long-term investor base and wanted to avoid giving away China-led multilateral institution? And where does that leave money in banking fees and an IPO discount. the IMF, which has traditionally claimed super seniority? A direct listing – as opposed to an IPO – was therefore a Even before answering those questions it is surely necessary sensible solution. Such a route would provide a listing with to make sure everyone knows what has been lent, and on minimal fuss – or rather as little fuss as there can be when a what terms. The transparent lending covenant will help to US$30bn company begins trading. ensure exactly that, and it deserves widespread support. But a direct listing comes with obvious downsides, and THOSEûWHOûPOINTEDûOUTûTHEûDIFlCULTIESûAHEADûOFûTIMEûWILLûFEELû Hazard a guess vindicated. ountries with plentiful natural resources often suffer The open was a mess. Price discovery was condensed into a Cproblems in their economic development as a result. few hours, and it was little surprise that shareholders reacted Singapore has no natural resources. But it does have to rising bids by raising their selling prices. something that can be similarly distorting: an over- 4HATûTHEûlRSTûTWOûMINUTESûOFûTRADINGûPROVIDEDûTHEûHIGH abundance of cash that upsets the balance between risk and water mark for the stock was also a black eye for the process. reward in the bond market. Indeed, if it wasn’t for the NYSE’s crafty decision to invent The huge onshore liquidity held by the city-state’s a spurious reference price in order to make it seem that the residents helped issuers raise funds at irrationally low rates, shares had traded up, much of the press coverage would have whether through senior bonds or hybrids, but it was not been damning. As it was, many in the media were UNTILûAûWAVEûOFûDEFAULTSûSTARTEDûINûLATEûûTHATûSOMEû hoodwinked, and it was widely reported that the stock ended investors started to seriously question what they had bought. ITSûlRSTûDAYûUPûNEARLYû ûRATHERûTHANûDOWNûûASûWASû 4HISûMONTHûSEESûTHEûlRSTûTIMEûTHATûAû3INGAPOREANûBONDû actually the case. investor will bring a bank to court for allegedly mis-selling Not surprisingly, liquidity was poor, with just 5.7m shares investments, including some of the Singapore dollar bonds ûOFûOUTSTANDING ûTRADINGûATûTHEûOPENûANDûFEWERûTHANû that defaulted in recent years. MûSHARESûCHANGINGûHANDSûONû4HURSDAYûnûJUSTûTWOûDAYSû Whatever the outcome of the court case, Singapore’s after the trading debut. banks have in recent months taken steps to give investors, It was fortunate that, while there were fewer sellers than especially customers of their private banks, more expected, there were also fewer buyers, meaning the stock information about the risks involved in investments. Issuers hasn’t been as volatile as feared. in the city state are notoriously reluctant to pay for credit That said, while the deal was hardly perfect, it was ratings, especially low ones, but some private banks are now certainly well clear of the worst-case scenario. stepping up to provide independent credit research. Yes, those who bought at the open will be smarting – as That is a move in the right direction, but bond will some shareholders who failed to sell straight away – but prospectuses already include pages of risk warnings that on the whole the deal met the client’s objectives. That is barely anyone seems to read. Holders of hybrid bonds issued surely something that all involved can be proud of. BYû(YmUXûANDû.OBLEû'ROUPûWEREûSHOCKEDûWHENûTHOSEû companies suspended coupon payments, even though the Eastern promises sought terms clearly stated that it could be done. hristine Lagarde visits China this week at a perilous time, The simplest thing would be for the Singapore authorities Cwith a trade war potentially about to break out between to make credit ratings mandatory, perhaps even encouraging her hosts and the US. But there are other important matters the development of a home-grown rating agency if issuers that the IMF chief will be keen to discuss when she is in really do not want to pay the price of international ratings. Beijing. That would at least show the differences in risk between The IMF is urging all lenders to sign up to a so-called companies, and between senior and subordinated bonds. transparent lending covenant, a move that is also being Of course, yields already give an indication of risk in supported by major Western banks, via the Institute of Singapore, and Asia in general. Yields have been compressed )NTERNATIONALû&INANCE ûANDûlNANCEûMINISTRIES ûVIAûTHEû0ARISû for many years by the sheer force of liquidity. Club. Ratings could signal a company’s gradual decline, rather than 4HEûCOVENANTûREQUIRESûSOVEREIGNSûANDûQUASI SOVEREIGNS ûTOû see investors being caught by surprise by a default. That might be more transparent about the loans made to other even give investors a chance to exit a position before disaster sovereigns. strikes (although the current lack of liquidity in secondary !NDûWITHû#HINAûBECOMINGûAûSIGNIlCANTûLENDERûTOûOTHERû TRADINGûINû3INGAPOREûDOLLARûBONDSûMIGHTûMAKEûTHATûTRICKY  states over the last decade, either directly or through projects Singapore, though, has already delivered its most carried out by state-owned vehicles, that is a subject that important lesson in bond investing. Now investors know that Lagarde will do well to bring up. they can lose money.

International Financing Review April 7 2018 1 FREE TO ALL ADB DELEGATES

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The Roundtable is free to attend for all delegates at the 51st ADB Annual Meeting in Manila. INTERNATIONAL FINANCING REVIEW Contents APRIL 7 2018 ISSUE 2228

TOP NEWS 04 EQUITIES Downhill Spotify makes a noisy NYSE debut, as the music streamer’s shares slump after its direct listing and delayed opening. 04 EQUITIES Preferential China rolls out the red carpet for tech firms and unicorns to encourage them to list locally. 06 EMERGING MARKETS Squabble Qatar hopes to leave its bitter regional dispute behind as it takes a new multi-tranche bond on the road. 07 BONDS In demand Short-dated bonds catch a bid as yields look attractive, but the asset class could still face headwinds. 08

ETFs March sees biggest monthly inflows since October 2017. 08 Disclosure IMF seeks more transparency from sovereign creditors. 09 Tensions Trio of Russian companies launch equity issues despite spat with the West. 10 Santos Asia-Pacific’s largest leveraged financing primed for US sell-down. 11

PEOPLE & Strategy JP Morgan wants more market share, with CEO Jamie Dimon 13 MARKETS looking for the investment bank to expand into new countries. Deutsche Ex-Merrill boss John Thain has been nominated to join the supervisory board of the German bank. 14 Diversify Greenhill builds up its restructuring firepower to help the firm weather rough patches in its primary M&A business. 15 Lost halo Goldman Sachs’ M&A group has a rough quarter, by its own lofty standards. 17 Increased costs Eurozone banks face hefty resolution bill. 19 Listing Spain’s Abanca eyes IPO in next three years. 21

BONDS Vulnerable Corporate gravy train slows, as five-year express ride nears end. 23 Covered Issuers lift concessions to take size. 24 Europe High-yield braced for uncertain Q2. 35

EMERGING Cairo Egypt takes up African euro gauntlet, lines up debut offering. 47 MARKETS Asia Libor rise scuppers carry trade. 48 Singapore DBS diversifies investor base. 52

LOANS First quarter Syndicated lending falls in Europe, but pipeline looks strong. 57 Earnings rise Banks boosted by US lending. 63 US Leveraged lending sags, high-grade rises. 64

EQUITIES IPOs Three Indonesian companies plan to avoid general election uncertainty. 71 Graftech Brookfield set to hit IPO jackpot. 79 Alzheimer’s Drug developer seeks funding. 80

STRUCTURED Convertible Chuantou Energy pulls six-year bond application. 83 EQUITY US US$500m deal for Pure Storage. 83 US BofA offloads Voya exposure. 84

International Financing Review April 7 2018 3 Top news China readies tech listing pilot 06 Investor sues UOB 06 Qatar hopes to leave troubles behind 07 Spotify makes noisy NYSE debut

„ Equities Direct listing sees music streamer’s shares slump after delayed opening

BY STEPHEN LACEY 4HEûNEXTûDAYûTHEûSHARESûCLOSEDû price” of US$132 provided by the their asking prices above what at US$144.22 - down another .EWû9ORKû3TOCKû%XCHANGE  buyers were willing to pay, It was pretty much downhill all 3.2%. On Thursday, the stock "UTû3POTIFYûISûNOTûTHEûlRSTû bankers involved in the process the way for SPOTIFY TECHNOLOGY’s made a partial recovery in intra- company to see that kind of TOLDû)&2 shares in the three days after day trading - at one point it was trading pattern immediately Opening indications on they opened for trading at up 4% - but the decline then after a listing, and the price Tuesday were US$145-$155 at 12.43pm New York time on resumed and it closed at action was certainly less volatile the bid-ask at 10:30am, and then Tuesday following the company’s US$143.99, down 0.16%. than many feared. US$150-$160 around noon as unusual direct listing. Hardly ideal, even if those The low was also well above selling shareholders demanded The long-delayed opening print prices are still well above the what doomsayers had forecast. more - a classic locked market. came at US$165.90, but the music high of US$132.50 seen in VC luminary Bill Gurley, for The higher the bid, the higher streamer’s stock closed that day at private trades this year (and the instance, tweeted ahead of the the ask, leaving designated US$149.01 - 10.2% below the open. largely meaningless “reference open that Spotify could trade market maker Citadel Securities down to just US$80, adding that grappling to create a meaningful SPOTIFY STRUGGLES ON LIGHT VOLUME “the establishment” wanted the open as the hours ticked by. direct listing to fail. “The private equity types kept US$ Million lifting their price limits - 175 6 MOVING TARGET US$150, US$160, US$165,” said 170 5 The big question now is whether one banker involved in 165 the company’s decision to opt brokering the opening trade. 160 4 for a direct listing - instead of a “The fundamental demand was 155 traditional IPO - contributed to in the US$150-$155 range.” 3 150 the disappointing trading. Just 5.7m shares (a measly 3.2% It certainly made for a tricky of outstanding shares) were 145 2 lRSTûDAYûFORûTHOSEûTASKEDûWITHû crossed at the eventual opening 140 1 lNDINGûAûREASONABLEûOPENINGû print of US$165.90. The shares 135 print. BRIEmYûTRADEDûHIGHER ûTOPPINGûOUTû 130 0 Indeed, the open was delayed at US$169, but it took only 65 03/04/2018 04/04/2018 05/04/2018 until well into the afternoon, as minutes before they broke below () () Source: Thomson Reuters prospective sellers kept lifting US$160. By the end of the day, Banks take hit on struggling junk deals

„ Bonds/Loans Sceptical buyside makes borrowers pay up for transactions

BY DAVIDE SCIGLIUZZO, Greetings, which twice banks involved were in the and also included an eight-year ANDREW BERLIN downsized what became a seven- REDûONûTHEûENTIREûlNANCING û tranche. year non-call three trade, rated which also included a term The notes - to support the Investors pushed back hard Caa1/CCC+, and priced it at 87 loan. acquisition of CHICAGO BRIDGE & against two acquisition junk cents on the dollar. The deal had The deal helps fund the 60% IRON - printed at a discount of bonds in the US last week, set out to raise US$325m but STAKEûTHATûPRIVATEûEQUITYûlRMû 94.75 cents on the dollar, forcing banks to take losses and ended up at US$282.5m. CLAYTON, DUBILIER & RICE is buying allowing the company to keep sell the deals at steep discounts The coupon remained at in the company. the coupon at 10.625%. to get them over the line. 8.75%, but the repricing resulted Meanwhile Barclays was the McDermott also agreed to Oil construction name in a yield-to-maturity of almost lead for McDermott, which tighten covenants. MCDERMOTT INTERNATIONAL and 11.5%, massively wider than priced the riskiest part of its Sources said the two bonds greeting-cards maker AMERICAN high 8% to 9% level initially eyed. lNANCINGû ûAû53BNûSIX YEARû cleared well outside the cap GREETINGS both stumbled amid The issuer also agreed to make junk bond (B2/B-) - at a yield of rates that banks had guaranteed, deep buyside doubts about the covenant changes and shorten 11.865%. and that underwriters took a credits - and the deals the maturity from eight years to That was more than 300bp loss on both. themselves. seven. wider than the mid-8% level “They were deer in the Deutsche Bank was lead Sources said losses on the where marketing began, when headlights,” one leveraged underwriter for American bond were so steep that the the deal was sized at US$1.5bn lNANCEûBANKERûTOLDû)&2ûh)TûWASûAû

4 International Financing Review April 7 2018 For daily news stories @ visit www.ifre.com IMF seeks more transparency 09 Santander pressed by Pimco 10 Trio of Russian ECM deals 10

30.5m shares of the 162m “Opening on 6m shares - is resist cashing in some of its It meant he was not there to available to trade had changed that really a validating trade?” 53BNûPAPERûPROlTûBYûSELLINGû see the NYSE mistakenly display hands, though much of that was Citadel, the largest market 1.75m shares from its THEûmAGûOFû3WITZERLAND ûBEFOREû down to churn of the same stock. maker of NYSE securities, was 10.2m-share (5.7%) holding on quickly correcting the error The lack of the price joined by Morgan Stanley, THEûlRSTûDAY WITHûTHEûmAGûOFûTHEûMUSIC discovery process inherent in Goldman Sachs and Allen & Co as streamer’s Swedish homeland. TRADITIONALû)0/SûMEANTûEXISTINGû lNANCIALûADVISERSûTOû3POTIFYû EARLY DAYS “While this is obviously a big investors were able to cash out They were paid fees of €29m There are fundamental day, and I’m very proud of my ATûTHEûEXPENSEûOFûTHEûOVER EAGERû between them. UNDERPINNINGSûTOû3POTIFYû û2"#û employees, I really feel like we Indeed, investors who bought at Capital Markets initiated are in our early days, not THEûHIGHESTûPRINTûONûTHEûlRSTûDAYû A LIQUID SITUATION coverage with an outperform celebrating the end days as so were sitting on losses of around Spotify’s move to list directly rating and US$220 price target many other companies are 15% just three days later. WASûANûEXTENSIONûOFûTHEû BASEDûONûAûlVEûTIMESû%6 TO SALESû doing,” Ek said on the morning Similarly, the absence of a company’s longstanding multiple on estimated 2019 news show. stabilisation agent to carefully practice of giving all investors revenue of €6.7bn - and much of Whether others follow the balance buy and sell orders the ability to cash out. In theory, the near-term debate about the path blazed by Spotify remains meant there was no effort to there were 162m shares that listing is technical, and to be seen and it will take time dampen volatility. were available for sale on day irrelevant to Spotify to assess how the lack of lock- Pre-trade price discovery and one, representing a 91% free- management. ups impacts share price stabilisation are intended to mOAT ûWITHûONLYû4ENCENTûANDûITSû Their goal was to give all performance. Nevertheless, the allow underwriters to settle on 16.2m shares locked up. shareholders the ability to sell unique circumstances of Spotify an opening price more or less The reality is that many whenever they felt appropriate, - heavy ownership by where they believe the stock will EXISTINGûHOLDERSûAREûNOTûSELLERS û without diluting them by MANAGEMENT ûNOûlNANCIALû CLOSEûONûTHEûlRSTûDAYû$ROPBOX û for strategic and other reasons. raising money via a traditional SPONSORûOFûSIGNIlCANCE ûANDûNOû ASûANûEXAMPLE ûOPENEDûITSûlRSTû “A lot of the sellers are IPO, and giving all investors of need for money - suggests it is day of trading last month at incredibly patient. They’re not all stripes the ability to buy on an outlier. US$29.00 and closed at US$28.48 lNANCIALûINVESTORSû4HEYûWANTû an equal footing. Limiting the “Evolution of the capital even when the volume for the to participate [whether there is] amount of money paid to markets is a good thing,” said a day was 1.6 times the IPO. upside or downside.” investment banks and given up banker involved in the deal. “We may have waited a little Spotify co-founders Daniel Ek via an IPO discount were added “But I don’t think direct listing longer if we were in control [of and Martin Lorentzon, with 49.6m attractions of a direct listing. is for all companies. We’ve the open],” said a second capital and 23.6m shares, respectively, are Daniel Ek refused to appear at talked to a lot of companies and markets banker, though Spotify obvious long-term holders. the NYSE for opening day, only a few are interested. opened later in the day than any Sony is also seen as a strategic instead turning up to discuss the “I think it will be a once-in-a- previous listing in the US. investor, though it couldn’t deal on “CBS This Morning”. decade event.” „

misjudgement on what the digital age since before its Meanwhile McDermott had total leverage covenant was market was going to take.” founding Weiss family took the twice to deepen the discount on ADDEDûANDûTHEûEXCESSûCASHûmOWû Deutsche Bank and Barclays company private in a 2013 Aû53BNûlRST LIENûTERMûLOANû sweep was increased. declined to comment. leveraged buyout. that was also part of the )NVESTORSûEXPRESSEDûCONCERNû “Greeting cards is not a lNANCING ABOUTû-C$ERMOTTSûCASHmOWû û LOAN PROBLEMS growth business,” one portfolio Pricing was 500bp over Libor which depends on winning Pricing on the American MANAGERûTOLDû)&2ûh7EûHAVEû WITHûAûûmOORûANDûûORIGINALû large contracts - and its US$6bn Greetings US$470m term loan B been in other businesses that issue discount. The discount had all-stock acquisition of Chicago was widened to 450bp over are declining, and sometimes been guided at 99. Bridge & Iron. Libor from 375bp, while the they decline faster than But the spread earlier in “McDermott’s deal for CB&I discount was brought to 98 anticipated.” syndication was increased and was tolerable with the facts from 99.5 and the maturity The company’s Ebitda has the original issue discount was available at the time,” said Noah SHORTENEDûTOûSIXûYEARSûFROMû fallen by around 20% since widened, with initial guidance Mayer at Hotchkis & Wiley, an seven.  ûTHOUGHû#$2Sû circulated in the 400bp-425bp asset manager that owns about There was also as a US$250m projections suggest that the over Libor range. The discount 2% of McDermott. “But the lVE YEARûREVOLVINGûCREDITû transaction will deliver more was guided at 99.5 at launch. situation has worsened facility. than US$75m of cost savings, During syndication, soft-call materially since the deal was Sources said the loan could one source said. protection at 101 was also made,” he said in a letter made not gain much momentum as While the loan was upsized EXTENDEDûTOûAûPERIODûOFûû public on Thursday. investors shied away from a from US$445m, the bond was MONTHSûFROMûSIXûMONTHSûATû “The crisis at CB&I is driving company facing uncertainty. rolled back from US$325m to launch. the bond market to price American Greetings has been US$300m and then again to the Among other changes to the McDermott’s unsecured notes to struggling to stay relevant in the lNALûPRINTûOFû53M TERMSûOFûTHEûLOAN ûAûMAXIMUMû lNANCEûTHEûDEALûATûOVERûv „

International Financing Review April 7 2018 5 Top news China rolls out red carpet for tech

„ Equities CSRC issues rules to encourage large innovative companies to list domestically will control the size and the pace of these deals,” said a banker. BY FIONA LAU, KEN WANG Companies will be allowed to according to a Sinolink The Sinolink report forecasts remit IPO proceeds abroad or Securities research report. that only one or two companies China has issued much-anticipated retain them for domestic use. ALIBABA is already mulling an WILLûISSUEû#$2SûTHISûYEARûFORûAû rules to encourage its technology A-share listing through an issue combined fundraising target of giants to list domestically, setting STEM THE EXODUS OFû#$2S ûASûEARLYûASûTHEûMIDDLEû 2MBBNûTOû2MBBN the stage for a series of carefully The measures pave the way for OFûTHISûYEAR û)&2ûREPORTEDûEARLIERû “Overseas-listed large-cap choreographed mega-IPOs in China’s overseas-listed tech CICC and Citic Securities are COMPANIESûAREûEXPECTEDûTOûBEû coming years. giants to relist at home. The WORKINGûONûTHEûmOAT ûWHICHû THEûlRSTûTOûISSUEû#$2Sû4HEû The country’s securities regulator hopes this will stem COULDûRAISEûMOREûTHANû2MBBN fundraising size will be very big, REGULATORûISûTARGETINGûQUALIlEDû THEûEXODUSûOFûFAST GROWINGûTECHû JD.COMûALSOûPLANSûTOûISSUEû#$2Sû even if they sell only small “red-chip” companies with a companies listing outside China, with the help of China Securities, stakes,” said an analyst at a market capitalisation of no less as overseas-domiciled entities Huajing Securities and Huatai Chinese brokerage. THANû2MBBNû53BN ûTOû and those with variable-interest United Securities. “The regulator is also likely to issue shares or Chinese entity ownership structures will Smartphone maker XIAOMI is carry out the pilot programme in $EPOSITARYû2ECEIPTSûINûTHEû no longer face insurmountable also considering a domestic batches, in order to ease the A-share market as part of a pilot hurdles to list onshore. LISTINGûTHROUGHû#$2SûALONGSIDEûAû pressure on the broader market.” SCHEMEû2EDûCHIPSûAREûOVERSEASû CICC analysts estimate there Hong Kong IPO later this year, !CCORDINGûTOû#32#ûSPOKESMANû listed and incorporated are 35 companies, comprising SOURCESûTOLDû)&2ûEARLIER Chang Depeng, the regulator companies that have most of lVEûOVERSEAS LISTEDûENTITIESûANDû will control the number of their activities in China. 30 so-called unicorns, which may NOT ALL AT ONCE issuers and their fundraising In rules published on its website FULlLûTHEûLISTINGûREQUIREMENTSû Although many Chinese tech sizes for the pilot scheme. on March 30, the China Securities under the pilot scheme (See table). companies are interested in The rule changes follow a 2EGULATORYû#OMMISSIONûSAIDûITû The listcos are Alibaba Group A-share listings, market SERIESûOFû#32#ûEFFORTSûTOûATTRACTû WOULDûALSOûALLOWûQUALIlEDûUNLISTEDû Holding, Tencent Holdings, participants reckon the deals tech listings amid intense companies, with valuations of no Baidu, JD.com and NetEase. will be spread out over time. COMPETITIONûWITHûEXCHANGESûINû LESSûTHANû2MBBNûANDûREVENUESû !SSUMINGûTHEûlVEûWEREûTOû “The pilot rules lay the the US and Hong Kong. OFûNOûLESSûTHANû2MBBN ûTOûGOû issue 3% of their outstanding foundation for overseas-listed Last Wednesday, battery giant public under the pilot scheme. CAPITALûTHROUGHû#$2S ûTHEû Chinese companies and unlisted CONTEMPORARY AMPEREX TECHNOLOGY 4HEû#32#ûHASûREMOVEDûTHEû combined fundraising size tech unicorns to list RECEIVEDû#32#ûAPPROVALûFORûAû USUALûPROlTABILITYûREQUIREMENTû WOULDûBEûAROUNDû2MBBN û domestically, but it is unlikely PROPOSEDû#HI.EXTû)0/ûOFûABOUTû for companies participating in which is close to the total WEûWILLûSEEûAûmOODûOFûTHEMûINûTHEû 2MBBNû4HISûWILLûBEûTHEûlRSTû this scheme, so as to allow loss- volume of A-share IPOs for the near term as the listing criteria #HI.EXTû)0/ûTOûBREACHûTHEû making entities to be listed. WHOLEûOFûû2MBBN û are very high and the regulator 2MBBNûMARKûSINCEûTHEû Singapore bond investor sues UOB „ Emerging Markets Bank says it will defend itself vigorously against mis-selling claims

BY KIT YIN BOEY UNSUITABLEûFORûHERûRISKûPROlLE and Mah declined to comment circular, which highlighted risks Among the products WHENû)&2ûCONTACTEDûTHEMû in the investments, was not A Singaporean investor who lost purchased on her behalf were through their legal adviser. provided to her at the time of money on bond investments has Trikomsel’s 7.875% bonds due In late 2015, Indonesian the investment, and was only opened a civil action in the 2017 and Ezion Holdings’ 4.875% mobile phone retailer Trikomsel shared after its default. Singapore High Court against bonds due 2021, according to BECAMEûTHEûlRSTûISSUERûTOûDEFAULTû Since Trikomsel defaulted, UNITED OVERSEAS BANK and two DOCUMENTSû)&2ûHASûSEEN on Singapore dollar bonds since more than a dozen corporate former employees. A pre-trial conference will be Celestial Nutrifoods missed issuers have had to restructure The investor alleges a breach of held at the Singapore High Court payments in 2009. Singapore dollar bonds, DUTYûOFûCARE ûINûTHEûlRSTûSUCHû on April 17. Meanwhile, Ezion obtained including some 10 issuers that lawsuit since a wave of corporate- !û5/"ûSPOKESPERSONûTOLDû)&2û bondholder approval last defaulted on their obligations. debt restructurings hit Singapore. the bank was unable to discuss November to restructure Private banking clients and (OONû3INGû+EOWûlLEDûTHEû the matter as it was before the S$575m (US$439m) of bonds. Its high-net-worth investors bought originating summons in late court. Nevertheless, the bank restructuring plan, like that of the bulk of these bonds, many of March against the local bank, “will vigorously defend the Trikomsel, involves a swap of whom later said that their her former wealth relationship claim as the allegations are DEBTûFORûSHARESûANDûINmICTSûHEAVYû relationship managers had not manager Thomas Heng Swang baseless”, said the spokesperson. losses on bondholders. PROPERLYûEXPLAINEDûTHEûRISKSû and his supervisor Mah Siew ,AWûlRMû3HOOKû,INûû"OKû Hoon, represented by legal However, none had gone to Keong, claiming she was sold represents UOB Bank and the practice Parwani Law, claims court so far to test these claims. high-risk investment products two individuals in the suit. Heng that Trikomsel’s offering The case could therefore be

6 International Financing Review April 7 2018 For daily news stories @ visit www.ifre.com

establishment of the Nasdaq- TECH UNICORNS WITH VALUATIONS style board in 2009. OF NO LESS THAN Rmb20bn Qatar hopes to leave Biotechnology company WUXI Company name Valuation RMB (bn) APPTECûCLEAREDûAû#32#ûHEARINGû Xiaomi 627.0 troubles behind last month for a proposed Ant Financial 470.3 3HANGHAIûmOATûOFûABOUTû Didi Chuxing 313.5 „ Emerging Markets Comeback beckons for black sheep 2MBBN ûWHICHûISûSETûTOû Meituan-Dianping 188.1 BECOMEûTHEûlRSTûOVERSEAS Toutiao 188.1 BY ROBERT HOGG there, in addition to the normal delisted Chinese company in Lufax 131.7 guys,” he said. “There is recent years to relist in the Cainiao 125.4 QATAR believes that investors DElNITELYûDEMANDûFORûTHISû A-share market through an IPO. Contemporary Amperex will see past a bitter regional credit, the fundamentals are The regulators are also fast- Technology 122.9 dispute in order to get their very strong, and relative to some tracking large tech IPOs on Kuaishou 94.1 HANDSûONûTHEûSOVEREIGNSûlRSTû of their Double A peers they DOMESTICûSTOCKûEXCHANGES û DJI 75.2 bond since a spat with the trade wide.” allowing them to bypass the JD Finance 62.7 country’s Gulf neighbours long queue of listing WeBank 57.1 erupted last year. BEHIND THE SCENES applications. FOXCONN INDUSTRIAL iQiyi 50.2 &INANCEûMINISTRYûOFlCIALSû In the build-up to the deal, Qatar INTERNET, a mainland unit of Lianjia 40.8 will meet accounts in the UK has been spending time 4AIWANSû&OXCONN ûISûTHEûlRSTû Koubei 37.6 and US from April 9 to April 11, conducting meetings behind the HIGH PROlLEûTECHûCOMPANYûTOû Ele.me 37.6 ahead of issuing a multi-tranche scenes with accounts. enjoy this privilege. Mobike 34.5 deal. “The preparatory work is 7U8Iû!PP4EC û&))ûANDû#!4,û Ofo 34.5 The transaction would mark a complete and they have a AREûSTILLûAWAITINGûWRITTENû#32#û Shanghai United Imaging watershed moment after Saudi window to issue. If the market is approvals for their IPOs. Healthcare 31.4 Arabia, the United Arab stable then we will go ahead WM Motor Technology 31.4 Emirates and Bahrain cut WITHûANûEXERCISEûTHISûWEEK vûSAIDû MORE DETAILS NEEDED Nio 31.4 diplomatic ties and imposed an THEûlRSTûBANKER "EFOREûTHEûlRSTû#$2SûCANûBEû WiFi Master Key 31.4 economic boycott in June, &ORûINVESTORS ûTHEREûSHOULDûBEû launched, more detailed UBTECH 31.4 protesting against Qatar’s no problem with participating regulations are needed, Meizu 28.8 relationship with Iran. in the deal irrespective of the including trading rules, pricing Royole 28.2 No Qatari borrower has since bigger political issues, but some mechanisms, listing procedures Meili (Mogujie) 25.1 accessed the mainstream US banks have been treading and whether the conversion of Shanghai e-Shang dollar market, although debut especially carefully in the #$2SûINTOûFOREIGNûSHARESûWILLûBEû Warehousing Services 22.6 issuer Mannai Corp is on the region. allowed. Tongcheng-Elong 21.9 road marketing a deal. While Saudi Arabia and To select candidates for the Guazi.com 20.1 “I’m sure people will want its allies have not publicly PILOTûSCHEME ûTHEû#32#ûWILLûSETû China UnionPay Merchant colour and nuance with warned banks to avoid business up an advisory committee to Services 20.1 regards to the regional politics, in Qatar, bankers have said that review applications. „ Source: CICC, ITJUZI and the ministry is there to it is clear that close ties with answer the questions,” said Doha could hurt business one banker close to the deal. relations. IMPORTANTûINûDElNINGûHOWûMUCHû with UOB in 2013 and was “But the nuts and bolts Heavyweights Citigroup, responsibility private banks and assigned a relationship manager, haven’t changed over the last (3"#ûANDû*0û-ORGAN ûWHICHû)&2û their relationship managers have WHOûASKEDûHERûTOûlLLûINûAû SIXûTOûNINEûMONTHSû0EOPLEûWILLû data show topped the when client investments go sour. questionnaire to assess her risk ask about the outlook and bookrunner league tables for Hoon’s originating summons PROlLEû(ERûPROlLEûWASûDEEMEDû banking system, and look at international emerging market asks the court to declare, among “conservative”, according to her. the credit spreads.” BONDSûINûTHEûlRSTûQUARTERûOFû other things, that the Soon after Hoon transferred Qatar is looking to mirror the 2018, are all absent from the relationship manager owed a S$1.7m to UOB, she claims she structure of its last foray into ticket. duty of care to her, that he WASûASKEDûTOûlLLûINAûSECONDûRISK international markets. In June Al Khaliji, Barclays, Credit breached it in failing to give PROlLEûQUESTIONNAIRE ûWHICHû 2016 it raised US$9bn through Agricole, Credit Suisse, Deutsche appropriate advice, that UOB resulted in her risk assessment lVE ûûANDû YEARûNOTES Bank, Mizuho, QNB Capital and sold unsuitable products to her, being changed to “growth”, an Bankers on the new deal were Standard Chartered are joint leads and that Mah failed in his duty to indication that an investor had RELUCTANTûTOûSETûAûlXEDûTARGETûFORû and books. supervise and review sales the the capacity and tolerance for the issuance, although it could “Of course, any institution is relationship manager had made. higher risks. reach a similar size to the last alert to the implications of “Basically, her case appears to /NCEûHERûPROlLEûRANKINGûWASû trade. REGIONALûPOLITICS vûSAIDûTHEûlRSTû be premised on two main tenets MODIlED ûTHEûRELATIONSHIPû 4HEûNOTESûAREûEXPECTEDûTOûBEû banker. “It’s self evident the of private banks – a duty to take manager bought a total of 13 rated Aa3/AA–/AA–. bookrunners are supportive of – care of her investments and a bonds and highly structured A second banker said he and present alongside – Qatar in know-your-customer policy,” said lNANCIALûPRODUCTSûONûHERûBEHALF û thought the 30-year could the capital markets.” another private bank investor some on leverage, between June garner particularly strong Qatar’s bonds took a hit in the closely watching the case. 2013 and May 2015, Hoon claims. interest thanks to a Taiwan secondary market on news of Hoon returned to Singapore in The Monetary Authority of listing. the mandate, with a trader 2011 after a 40-year stay in Singapore did not respond to a h9OUûCANûEXPECTû4AIWANû spotting the curve down 0.75 Sweden. She set up an account request for comment. „ onshore guys to play in size points. „

International Financing Review April 7 2018 7 Top news Short-dated bonds catch a bid

„ Bonds Yields look attractive, but the asset class could still face headwinds

BY ELEANOR DUNCAN 25bp of tightening on the “[The short end] is one of the have become fairly attractive to longer-dated tranches. most interesting stories in the investors,” the bond-buyer said. After spread widening at the Even so, investors still MARKET vûSAIDû2ICKû2IEDER û short end of the curve in recent got a 3.205% yield. Three-year "LACK2OCKSûGLOBALû#)/ûOFûlXEDû OPPOSITE VIEW weeks, many high-grade bonds were only delivering in income. Still, not everyone is convinced investors are now snapping up the mid-2% range around this “That part of the curve is now that the turbulence at the front TWOûANDûTHREE YEARûlXED RATEû TIMEûLASTûYEAR ûACCORDINGûTOû)&2û really attractive. It’s a pretty end is over, even though spreads corporate bonds for the better data. good place to put money. And have already gapped out 40bp- yields on offer. with fundamental conditions 50bp in recent weeks. GENERAL MILLS’ US$6.05bn “It’s become a lot likely to be good for a while, and “If you take the view that -!ûDEALûONû4UESDAYûTOûlNANCEû harder to buy these rate hikes ahead, why would you it’s not going to get much its purchase of petfood maker bonds. A lot of supply go [longer]?” he said. worse in terms of that story, "LUEû"UFFALO ûFORûEXAMPLE û Other investors are doing the then it’s a great place to be,” INCLUDEDûAûTHREE YEARûlXED RATEû has been getting SAME û2IEDERûSAID said Hans Mikkelsen, bond that saw a frenzy of cleaned up over the “It’s become a lot harder to investment-grade credit demand. past few weeks” buy these bonds. A lot of supply strategist at Bank of America That US$600m tranche was has been getting cleaned up over Merrill Lynch. nearly 10 times covered - a the past few weeks.” “I take the opposite view. That massive showing of demand for "LACK2OCK ûTHEûWORLDSû One bond-buyer said that he story is very big - and it hasn’t a part of the curve that has had a largest money manager, is one had snapped up US$1bn of short- played out yet.” rough go of it lately. shop that sees the higher yields dated corporate bonds in recent The top 25 corporate investors Pricing progression was a on offer at the shorter end as a weeks. have around US$1trn in total whopping 40bp from initial talk good opportunity to add “We’ve reached the point at cash holdings, he said, with to pricing levels, compared with EXPOSURE the front end where all-in yields almost US$400bn of that in Asset managers eye loan ETFs as rates rise „ Loans March sees biggest monthly inflows to ETFs since October 2017

BY YUN LI #HRISû2OMANO ûDIRECTORûOFû combined took in US$331.6m in Matthew Bartolini, head of RESEARCHûATû%4&û'LOBAL the week ending March 28, 30$2û!MERICASûRESEARCHûATû3TATEû Asset managers are planning to Loan funds are becoming WHICHûWASûTHEûSIXTHûSTRAIGHTû Street Global Advisors, favours LAUNCHûNEWûBANKûLOANûEXCHANGE more attractive to yield-hungry WEEKûOFûINmOWS ûACCORDINGûTOû 32,.SûACTIVEûSTRATEGY ûARGUINGû TRADEDûFUNDSûDESIGNEDûTOûBENElTû investors, who face diminishing ,IPPERû53û&UNDû&LOWSûDATAû that careful credit selection is from a rising interest rate RETURNSûFROMûlXEDûINCOMEû Investors added US$322m to crucial in the loan space to avoid environment. securities in a higher rate LOANû%4&SûINû-ARCH ûTHEûBIGGESTû low liquidity and defaults. The US$13bn bank loan environment. MONTHLYûINmOWûSINCEû/CTOBERû h"ECAUSEû32,.ûISûACTIVELYû %4&ûMARKETûHASûATTRACTEDû 2017. managed, you don’t have to hold around US$437m of new “I expect more demand something just because it’s in an money so far this year, as more POWER DUO INDEXûOFûHUNDREDSûOFûLOANS vûSAIDû EXISTINGûMANAGERSûLAUNCHûNEWû for bank loans and any 3IXûLOANû%4&SûAREûTRADEDûONûTHEû Bartolini. funds, according to Morningstar kind of adjustable- .EWû9ORKû3TOCKû%XCHANGEûANDû Active management can help data. rate product that can Nasdaq. The two biggest are the to avoid credit blowups such as FRANKLIN TEMPLETON INVESTMENTS increase its yields and 53BNû30$2û"LACKSTONE'3/û 4OYSû2û5S ûWHICHûWENTûINTOû and O’SHARES INVESTMENTS are two take advantage of the 3ENIORû,OANû%4&û32,. ûANDûTHEû Chapter 11 bankruptcy managers that are preparing to higher rates” US$8bn PowerShares Senior protection in September 2017, launch news funds, according to ,OANû%4&û"+,. ûWHICHûHAVEû ANDûI(EART-EDIA ûWHICHûlLEDûFORû 3%#ûlLINGS seen about US$154m and Chapter 11 in March and is rated ,OANû%4&SûGIVEûEXPOSUREûTOû 53MûOFûRETAILûINmOWSûINû D by S&P. mOATING RATEûSENIORûLOANS ûWHICHû h)ûEXPECTûMOREûDEMANDûFORû 2018, respectively. “The two glaring cases right AREûDIFlCULTûFORûRETAILûINVESTORSû bank loans and any kind of 4HEûTWOû%4&SûHAVEûDIFFERENTû now of why active management to access and trade otherwise, adjustable-rate product that can STRATEGIESû32,.ûISûACTIVELYû is positive in the loan space are and are often used as a hedge increase its yields and take managed by portfolio managers 32,.ûDOESûNOTûHOLDûANYû4OYSû2û against rising interest rates, as advantage of the higher rates,” who select and oversee the 282 Us credit nor iHeartMedia,” loan coupons increase. 2OMANOûSAID US and non-US leveraged loans, Bartolini said. “Investors have been more Money is also going into WHILEû"+,.ûTRACKSûANûINDEXûOFû "+,.SûUNDERLYINGûINDEX ûONû interested in bank loans with mutual funds containing loans. the 100 largest US senior loan the other hand, holds interest rates slowly rising,” said ,OANû%4&SûANDûMUTUALûFUNDSû facilities. iHeartMedia’s parent

8 International Financing Review April 7 2018 For daily news stories @ visit www.ifre.com

relatively liquid short-dated of the bid for US investment- corporate bonds. grade credit, Stephen Caprio, IMF seeks more If companies liquidate their CREDITûSTRATEGISTûATû5"3 ûTOLDû)&2 bond holdings as part of the transparency from CASHûREPATRIATIONûEXPECTEDû “The big picture is that UNDERûNEWûTAXûLAWS ûTHEûSELL OFFû the front end used could double the spread sovereign creditors widening, Mikkelsen said. to be a very crowded And if they want the cash to place. The two biggest „ People & Markets China pressed to disclose more details fund buybacks, dividends or investors in the front M&A, they’re likely to be much end were the corporates BY CHRISTOPHER SPINK several sovereign-guaranteed more aggressive in repatriating and the foreign investor loans were disclosed. it, he said. A campaign to convince sovereign The initiative wants both The companies that have the - and both of them are or quasi-sovereign lenders creditors and borrowers to be biggest piles of overseas cash going away” including China to disclose the responsible jointly for disclosing largely reside in two sectors, terms and conditions of loans not only direct lending but also tech and healthcare. And with "UTûFOREIGNûEXCHANGEûHEDGINGû they have made to other other state-guaranteed liabilities, tech’s recent underperformance costs for euro and yen-based sovereigns is gathering pace. so there is more clarity on the in the equity market, tech investors have spiked to post- Last month the International perceived seniority of such loans. companies could be under crisis peaks in recent weeks, -ONETARYû&UNDSûEXECUTIVEû 4HEû)-&ûDIRECTORSûCALLEDûFORû pressure to deploy overseas LEAVINGûFOREIGNûmOWSûATû board backed a staff report “improved sharing of CAPITALûTOûTHEûBENElTûOFû negligible levels. calling for full disclosure of such information among creditors shareholders. “The big picture is that the front liabilities by both borrowers and ANDûINTERNATIONALûlNANCIALû Meanwhile foreign investors end used to be a very crowded lenders. And this coming week institutions on amounts, terms, have also been beating a place,” said Mikkelsen at BAML. THEû)-&SûMANAGINGûDIRECTORû and conditions of debt”. retreat from the short end of “The two biggest investors in the Christine Lagarde has an The widely anticipated the curve. front end were the corporates and opportunity to press her case restructuring of VENEZUELA’s debts Between 2014 and 2016, the foreign investor - and both of during a visit to China. is likely to be complicated by the FOREIGNûmOWSûACCOUNTEDûFORûHALFû them are going away.” „ It is unclear if she will bring fact that China is believed to be the up the issue with her hosts but country’s biggest creditor but has the “transparent lending not divulged the precise nature of iHeartCommunications’ term US$3.7m of assets under COVENANTv ûlRSTûmOATEDûBYû#REDITû ITSûLENDINGû4HEû)-&ûITSELFûHASûNOTû loan due December 2019 with a management. Suisse last October, is due to be INSPECTEDû6ENEZUELASûlNANCESûFORû 9% coupon. 9%32ûINVESTSûINûûSENIORûLOANû discussed by a working group at over a decade. BKLN returned 2.4% in 2017 closed-end funds which use the Institute of International WHILEû32,.ûRETURNEDû û leverage and offer value and &INANCEûONû!PRILûûANDûATûTHEû TAKING RESPONSIBILITY according to Morningstar data. higher income as they trade at a Paris Club in June. However, while the idea proposal They both posted a 1.2% year-to- discount to net asset value, said 4HEû)-&ûEXECUTIVEûDIRECTORSû seems to have got strong backing date return. BKLN has an Christian Magoon, chief “noted the need to ensure full FROMû7ESTERNûBANKS ûVIAûTHEû))& û EXPENSEûRATIOûOFûBPûANDû32,.û EXECUTIVEûOFlCERûOFû!MPLIFYû coverage of public and publicly ANDûlNANCEûMINISTRIES ûATûAû0ARISû costs 70bp. The asset-weighted %4&S guaranteed debt in public debt Club level, convincing China and AVERAGEû%4&ûFEESûWEREûBPûINû Although more managers are lGURESûTOûALLOWûFULLûASSESSMENTû its state lenders to back the 2016, according to Morningstar GEARINGûUPûTOûENTERûTHEûLOANû%4&û of debt vulnerabilities and initiative may prove harder. data. space, it is harder to be a late CONTINGENTûLIABILITIES vûTHEû)-&û It is understood that “very "+,. ûWHICHûWASûTHEûlRST entrant unless fees are said in a statement. initial conversations” have been EVERûBANKûLOANû%4& ûHASûHADû aggressively low, said Todd The statement also cited the held with the latter parties as lRST MOVERûADVANTAGEûSINCEûITSû 2OSENBLUTH ûSENIORûDIRECTORûOFû directors as saying this was well as the Asia Infrastructure launch in 2011, and has the %4&ûANDûMUTUALûFUNDûRESEARCHû “essential for maintaining Investment Bank, the new China- BENElTûOFûLIQUIDITYûANDûINTRA DAYû ATû#&2! CONlDENCEûINûTHEûINTEGRITYûOFû led multilateral institution. dealing due to its size, said Scott h&RANKLINû4EMPLETONûISû debt sustainability analyses”. Deborah Zandstra, a sovereign Baskind, head of global senior planning to go active. There’s a There have been mounting debt lawyer and partner at law loans at Invesco. number of asset managers concerns that creditors may be lRMû#LIFFORDû#HANCE ûWELCOMEDû “The makeup of BKLN is the THATûHAVEûENTEREDûTHEû%4&û reluctant to participate in future the move to get lenders to take 100 largest issues in the marketplace that have a debt restructurings because responsibility with borrowers for market. It’s a higher-quality strong active management UNEXPECTEDûLIABILITIESûCOULDûCROPû transparency. “The challenge may pool than the broad market,” presence, so I think that it’s up which might blow a be that not all banks may want to he said. an area that could see COUNTRYSûlNANCESûOFFûTRACK disclose potentially sensitive MOREû%4&Sû4HEûlXEDûINCOMEû This happened in MOZAMBIQUE commercial terms,” she said. NEWCOMERS %4&ûMARKETûISûSTILLûINûTHEû in 2016, when the African “This could bring along more 4HEûMOSTûRECENTûBANKûLOANû%4&û EARLIERûSTAGES vû2OSENBLUTHû country was unable to keep banks to join such initiatives was Amplify YieldShares Senior said. servicing its US$727m 2023 and increase debt transparency ,OANûANDû)NCOMEû%4&û9%32 û !ûSPOKESPERSONûATû&RANKLINû bonds (arranged by Credit but alone it may not lead to which was launched in August Templeton declined to Suisse, which also arranged complete transparency. The 2017 and employs a fund of comment. O’Shares Investments loans to the country and its issue of contingent debt remains FUNDSûSTRUCTUREû9%32ûHASû CONlRMEDûTHEû3%#ûlLING „ state-owned enterprises) after an important one.” „

International Financing Review April 7 2018 9 Top news Santander pressed by Pimco over controversial Popular deal

„ People & Markets Junior bondholders file US court application for information the bondholders. It has already RESPONDEDûTOûTHEû-EXICANû BY CHRISTOPHER SPINK however, have a suit against their involvement in the INVESTORûGROUPSûlLINGûBYûASKINGû 3PAINû4HEû-EXICANûSHAREHOLDERSû purchase of Banco Popular, the court to outline a schedule Two major holders of BANCO do, claiming a breach of the which led to the loss of our FORûlLINGSûRELATINGûTOûTHATûACTION POPULAR junior bonds that were bilateral investment treaty clients’ investments.” A key part of the suit revolves wiped out ahead of the Spanish BETWEENû-EXICOûANDû3PAIN The actions caused Pimco and around the Bank of Spain’s lender’s sale to SANTANDER last Pimco and Anchorage have Anchorage to lose €640m decision to deny Banco Popular *UNEûHAVEûlLEDûANûAPPLICATIONûINû asked for the two New York (US$800m) according to their a further €6bn of emergency a New York court seeking actions seeking information .EWû9ORKûCOURTûlLING liquidity facilities, which could information from Santander from Santander, which is not The Madrid action refers to have tided over the lender until about the decisions that led to being sued, to be consolidated. the ongoing criminal fresh capital was injected. That Popular’s resolution. They argue both suits seek the investigation in Spain’s National decision was ultimately The action by Pimco and same documents to be revealed #OURTûSURROUNDINGûSPECIlCû damaging to shareholders and Anchorage Capital follows a about Popular’s resolution. claims in connection with junior bondholders. SIMILARûlLINGûLASTûMONTHûBYûAû “We are making this Popular’s resolution, as well as The investors want to know -EXICANûINVESTORûGROUPûLEDûBYû application so that we have all the administrative claims against the how Santander was able to value Antonio del Valle, the biggest necessary evidence and facts from &2/" û3PAINSûBANKûRESTRUCTURINGû Banco Popular prior to its sale for shareholder in Popular. Santander to support our ongoing fund. a token €1, and what it was told Separately both groups have LEGALûACTIONSûINû,UXEMBOURGûANDû The discovery application was by Spanish authorities about the sued in the European Court of -ADRID vûSAIDû2ICHARDû%AST ûPARTNERû made in the US federal court for bank’s liquidity position. Justice the European Commission ATûLAWûlRMû1UINNû%MANUELû the Southern District of New 3EPARATELY ûTHEû32"SûCHAIRû ANDûTHEû3INGLEû2ESOLUTIONû"OARD û Urquhart & Sullivan, which York. Both petitioners say they Elke Koenig, who last July called which were jointly responsible represents the bondholders. knew of a potential €4bn capital THEûBANKSûRESOLUTIONûhTEXT BOOKû for the decision to resolve “Santander was the principal injection discussed ahead of the like”, on Thursday said the case Popular. Algebris Capital and ANDûSIGNIlCANTûBENElCIARYûOFû resolution decision that would “was one from which we can 2ONITû#APITALûHAVEûJOINEDû the resolution action. It is only have stabilised the bank. draw valuable lessons in order Anchorage in that suit. right that they be required to Santander declined to to improve the process of The bondholders do not, disclose key documents about comment on the new action by resolution going forward”.„ Trio of Russians launch ECM deals

„ Equities Surge comes despite political tensions between Russia and the West

BY ROBERT VENES vertically integrated meat producer account for more than half of “It’s a bit coincidental that CHERKIZOVO, which opted to de-list the deal with proceeds to fund THISûWEEKûISûALLû2USSIA ûTHEREûISû The row between the UK and ITSû,ONDONû'$2ûLINEûLASTû.OVEMBERû organic growth and potential not a lot linking the deals and 2USSIAûOVERûTHEûATTEMPTEDû due to very thin trading. Once the acquisitions. Citigroup and they are not that big,” said the assassinations of Sergei and '$2SûWEREûCANCELLEDûINûMID Renaissance Capital are joint second banker. Both Cherkizovo Yulia Skripal reached the UN &EBRUARY ûTHEûOVERALLûFREE mOATû global coordinators and joint and IBS are reasonably well Security Council last week, but dropped to around 2%-3%. bookrunners with SOVA Capital known domestically, he said, that didn’t dissuade three A primary raise of US$150m will (formerly Otkritie Capital). Alfa- and should have good traction 2USSIANûCOMPANIESûFROMû PAYûDOWNûDEBTûANDûlNANCEû Bank is retail manager. amongst local funds. launching equity issues. acquisitions, with a larger “Despite all the background The pre-summer pipeline is On Monday, Moscow-based secondary tranche coming from noise, people still see a lot of EXPECTEDûTOûKICKûOFFûINûEARNESTû ONLINEûRECRUITMENTûlRMû MB Capital, owned by the founding value across the landscape in NEXTûWEEKûANDûWILLûBEûMOREû HEADHUNTER GROUPûlLEDûWITHûTHEû Mikhailov/Babaev family, to bring 2USSIA vûSAIDûAûBANKERûWORKINGû diverse geographically, but a SEC for a US$250m Nasdaq listing. THEûFREE mOATûUPûTOûAROUNDûû on the IBS deal. “During the jam-packed schedule is 4HEûBUSINESSûWASûSOLDûBYû2USSIASû Goldman Sachs, JP Morgan and RECENTûSELL OFF û2USSIAûHASûHELDû EXPECTEDûTOûLEADûTOûAûFOCUSûONû -AILRUûINû&EBRUARYûûTOûANû Sberbank are joint bookrunners. up well and outperformed quality. investor consortium led by Elbrus And then on Wednesday, pre- much of Europe, but it also “We’re still in an environment Capital. Morgan Stanley, Goldman marketing began for an IPO of comes from a very cheap base.” where not many deals have been Sachs, Credit Suisse, VTB Capital, Bank IBS IT SERVICES, with an offering Both he and a second banker pulled and there haven’t been of America Merrill Lynch and Sberbank ANTICIPATEDûATûUPûTOû2BSBNû said that there was more too many shockers in terms of CIB AREûATTACHEDûONûTHEûmOAT 53M ûFORûAûFREE mOATûOFû 2USSIANûISSUANCEûTOûCOME û performance, but I think this The following day, pre- APPROXIMATELYû û following a recent increase in NEXTûWAVEûOFûISSUANCEûWILLû marketing began for the re-IPO of Primary shares are likely to emerging market deals. probably test that.” „

10 International Financing Review April 7 2018 For daily news stories @ visit www.ifre.com

Santos buyout preps jumbo debt deal

„ Loans Asia-Pacific’s largest leveraged financing primed for US sell-down

BY SHARON KLYNE 4HEûlNANCING ûWHICHûWILLûBEû of medium-term notes, and the transaction will swell to targeted mainly at the US US$1.23bn of cash as of around US$15bn, including the JP Morgan and Morgan Stanley are institutional market, will December 2017. costs of swaps and break fees, underwriting a US$7.75bn consist of leveraged loans and The company also has with the US$7.75bn debt SENIORûDEBTûlNANCINGûBACKINGû high-yield bonds with various US$960m in off-balance sheet accounting for around 51% of the leveraged buyout of tenors. Investor demand is operating lease liabilities and total capitalisation. Harbour Australian oil and gas producer EXPECTEDûTOûBEûSTRONG ûGIVENûTHEû asset retirement costs, %NERGYSûBIDûISûGEAREDûOVERûlVEû SANTOS that will set a record for appeal of the assets, location according to Deutsche Bank times based on Santos’ earnings ,"/ûANDûRELATEDûDEBTûlNANCINGû and growing demand for gas. estimates. However, there will BEFOREûINTEREST ûTAX û INû!SIAû0ACIlC “There’s enough appetite for BEûNOûNEEDûTOûRElNANCEûANYûOFû depreciation, depletion, The deal dwarfs Asia’s an oil and gas deal of this size. the project debt at the asset EXPLORATION ûEVALUATIONûANDû previous LBO record, a US$4.1bn [Australia is] an industrialised level if Harbour Energy succeeds impairment of US$1.43bn in buyout loan backing the nation and the company has a in the acquisition, other 2017. acquisition of Singapore-based WELL DIVERSIlEDûASSET BASE vûAû banking sources familiar with Harbour Energy needs Global Logistic Properties last banking source in New York the deals said. shareholder approval as well July, and is also the largest said. Santos has stakes in projects as the green light from private equity buyout in the oil !ûDATAûROOMûISûEXPECTEDûTOû including the prized Papua New !USTRALIASû&OREIGNû)NVESTMENTû and gas sector globally. OPENûLASTûWEEKûFORûSIXûWEEKSû Guinea LNG project operated by 2EVIEWû"OARD ûWHICHûMAYûBEû Santos announced on April 3 Santos revealed in November %XXONû-OBIL DIFlCULTûGIVENûTHEûSTRATEGICû it had received a US$10.4bn that it had rebuffed a A$9.5bn 4HEûCOMPANYûSIGNIlCANTLYû importance of the assets to a takeover bid from US private (US$7.29bn) takeover approach lowered production costs and country with a chronic energy EQUITYûlRMû(ARBOURû%NERGYûANDû from Harbour Energy in August, de-leveraged in the aftermath of supply shortage. agreed to grant the bidder which it said undervalued the THEûûlNANCIALûCRISISû)TSû Harbour Energy’s advisers are access to due diligence. If the company. average oil production cost is JP Morgan, Highbury bid is successful, the private The new borrowing will also just over US$32 a barrel, Partnership, Morgan Stanley equity sponsor will own a low- RElNANCEûALLûOFû3ANTOSSûDEBTû compared to around US$66 a and EIG Capital Markets, while cost energy producer with Santos, rated BBB- (S&P), had barrel for Brent crude, 3ANTOSûHASûRETAINEDû2OTHSCHILD û STAKESûINûSEVERALûLARGEûLIQUElEDû total balance sheet debt of ACCORDINGûTOû2EUTERSûDATA JB North & Co and Deutsche natural gas projects in Asia. US$3.95bn, including US$800m The total enterprise value of Bank. „

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Former Merrill Greenhill BNP Paribas 14 Lynch boss 15 makes good 19 and other John Thain is set to on its promise to build eurozone banks will join Deutsche Bank’s a restructuring team have to stump up board as pressure capable of becoming €7.5bn this year for builds for change a leading adviser a resolution fund to protect savers

„ FRONT STORY STRATEGY JP Morgan wants more market share CEO Dimon says investment bank will expand to new countries

)NûTHEûDECADEûSINCEûTHEûlNANCIALûCRISISûJP ANDûREVIEWûANDûROLLûBACKûREGULATIONS ûINCLUDINGû WORRYûABOUTûWHATûWOULDûHAPPENûIFûTHESEû MORGANûHASûPRESSEDûITSûADVANTAGEûANDûTAKENûAû PERHAPSûLOOSENINGûCAPITALûCONSTRAINTS FUNDSûWENTûINTOûLARGEûLIQUIDATION vûHEûSAID DOMINANTûPOSITIONûINûCAPITALûMARKETSûANDû h7EûCURRENTLYûHAVEûEXCESSûCAPITAL ûBUTûDUEû TRADING ûCHIEFûEXECUTIVEû*AMIEû$IMONûSAIDûLASTû TOûRECENTûTAXûREFORMûANDûAûMOREûCONSTRUCTIVEû BREXIT … EARLY DAYS WEEK ûADDINGûTHATûTHEûBANKûISûNOTûDONEûYET REGULATORYûENVIRONMENT ûWEûHOPE ûINûTHEû 3OûFAR ûPLANSûFORû"RITAINSûEXITûFROMûTHEû%UROPEANû )NûHISûANNUALûLETTERûTOûSHAREHOLDERS û$IMONû FUTURE ûTOûUSEûMOREûOFûOURûEXCESSûCAPITALûTOû 5NIONûHAVEûTURNEDûOUTûhPRETTYûMUCHûLIKEûWEû SAIDû*0û-ORGANûSTILLûHASûGROWTHûOPPORTUNITIESû GROWûOURûBUSINESSES ûEXPANDûINTOûNEWû EXPECTED vû$IMONûSAIDûh)TSûCOMPLEXûANDûHARDûTOû INûlXEDûINCOME ûCURRENCIESûANDûCOMMODITIESû MARKETSûANDûSUPPORTûOURûEMPLOYEES vûHEûSAID lGUREûOUT ûANDûTHEûLONG TERMûIMPACTûTOûTHEû ANDûOTHERûAREASûOFûCAPITALûMARKETSûASû $IMONûALSOûWARNEDûTHATûTHEûNEXTûlNANCIALû 5NITEDû+INGDOMûISûSTILLûUNCERTAINv DEVELOPINGûMARKETSûCONTINUEûTOûEXPAND CRISISûCOULDûBEûTRIGGEREDûBYûTHEûREVERSALûOFû 3OûFAR ûTHEû"REXITûPROCESSûAPPEARSûTOûBEû h7EûSEEûOPPORTUNITIESûTOûGAINûSHAREûINû QUANTITATIVEûEASINGûBYûCENTRALûBANKS ûORûBYû HELPINGûTHEûRESTûOFûTHEû%5ûTOûPULLûTOGETHERû VARIOUSûPRODUCTSûANDûINûCERTAINûREGIONSû INDEXûFUNDS UNDERûTHEûLEADERSHIPûOFû&RANCEûANDû'ERMANY WHEREûWEûHAVEûLOWûSHARE vû$IMONûSAID h3INCEû1%ûHASûNEVERûBEENûDONEûONûTHISû 4HEûSHORT TERMûIMPACTûONû*0û-ORGANûWILLû h7EûHAVEûûSHAREûINûTHEû53ûBUTûLESSûTHANûû SCALEûANDûWEûDONTûCOMPLETELYûKNOWûTHEû BEûTOûESSENTIALLYûMOVEû ûJOBSûAROUNDû SHAREûINû!SIA vû$IMONûSAIDûh#OUNTRYûBYûCOUNTRYû MYRIADûEFFECTSûITûHASûHADûONûASSETûPRICES û %UROPEû4HATûISûFARûLESSûTHANûTHEû ûJOBSû ANDûINDUSTRYûBYûINDUSTRY ûTHEREûAREûSTILLûPLENTYûOFû CONlDENCE ûCAPITALûEXPENDITURESûANDûOTHERû THATû$IMONûPREVIOUSLYûWARNEDûCOULDûBEû OPPORTUNITIESûTOûINCREASEûOURûLOWûMARKETûSHAREv FACTORS ûWEûCANNOTûPOSSIBLYûKNOWûALLûOFûTHEû AFFECTED ûBUTûHEûSAIDûITûISûSTILLûEARLYûDAYS $IMONûSAIDûTHEûBANKûCANûALSOûGROWûITSû EFFECTSûOFûITSûREVERSAL vû$IMONûSAID h7HATûWEûDOûNOTûKNOWûˆûANDûWILLûNOTû TREASURYûSERVICESûANDûCUSTODYûBUSINESSû h/NEûDAYûTHEREûWILLûBEûANOTHERûCRISIS vûHEû KNOWûUNTILûTHEûNEGOTIATIONSûAREûCOMPLETEûˆû SIGNIlCANTLYûBYûADDINGûBANKERS ûBUILDINGûBETTERû SAIDû!NDûITûCOULDûBEûEXACERBATEDûORû ISûWHATûTHEûENDûSTATEûWILLûLOOKûLIKE TECHNOLOGYûANDûENTERINGûNEWûCOUNTRIESû4HEû TRIGGEREDûBYûTHEû53TRNûOFûASSETSûMANAGEDû h4HEûWORSTûOUTCOMEûWOULDûBEûMUCHûOFû BANKûISûBEINGûCHALLENGEDûBYûNEWûRIVALSûINûTHEû PASSIVELYûINûINDEXûFUNDSûORû%4&S ,ONDONSûlNANCIALûCENTREûMOVINGûTOûTHEû SPACE ûINCLUDINGû'OLDMANû3ACHS ûBUTû$IMONûWASû h3OMEûOFûTHESEûFUNDSûPROVIDEûFARûMOREû #ONTINENTûOVERûTIMEû7EûHOPEûFORûALLûINVOLVEDû CONlDENTûHISûCLIENTSûWOULDNTûBEûEASILYûPOACHED LIQUIDITYûTOûTHEûCUSTOMERûTHANûTHEûUNDERLYINGû THATûTHISûOUTCOMEûWILLûNOTûBEûTHEûCASE vûHEûSAID h)NûTHISûBUSINESSûxûWHENûYOUûGAINûCLIENTS û ASSETSûINûTHEûFUND ûANDûITûISûREASONABLEûTOû Philip Scipio THEYûUSUALLYûSTICKûWITHûYOUûFORûAûLONGûTIME vû JP MORGAN: RECORD EARNINGS, 13% RETURNS HEûSAID NET INCOME (US$BN) AND RETURN ON TANGIBLE COMMON EQUITY (%) 2004-2017 h/VERûTIME ûWEûDOûEXPECTûTOûEXPANDûOURû CORPORATEûANDûINVESTMENTûBANKûINTOûNEWû 25 COUNTRIES ûWHICHûWILLûBENElTûALLûTHEû BUSINESSESûWITHINûTHISûFRANCHISEv 20 )NûCOMMERCIALûBANKINGû*0û-ORGANû 15 COMPLETEDûITSûEXPANSIONûINTOûTHEûTOPûû REGIONSûINûTHEû53ûWHICHûWILLûHELPûDRIVEûTHEû 10 GROWTHûINûTHEû#)" ûHEûSAID 4HEûBANKûHASûPLENTYûOFûCAPITALûTOûFUNDûITSû 5 EXPANSION 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 LEADER OF THE PACK Net income ROTCE $IMONûUSEDûNEARLYûHALFûOFûTHEû PAGEûLETTERûTOû RUMINATEûONûPUBLICûPOLICY ûANDûPRAISEDûTHEû 4RUMPûADMINISTRATIONSûREVISEDû53ûTAXûCODEû Source: Jamie Dimon letter to shareholders 2018

International Financing Review April 7 2018 13 h/NEûTOPICûWILLûBEûTHEûQUESTIONûOFûHOWûTOûDEALûWITHû BONDSûISSUEDûBYûEUROûAREAûBANKSûUNDERû5+ûLAWv SINGLE RESOLUTION BOARD CHAIR ELKE KOENIG ON THE IMPACT OF BREXIT, P19

Deutsche nabs ex-Merrill boss Thain &ORMERû-ERRILLû,YNCHûBOSSûJohn Thain has LOW PROFITABILITY NEW BLOOD BEENûNOMINATEDûTOûJOINûTHEûSUPERVISORYû !BOUHOSSEINûSAIDû$EUTSCHEûCOULDûCREATEû $EUTSCHEûSAIDûSHAREHOLDERSûWILLûGETûTOûVOTEû BOARDûOFûDEUTSCHE BANKûATûAûTIMEûOFûGROWINGû SHAREHOLDERûVALUEûBYûSHRINKINGûANDû ONûTHEûAPPOINTMENTûOFû4HAINûANDûOTHERû PRESSUREûONû'ERMANYSûBIGGESTûBANKûTOû RELEASINGûEQUITYûBYûRESTRUCTURINGûITSû53û NEWûDIRECTORSûATûITSûANNUALûGENERALû CHANGEûITSûLEADERSHIPûTOûREVIVEûITSû BUSINESS ûWHICHûCONSUMESûATûLEASTûõBNû MEETINGûNEXTûMONTH TURNAROUND OFûCAPITAL ûORûûOFûTHEûBANKSûTOTAL 4HAINûHEADEDû-ERRILLûBEFOREûITûWASûSOLDû 4HAINSûPROPOSEDûAPPOINTMENTûWASû TOû"ANKûOFû!MERICAûATûTHEûHEIGHTûOFûTHEû ANNOUNCEDûJUSTûASûANALYSTSûATû*0û-ORGANû lNANCIALûCRISISû4HAINûWASûDUMPEDûMONTHSû SAIDû$EUTSCHEûSHOULDûRESTRUCTUREûITSû53û ”A self-funded IB restructuring LATERûBYû"!-,ûBOSSû+ENû,EWIS ûANDûBLAMEDû BUSINESSûTOûUNLOCKûCAPITALûTHATûISûTRAPPEDû - releasing immediate value to FORûACCELERATINGûALMOSTû53BNûOFûBONUSû THEREûTOûIMPROVEûITSûPROlTABILITY shareholders and improving PAYMENTSûTOû-ERRILLûSTAFF 4HEûPROPOSALûFORûAûMAJORûSHAKE UPû long-term ROE - should be 4HAIN ûWHOûBEGANûHISûBANKINGûCAREERûINû SHOWSûTHEûMOUNTINGûCHALLENGESûFACINGû welcomed”  ûWASûPREVIOUSLYûPRESIDENTûANDûCHIEFû $EUTSCHEû0RESSUREûFROMûINVESTORSûISû OPERATINGûOFlCERûATû'OLDMANû3ACHS û BUILDINGûFORûTHEûBANKûTOûCHANGEûSTRATEGICû WHEREû$EUTSCHEû"ANKûCHAIRMANû0AULû COURSEûAFTERûYEARSûOFûLOSSESûANDûPALTRYû 4HEû53ûBUSINESSûhHASûBEENûSUFFERINGû !CHLEITNERûALSOûWORKEDûEARLIERûINûHISû RETURNS FROMûPERSISTENTLYûLOWûPROlTABILITYûFORûAû CAREERû4HAINûALSOûRANûTHEû.EWû9ORKû3TOCKû h!û53ûLEGALûENTITYûANDûBRANCHûSHRINKAGEû FEWûYEARSûNOWv ûHEûSAID ûESTIMATINGûITûWASû %XCHANGE ûWHEREûHEûENGINEEREDûAûSERIESû INûAûSELF FUNDEDû)"ûRESTRUCTURINGû û LIKELYûTOûHAVEûBEENûûATûBESTûLASTûYEAR OFûTAKEOVERSû(EûISûCURRENTLYûONûTHEûBOARDû RELEASINGûIMMEDIATEûVALUEûIE ûCASH ûTOû !BOUHOSSEINûSAIDû$EUTSCHEûSHOULDû OFû5BER SHAREHOLDERSûANDûIMPROVINGûLONG TERMû SHRINKûITSû53ûEQUITIESûBUSINESSûANDûREDUCEû $EUTSCHEûALSOûNOMINATEDûMayree Clark û 2/%û;RETURNûONûEQUITY=û ûSHOULDûBEû ITSûINVOLVEMENTûWITHû53ûCORPORATEûCLIENTS û FOUNDERûANDûMANAGINGûPARTNERûOFû%ACHWINû WELCOMED vû*0û-ORGANûANALYSTû+IANû ANDûFOCUSûINSTEADûONûSERVINGû%UROPEANû #APITALûANDûAûFORMERû-ORGANû3TANLEYû !BOUHOSSEINûSAIDûINûAûNOTE COMPANIESûINSIDEûANDûOUTSIDEû%UROPE BANKER ûANDûMichele Trogni ûPREVIOUSLYûCHIEFû Citi tops transaction banking CITIGROUPûRETAINEDûITSûTOPûPOSITIONûFORû SUBSTANTIAL ûSTABLEûREVENUESû)TûISûALSOûSEENûASû USINGûANALYSISûOFû@BIGûDATAûTOûHELPûTREASURERSû TRANSACTIONûBANKINGûLASTûYEAR ûTHANKSûTOû AûGOODûWAYûTOûBUILDûUPûAûRELATIONSHIPûWITHûAû IMPROVEûVISIBILITYûANDûRISKûCONTROL LEADINGûPOSITIONSûFORûTRADEûlNANCEûANDûCASHû CORPORATEûCLIENT ûWHICHûCANûLEADûTOûMOREû MANAGEMENTûANDûINûALLûTHREEûGEOGRAPHICû LUCRATIVEûFEESûFORûADVISORYûWORK Bankers say transaction REGIONS ûANALYSISûlRMû#OALITIONûSAID banking requires scale and is #OALITIONûSAIDûINûAûREPORTûLASTûWEEKûTHATû SCALE GAME? #ITIGROUPSûGLOBALûTRANSACTIONûBANKINGû "ANKERSûSAYûTRANSACTIONûBANKINGû becoming increasingly driven by REVENUESûINûûWEREûAHEADûOFûHSBC and JP REQUIRESûSCALEûANDûISûBECOMINGû having a technology edge over MORGAN ûWHOûWEREûEQUALûSECONDû4HEûTHREEû INCREASINGLYûDRIVENûBYûHAVINGûAû rivals lRMSûOCCUPIEDûTHEûSAMEûPOSITIONSûINû TECHNOLOGYûEDGEûOVERûRIVALS "ANKSûAREûPUTTINGûINCREASINGûFOCUSûONû .EWûTECHNOLOGYûCANûHELPûBANKSûMOREû #OALITIONûSAIDûBANK OF AMERICA MERRILL LYNCH TRANSACTIONûBANKING ûORûTHEûCOLLECTIONûOFû EFlCIENTLYûPROCESSûTRADES ûINCLUDINGûUSINGû RANKEDûFOURTHûGLOBALLY ûFOLLOWEDûBYûBNP PARIBAS û VANILLAûSERVICESûSUCHûASûlNANCINGûTRADEûANDû BLOCKCHAINû-ACHINEûLEARNINGûISûALSOûHELPINGû DEUTSCHE BANK and STANDARD CHARTEREDûWELLS HANDLINGûPAYMENTS ûASûITûBRINGSûINû THEMûAUTOMATEûPROCESSES ûANDûTHEYûAREû FARGO ûSOCIETE GENERALE and BARCLAYSûlLLEDûTHEûTOPû Who’s moving where…

GOLDMAN SACHS 1998 as an analyst in CREDIT SUISSE 2009 and will maintain named Colin Ryan co- London and named John Dabbs his responsibilities as head of mergers and transferred to San head of prime financing head of prime acquisitions in the Francisco in 2005, and sales for the Americas, derivatives services. He Americas alongside was named partner in a new position that is will also oversee capital Stephan Feldgoise. 2014. responsible for prime services, client services Ryan is a member of brokerage, swaps and and consulting. He was Goldman’s technology, futures. Dabbs will previously European media and telecom report to Paul Galietto, head of listed group in San global head of prime, derivatives and US Francisco, where he and Eric Miller, head of head of prime focuses on tech M&A. equities sales. Dabbs derivative services. He joined Goldman in joined Credit Suisse in

14 International Financing Review April 7 2018 People &Markets

INFORMATIONûOFlCERûATû5"3 ûTOûTHEû SUPERVISORYûBOARD Greenhill builds restructuring Alexander Schuetz ûWHOûREPRESENTSûTHEû INTERESTSûOFûTHEû#HINESEûCONGLOMERATEû firepower (.!û ûWHICHûOWNSûABOUTûûOFû$EUTSCHEû û GREENHILLûISûMAKINGûGOODûONûITSûPROMISEûTOû MOREûLIKEûITSûRIVALSû%VERCORE û-OELIS û0*4û ISûALSOûUPûFORûRE ELECTIONûFORûAûlVE YEARû BUILDûOUTûAûDYNAMICûRESTRUCTURINGûTEAMû ANDûOTHERS TERM CAPABLEûOFûHELPINGûTHEûlRMûWEATHERûROUGHû !LLûTHEûlRMSûHAVEûFOLLOWEDûAûMODELû PATCHESûINûITSûPRIMARYû-!ûADVISORYû PERFECTEDûBYû,AZARDûTHATûBLENDSû Thain was dumped months later BUSINESS COUNTERCYCLICALûINVESTMENTûBANKINGûWITHû by BAML boss Ken Lewis, and 4HEûBUILDûOUTûCOMESûAFTERûTHEû RESTRUCTURINGûBUSINESSESû)NûTHEORY ûTHEû INDEPENDENTûINVESTMENTûBANKûSUFFEREDû RESTRUCTURINGûBUSINESSûOFTENûBOOMSûWHENû blamed for accelerating almost ONEûOFûITSûWORSEûYEARSûLASTûYEARûASûREVENUEû -!ûISûWEAKER ûANDûVICEûVERSAû!NDûUNDERû US$4bn of bonus payments to SLUMPEDû OPTIMALûCONDITIONSûAûBANKSûFORMERû Merrill staff 'OINGûFORWARDûTHEûBANKûWILLûHAVEûTHREEû RESTRUCTURINGûCLIENTSûWILLûLATERûBECOMEû CO HEADSûTAPPEDûFROMûTHREEûDIFFERENTû -!ûCLIENTS BANKSûDRIVINGû'REENHILLSûRESTRUCTURINGû 4HEûRECRUITMENTûOFû!UGUSTINE ûONEûOFû BUSINESS THEûTOPûNAMESûINûTHEûRESTRUCTURINGû $EUTSCHESûNEWûBOARDûMEMBERSûWILLû 4HEûBANKûHASûHIREDû.EILû!UGUSTINEûASû ADVISORYûBUSINESS ûISûAûhHUGEûSTEPûINûTHEû REPLACEûFOURûRETIRINGûMEMBERS VICEûCHAIRMANûANDûCO HEADûOFû.ORTHû EXPANSIONûOFûITSûTEAM vû'REENHILLûCHIEFû 3CRUTINYûOFû!CHLEITNERûISûBUILDINGûAFTERû !MERICANûlNANCINGûADVISORYûANDû EXECUTIVEû3COTTû"OKûSAID REPORTSûEMERGEDûLASTûMONTHûTHATûHEûWASû RESTRUCTURINGû)TûBRINGSûTOGETHERû !NALYSTSûHADûPREVIOUSLYûVOICEDû SCOUTINGûFORûSUCCESSORSûTOûCHIEFûEXECUTIVEû RESTRUCTURINGûLEADERSûFROMûTHREEûBANKSûTOû SCEPTICISMûATû'REENHILLSûABILITYûTOûRECRUITû *OHNû#RYANû(ISûEFFORTSûSOûFARûAPPEARûTOû DRIVEû'REENHILLSûBUSINESS TOPûTALENTûINûTHEûAREAû-OSTûRESTRUCTURINGû HAVEûBEENûUNSUCCESSFULûANDû#RYANûISSUEDûAû !UGUSTINEûHASûMOREûTHANûûYEARSûOFû GROUPSûAREûRELATIVELYûTIGHT STATEMENTûTOûDISMISSûTHEûRUMOURS ûBUTûTHEû EXPERIENCEûADVISINGûCOMPANIESûANDû CHATTERûHASûREFUSEDûTOûDIEûDOWN CREDITORSûINûRESTRUCTURINGûANDû-!û “MAJOR WAVE” Steve Slater TRANSACTIONSû(EûWASûMOSTûRECENTLYûCO HEADû "OKûSAIDûHEûISûDETERMINEDûTOûEXPANDûTHEû OFû.ORTHû!MERICANûDEBTûADVISORYûANDû GROUP RESTRUCTURINGûATû2OTHSCHILD ûWHEREûHEû h7EûWOULDûLIKEûTOûBUILDûUPûOURû ûGLOBALûSPOTS ûWHICHûWEREûBASEDûONûREVENUESû SPENTûTHEûLASTûûYEARS RESTRUCTURINGûPRACTICEûSIGNIlCANTLY vû FROMûINSTITUTIONALûANDûCORPORATEûCLIENTSûWITHûANû ,ASTûYEAR û'REENHILLûHIREDû'EORGEû-ACKû HEûSAIDûh)ûTHINKûWELLûlNDûWAYSûTOûDOû ANNUALûTURNOVERûOFûMOREûTHANû53BN FROMû"ARCLAYS ûNAMINGûHIMûCO HEADûOFûTHEû ITv 4HEûTOPûTRANSACTIONûBANKINGûlRMSûINûTHEû GROUPû-ACKûHADûSPENTûûYEARSûATû"ARCLAYSû "OKûSAIDûTHEûBUILDûOUTûISûNOTûBECAUSEû !MERICASûWEREû#ITI û*0û-ORGAN ûANDû"!-,ûINû ANDû,EHMANû"ROTHERS ûADVISINGûONûTHEû 'REENHILLûISûEXPECTINGûANûIMMINENTûBOOMû !SIAûTHEYûWEREû#ITI û(3"# ûANDû3TANDARDû RESTRUCTURING ûPURCHASE ûSALEûANDûlNANCINGû INûRESTRUCTURING ûBUTûWHENûITûDOESûHAPPENû #HARTEREDûANDûINû%-%!ûTHEYûWEREû#ITI û(3"# û OFûCOMPANIESûINûAûWIDEûRANGEûOFûINDUSTRIESû THEYûWILLûBEûWELLûPOSITIONED ANDû".0û0ARIBAS ûACCORDINGûTOû#OALITION INûALLûSTAGESûOFûlNANCIALûDISTRESS h!SûINTERESTûRATESûSTARTûTOûMOVEûUP ûWEû 0AYMENTS ûCASHûMANAGEMENTûANDûTRADEû !UGUSTINEûANDû-ACKûJOINEDû%RICû EXPECTûTHATûAûMAJORûWAVEûOFûRESTRUCTURINGû lNANCEûBUSINESSESûTOGETHERûREPRESENTûAû -ENDELSOHNûTOûRUNûTHEûGROUPû-ENDELSOHNû WILLûCOMEûINûTHEûNOTûTOOûDISTANTûFUTUREû)Nû 53BNûANNUALûREVENUEûPOOL ûANDûTHEREûAREû JOINEDû'REENHILLûINûûFROMû,AZARDûAFTERû ORDERûTOûMAXIMIZEûOURûABILITYûTOûCAPITALIZEû ADDITIONALû&8ûmOWSûONûTHEûBACKûOFûIT ûACCORDINGû AûLEADERSHIPûSHAKE UPûTHERE ONûTHATûOPPORTUNITY ûWEûEXPECTûTOûADDûMOREû TOûCONSULTINGûlRMû/LIVERû7YMANû!TûSOMEû RESOURCESûATûALLûLEVELSûASûWEûLOOKûTOûBUILDû BANKSûTRANSACTIONûBANKINGûACCOUNTSûFORû û M&A AND RESTRUCTURING OUTûFURTHERûOURûALREADYûSTRONGûTEAM vûHEû OFûCORPORATEûANDûINVESTMENTûBANKûREVENUES $EVOTINGûSOûMUCHûlREûPOWERûTOû SAID Steve Slater RESTRUCTURINGûWILLûMAKEû'REENHILLûLOOKû Philip Scipio

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SOCIETE GENERALE coverage in the region. Mark Leahy has been experience in fixed- has created four new Damien Pieron is head named head of fixed income trading and positions in Dubai to of family offices and income at syndicate and was cover sovereign clients, holdings’ coverage. SINGAPORE most recently Asia family offices, and Rishmein Vallimamonde EXCHANGE, Pacific head of debt global markets sales to has been hired as responsible for capital markets and financial institutions corporate derivatives executing strategy for syndication at and corporates in the sales specialist and its bond trading Nomura. Before that, Middle East. Amine Wassim Kesrouani will business, SGX Bond he was Asian debt Jaoui, previously SG’s join as fixed income Pro, as well as syndicate head at head of business and currencies sales attracting bond listings Deutsche Bank. development, is now specialist. to the exchange. Leahy head of public sector has 27 years of

International Financing Review April 7 2018 15 Bellwether Bellwether: n. From the practice of placing a bell around the .OTûONLYûDIDû,LOYDû"LANKFEINûPAYûTRIBUTEûTOûNEWLYûDEPARTEDû neck of a castrated ram so that it might lead its flock CO PRESIDENTû(ARVEYû3CHWARTZ ûBUTûHISûLETTERûTOûSHAREHOLDERSû WASûADORNEDûWITHûAûPHOTOûOFûHIMûANDûNOWûSOLEûPRESIDENTû *534û7(%.û*/(.û#RYANûTHOUGHTûITûWASûSAFEûTOûGOûBACKûINTOûAû $AVIDû3OLOMONûAPPARENTLYûPERCHEDûONûHISûSHOULDERûnûSOû $EUTSCHEû"ANKûBOARDûMEETING ûTHEûDYSFUNCTIONALû'ERMANû CLOSE ûINûFACT ûTHATûITûLEAVESûTHEûCLEARûIMPRESSIONûTHISû LENDERû#OPYRIGHTûEVERYONE ûHASûPROPOSEDûAPPOINTINGû*OHNû SUCCESSIONûRACEûISûDONEûANDûDUSTED 4HAINûASûAûMEMBERûOFûITSûSUPERVISORYûBOARD #ONTRASTûTHATûWITHû*AMIEû$IMONSûLETTERûTOû /LDERûREADERSûWILLûREMEMBERû4HAINûWHEN ûASûTHEû#%/ûOFû SHAREHOLDERS ûWHICHûWASûACCOMPANIEDûBYûAûPHOTOûOFû*0û -ERRILLû,YNCH ûHEûSPENTû53MûOFûCOMPANYûFUNDSûONûAû -ORGANSûCHAIRMANûANDû#%/ûnûINûOTHERûWORDSûJUSTû*AMIEû LAVISHûOFlCEûRENOVATIONûMONTHSûBEFOREûITSûlREûSALEûTOû"ANKûOFû $IMONû.O ONEûELSEûWILLûBEûMUSCLINGûINûONûTHATûSHOTûANYû !MERICAûINû TIMEûSOON 4HAINSûRAMPANTûEXPENDITUREûINCLUDEDûANû53 û h2OMANû3HADEv ûANû53 ûRUGûAND ûMOSTûMEMORABLY ûAû 3(/24,9û!&4%2û(%ûARRIVEDûASûHEADûOFû COMMODEûONûLEGS Thain’s $EUTSCHEû"ANKSûCORPORATEûANDû /FûCOURSE ûSOMEûMIGHTûSAYû$EUTSCHEûALREADYûHASûONEûOFû rampant INVESTMENTûBANKûINû û*EFFû5RWINû THOSEûINûTHEûSHAPEûOFûCHAIRMANû0AULû!CHLEITNER expenditure SAIDûHEûTOOKûONEûPEEKûUNDERûITSûBONNETû )NDEED ûBYûHIRINGûFELLOWûFORMERû'OLDMANû3ACHSûCOLLEAGUEû included an ANDûDIDNTûLIKEûWHATûHEûSAWûh)ûCAMEû 4HAINûAFTERûAûBOTCHEDûATTEMPTûTOûLUREû2ICHARDû'NODDE û US$11,000 HEREûTHINKINGû)ûWASûGETTINGûAû-ERCEDES û !CHLEITNERûISûPLAYINGûAûGAMEûOFû0OKEMONû'OûnûEXCEPTûTHEû BUTûINSTEADû)ûFOUNDûITûWASûAû&IAT vûHEû lGURESûHEûHASûTOûCOLLECTûAREûFORMERûPARTNERSûOFûTHEû6AMPIREû “Roman TOLDûSTAFF 3QUIDûSOMEWHATûPASTûTHEIRûPRIME Shade”, an !SûAûRALLYINGûCRYûITûWASûAWFULûANDû )Fû!CHLEITNERûDOESûTURNû$EUTSCHEûINTOûAûRETIREMENTûHOMEûFORû US$87,000 BANKERSûHAVEûLARGELYûAVOIDEDû 'OLDMANûPARTNERS ûTHENû*OHNû#RYANûWILLûFEELûJUSTIlABLYûPEEVED rug and, most AUTOMOTIVEûMETAPHORSûSINCEû"UTûNOWû )NûFACT ûHEûWOULDûBEûFORGIVENûFORûCOMINGûOVERûAûBITû,IAMû memorably, a THEYREûBACK ûAFTERû5"3SûINVESTMENTû .EESON ûWHOûINûHISûMOSTûRECENTûlLMûh4HEû#OMMUTERvûPLAYSûAû commode on BANKûPRESIDENTû!NDREAû/RCELûCOMPAREDû FORMERû.EWû9ORKû#ITYûCOPûTURNEDûINSURANCEûSALESMANûNAMEDû HISûlRMûFAVOURABLYûWITHûCOMPETITORS -ICHAELû-AC#AULEY legs h&IATûISûLIKEûTHEûBULGE BRACKETûBANKSû )NûONEûSCENE ûAFTERûHEûISûGIVENûSHORTûSHRIFTûBYûAû'OLDMANû THATûAREûACTIVEûONûALLûTHEûBUSINESSû BROKER ûHEûRESPONDSûh(EYû'OLDMANû3ACHS ûONûBEHALFûOFûTHEû SEGMENTS ûANDûTHEYûGOûFORûVOLUMEû5"3û !MERICANûMIDDLE CLASS ûFUCKûYOUv ISûLIKEû&ERRARIûWEûAREûMUCHûSMALLERûANDû MOREûFOCUSEDv -%!.7(),% û4(%û2%#%.4ûCOMINGSûANDûGOINGSûnûWELL ûGOINGSûnû )TSûNOTûCLEARûWHETHERû/RCELûTHINKSû ATû'OLDMANûWEREûEXECUTEDûWELLûWITHINûTHEûPRINTûDEADLINEûOFû &IATûMAKESûCRAPûCARS ûBUTûITSûAûCOMMENTûTHATSûLIKELYûTOûDRIVEû THEûBANKSûANNUALûREPORT ûWHICHûWASûPUBLISHEDûLASTûWEEK RIVALSûUPûTHEûWALLû„ Who’s moving where…

„ BARCLAYS has Morgan, where he „ Emmanuel Dray has linear trading. He will „ Investment bank its technology, media hired Emmanuel Cau spent 13 years. been appointed UK report to Marque and GREENHILL named and telecom team. He from JP Morgan as Barclays has been head of equity Olivier Osty, head of Nick Melton head of previously spent 13 head of European investing across its derivatives at BNP global markets. Dray telecommunications years at Lazard and equity strategy for its equities business and PARIBAS, a newly started at BNP Capital and infrastructure began his career as an research team in has hired 50 people in created role after Markets in London in corporate advisory for equity research analyst London. Cau will join the business in the global head Nicolas 1996 in fixed income North America, focused on the in June and report to past year across sales, Marque relocated from and moved to equities working out of New telecom services Rupert Jones, head of trading and research, London to Paris. Dray in 2000. He was York. Melton joins industry at JP Morgan. European equity including Stephen will retain his current previously head of flow Greenhill from research. Cau was Dainton as global role as global head of trading. Rothschild, where he previously global head of equities. equity derivatives has worked for seven equity strategist at JP institutional sales and years, most recently in

16 International Financing Review April 7 2018 People &Markets Goldman loses M&A halo GOLDMAN SACHSûVAUNTEDûMERGERûANDû )TSûSOFTûlRSTûQUARTERûWASûDESPITEûGLOBALû )TSûTROUBLESûMAYûJUSTûCOMEûDOWNûTOû ACQUISITIONSûGROUPûHADûAûROUGHûQUARTERû ûATûLEASTû -!ûDEALûVALUEûHITTINGû53TRN ûTHEûBESTû TIMINGû!SûTHEûBANKSûDEALSûCLOSE ûFEESûWILLû BYûTHEû7ALLû3TREETûlRMSûOWNûLOFTYûSTANDARDS lRSTûQUARTERûEVER SHOWûUPûINûLATERûQUARTERSûANDûPERHAPSûPUTû 'OLDMANûRANKEDûTHIRDûINûGLOBALû-!û %UROPEANû-!ûDOUBLEDûINûTHEûQUARTERû 'OLDMANûBACKûONûTOP ADVISORYûINûTHEûlRSTûQUARTER ûBEHINDûMORGAN ANDûMEGAûDEALSûSURGED ûACCOUNTINGûFORûû )NûTHEû!MERICASû'OLDMANûSLIPPEDûFROMû STANLEY and JP MORGAN ûACCORDINGûTOû4HOMSONû OFûACTIVITY NUMBERûONEûTOûFOURTHûINûCOMPLETEDûDEALSû 2EUTERSûDATAû'OLDMANSûSHAREûOFûFEESûFORû &ORûADVISINGû-!ûTARGETSûBASEDûINûTHEû53 û ADVISINGûTRANSACTIONSûINûTHEûQUARTERûFELLûû Goldman has dominated M&A 'OLDMANûSLIPPEDûTOûFOURTHûFROMûSECONDûINû FROMûAûYEARûAGOûTOû53M THEûPRIORûYEAR *0û-ORGANûANDû-ORGANû3TANLEYûSAWûFEEû league table for more than a )TSûFEEûDECLINEûMAYûBEûMASKEDûINûlRSTû REVENUEûSURGEûINûTHEûPERIODû*0û-ORGANSû decade and in the last three QUARTERûRESULTS ûASûMOREûTHANûFEESûGETû FEESûJUMPEDûûFROMûAûYEARûAGOûTOû years has posted a couple BLENDEDûINTOûTHEûREPORTEDûREVENUES ûANDûTHEû 53MûANDû-ORGANû3TANLEYSûREVENUEûWASû of quarters where revenue BANKûCOULDûREPORTûAûROBUSTûlRSTûQUARTERû UPûûATû53M approached US$1bn RESULTû"UTûITûWILLûPROBABLYûSTRUGGLEûTOûMATCHû 'OLDMANûHASûDOMINATEDûTHEû-!ûLEAGUEû THEûlRSTûQUARTERûOFû ûWHENû'OLDMANû TABLEûFORûMOREûTHANûAûDECADEûANDûINûTHEûLASTû 'OLDMANûWASûHURTûBYûBEINGûOUTûOFû WASûRESPONSIBLEûFORûûOFûADVISORYûREVENUEû THREEûYEARSûTHEûBANKûHASûPOSTEDûAûCOUPLEûOFû POSITIONûONûSEVERALûMEGA DEALSûINVOLVINGû OFûTHEûlVEûLARGESTû53ûBANKS QUARTERSûWHEREûREVENUEûAPPROACHEDû53BN 5NILEVER û#OMCASTûANDû%XPRESSû3CRIPTS Philip Scipio Wells Fargo creates Goldman rehires CIB group Moorthy WELLS FARGOûISûPLANNINGûTOûINTEGRATEû 5NDERûTHEûREALIGNMENT ûCO GOLDMAN SACHSûHASûLUREDûHari (EûLEFTû'OLDMANûFORû*0û ITSûCORPORATEûBANKûANDûINVESTMENTû HEADSûOFû7ELLSû&ARGOû3ECURITIES û Moorthy BACKûFROMû*0û-ORGAN û -ORGANûINûûAFTERûSEVENû BANKûINûANûEFFORTûTOûCREATEûAûCLOSERû 7ALTERû$OLHAREûANDû2OBERTû%NGEL û NAMINGûHIMûCO CHIEFûTECHNOLOGYû YEARSû(ISûLASTûASSIGNMENTûATû PARTNERSHIPûBETWEENûTHEûTWOû ALONGûWITHûTHEûHEADûOFû7ELLSû OFlCERûOFû'OLDMANû3ACHSû"ANKû 'OLDMANûWASûGLOBALûHEADûOFû BUSINESSES ûACCORDINGûTOûSOURCESû CORPORATEûBANK û+YLEû(RANICKY û 53!ûWITHû"OEû(ARTMAN ûANDû THEûDEVELOPMENTûPRACTICESû FAMILIARûWITHûTHEûREALIGNMENT ANDû,ISAû-C'EOUGH ûHEADûOFûTHEû HEADûOFûCOMMERCIALûBANKINGû GROUPûANDûTHEûCHIEFû 4HEûMOVEûWILLûALLOWûTHEûTWOû lNANCIALûINSTITUTIONSûGROUP ûWILLû ENGINEERING TECHNOLOGYûOFlCERûOFûGLOBALû DIVISIONSûTOûCOMPETEûMOREû SHAREûPROlTûANDûLOSSûTARGETSû PRIMEûSERVICES EFFECTIVELY ûSAIDûONEûSOURCEû ACROSSûINDUSTRYûVERTICALSû!LLûFOURû )NûHISûNEWûROLEû-OORTHYûWILLû -OSTûOFû7ELLSû&ARGOSûPEERSû WILLûREPORTûTOû0ERRYû0ELOS ûHEADûOFû Moorthy will oversee OVERSEEûCORPORATEûCASHû ALREADYûCOMBINEûCORPORATEûANDû WHOLESALEûBANKING corporate cash MANAGEMENTûANDûDEVELOPû INVESTMENTûBANKINGûWITHINûAû 4HEûCONSOLIDATIONûWILLûRESULTûINû management, develop PAYMENTûSOLUTIONSûFORû BROADERû#)"ûGROUP SOMEûLAYOFFS ûALTHOUGHûTHEûAFFECTEDû payment solutions 'OLDMANûANDûITSûCLIENTS û 4HEûINTEGRATIONûHASûBEENûONûTHEû STAFFûAREûLARGELYûINûINDUSTRYû REPORTINGûTOû5MESHû BOARDûFORûMOREûTHANûAûYEARûANDûISû COVERAGEûANDûNOTûCAPITALûMARKETSû -OORTHYûWASûMOSTûRECENTLYû 3UBRAMANIAN ûCO HEADûOFû EXPECTEDûTOûBEûFULLYûIMPLEMENTEDû ORûADVISORY ûTHEûSOURCEûSAID HEADûOFûGLOBALûBANKINGû 'OLDMANSûTECHNOLOGYûDIVISION INûTHEûNEXTûCOUPLEûOFûMONTHS Philip Scipio TECHNOLOGYûATû*0û-ORGANû#HASE Philip Scipio

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„ Trent Wilkins, a „ BANK OF AMERICA „ INTERMEDIATE years at the helm. „ Ralph Von Selzam „ Institutional investor banker in the debt MERRILL LYNCH has CAPITAL GROUP Shelswell joined ICG in has been appointed a CAISSE DE DEPOT ET capital markets team hired Francois Planque to promoted Ryan 2010. He completed managing director of PLACEMENT DU at Barclays, is leaving work in its public sector Shelswell, head of seven deals in Australia mid-market advisory QUEBEC has hired to join GOLDMAN financing business, equity and mezzanine and New Zealand, firm BAIRD. He will Emmanuel Jaclot as SACHS, a source said. according to sources. for Australia and New involving investments of work in the group’s executive vice-president Wilkins was recently Planque joined from Zealand, to run its Asia over US$700m, nearly Frankfurt office. He of infrastructure to promoted to director at Barclays, where he was a Pacific business. The 70% of the capital ICG has spent the past 15 manage its US$16bn Barclays and had director in the sovereign, London-listed specialist had deployed in the years at Goldman portfolio. Jaclot will relocated to Hong supranational and fund manager said region. He will report to Sachs as an M&A eventually head CDPQ Kong. He joined agency origination team. Shelswell starts on July Benoit Durteste, the banker in the global Infra, a unit responsible Barclays in 2011. He previously worked at 30 to replace Chris Heine, chief executive of ICG in industrials team. for operating Credit Agricole. who is retiring after 12 London. infrastructure projects.

International Financing Review April 7 2018 17 h)ûTHINKûTHATûWITHINûTHREEûYEARSûWEûCANûDECIDEûTOûGOûTOûTHEû MARKETû7EûAREûPRO MARKET ûWEûLIKEûTHEûCAPITALûMARKETv JUAN CARLOS ESCOTET, MAJORITY OWNER OF SPANISH BANK ABANCA, P21 Capital markets week ahead: Vrio, Bank of China, Qatar

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QUARTERûOFû ûAûûDECLINEûFROMûAûYEARû MANY HAPPY RETURNS!û!NûUNEXPECTEDûNAMEû OFFERSûEXPOSUREûTOûLIFEûSCIENCESûTHROUGHûLOANSû EARLIER COULDûBREAKûAû MONTHûLONGûHIATUSûFORû1ATARIû TOûPHARMACEUTICALûCOMPANIES ûISûRAISINGûNEWû BORROWERSûINûTHEûBONDûMARKETSûTHISûWEEK ûWITHû FUNDSûFORûINVESTMENTû)NVESCOû!SSETû DEBUTûISSUERû-ANNAIû#ORPORATIONûSETûTOûLAUNCHû -ANAGEMENT ûWITHûAûûSHAREHOLDING û LAST WEEK IN NUMBERS AûDEALû.Oû1ATARIûBORROWERûHASûACCESSEDûTHEû SAIDûITûWILLûPARTICIPATE ûHAVINGûPREVIOUSLYûPUTû 194 minutesûnû$ELAYûINûOPENINGûPRINTûFORû MAINSTREAMû53ûDOLLARûMARKETûSINCEûAûSPATûWITHû INû53MûINû$ECEMBER 3POTIFY ûWHICHûLISTEDûITSELFûDIRECTLYûONû $OHASû'ULFûNEIGHBOURSûERUPTEDûINû*UNEû 4UESDAY -ANNAIûENDSûAûROADSHOWûONû4UESDAYûnûANDûISû POLL POSITION 4HREEû)NDONESIANû)0/SûAREûINû US$39.6bnûnû$EMANDûFORû'ENERALû-ILLSû EXPECTEDûTOûLAUNCHûAûDEALûIFûFEEDBACKûISûGOOD THEûMARKET ûWITHûISSUERSûSEEMINGLYûKEENûTOû 53BNûDEALûTOûFUNDûITSûPURCHASEûOFû"LUEû TAPûCAPITALûMARKETSûBEFOREûUNCERTAINTYûAROUNDû "UFFALOû0ETû0RODUCTS SEED MONEYû!GRIBUSINESSû3YNGENTAûBEGINSû NEXTû!PRILSûELECTIONSûHITSû3TATE OWNEDûLENDERû €7.5bnûnû"ILLûTOûBEûPAIDûBYûEUROZONEû MARKETINGûAûNEWûBONDûSALEûONû-ONDAY ûSEVERALû "ANKû"2)3YARIAHûHASûALREADYûOPENEDûBOOKSûONû BANKSûTOûSAFEGUARDûDEPOSITS ûALMOSTûõBNû MONTHSûAFTERûITûWASûFORCEDûTOûSHELVEûAû53BNû ITSû53MûDEAL ûWITHûPRICINGûSLATEDûFORûNEXTû MOREûTHANûLASTûYEAR TRADEû4HEû3WISSûCOMPANY ûWHICHûWASûBOUGHTû &RIDAYû(EALTHCAREûPROVIDERû-EDIKALOKAû 26%ûnû&ALLûINûSHAREûOFûGLOBALû-!ûFEESû BYû#HEM#HINAûLASTûYEARûINûTHEûLARGEST EVERû (ERMINAûANDûSANITARYûPRODUCTSûlRMû FORû'OLDMANû3ACHS ûWHICHûNOWûRANKSû ACQUISITIONûBYûAû#HINESEûCOMPANY ûISûLOOKINGûTOû DISTRIBUTORû3URYAû0ERTIWIûAREûATûTHEûPRE THIRDûAMONGûPEERS TAPûBOTHûTHEû53ûDOLLARûANDûEUROûMARKETSû!ûDEALû MARKETINGûSTAGE

18 International Financing Review April 7 2018 People &Markets Eurozone banks face €7.5bn resolution bill "ANKSûINûTHEûEUROZONEûWILLûNEEDûTOûPAYû THEûPASTûTHREEûYEARS ûINCLUDINGûõMûLASTû WASûONûTHEûVERGEûOFûINSOLVENCYûANDûSETûTOûBEû õBNûTHISûYEARûINûCONTRIBUTIONSûTOûAûFUNDû YEAR WOUNDûDOWN THATûSAFEGUARDSûDEPOSITSûANDûCRITICALû DEUTSCHE BANK ûWHICHûHADûTOûRAISEûCASHû 4HEû32"ûHASûDEALTûWITHûTHREEûOTHERûCASESû FUNCTIONSûWHENûAûBANKûGOESûINTOûRESOLUTION û FROMûSHAREHOLDERSûLASTûYEAR ûPAIDûõMû INûTHEûPASTûYEAR ûANDûINûEACHûCASEûITûSAIDûTHEREû ALMOSTûõBNûMOREûTHANûTHEYûPAIDûLASTûYEAR RELATEDûTOûTHEû32&ûANDûOTHERûRECOVERYûANDû WASûNOûNEEDûTOûENTERûRESOLUTIONû4HEYû %LKEû+OENIG ûCHAIRûOFûTHEû%5Sû3INGLEû RESOLUTIONûLEVIESûLASTûYEAR ûUPûFROMûõMû INVOLVEDû)TALYSûBANCA POPOLARE DI VICENZA and 2ESOLUTIONû"OARD ûSAIDûTHEûCOSTûHASûGONEûUPû INû VENETO BANCAûAND ûMOREûRECENTLY û,ATVIASû ASûCOVEREDûDEPOSITSûINûTHEûBLOCûINCREASEDûBYû ABLV MOREûTHANûûLASTûYEAR BNP Paribas has paid €1.35bn 4HEû3INGLEû2ESOLUTIONû&UNDûISûTAKINGû BREXIT WARNING MONEYûEVERYûYEARûFROMûBANKSûINûTHEûû into the European resolution +OENIGûALSOûWARNEDûTHATûEUROZONEûBANKSû MEMBERûSTATES ûWITHûTHEûAIMûOFûBUILDINGûUPû fund in the past three years, MAYûNEEDûTOûISSUEûNEWûDEBTûTOûREPLACEû AûPOOLûOFûABOUTûõBNûBYû ûEQUIVALENTû including €502m last year EXISTINGûBONDSûISSUEDûUNDERû5+ûLAWûIFûTHEû TOûATûLEASTûûOFûTHEûBLOCSûCOVEREDûDEPOSITS COUNTRYSûLAWSûNOûLONGERûMEETû%UROPEANû 4HEûFUNDûCOLLECTEDûõBNûINû ûWHICHû 5NIONûREGULATIONSûAFTERû"REXIT MEANTûITûHADûACCUMULATEDûõBN 4HATûCOULDûAFFECTûABOUTûõBNûOFûBONDS û 4HEûCOSTûCANûBEûSUBSTANTIALûFORûTHEûBIGû "ANKSûINû&RANCEûPAIDûõBNûLASTûYEAR û BASEDûONûAûSMALLûSAMPLEûESTIMATEû4HEû32"û BANKSûBNP PARIBAS ûFORûEXAMPLE ûHASûPAIDû ANDû'ERMANûBANKSûPAIDûõBN SAIDûITûISûCARRYINGûOUTûAûMOREûACCURATEû õBNûINTOûTHEû%UROPEANûRESOLUTIONûFUNDûINû )TALIANûLENDERSûCONTRIBUTEDûõMûANDû ESTIMATEûOFûTHEûIMPACT 3PANISHûBANKSûPAIDûõMû"ANKSûINûTHEû h/NEûTOPICûWILLûBEûTHEûQUESTIONûOFûHOWû EUROZONE RESOLUTION COSTS JUMP .ETHERLANDSûPUTûINûõM û"ELGIANûLENDERSû TOûDEALûWITHûBONDSûISSUEDûBYûEUROûAREAû ANNUAL PAYMENTS TO SINGLE RESOLUTION FUND PAIDûõM û!USTRIANûBANKSûPAIDûõM û BANKSûUNDERû5+ûLAW vû+OENIGûSAIDûh4HESEû BY BANKS IN EACH COUNTRY; 2018 BREAKDOWN &INNISHûBANKSûPUTûINûõMûANDûBANKSûINû WILLûBECOMEûTHIRD COUNTRYûISSUESûANDû REVEALED IN MAY; IN €m 'REECE ûWHEREûTHEûINDUSTRYûISûTRYINGûTOû MIGHTûNOûLONGERûBEûELIGIBLEûFORû-2%,ûGOINGû

8,000 €7.5bn REBUILD ûPAIDûõMûINTOûTHEûFUNDûSEEû FORWARDv CHART  -2%, ûORûMINIMUMûREQUIREMENTûFORûOWNû 7,000 €6.4bn €6.6bn 6,000 +OENIGûSAIDûTHISûYEARSûCOSTûWOULDûBEû FUNDSûANDûELIGIBLEûLIABILITIES ûISûTHEû%5Sû SPREADûACROSSû ûlRMS ûDOWNûFROMû û VERSIONûOFûGLOBALûRULESûREQUIRINGûBANKSûTOû 5,000 LASTûYEARû4HEûBIGGERûBANKSûWILLûPAYûMORE û HOLDûDEBTûTHATûCANûABSORBûLOSSESûIFûAûBANKû 4,000 BASEDûONûTHEûCOVEREDûDEPOSITSûTHEYûHOLD HITSûTROUBLE 3,000 &IRMSûWILLûBEûTOLDûTHEûCOSTûONû-AYûûANDû 7HETHERûBONDSûISSUEDûUNDERû5+ûLAWûAREû 2,000 HAVEûTOûPAYûBYûTHEûENDûOFû*UNE -2%, ELIGIBLEûWILLûDEPENDûONûHOWû"RITAINSû 1,000 4HEû32"ûWASûSETûUPûINûûTOûHANDLEû NEGOTIATIONSûWITHûTHEûRESTûOFûTHEû%5ûGOû 0 FAILINGûBANKSûANDûENFORCEûAûCONSISTENTû "RITAINûISûDUEûTOûLEAVEûTHEû%5ûATûTHEûENDûOFû 2016 2017 2018 RESOLUTIONûREGIMEûIFûNEEDEDû)TûDEALTûWITHûITSû -ARCHû ûALTHOUGHûAûTRANSITIONûPERIODûISû Other Netherlands Italy France lRSTûRESOLUTIONûCASEûINû*UNE ûWHENû3PAINSû EXPECTEDûTOûBEûINûPLACEûUNTILûTHEûENDûOFû Spain Germany BANCO POPULARûWASûBOUGHTûBYûSANTANDERûFORû ûTOûAVOIDûANYûSUDDENûRULEûCHANGES Source: Single Resolution Board AûNOMINALûõ ûAFTERûREGULATORSûSAIDû0OPULARû Steve Slater

OBITUARY: DAVID KIRBY

LOSSûOFû$AVIDû+IRBY ûWHOûHASû 2OBû#OLLINS ûHEADûOFûFUNDINGû WITHûTHEûFUNDINGûANDûCAPITALû DIEDûOFûCANCERûATûTHEûAGEûOFû ANDûCAPITALûMARKETS ûTREASURYûATû MARKETSûTEAM $AVIDûWASûAûRESPECTEDûANDû .ATIONWIDE h(EûHADûTHEûSAMEûBRIGHTû WIDELYûLIKEDûMEMBERûOFûTHEû5+û $AVIDûJOINEDû,LOYDSûINû-AYû OUTLOOKûATûHOME ûATûWORKûANDû ISSUERûCOMMUNITY ûHAVINGû ûTOûWORKûINûTHEûCAPITALû INûTHEûPUBû(EûWASûAûMOSTû WORKEDûATû"ARCLAYS û.ATIONWIDEû MARKETSûISSUANCEûTEAMûWITHINû COURTEOUSûINDIVIDUALûWHOû "UILDINGû3OCIETYûANDûMOSTû GROUPûCORPORATEûTREASURYû(Eû ALWAYSûLOOKEDûOUTûFORûEVERYONEû RECENTLYûATû,LOYDSû"ANKINGû MADEûANûIMMEDIATEûANDûLASTINGû AROUNDûHIM ûBUTûCOUPLEDûTHISû 'ROUP IMPRESSIONûONûCOLLEAGUES ûNOTû WITHûAûDEEPûINTELLECTûANDûAû h%VERYONESûTHOUGHTSûONû ONLYûFORûHISûINDUSTRYûEXPERTISE û TERRIlCûSENSEûOFûHUMOUR vûSAIDû HEARINGûTHEûNEWSûWASûSUMMEDû BUTûALSOûFORûHISûPOSITIVEûANDû #OLLINS UPûBYûONEûOFû$AVIDSûCOLLEAGUESû ENGAGINGûAPPROACH $AVIDûISûSURVIVEDûBYûHISûWIFEû 4HEûDEBTûCAPITALûMARKETSû ATû,LOYDS ûWHOûSIMPLYûSAID û@HEû (EûJOINEDûFROMû.ATIONWIDE û *ULIAûANDûSONû-AX ûWHOûWASû COMMUNITYûISûMOURNINGûTHEû WASûTHEûBESTûOFûALLûOFûUS vûSAIDû WHEREûHEûSPENTûTHREEûYEARSû BORNûTHISûYEAR

International Financing Review April 7 2018 19 h#OUNTRYûBYûCOUNTRYûANDûINDUSTRYûBYûINDUSTRY ûTHEREûAREûSTILLû PLENTYûOFûOPPORTUNITIESûTOûINCREASEûOURûLOWûMARKETûSHAREv OMINOUS WARNING TO RIVALS FROM JP MORGAN CEO JAMIE DIMON, P13

SAIDû3ANDEEPû"AGLA ûASSOCIATEûDIRECTORûATû4RUSTû RBI adds fuel to India bonds rally #APITALûh"ANKSûSHOULDûSTARTûPARTICIPATINGûINû )NDIANûGOVERNMENTûBONDSûHAVEûRALLIEDûFORû h4HEû2")ûlNALLYûBUCKLEDûUNDERûGOVERNMENTû THEû)'"ûAUCTIONS ûWHICHûWILLûLEADûTOûLOWERûRISKû THEûSECONDûCONSECUTIVEûWEEKûAFTERûTHEû PRESSURE vûSAIDûAûTRADERûATûAûFOREIGNûBANK PREMIAûAND ûHENCE ûLOWERûYIELDSv CENTRALûBANKûALLOWEDûLENDERSûTOûSPREADûTHEIRû 4HISûWASûAûREPEATûOFû ûWHENûTHEû 3INCEû)NDIANûBANKSûOWNûMOREûTHANûûOFû MARK TO MARKETûLOSSESûOVERûSEVERALûQUARTERS CENTRALûBANKûALLOWEDûBANKSûTOûSPREADû-4-û OUTSTANDINGû)'"S û2")SûDECISIONûhSUGGESTSûTHATû 4HEûYIELDûONû YEARû)'"SûDROPPEDûBPûTOû LOSSESûASû YEARû)'"SûCROSSEDûTHEûûLEVELû THEûAUTHORITIESûAREûBECOMINGûPROACTIVEûINûTHEIRû ûLASTû4UESDAYûAFTERûTHEû2ESERVEû"ANKûOFû AFTERûTHATûYEARSûTAPERûTANTRUM APPROACHûTOûRESOLVINGûSUPPLYDEMANDûISSUESv û )NDIAûGAVEûLENDERSûANûOPTIONûTOûSPREADû )NûTHEûPASTûSIXûMONTHS ûTHEûYIELDûONû .OMURAûSAIDûINûAûNOTEûLASTûWEEK PROVISIONINGûFORûMARK TO MARKETû-4- ûLOSSESû YEARû)'"SûSPIKEDûBYûMOREûTHANûBPûTOû 0RIORûTOûTHEûRALLY ûSTATE OWNEDûBANKSûWEREû ONûINVESTMENTSûHELDûINûAVAILABLE FOR SALEû!&3 û ûBEFOREûREVERSINGûCOURSEûTWOûWEEKSû EXPECTEDûTOûINCURûTREASURYûLOSSESûOFû2SBNû ANDûHELD FOR TRADINGû(&4 ûPORTFOLIOSûFORûTHEû AGOû/Nû-ARCHû û)'"SûMADEûTHEIRûSHARPESTû 53BN ûFORûTHEû*ANUARY -ARCHûQUARTERûDUEû QUARTERSûENDINGû$ECEMBERûANDû-ARCHû"Yû ONE DAYûGAINSûSINCEûûAFTERûTHEû TOûTHEûUPTRENDûINûYIELDS ûACCORDINGûTOû#REDITû &RIDAY ûTHEûBENCHMARKûYIELDûHADûFALLENûTOû GOVERNMENTûCUTûITSûBORROWINGûPROGRAMMEû 3UISSEûRESEARCH ûRAISINGûCONCERNSûOVERûTHEû 4HEûMOVE ûINûRESPONSEûTOûTHEûSYSTEMICûIMPACTû ANDûREBALANCEDûTHEûTRADITIONALLYûFRONT ADEQUACYûOFûTHEûGOVERNMENTSûBANKû OFûSHARPûINCREASESûINû)'"ûYIELDSûONûBANKS ûWASûAû LOADEDûFUNDINGûSCHEDULEûTOWARDSûTHEûSECONDû RECAPITALISATIONû)'"SûMAKEûUPûABOUTûûOFû DEPARTUREûFROMûTHEû2")SûPREVIOUSûSTAND HALFûOFûTHEû!PRIL -ARCHûlNANCIALûYEAR THEûINVESTMENTûPORTFOLIOSûOFûBANKS )Nû*ANUARY ûDEPUTYûGOVERNORû6IRALû!CHARYAû h4HEREûWASûAûFEARûTHATûPUBLIC SECTORûBANKSû 2")ûSAIDûTHEûPROVISIONINGûFORû-4-ûLOSSESû HADûDAMPENEDûHOPESûOFûANYûCENTRALûBANKû WOULDûSHYûAWAYûFROMûPARTICIPATINGûINû MIGHTûBEûSPREADûEQUALLYûOVERûUPûTOûFOURû MEASURESûTOûEASEûTHEûPAINûFROMûTREASURYû GOVERNMENTûBONDûAUCTIONSû4HEûRECENTû QUARTERS ûSTARTINGûFROMûTHEûQUARTERûINûWHICHû LOSSESûAND ûINSTEAD ûACCUSEDûLENDERSûOFûNOTû MEASURESûWILLûALLAYûFEARSûFORûBANKSûSINCEû2")û THEûLOSSûWASûINCURREDû HAVINGûPROPERûRISKûMANAGEMENTûINûPLACE HASûADDRESSEDûTHEIRûCONCERNSûOFû-4-ûLOSSES vû Krishna Merchant

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

write-downs and mark-to-market management figures cast into the UBS management stressed losses appeared to be betting that wilderness and the spectre of mass that much of the adverse this was true, although the bank’s redundancies still haunting the performance in its real-estate exposure to risky credits remains market, the banking industry is in assets had occurred as recently huge. disastrous shape. as March 2008, a view backed up Part of the share price rally was But in spite of a desperate by Deutsche Bank’s assertion last also attributed to the welcome willingness by equity investors and week that conditions had become change of roles at the top of the some bank management teams “significantly more challenging firm, with chairman Marcel Ospel to believe that the time is right during the last few weeks”. finally giving way to pressure and to draw a line under the crisis, Optimists argue that the industry withdrawing his plans to stand for re- broader indicators suggest that the has been here before, and has still election at the next AGM. The board situation is set to become far worse. gone on to thrive afterwards – From April 5 2008 issue is proposing as his replacement Peter The US$19bn write-down whether it be the junk bond crisis Ospel stands down after Kurer, who joined the bank in 2001 as announced by UBS last week of the late 1980s, the late 1990s’ US$19bn write-down group general counsel. took the bank’s total write-downs combination of the collapse of UBS senior management last Kicking off a conference call to related to the current crisis to Asian markets, the Russian default week did its best to portray the announce estimated first-quarter US$37.5bn, sweeping the firm to and the LTCM debacle, or the later bank’s latest eye-watering losses net losses of SFr12bn after US$19bn the top of the league table of losses bursting of the internet bubble. as the result of a kitchen-sink of write-downs and losses in US announced so far. The new write- Pessimists counter that the approach to write-downs that left real estate and structured finance downs doubled the bank’s total current situation is different and the bank in a strong position to positions, and unveiling a SFr15bn at a stroke, taking it well ahead shows evidence of far greater return to profitability. In spite of underwritten rights issue, Ospel of Merrill Lynch’s US$25.9bn and systemic weaknesses than previous continued and painful evidence of said that he had felt it necessary to Citi’s US$21.3bn. calamities. They also emphasise catastrophic errors of judgement, stay on long enough to put in place The announcement last week that the full impact of a downturn senior figures lined up to suggest a solution to the problems. by Deutsche Bank that it expected in the global real economy is yet that the market should draw a line to write down a further €2.5bn in to be felt, and will inevitably result under the firm’s problems. April fools the first quarter of this year took its in a further big hit to the banking Shareholders pushing the With write-downs approaching own write-downs to some US$7bn, industry in addition to the write- stock up 12% on the day of the US$200bn, a massive fall in making it the worst affected downs that have resulted from announcement of US$19bn in primary market activity, senior European firm apart from UBS. secondary market seizures.

20 International Financing Review April 7 2018 People &Markets

Spain’s Abanca eyes IPO in „ IN BRIEF DERIVATIVES PROBE next 3 years QATAR NATIONAL BANK is helping the country’s authorities with data and expertise to probe if ABANCA û3PAINSûNINTH LARGESTûBANKûBYûASSETS ûISû RETURNûONûTANGIBLEûEQUITYû2/4% ûATûû)TSû Qatar’s neighbours manipulated its markets, CONSIDERINGûANûINITIALûPUBLICûOFFERINGûATûSOMEû SOLVENCYûRATIOûWASû ûABOVEû%UROPEANû including credit default swaps, during a political POINTûOVERûTHEûNEXTûTHREEûYEARS ûITSûCHAIRMANû #ENTRALû"ANKûREQUIREMENTSûANDûONEûOFûTHEû stand-off last year, its CEO said. ANDûMAJORITYûOWNERû*UANû#ARLOSû%SCOTETûSAID THREEûHIGHESTûCAPITALûRATIOSûAMONGû3PANISHû Qatar’s central bank said in December it had 4HEû6ENEZUELANûBILLIONAIREûSAIDû!BANCAûWASû BANKS ûACCORDINGûTOû%SCOTET launched a legal investigation into attempts ALSOûSTUDYINGûAûPOTENTIALûACQUISITIONûOFûTHEû )NûTHEûNEXTûTHREEûYEARSûITûPLANSûTOûKEEPû by countries opposed to it to harm the Qatari 3PANISHûBRANCHûOFûSTATE OWNEDû0ORTUGUESEû 2/4%ûATûAROUNDûûANDûITSûCOREû4IERûû economy by manipulating the currency, securities LENDERû#AIXAû'ERALûDEû$EPOSITOSû"ANCOû#AIXAû CAPITALûRATIOûATûABOVEû and derivatives markets. QNB chief executive Ali 'ERALûHASûBEENûFORûSALEûSINCEû$ECEMBER h)Nû ûWEûWILLûFOCUSûONûMANAGINGû Ahmed al-Kuwari told Reuters there had been %SCOTETûOWNSûANûûCONTROLLINGûSTAKEûINû OURûSETTINGûTOûMAINTAINûHIGHûPROlTABILITYû unusual moves in Qatari CDS late last year. “The !BANCA ûWHICHûLASTûMONTHûAGREEDûTOûBUYû LEVELSûWITHûAûSOLIDûCAPITALûPOSITIONxûOURû behaviour was abnormal … the way it was moving $EUTSCHEû"ANKSûPRIVATEûANDûCOMMERCIALûCLIENTSû CAPITALûSTRENGTHûALLOWSûUSûTOûTAKEûADVANTAGEûOFû very fast, this is not normal behaviour. The dust BUSINESSûINû0ORTUGALûFORûANûUNDISCLOSEDûSUM GROWTHûOPPORTUNITIESûINûTHEûMARKET vûHEûSAID around the crisis settled after two months, but the !BANCASûSTRUCTUREûANDûGOVERNANCEû !BANCAûHASûCOMEûTOû0ORTUGALûhINûORDERûTOû CDS continued to go up for no reason,” he said, ALREADYûMETûTHEû%UROPEANûCRITERIAûFORûLISTEDû GROWv ûHEûSAID ûNOTINGûTHEûCOUNTRYSûhFANTASTICvû estimating the Qatari CDS market at US$21bn. COMPANIES û%SCTOTETûSAIDû)TSûPROlTABILITYû ECONOMICûRECOVERYûINûTHEûPASTûFOURûYEARSûAFTERû Al-Kuwari said QNB was cooperating with the WASûALSOûSTRONG ûBUTûNOWûWASûNOTûTHEûBESTû AûDEBTûCRISISûANDûAûDROPûINûTHEûUNEMPLOYMENTû central bank in its investigation and had been TIMEûTOûLAUNCHûAûSHAREûSALEûDUEûTOûLOWû RATEûBYûNEARLYûHALFûSINCEûTHEûCRISIS “supplying them with any information or data they INTERESTûRATESûPRESSURINGûMARGINS ûHEûSAID !BANCASûACQUISITIONûOFûTHEû$EUTSCHEû"ANKû asked us to supply them with”. h)ûTHINKûTHATûWITHINûTHREEûYEARSûWEûCANûDECIDEû BUSINESSûINû0ORTUGALûWILLûINCREASEûITSûLOANû TOûGOûTOûTHEûMARKETxû7EûAREûPRO MARKET ûWEû PORTFOLIOûANDûASSETSûUNDERûMANAGEMENTûBYû LIKEûTHEûCAPITALûMARKET vû%SCOTETûTOLDûREPORTERS õBN ûADDINGûûOFlCES ûMOSTLYûINû,ISBONûANDû DANISH CHANGE !BANCA ûWITHûASSETSûOFûõBNû53BN û 0ORTO ûTOûITSûNETWORKûOFûûBRANCHESûINû3PAIN DANSKE BANK has hired Christian Baltzer from MADEûAûPROlTûOFûõMûLASTûYEAR ûWITHûAû Sergio Goncalves insurer Tryg as its new chief financial officer and said it would reorganise its personal and business banking divisions. The Danish bank’s personal banking and business banking, which currently BOC, BoCom profits up as operate as separate business units, will be merged into two country organisations; Banking Denmark and Banking Nordic, covering Norway, Sweden economy improves and Finland. The changes were made a day after a senior #HINASûBIGûlVEûBANKSûLOOKûTOûHAVEûTURNEDûAû "OTHû"/#ûANDû"O#OMûREPORTEDûAûSLIGHTû Danske executive quit after the bank concluded CORNERûAFTERûBANK OF CHINA and BANK OF DECLINEûINûTHEIRû.0,ûRATIOSû"/#SûRATIOûSTOODû there should have been an earlier and deeper COMMUNICATIONSûBOTHûREPORTEDûANûUPSWINGûINû ATûûATûTHEûENDûOFû$ECEMBER ûDOWNûBPû inquiry into alleged money laundering at its PROlTSûFORû ûWRAPPINGûUPûTHEûANNUALû FROMûAûYEARûEARLIER ûWHILEû"O#OMSûRATIOûFELLû Estonian branch. A Danske Bank spokesman RESULTSûSEASON BPûTOû said the latest changes were not related to "/# û#HINASûFOURTHûLARGESTûBANKûBYûASSETS û "OTHû"/#ûANDû"O#OMûREPORTEDûANû the departure of Lars Morch, who has been SAIDûITSûPROlTûLASTûYEARûWASû2MBBNû INCREASEûINûLOANûDEMANDûANDûLOWûSINGLE DIGITû responsible for the Baltic operations of Denmark’s 53BN ûUPûûFROMûTHEûYEARûBEFOREû INCREASESûINûTOTALûASSETSûFORûTHEûFULLûYEAR biggest bank since 2012. "O#OM û#HINASûlFTHûLARGESTûBANK ûMADEûANû 0RESIDENTû8Iû*INPINGSûCRACKDOWNûONû ANNUALûPROlTûOFû2MBBN ûAûûINCREASEû SHADOWûBANKINGûHASûFAVOUREDûTHEûLARGERû BUTûABOVEûANALYSTSûEXPECTATIONS BANKSûDUEûTOûTHEûKNOCK ONûEFFECTûTHISûHASû INSURER INJECTION 4HEûLATESTûRESULTSûFOLLOWûONûTHEûHEELSûOFû HADûONûTHEûWHOLESALEûMARKET China’s banking and insurance regulator has #HINASûTHREEûLARGESTûLENDERSûnûINDUSTRIAL AND #HINASûBIGûlVEûBANKSûAREûNETûLENDERSûINû approved a Rmb60.8bn (US$9.67bn) capital COMMERCIAL BANK OF CHINA ûCHINA CONSTRUCTION THATûMARKET ûWHICHûHASûLEDûTOûAûWIDENINGû injection for ANBANG INSURANCE GROUP. The move BANK and AGRICULTURAL BANK OF CHINAûnûALLû GAPûINûPERFORMANCEûVERSUSûTHEûSMALLERû follows the government’s seizure of control REPORTINGûSTRONGERûYEARLYûEARNINGS LENDERSûTHATûRELYûONûSHORT TERMûBORROWINGû over Anbang in February and prosecution of its 4HEIRûIMPROVEDûPERFORMANCESûFOLLOWûAû FORûFUNDING chairman. DIFlCULTûCOUPLEûOFûYEARSûFORû#HINASûMAJORû "/#ûREPORTEDûAûSLIGHTûSTRENGTHENINGûINûITSû The money will come from a non-government BANKS ûHURTûBYûLOWERûNETûINTERESTûMARGINSû NETûINTERESTûMARGINûFORûTHEûYEAR ûUPûBPûTOû bailout insurance security fund for the insurance ANDûRISINGûNON PERFORMINGûLOANS û"O#OMûSAIDûITSû.)-ûSTOODûATûûATû industry, which will temporarily take a stake #HINASûECONOMYûHASûSTARTEDûTOûIMPROVE û YEAR END ûDOWNûBP ûALTHOUGHûTHEûBANKû in Anbang during the restructuring of its WHICHûHASûALLOWEDûDELINQUENTûBORROWERS û SAIDûTHATûITûHADûRISENûBYûBPûDURINGûTHEû shareholding, a government work group said. PARTICULARLYûINûTHEûSTEELûANDûMININGû FOURTHûQUARTERûANDûEXPECTEDûFURTHERû The insurer will start the selection of new INDUSTRIES ûTOûREGAINûTHEIRûPRICINGûPOWERûANDû IMPROVEMENTûTHISûYEAR private strategic investors as the capital injection THEIRûABILITYûTOûSERVICEûDEBT Thomas Blott takes place, the statement said.

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SSAR 25 Corporates 28 FIG 32 Covered Bonds 34 High-Yield 35 Structured Finance 36

„ FRONT STORY CORPORATES Corporate bond gravy train slows Five-year express ride coming to an end More expensive funding beckons

Some of Europe’s biggest money managers are therefore bought by investors when they "ARBE ûHEADûOFû%UROPEANûlXEDûINCOMEûATû are slashing exposure to companies’ bonds are pessimistic on the underlying asset. BNP Paribas Asset Management. and some are even shorting them, betting “We are also heavily underweight cash “Credit market pressure is more on the US that stress is building in a market that corporate bonds. Our benchmark is about a side, but it will eventually affect Europe as enjoyed impressive gains over the past half- third global corporate bonds, and we have well,” he added. decade of rock-bottom borrowing costs. slightly less than zero exposure overall,” International Monetary Fund data last Unease over the hefty prices for corporate Riddell added, referring to the Bloomberg year showed that the net leverage - debt - which fund managers say do not Barclays Global Aggregate index. measured through the ratio of net debt to REmECTûVULNERABILITYûTOûMARKETûSHOCKSû ûHASû Ebitda - of S&P 500 companies was at its meant many new bond issues have ROOTED IN STIMULUS highest level at the end of 2016 since before STRUGGLEDûTOûlNDûBUYERS ûWHENûUNTILû The corporate bond boom is rooted in the THEûlNANCIALûCRISIS RECENTLYûTHEYûWOULDûHAVEûmOWNûOFFûTHEû stimulus unleashed by global central banks Amundi, one of the world’s largest shelves. in the post-2008 years and after the 2011- investors, with assets under management of Aside from expensive valuations and 2012 euro crises. over €1.4trn, has not gone short but has miniscule yield spreads over “safe” As companies rushed to bond markets for scaled back corporate debt exposure. government debt, concerns centre around cheap cash, the ratios of credit to gross h7EûWEREûVERYûLONGûCREDITûONûTHEûLASTûlVEû high levels of leverage. And in Europe, the domestic product skyrocketed, hitting a or six years. We remain with longs in some European Central Bank looks set to end record high 210.5% in China and a seven- PARTSûOFûTHEûMARKET ûBUTûITûISûSIGNIlCANTLYû soon the stimulus programme under which year high of 152% in the United States, less than what we had in the past,” said it has bought €143bn in corporate bonds according to the Bank for International Gregoire Pesques, head of the global credit since early 2016. Settlements. investment team at Amundi. “There’s a big vulnerability in the The eurozone trend is now downwards corporate bond market at the moment,” but remains at a historically high 160%. SIGNS OF STRESS said Mike Riddell, a fund manager at Allianz Eurozone bond sales shot to €383.5bn last &ORûTHEûlRSTûTIMEûINûYEARS ûBORROWERSûAREû Global Investors, which manages €498bn of year - a 45% jump from 2013 levels, lNDINGûRESISTANCEûINûTHEûROUGHLYûõBN assets. according to Thomson Reuters data. plus-a-year market for European syndicated “In Europe, the ECB has been helping the BNP Paribas Asset Management, with corporate bond sales, the main means by market out, and in the US and in China, €569bn under management, is short which companies borrow money in the leverage is quite high. If you strip out the European credit, fearing contagion from lXEDûINCOMEûMARKET tech companies like Google, Apple and across the Atlantic. For instance, British information services Amazon that are sitting on massive cash “US corporates have increased their lRMû2ELXûANNOUNCEDûAûõMûDEBTûSALEûONû piles, the numbers are far worse.” leverage, but a lot of them have done it to March 15 but had to revise that down to ECB buying has driven euro corporate conduct share buybacks, so this market €500m. bond yield spreads to their tightest since the could come under pressure,” said Patrick In a market where it has been the norm GLOBALûlNANCIALûCRISIS ûWITHûSPREADSûOVERû for borrowers to see twice or three times as benchmark asset swaps dropping from HEADING OUT much demand as they are raising, this came 116bp at the start of 2016 to as low as 38bp WEEKLY EUROPEAN RETAIL FLOWS as something of a shock. in February, though it has widened since. (WEEK ENDING MARCH 28) Some bankers told Reuters that a

At the peak of ECB bond buying and US$bn equivalent couple of German investors recently optimism over the sector in 2016, the 0.2 declined to engage with new sales, citing the AVERAGEûYIELDûOFûTHEû)BOXXûNON lNANCIALSû 0.0 need for greater clarity on the outlook for -0.2 index fell as low was 0.69%. Of late, credit. -0.4 however, the yield has risen to 1.18%. -0.6 “Markets have been great for such a long Riddell said Allianz’s strongest conviction -0.8 time,” said a banker who manages bond view is for a bear market in corporate bonds. -1.0 sales for European companies. “Issuers need To express that, it is investing in credit -1.2 to brace themselves for more elevated -1.4 default swap indices such as the iTraxx spreads (over benchmark borrowing rates) -1.6 Europe Subordinated Financial Index and -1.8 going forward and for investors to be even IG in € IG in £ IG in US$ IG (ETFs) the CDX US High-Yield Index. more picky. It’s going to be a new way of A CDS is a derivative that effectively acts thinking.” as insurance against losses on bonds. They Source: BAML/EPFR Global Abhinav Ramnarayan, Pauline Renaud

International Financing Review April 7 2018 23 Generous deals help covered WEEK IN NUMBERS 7.07% market find firmer footing „ THE FALL IN THE GLOBAL ISSUANCE RUN RATE IN FIRST QUARTER 2018 Issuers inflate concessions to take size COMPARED WITH THE SAME PERIOD A YEAR AGO Covered bond issuers willing to pay up were people are starting to focus on what will 2.1 rewarded with a warm investor welcome happen in September with the ECB’s asset LASTûWEEK ûHELPINGûTHEûMARKETûlNDûAûlRMERû purchase programme,” said the second footing after a string of poorly received banker away from the deals. 2.0 deals. Whether other issuers follow the same COMPAGNIE DE FINANCEMENT FONCIER and ING path remains to be seen. COMMERZBANK has 1.9 BANK, which both paid roughly 7bp in ALREADYûPUTûAûmAGûINûTHEûSANDûFORûTHEûWEEKûOFû concessions, had multi-billion order books, April 9, having mandated Commerzbank, 1.8 contrasting with recent weeks when deals HSBC, Natixis, Nord/LB and SEB for a 10-year have either struggled or failed to sell. covered bond. 1.7 “Now that people are paying the right German paper is among the tightest in the Q1 2016 Q1 2017 Q1 2018 price, everything has calmed down and the sector and until now, issuers have been likes of ING Bank’s €1.75bn 10-year have largely unwilling to pay chunky concessions. gone phenomenally well,” said a banker off SBANKEN BOLIGKREDITT is also lining up a the trades. trade. The Norwegian newcomer has US$39.6bn #O&&ûWASûLASTûWEEKSûlRSTûISSUERûTOûADAPTû mandated Natixis, Nordea Markets, LBBW and „ THE SIZE OF THE ORDER BOOK FOR to the new market reality on Monday as it UniCredit for its debut, with investor GENERAL MILLS US$6.05bn EIGHT- SOLDûAûõBNûlVE YEARûATûBPûTHROUGH meetings starting on April 13. TRANCHE OFFERING THAT WILL FUND THE The generous premium enabled the issuer The MORTGAGE SOCIETY OF FINLAND will hit the COMPANY’S PURCHASE OF BLUE BUFFALO to land the largest covered bond issue since road on April 9 for a €250m trade via DZ PET PRODUCTS. INVESTORS WERE January, though it was swiftly beaten by ING Bank, Nordea and OP Corporate Bank. ATTRACTED BY THE RELATIVE VALUE "ANKSûlRSTûCOVEREDûINûNEARLYûlVEûYEARSû4HEû “Things will widen out. You don’t normally €1.75bn 10-year attracted one of the largest get a situation where spreads are so tight and order books of 2018, of €2.3bn. rates are so low. Of course, the US-China trade Encouragingly, those concessions peaked war will mean more volatility going forward, 74bp real money investor interest, with only 24% which will persist throughout this year,” said „ THE SPREAD BETWEEN TWO AND OFû).'ûGOINGûTOûCENTRALûBANKSûANDûOFlCIALû the second banker. 30-YEAR TREASURIES, COMPARED WITH institutions, a much smaller portion than 100bp IN MID-FEBRUARY, HIGHLIGHTING A the 53% they took of Rabobank’s 10-year in RAMPING UP SELL-OFF IN FRONT-END TREASURIES ON January. The sterling market is also cranking up the RATE HIKE EXPECTATIONS And in another sign of market resurgence, size, with NATIONWIDE BUILDING SOCIETY offering bp 120 ABN AMRO priced the tightest and largest 20- its largest sterling covered issue in recent year covered bond offering in memory last times, taking £1bn on a £1.15bn book for its Wednesday. It paid a 5bp concession for an lVE YEARû&2. 100 €1.25bn issue that was priced at 8bp over The issuer had not brought a sterling mid-swaps. covered since 2016 and managed to squeeze “Clearly, size was a factor – it would not from the high 20s area starting point to a 80 have cost them so much if they had gone lNALûTHREE MONTHû,IBORûPLUSûBP and done €750m,” said a second banker SANTANDER UK budged slightly on price with away from the deal. its £1bn three-year covered FRN out last Friday, 60 lXINGûTHEûSPREADûATûBPûAFTERûBPûAREAû)04S û 2/1/18 2/2/18 2/3/18 2/4/18 SECONDARY WAIVERS and leaving 2bp on the table to ensure a The bigger new issue concessions have not £1.5bn-plus book. RBC Capital Markets, Santander been without consequences and, as in the and TD Securities ran the deal. 20% senior market, have pushed secondary levels The trade was also helped by the recent „ THE AMOUNT OF CSPP-ELIGIBLE PAPER wider. lack of three-year sterling supply. THE ECB WAS ALLOCATED ON AVERAGE “Although paying up is a logical approach, “A number of investors are keen to see IN FEBRUARY IN THE PRIMARY MARKET, this will have an impact on outstanding issuance a little shorter down the curve, ACCORDING TO JP MORGAN, WHICH WAS spreads and follow-on deals now that more given the volatility,” said a lead. AN ALL-TIME HIGH than one issuer has done this,” said a third All eyes will be on whether SPAREBANK 1 banker away from all the deals. BOLIGKREDITT will follow the same price pattern Rabobank’s €1.25bn 10-year, which was FORûITSûUPCOMINGûSTERLINGûlVE YEARûCOVEREDû quoted at less 9bp on March 20, has since BENCHMARK ûEITHERûAûlXEDûORû&2.ûISSUE €238m widened to less 6bp, according to Tradeweb. The Norwegian issuer has mandated Credit „ THE AMOUNT THE ECB BOUGHT “As well as size, I think there is a little bit Suisse, NatWest Markets and RBC for a THROUGH ITS CSPP IN TRADES SETTLED of repricing happening, considering how roadshow that begins on April 9. IN THE WEEK UP TO MARCH 30 tight spreads have become and the fact that Merle Crichton In total, it has bought €148.705bn

24 International Financing Review April 7 2018 BONDS SSAR

extremely well,” another syndicate banker ASûHIGHûASûWEVEûSEENûINûCOVEREDS vûTHEûlRSTû said. banker said. “SSA did reprice at the SSAR “Thirty-years still offer value to investors, beginning of the year, whereas covereds so I wouldn’t rule it out. At the end of the hadn’t. It’s encouraging to see the good day, they only have €5bn to do, they have a demand we’ve had in covereds.” EUROS lot of windows and they can be selective.” !".ûATTRACTEDûAûlNALûBOOKûOFûOVERûõBN û At €8.5bn in Q2, the funding target for while ING on Thursday printed a €1.75bn FIELD WIDE OPEN FOR EFSF’S RETURN EFSF/ESM is the smallest quarterly 10-year on €2.35bn of demand. requirement in 2018. EFSF should be able to leverage on the The EUROPEAN FINANCIAL STABILITY FACILITYSûlRSTû A third banker was less bullish however. lesser EFSF/ESM supply in 2018 compared to transaction since February will come against “The 2040 tap worked well but the last year. By this point in 2017, they had a untested market backdrop for euro market’s rallied since then and there’s quite raised a combined €21bn in the syndicated benchmarks, though the borrower will at a few accounts that are asking themselves market versus the €13.5bn from EFSF only least have a wide range of choices available. where rates will go from here,” he said. this year. !FTERûAûSTRONGûlRSTûTWOûMONTHS ûPUBLICû Other issuers will likely look to take sector euro issuance in recent weeks has WHAT’S THE PREMIUM? advantage of the liquid conditions in the slowed to almost half its previous run rate. How much of a premium EFSF pays will be market. There is no shortage of candidates. Aside from a €3.5bn July 2036 linker for closely watched. Concessions have risen in SPAIN, for example, is looking at a possible France on March 28, there has not been a RECENTûWEEKSûFORûCORPORATESûANDûlNANCIALû 15-year syndicated linker. IRELAND has also €1bn-plus benchmark since KfW’s €4bn issuers, including those selling covered said it would conduct its second syndication February 2023 in mid-March. bonds. of the year in Q2. “There hasn’t been much in primary Compagnie de Financement Foncier, for ITALY is another possible, depending on APARTûFROMûlNANCIALSûANDûCOVEREDS ûSOûTHEû EXAMPLE ûPAIDûSOMEûBPûFORûITSûõBNûlVE the political situation and how BTPs fare. market is untested,” said a syndicate year last Monday, though that allowed it to banker. print the largest deal in the sector since “Also, the picture is a bit complicated January. STERLING because even though there’s loads of ABN AMRO, which priced the tightest and redemptions and coupon payments, largest 20-year covered last Wednesday - EIB BACK IN STERLING DESPITE investors saw much higher rates in February, €1.25bn at swaps plus 8bp - offered around SHRINKING LOAN BOOK so we’ll have to see if they want to buy here.” 5bp of concession. April coupon payments are €29bn, “NIPs might be more elevated in SSA than The EUROPEAN INVESTMENT BANK priced its fourth according to Citigroup research, the highest they have been but I don’t think they will be sterling issue of 2018 last week, taking to in H1, with around half coming from France. Redemptions total €101bn from ALL INTERNATIONAL BONDS (ALL CURRENCIES) ALL BONDS IN EUROS Germany, France, Spain, the Netherlands BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 and Italy, the third largest month in 2018. Managing No of Total Share Managing No of Total Share But while there is a lot of liquidity to go bank or group issues US$(m) (%) bank or group issues €(m) (%) back into the market, rates are lower. Ten- 1 JP Morgan 292 86,818.08 7.5 1 SG 85 25,356.19 6.7 year Bunds were yielding 0.52% last 2 Citigroup 288 79,470.03 6.9 2 BNP Paribas 98 25,006.64 6.6 Thursday, according to Thomson Reuters 3 Barclays 219 71,774.36 6.2 3 Barclays 73 22,228.08 5.9 data, down from the high of just inside 4 BAML 229 64,928.59 5.6 4 Deutsche Bank 101 21,426.20 5.7 0.81% hit in early February. 5 Goldman Sachs 166 64,907.82 5.6 5 UniCredit 92 20,822.05 5.5 Agence France Tresor sold a relatively 6 HSBC 278 59,071.84 5.1 6 Credit Agricole 74 20,594.24 5.5 slim €7.665bn in long-dated OATs last week, 7 Deutsche Bank 226 51,241.71 4.4 7 HSBC 104 20,444.47 5.4 towards the bottom end of the €7.5bn- 8 BNP Paribas 194 49,494.64 4.3 8 JP Morgan 68 19,961.12 5.3 €8.5bn targeted range. And while the results 9 SG 127 38,106.09 3.3 9 Citigroup 59 16,505.75 4.4 suggested a healthy sale overall, the small 10 Morgan Stanley 164 37,839.31 3.3 10 Goldman Sachs 47 16,474.11 4.4 lLLûADDEDûTOûTHEûQUESTIONûOVERûDEMANDûFORû Total 1,535 1,154,440.34 Total 469 376,664.59 long-end OAT auctions. Including Euro, foreign, global issues. Excluding equity-related debt, Including Euro-preferreds. Excluding equity-related debt, US Global ABS/MBS. US Global ABS/MBS. ”EFSF might look at the long end, it makes sense, the 2040 has performed Source: Thomson Reuters SDC code: J1 Source: Thomson Reuters SDC code: N1

EUROPEAN SOVEREIGN BOND AUCTION RESULTS WEEK ENDING APRIL 5 2018 Pricing date Issuer Size Coupon (%) Maturity Average Yield (%) Bid-to-cover Apr 4 2018 Germany €2.4576bn 0.00 Apr 14 2023 -0.10 1.66 Apr 4 2018 UK £2.75bn 0.75 Jul 22 2023 1.094 2.19 Apr 5 2018 Spain €1.006bn 0.05 Jan 31 2021 -0.232 3.08 Apr 5 2018 Spain (ei) €625m 0.65 Nov 30 2027 0.297 1.90 Apr 5 2018 Spain €1.362bn 1.40 Apr 30 2028 1.148 1.51 Apr 5 2018 Spain €2.091bn 2.70 Oct 31 2048 2.225 1.27 Apr 5 2018 France €4.197bn 0.75 May 25 2028 0.74 1.94 Apr 5 2018 France €1.091bn 1.25 May 25 2034 1.14 1.80 Apr 5 2018 France €1.096bn 1.75 Jun 25 2039 1.34 1.76 Apr 5 2018 France €1.281bn 2.00 May 25 2048 1.58 1.85 Source: IFR

International Financing Review April 7 2018 25 ALL INTERNATIONAL BONDS (1/1/2018–31/3/2018) COUNTRY VS TYPE OF INSTRUMENT All issues Straights FRNs Convertibles No of issues Amount US$(m) No of issues Amount US$(m) No of issues Amount US$(m) No of issues Amount US$(m) Germany 184 119,889 145 98,005 39 21,884 – – France 106 87,548 84 73,057 19 13,146 3 1,345 Luxembourg 64 54,187 59 52,772 5 1,415 – – United Kingdom 98 73,453 63 47,314 34 25,808 1 330 Spain 39 53,528 26 46,960 11 5,653 2 915 Italy 30 29,616 23 26,448 7 3,168 – – Belgium 13 27,019 11 26,273 1 500 1 245 Netherlands 71 34,643 54 25,327 17 9,316 – – Sweden 45 29,179 30 24,989 15 4,190 – – Switzerland 20 24,083 14 20,123 4 3,189 2 771 Norway 35 13,750 28 12,023 7 1,727 – – Finland 27 13,032 21 11,955 6 1,076 – – Austria 16 11,158 14 10,407 1 12 1 739 Ireland 9 9,636 8 9,351 1 286 – – Russian Federation 8 8,032 8 8,032 – – – – Portugal 2 5,133 2 5,133 – – – – Denmark 7 4,526 5 4,422 2 104 – – Greece 3 4,381 3 4,381 – – – – Turkey 6 4183.8 6 4183.8 – – – – Slovenia 2 3,312 2 3,312 – – – – Romania 1 2,477 1 2,477 – – – – Poland 2 1,854 2 1,854 – – – – Iceland 4 760 3 748 1 13 – – Guernsey 2 686 1 671 – – 1 14 Jersey 2 636 2 636 – – – – Cyprus 1 250 – – – – 1 250 Belarus 1 600 1 600 – – – – Macedonia 1 592 1 592 – – – – Azerbaijan 1 497 1 497 – – – – Kazakhstan 2 486 2 486 – – – – Slovak Republic 1 386 1 386 – – – – Isle of Man 1 300 1 300 – – – – Hungary 1 282 1 282 – – – – Europe 805 620,094 623 523,996 170 91,488 12 4,610 United States 347 283,224 265 230,559 81 52,158 1 507 Canada 73 50,342 51 40,143 18 10,011 4 189 North America 420 333,567 316 270,702 99 62,169 5 696 Australia 36 18,440 25 11,481 10 6,675 1 284 New Zealand 5 1,594 5 1,594 – – – – Australasia 41 20,034 30 13,075 10 6,675 1 284 Mexico 10 12,416 10 12,416 – – – – Brazil 11 7,012 11 7,012 – – – – Bermuda 4 3,122 4 3,122 – – – – Chile 2 3,027 2 3,027 – – – – Ecuador 1 3,000 1 3,000 – – – – Dominican Republic 1 1,818 1 1,818 – – – – Cayman Islands 4 1,810 3 1,409 1 401 – – Venezuela 2 1,298 2 1,298 – – – – Argentina 3 1,259 3 1,259 – – – – Bahamas 2 818 2 818 – – – – Paraguay 1 530 1 530 – – – – British Virgin Isls (UK) 1 350 1 350 – – – – Peru 1 350 1 350 – – – – Honduras 1 214 1 214 – – – – Colombia 1 78 1 78 – – – – LatAm/Caribbean 45 37,102 44 36,701 1 401 – – Israel 6 7,889 6 7,889 – – – – Oman 2 6,952 2 6,952 – – – – United Arab Emirates 17 6,802 15 6,527 2 275 – – Saudi Arabia 3 1,844 3 1,844 – – – – Qatar 7 2,154 4 1,576 3 578 – –

26 International Financing Review April 7 2018 BONDS SSAR

ALL INTERNATIONAL BONDS (1/1/2018–31/3/2018) COUNTRY VS TYPE OF INSTRUMENT CONTINUED All issues Straights FRNs Convertibles No of issues Amount US$(m) No of issues Amount US$(m) No of issues Amount US$(m) No of issues Amount US$(m) Bahrain 1 1,000 1 1,000 – – – – Middle East 36 26,641 31 25,788 5 853 – – China 81 45,791 73 38,035 6 5,508 2 2,249 Japan 44 25,279 27 19,917 11 4,049 6 1,313 Hong Kong 38 15,046 36 13,918 1 128 1 1,000 Philippines 20 14,416 17 14,116 3 300 – – South Korea 26 7,472 17 5,241 8 1,947 1 284 Indonesia 7 4,798 7 4,798 – – – – India 11 4,556 11 4,556 – – – – Singapore 9 3,921 6 2,500 3 1,421 – – Thailand 3 900 2 700 – – 1 200 Sri Lanka 1 500 1 500 – – – – Malaysia 2 471 1 150 – – 1 321 Taiwan 1 100 – – – – 1 100 Myanmar (Burma) 1 3 – – – – 1 3 Asia-Pacific 244 123,252 198 104,430 32 13,352 14 5,470 Ivory Coast 11 4,618 11 4,618 – – – – Egypt 1 4,000 1 4,000 – – – – Nigeria 1 2,500 1 2,500 – – – – Senegal 1 2,240 1 2,240 – – – – Kenya 1 2,000 1 2,000 – – – – Uganda 1 800 1 800 – – – – South Africa 1 820 – – 1 820 – – Africa 17 16,978 16 16,158 1 820 – – Total 1,597 1,177,668 1,258 990,850 313 175,758 26 11,059 Source: Thomson Reuters

ALL INTERNATIONAL BONDS (1/1/2018–31/3/2018) CURRENCY VS TYPE OF INSTRUMENT All issues Straights FRNs Convertibles No of issues Amount US$(m) No of issues Amount US$(m) No of issues Amount US$(m) No of issues Amount US$(m) US Dollar 711 608,328 561 523,529 140 80,725 10 4,075 Euro 487 459,932 357 388,210 122 68,787 8 2,935 British Pound 92 52,933 58 33,389 32 19,527 2 17 Canadian Dollar 15 11,964 8 8,870 3 2,905 4 189 Australian Dollar 93 10,933 88 9,617 5 1,316 – – Chinese Renminbi 32 7,022 32 7,022 – – – – Swiss Franc 28 5,809 26 5,290 1 214 1 305 Japanese Yen 25 4,478 19 3,442 1 31 5 1,006 Swedish Krona 45 4,129 32 2,849 13 1,280 – – Hong Kong Dollar 29 3,979 26 1,602 1 128 2 2,249 New Zealand Dollar 12 2,732 12 2,732 – – – – Norwegian Krone 16 1,287 11 884 5 403 – – Dominican Repub Peso 1 818 1 818 – – – – Indian Rupee 7 642 7 642 – – – – Indonesian Rupiah 3 443 3 443 – – – – Polish Zloty 1 443 – – 1 443 – – Russian Rouble 2 431 2 431 – – – – Turkish Lira 8 430 8 430 – – – – Mexican Peso 7 378 7 378 – – – – South Korean Won 1 284 – – – – 1 284 Brazilian Real 5 162 5 162 – – – – South African Rand 2 62 2 62 – – – – Argentine Peso 1 26 1 26 – – – – Malaysian Ringgit 1 13 1 13 – – – – Ghanaian Cedis 1 10 1 10 – – – – Total 1,625 1,177,668 1,268 990,850 324 175,758 33 11,059 Source: Thomson Reuters

International Financing Review April 7 2018 27 £3bn the amount it has raised despite a This is despite a dramatic shrinking of EIB The country’s smallest self-governing shrinking lending book in the currency. LENDINGûINûTHEû5+û)TSûSOLEûlNANCINGûTOTALLEDû internal territory sold a A$525m 2.5% 10- The supranational printed a no-grow €1.8bn-equivalent in 2017, down almost 74% year bond offering in May 2016, priced £500m March 2025 benchmark via Barclays, versus 2016, while total investment of the 35.5bp wide of ACGBs. Deutsche Bank and HSBC at Gilts plus 33bp, in EIB group was €2.1bn. line with plus 33bp area guidance and IPTs. Overall, the EIB’s presence in the sterling “The cross-currency basis and swap market has been on a steadily declining spreads make the sterling market attractive path, from £8.25bn in 2013 to £6.875bn in to issuers right now,” said a lead. “It started 2014, £6.775bn in 2015, and £6bn in 2016. CORPORATES before Easter, but market conditions were a “That makes them more of an attractive bit softer then, so no one wanted to do asset as they become scarcer,” the lead said. anything. The arbitrage is not as good now “It’s a name everyone likes. It helps that it’s US DOLLARS as it was then, but it’s still attractive.” Aû,EVELûûASSETûWITHûTHEû"ANKûOFû%NGLANDv The seven-year sterling/euro basis swap Away from EIB, KFW came to the sterling INVESTORS DEVOUR GENERAL has improved to 25.5bp from around 22bp market, pricing a £100m tap of its 1.375% MILLS M&A BOND in late February. February 2021 via Barclays and RBC at 24bp The Gilts plus 33bp reoffer spread equated to over Gilts. Books closed over £100m. The tap Investors placed over US$39bn of orders SOMEûBPûOVERûSTERLINGû,IBORû4HATûINûTURNûCAMEû took the issue size to £1.45bn. on Tuesday for GENERAL MILLS US$6.050bn OUTûAROUNDû%URIBORûLESSûBP ûORûROUGHLYûmATû eight-part bond that will fund the to equivalent maturity EIB euro paper. company’s purchase of Blue Buffalo Pet Books had passed £500m at the last NON-CORE CURRENCIES Products. update for the issue, which refreshed that The overwhelming response, despite part of the EIB curve. The current 2025 ACT READIES 10-YEAR BENCHMARK ongoing concerns about leverage and marker has a 5.50% coupon and priced way market volatility, was mainly due to the back in April 2000. AUSTRALIAN CAPITAL TERRITORY, rated AAA (S&P), deal’s bookbuilding strategy. The £3bn EIB has raised in sterling year to has hired ANZ, UBS and Westpac as joint lead The Cheerios cereal maker announced date almost matches its full-year 2017 total MANAGERSûFORûANû!USTRALIANûDOLLARûlXED RATEû the trade early on Tuesday at initial price of £3.45bn, according to IFR and EIB data. 10-year benchmark bond issue. talk levels which implied new issue

ALL SUPRANATIONAL BONDS IN EUROS MUNICIPAL, CITY, STATE, PROVINCE ISSUES IN EUROS ALL US DOLLAR FIXED-RATE GLOBALS BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 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 US$(m) (%) 1 Credit Agricole 7 3,952.63 12.5 1 DGZ-DekaBank 13 2,165.88 16.8 1 JP Morgan 58 26,194.99 11.6 2 UniCredit 5 3,719.95 11.8 2 UniCredit 14 1,658.70 12.9 2 BAML 62 25,586.48 11.3 3 Barclays 5 3,581.26 11.3 3 LBBW 11 1,410.02 10.9 3 Goldman Sachs 42 22,708.87 10.1 4 Commerzbank 5 3,511.72 11.1 4 HSBC 9 1,271.21 9.9 4 Barclays 36 20,243.22 9.0 5 JP Morgan 3 2,302.06 7.3 5 Nord/LB 9 1,037.86 8.1 5 Citigroup 61 19,875.83 8.8 6 Goldman Sachs 3 2,218.37 7.0 6 Deutsche Bank 7 688.21 5.3 6 Wells Fargo 34 14,878.12 6.6 7 Deutsche Bank 5 1,941.70 6.2 7 JP Morgan 3 443.59 3.4 7 Morgan Stanley 31 10,469.65 4.6 8 SG 3 1,905.44 6.0 8 Barclays 3 407.50 3.2 8 Deutsche Bank 22 8,536.96 3.8 9 BAML 3 1,695.69 5.4 9 Cooperatieve Rabobank 1 403.77 3.1 9 RBC 21 8,033.75 3.6 10 NatWest Markets 1 1,481.08 4.7 =9 Credit Agricole 1 403.77 3.1 10 TD Securities 24 7,855.29 3.5 Total 25 31,556.91 Total 40 12,883.39 Total 126 225,682.23

Excluding ABS/MBS. Excluding ABS/MBS. Excluding equity-related debt, ABS/MBS. Source: Thomson Reuters SDC code: N5 Source: Thomson Reuters SDC code: N7 Source: Thomson Reuters SDC code: O5

ALL INTERNATIONAL US$ BONDS ALL SOVEREIGN BONDS IN EUROS ALL AGENCY BONDS IN EUROS BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 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 €(m) (%) 1 JP Morgan 198 56,929.26 9.7 1 Barclays 10 8,509.20 12.0 1 HSBC 11 3,498.07 10.9 2 Citigroup 215 56,542.45 9.7 2 Citigroup 13 8,121.10 11.5 2 UniCredit 4 2,726.56 8.5 3 BAML 172 46,433.31 7.9 3 JP Morgan 10 7,911.91 11.2 3 SG 9 2,661.50 8.3 4 Goldman Sachs 114 43,875.50 7.5 4 NatWest Markets 5 6,161.45 8.7 4 BNP Paribas 5 2,425.45 7.6 5 Barclays 123 40,770.60 7.0 5 BNP Paribas 9 5,158.66 7.3 5 Goldman Sachs 3 2,099.74 6.6 6 Wells Fargo 101 29,785.24 5.1 6 HSBC 6 4,187.31 5.9 6 Commerzbank 3 2,015.55 6.3 7 Morgan Stanley 115 29,404.73 5.0 7 SG 6 3,430.40 4.8 7 Credit Agricole 7 1,889.06 5.9 8 HSBC 112 24,800.91 4.2 8 Santander Global 4 3,428.70 4.8 8 JP Morgan 7 1,879.68 5.9 9 Deutsche Bank 97 21,864.91 3.7 9 ING 3 3,087.00 4.4 9 Deutsche Bank 7 1,618.75 5.1 10 Credit Suisse 97 19,516.05 3.3 10 Goldman Sachs 5 2,858.95 4.0 10 Natixis 5 1,458.04 4.6 Total 643 584,986.81 Total 21 70,794.87 Total 41 32,018.59

Including Euro, foreign and global issues. Excluding equity-related debt, Excluding ABS/MBS. Excluding equity-related debt. Including publicly owned institutions. US Global ABS/MBS.

Source: Thomson Reuters SDC code: O1 Source: Thomson Reuters SDC code: N4 Source: Thomson Reuters SDC code: N6

28 International Financing Review April 7 2018 BONDS CORPORATES

PREMIUMSûOFûBP BPûACROSSûSIXûlXED RATEû Mills to diversify within the consumer TRADERSûWHOûCLAIMEDûlNANCIALûLOSSESûOVERû TRANCHESûWITHûMATURITIESûOFûTHREE ûLONGûlVE û sector, he said. Syngenta’s decision to commercialise a seven, 10, 20 and 30 years. Also on offer “The company is going from A to Triple B - GENETICALLYûMODIlEDûSTRAINûOFûCORNûBEFOREû WEREûTHREE YEARûANDûLONGûlVE YEARûmOATERS but with reason,” Kimball said. China approved it for import. The company then leveraged on the Syngenta paid the farmers close to ENSUINGûINVESTORûDEMANDûTOûPRICEûTHEûlXED SYNGENTA TO START MARKETING AGAIN US$1.5bn to settle, but the payment rate notes some 25bp-40bp tighter than IPTs. threatened to derail its investment-grade 4HEûNEWûISSUEûPREMIUMSûWEREûABOUTûmATûTOû Agribusiness SYNGENTA will begin marketing ratings. 2bp at launch. a new investment-grade corporate bond deal Fitch (BBB) and S&P (BBB-) put their The solid reception was a far cry from the Monday, several months after it was forced ratings at risk of downgrade, citing concerns subdued scenes when Campbell Soup came to shelve a US$7bn trade. about the payment and whether the to the market with its M&A bond two weeks The split-rated Swiss company (Ba2/BBB-/ Chinese government would support ago. BBB) is looking to tap both the US dollar and litigation liabilities. Then, the soup giant only managed to pull euro markets, with marketing set to begin "UTûBOTHûAGENCIESûHAVEûSINCEûAFlRMEDû in US$11.5bn of orders for its US$5.3bn deal Monday April 9, according to a mandate their ratings on the company. TOûlNANCEûITSûACQUISITIONûOFûSALTYûSNACKSû seen by IFR. S&P analysts said last month they MAKERû3NYDERS ,ANCE BNP Paribas, Citigroup, Credit Suisse and expected ChemChina, and indirectly the The difference partly came down to price, HSBC will be coordinating. government of China, to ensure “timely and one investor said. The company will hold investor meetings full payment of Syngenta’s debt Campbell priced its 10-year bonds at in Asia and Europe and calls in the United obligations”. Treasuries plus 130bp, while General Mills States, according to a banker close to the Previously, the Financial Times had started bookbuilding with 10-year price talk deal. reported that China would not directly of plus 170bp area, he noted. The US dollar component will be a intervene to help with the lawsuits. “The level was just wrong on Campbell,” benchmark multi-tranche trade with The new bond deal could be around he said. maturities out to 30 years. US$5bn, according to a Reuters interview The result seemed to show that investors In the euro market, Syngenta is hoping to with Syngenta’s CFO in February. were not necessarily perturbed by S&P and BRINGûAûlXED RATEûSENIORûUNSECUREDû2EGû3û Moody’s decision to cut General Mills’ transaction with a maturity of three to eight INVESTORS EMBRACE SALESFORCE ratings by one and two notches, years. It is targeting a minimum size of BOND DEBUT respectively, to BBB and Baa2 on concerns €500m. about leverage after the Blue Buffalo “It’s a similar exercise to the previous Investors placed US$9bn of orders for cloud acquisition. bond, but there was outstanding litigation computing company SALESFORCE.COM’s debut At the time, S&P calculated that leverage that had to be deciphered,” the banker said. bond on Thursday, a US$2.5bn two-part would increase to 4.5 times from 3.2 times “Now that’s been settled, Syngenta is TRANSACTIONûTOûHELPûlNANCEûITSûACQUISITIONûOFû as a result of the tie-up. coming back to the market.” MuleSoft. “Ratings are not the full indicator of Syngenta had to pull a US$7bn bond The San Francisco-based company, rated creditworthiness. You have be extremely offering in September. After starting to A3/A-, shrugged off technology sector cognisant of what you’re buying and do your market the deal on September 11, lead banks WEAKNESSûINûEQUITIESûTOûTIGHTENûITSûNEWûlVEû own homework in this environment,” said twice postponed the deal’s announcement and 10-year bonds by 17.5bp from initial Scott Kimball, senior portfolio manager at before putting the bond on hold. levels to launch. BMO Global Asset Management. That offering had been intended to help The bond had rarity value going for it, as “With General Mills, you’re looking at a lNANCEû#HEM#HINASû53BNûACQUISITIONû ITûWASûTHEûlRSTûTIMEûTHEûCOMPANYûHADûTAPPEDû name that is uplevering, but in a growth- of Syngenta - the largest ever takeover by a the debt market in its near two-decade orientated move.” Chinese company. history. The company’s purchase of Blue Buffalo, a But investors balked at participating “Tech is a sector in which diversity is leader in pet products, will allow General BECAUSEûOFûLAWSUITSûlLEDûBYûFARMERSûANDû valued a lot,” Jason Shoup, senior portfolio

ALL INV-GRADE US CORPORATE BONDS ALL US INVESTMENT GRADE CORPORATE DEBT ALL CORPORATE BONDS IN EUROS BOOKRUNNERS: 1/1/2018–31/3/2018 (EXCLUDING SOLE SELF FUNDED DEALS) BOOKRUNNERS: 1/1/2018–31/3/2018 Managing No of Total Share BOOKRUNNERS: 1/1/2018–31/3/2018 Managing No of Total Share bank or group issues US$(m) (%) Managing No of Total Share bank or group issues €(m) (%) 1 Morgan Stanley 14 3,700.00 11.6 bank or group issues US$(m) (%) 1 BNP Paribas 43 7,961.94 8.9 2 JP Morgan 20 2,925.38 9.1 1 JP Morgan 107 33,126.80 11.9 2 SG 34 6,831.33 7.6 3 BAML 18 2,579.88 8.1 2 BAML 99 28,046.59 10.1 3 Goldman Sachs 21 6,429.48 7.2 4 Barclays 13 2,409.85 7.5 3 Citigroup 98 24,860.31 8.9 4 UniCredit 30 6,126.10 6.8 5 Wells Fargo 19 2,381.74 7.4 4 Goldman Sachs 64 23,662.82 8.5 5 Deutsche Bank 35 5,545.45 6.2 6 Citigroup 14 2,119.88 6.6 5 Barclays 54 21,251.22 7.6 6 HSBC 35 4,737.64 5.3 7 Goldman Sachs 8 1,721.83 5.4 6 Morgan Stanley 73 18,730.32 6.7 7 Credit Agricole 28 4,625.57 5.1 8 Mizuho 12 1,437.64 4.5 7 Wells Fargo 69 18,247.03 6.6 8 JP Morgan 26 4,452.43 5.0 9 US Bancorp 13 1,060.80 3.3 8 Mizuho 44 9,037.09 3.2 9 Barclays 23 3,840.18 4.3 10 MUFG 7 1,058.19 3.3 9 Deutsche Bank 32 8,954.86 3.2 10 BAML 21 3,724.41 4.1 Total 47 32,028.87 10 Credit Suisse 38 8,502.14 3.1 Total 133 89,852.89

Excluding equity-related debt, ABS/MBS, all foreign issues, global issues Total 238 278,301.54 Excluding equity-related debt. FIGs, ABS/MBS. and non corporates.

Source: Thomson Reuters SDC code: F6a Source: Thomson Reuters SDC code: F09a Source: Thomson Reuters SDC code: N8

International Financing Review April 7 2018 29 MANAGERûATû,EGALûû'ENERALû)NVESTMENTû 4HEû53BNûlVE YEARûBONDSûCARRYûAûSPECIALû US$2.2bn of orders for its US$500m Management America, told IFR. mandatory redemption clause that obliges investment-grade bond, leaving it over four Issuance in the sector tends to be very the issuer to redeem them at 101 if the times covered. concentrated, with extreme weightings in company fails to complete the acquisition Moody’s, which assigned Dollar Tree’s bonds issued by huge companies such as by April 20 2019. The SMR was not included new print a rating of Baa3, said it views the Apple and Microsoft, he said. on the US$1.5bn 10-year. dollar store section favourably. And with debt issuance from tech Bank of America Merrill Lynch and JP Morgan “It will continue to grow, given its low companies expected to be down this year were active bookrunners on the deal. price points and convenient locations, thanks to repatriation, investors jumped at especially for cash-constrained consumers,” the chance to add a new name from the INVESTORS SNAP UP DOLLAR TREE BOND analysts at the ratings agency said on sector. Thursday. “Any tech issuance is a certain DOLLAR TREE’s US$4bn four-part bond was 4HEû53Mû.#ûmOATERûWASûAûNOTABLEû opportunity to add on the bid side,” Shoup over three times covered on Thursday, feature of the Dollar Tree offering, as said. “There won’t be a lot of opportunity to showing there is still a bid for the right callable bonds were a relatively rare sight in do that through the remainder of the year.” names in retail. investment-grade corporates until last year. 53ûTECHûlRMSûSUCHûASû!PPLEûHAVEûAROUNDû The discount retailer (Baa3/BBB-) But borrowers have been using the format US$700bn of cash held offshore, which is approached investors with three tranches of as a way to provide themselves with an SIGNIlCANTLYûGREATERûTHANûANYûOTHERûNON lXED RATEûBONDSû ûlVE ûSEVENûANDû YEARû option if interest rates jump. lNANCIALûSECTOR ûACCORDINGûTOûAû#REDIT3IGHTSû MATURITIESû ûASûWELLûASûAû.#ûmOATING RATEû “Some corporate issuers are using callable report published earlier this year. piece. mOATERSûTOûINSULATEûTHEMûFROMûTHEûRISINGûRATEû Those companies are expected to use Demand of US$13.6bn in orders allowed environment,” one syndicate banker told their repatriated cash to boost shareholder Dollar Tree to tighten initial levels on the IFR. returns and to fund M&A, rather than lXED RATEûTRANCHESûBYûBPûTOûLAUNCH û “There’s been outsized appetite from the tapping the debt market for such needs. whittling concessions down from 25bp into buyside to participate in those offerings.” 4HEû3ALESFORCEûDEALûCOMPRISEDûlXED RATEû the single digits. The callable structure offers investors a TRANCHESûWITHûMATURITIESûOFûlVEûANDûû The healthy showing is another example premium of around 10bp, an appealing years. of investor desire for rarity value. Dollar pick-up at the short end of the curve, which Initial price thoughts were set at Tree has only issued in the high-grade has been under pressure of late, a second Treasuries plus 80bp area and 105bp area. market once before, in 2016. syndicate banker said. By launch those levels had tightened to The deal comes about a month after the 62.5bp and 87.5bp, respectively. company reported disappointing holiday- AUTO FINANCE CREDITS TEST Adobe (A3/A) and Oracle (A1/AA-) were QUARTERûSALESûANDûISSUEDûAûFULL YEARûPROlTû APPETITE FOR IG SHORT END seen as offering the closet comparables, forecast that was below expectations as it with the latter’s 2023s and 2027s trading at spends more, according to a Reuters report. 4HEûlNANCEûARMSûOFûGENERAL MOTORS and BMW G-spreads of 66bp and 85bp, a broker said. The company said it would spend an extra saw excellent price progression and ended The Salesforce bond and a new US$500m US$100m from corporate tax reform on up with large order books on new bond unsecured term loan will help pay for the raising wages of hourly workers, giving deals on Thursday, demonstrating solid US$4.8bn cash portion of the MuleSoft them more work hours and offering appetite for short tenors that have been ACQUISITION ûACCORDINGûTOûAûREGULATORYûlLING maternity leave for some employees, strained in recent weeks. Moody’s and S&P assigned issuer ratings matching similar moves by Walmart and "-7û53û#APITALûPRICEDûTHREE ûlVEûANDû of A3 and A-, placing Salesforce well inside Target. YEARûlXED RATEûBONDSûBP BPûTIGHTERûTHANû investment-grade territory. Investors have favoured retailers that initial price talk, underscoring the strong The MuleSoft purchase will lift adjusted offer a little juice in their trades, and buyside demand. It is also priced a three- leverage to near 1.5 times, but S&P believes discount retailers especially are seen as YEARûmOATERûANDûDROPPEDûAûlVE YEARûmOATER Salesforce can cut that to 0.6 times by 2020, “recession resistant”, one bond buyer said. Total books on the US$3.5bn trade were providing it stays clear of more large In March, Dollar Tree’s chief rival Dollar 53BNûWITHûTHEûTHREEûANDûlVE YEARûlXEDû acquisitions. General (Baa2/BBB) saw investors place GETTINGû53BNûEACH ûWHILEûTHEû YEARûlXEDû ANDûTHREE YEARûmOATERûRECEIVEDû53BNû ALL INVESTMENT-GRADE BONDS IN EUROS ALL CORPORATE BONDS IN STERLING apiece. BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 Despite the large spread tightening Managing No of Total Share Managing No of Total Share through bookbuild, BMW still priced its bank or group issues €(m) (%) bank or group issues £(m) (%) bonds some 4bp-11bp wider than recent 1 SG 63 19,752.95 6.8 1 HSBC 5 469.11 16.6 comparables, so there was some value on 2 Barclays 55 19,218.61 6.6 2 Lloyds Bank 4 374.49 13.3 the table, which could explain the strong 3 BNP Paribas 64 18,789.91 6.5 3 Barclays 4 366.47 13.0 reception. 4 JP Morgan 48 17,520.53 6.0 4 MUFG 3 248.53 8.8 4HEû53BNûTHREE YEARûlXEDûPRICEDûATû 5 Credit Agricole 55 17,264.18 5.9 5 NatWest Markets 3 238.82 8.4 4REASURIESûPLUSûBP ûTHEû53BNûlVE YEARû 6 HSBC 79 16,727.06 5.8 6 RBC 2 174.49 6.2 at 83bp and US$750m 10-year 93bp. The 7 Deutsche Bank 70 16,378.82 5.6 7 Morgan Stanley 1 160.00 5.7 53MûTHREE YEARûmOATERûPRICEDûATûTHREE 8 UniCredit 60 15,961.54 5.5 8 Deutsche Bank 1 149.34 5.3 MONTHû,IBORûPLUSûBP 9 Goldman Sachs 32 14,506.54 5.0 9 BNP Paribas 2 134.05 4.7 Meanwhile, General Motors Financial 10 Citigroup 43 12,298.44 4.2 10 Mizuho 2 115.52 4.1 PRICEDûTHREEûANDûSEVEN YEARûlXEDûNOTESûATû Total 345 290,590.80 Total 11 2,826.31 Treasuries plus 112bp and 160bp, or some Excluding ABS/MBS, equity-related debt. 15bp-18bp inside IPTs. GM also priced three- Source: Thomson Reuters SDC code: N9 Source: Thomson Reuters SDC code: N8a YEARûmOATERS

30 International Financing Review April 7 2018 BONDS CORPORATES

Final order books on the US$2.5bn trade Monday and in Singapore on Tuesday. !ûEURO DENOMINATEDûlXED RATEûSENIORû were US$8.6bn, with the US$1bn three-year The Australian toll road operator, of unsecured benchmark transaction with a lXEDûRECEIVINGû53BN ûTHEû53BNûSEVEN which Transurban owns 62.5%, met Zurich maturity of 10 years will follow, subject to year US$3.1bn and the US$500m three-year investors through arranger UBS last Friday market conditions. mOATERû53BNû.EWûISSUEûPREMIUMSûWEREû for a possible Swiss franc bond issue. The proceeds will be used for general estimated at around 7bp. CORPORATEûPURPOSESûANDûRElNANCINGûDEBTû)NFRAû Such strong price progression was MARUBENI HIRES FOR DOLLARS Park intends to exercise the make-whole SOMEWHATûDIFlCULTûINû-ARCH ûBUTûTHEûSTARTûOFû option on all of its €500m bond maturing in the new quarter seems to have attracted a MARUBENI hired JP Morgan, Citigroup, Mizuho 2020 and to repay the €100m shareholder loan renewed bid - especially for shorter tenor and SMBC Nikko as joint bookrunners for contracted from its parent company Infra bonds. investor meetings in Singapore and Hong &OCHû4OPCOûTOûOPTIMISEûITSûlNANCINGûCOSTS This changed mindset revealed itself Kong, from April 5, ahead of a proposed US Engineering company ACS SERVICIOS, earlier last week in General Mills’s M&A DOLLARûlVE YEARûSENIORûUNSECUREDûBONDûISSUE COMUNICACIONES Y ENERGIA, rated BBB (negative) bond, where the three-year tenor was close The Japanese trading company is by S&P, the wholly owned subsidiary of ACS to 10 times covered and priced some 40bp expected to price the Reg S notes in the near Actividades de Construccion y Servicios, has inside IPTs. future, subject to market conditions. mandated BBVA as green structuring adviser “There is still a bit of a price discovery The notes are expected to be rated Baa2/ and BBVA, HSBC, JP Morgan, Natixis and Societe process in the front end of the curve, but BBB (Moody’s/S&P), in line with the issuer. Generale as global coordinators and joint lead THEREûISûDElNITELYûLIQUIDITYûOUTûTHEREûFORû managers to arrange investor meetings in deals,” said one senior syndicate banker. Europe commencing on April 9. Analysts at CreditSights were positive EUROS An inaugural Green bond with a maturity about both offerings. between seven and 10 years will follow. The They said of the GM trade: “While we do PIPELINE BUILDS notes are expected to be rated BBB (negative) expect to see tightening from IPTs, we by S&P and will be issued under standalone would view any new issue concession as an The April pipeline continued to build last documentation. attractive opportunity to add exposure to week, with announcements from Euronext, 4HEûPROCEEDSûWILLûBEûUSEDûTOûlNANCEûAND the name.” Infra Park, ACS SCE, and Clarion Housing ORûRElNANCEûASSETSûORûACTIVITIESûTHATûMEETû Group. the eligibility requirements of the Green AUSGRID READIES BENCHMARK ISSUES Exchange group EURONEXT (A stable by S&P) bond framework. mandated BNP Paribas and Credit Agricole as CLARION HOUSING GROUP, the UK’s largest AUSGRID FINANCE, rated Baa1/BBB joint global coordinators and ABN AMRO,ING, housing association, has mandated Lloyds, (Moody’s/S&P), has mandated ANZ, Bank of MUFG and Societe Generale as joint bookrunners HSBC and NatWest Markets to organise investor America Merrill Lynch and HSBC to arrange TOûARRANGEûlXEDûINCOMEûINVESTORûMEETINGSû MEETINGSûINû,ONDONûSTARTINGûONû!PRILûû4HEû investor meetings in Sydney, Asia and the across Europe that started on April 5. anticipated £250m 28 to 35-year bond is US from April 6. !ûõMûNO GROWûlXED RATEûSENIORû expected to be rated A3 (stable) by Moody’s The Australian energy infrastructure unsecured benchmark transaction will follow, and will be offered under Clarion Housing company also named BNP Paribas, Credit subject to market conditions. The notes will Group’s secured EMTN programme. Agricole and HSBC for separate meetings in be issued under standalone documentation Europe from April 11. and will have a seven-year tenor. REGAINING CONFIDENCE, CORPORATES Ausgrid plans to issue benchmark US Car park operator INFRA PARK (BBB positive SET FOR BUSY APRIL DOLLARû!2EGû3ûBONDSûOFûlVEûANDORûû by S&P) has mandated HSBC and Societe years, and/or benchmark euro bonds of Generale as joint global coordinators and !FTERûAûLACKLUSTREûSTART ûTHEûlRSTûWEEKûOFû1û seven to 12 years. joint bookrunners and ?BNP Paribas and closed on an upbeat note with successful ,ASTû!UGUST û!USGRIDûSETûAûCROSS BORDERû NatWest Markets as joint bookrunners to trades from Volkswagen and Scentre giving record with an inaugural US$1.9bn sale in arrange investor meetings in Europe the market a much-needed boost of the US private placement market to pay off starting on April 9. CONlDENCEûAHEADûOFûAûBUSYû!PRIL. a A$2bn bridge loan. Two months later, Ausgrid raised a local ALL SWISS FRANC BONDS EXCLUDING ALL INTERNATIONAL STERLING BONDS corporate record A$1.2bn (US$925m) from SECURITISATIONS EXCLUDING SECURITISATIONS debut dual-tranche seven-year MTNs. BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 The New South Wales government holds Managing No of Total Share Managing No of Total Share a 49.6% interest in Ausgrid, while a bank or group issues SFr(m) (%) bank or group issues £(m) (%) consortium of IFM Investors and 1 Credit Suisse 34 3,486.76 25.5 1 NatWest Markets 30 4,171.35 12.8 AustralianSuper controls the remaining 2 UBS 31 3,315.18 24.3 2 HSBC 28 4,097.69 12.6 50.4%. 3 Verband Schweiz 3 2,221.72 16.3 3 Lloyds Bank 17 3,059.91 9.4 4 ZKB 16 1,194.61 8.7 4 RBC 20 2,983.56 9.1 TRANSURBAN WORKS ON OFFERING 5 Raiffeisen Schweiz 7 875.44 6.4 5 Barclays 18 2,353.47 7.2 6 BNP Paribas 8 734.06 5.4 6 JP Morgan 6 2,226.59 6.8 TRANSURBAN QUEENSLAND, rated BBB (S&P), will 7 Deutsche Bank 6 583.36 4.3 7 BAML 8 2,169.84 6.7 this week complete a roadshow, with ANZ, 8 Commerzbank 3 204.47 1.5 8 Santander Global 6 1,813.20 5.6 Bank of America Merrill Lynch and SMBC Nikko 9 Gazprombank 1 187.50 1.4 9 Nomura 11 1,548.46 4.7 as arrangers, for a potential 10-year Reg S US =9 VTB Capital 1 187.50 1.4 10 TD Securities 12 1,480.04 4.5 dollar issue under its EMTN programme. Total 61 13,656.81 Total 75 32,627.65 !FTERûLASTû4HURSDAYSû,ONDONûMEETINGS û Including preferreds. Excluding equity-related debt. Including preferreds. Excluding equity-related debt. the issue will be marketed in Hong Kong on Source: Thomson Reuters SDC code: K06b Source: Thomson Reuters SDC code: K05a

International Financing Review April 7 2018 31 VOLKSWAGEN FINANCIAL SERVICES brought a and CLARION HOUSING GROUP, with at least GKN has carried Double B ratings from all õBNû MONTHûmOATERûATûAûDISCOUNTûMARGINû €2.4bn-equivalent waiting in the public three ratings agencies in the past, regaining of three-month Euribor plus 20bp, a €500m pipeline, according to IFR data. Bankers said full investment-grade status in 2014 with three-year at 37bp over mid-swaps and a a robust, but still private pipeline is also upgrades from Moody’s and S&P. õMûlVE YEARûATûBPûOVERûSWAPSû building as discussions continue with Australian retail property group SCENTRE potential issuers and some M&A trades priced a €500m 10-year at 80bp over mid- could also come to market. swaps. Whether or not all this could lead to ,EADSûWEREûHAPPYûTHEûNEW ISSUEû indigestion is a matter of timing. When FIG premiums were in line with other bonds to €21bn of issuance came to market in the have priced of late, especially after the second week of March, with issuers jumping week’s early issuers paid up. in before quarter-end and Easter, new-issue US DOLLARS 67Sû&2.ûWASûmATûTOûFAIRûVALUE ûWHILEûTHEû premiums grew and book sizes shrank, THREE YEARûANDûTHEûlVE YEARûPAIDû.)0SûINûTHEû while paper widened in secondary. SG AT1 ATTRACTS 2.5 TIMES COVER low teens, according to a lead. Scentre also “It all depends on how concentrated the paid around 10bp, according to a lead. issuance comes. If the issues are equally SOCIETE GENERALE’s US$1.25bn Additional Tier In contrast, NIPs reached as high as the spread out over the whole of April, I think 1 perpetual non-call 10-year subordinated low 20s on CAPGEMINI’s 10-year, part of a dual- that the market has capacity,” said the lead note was about 2.5 times covered on TRANCHEûOFFERING ûWHICHûWASûTHEûlRSTûTOû on Volkswagen. Wednesday, a source told IFR. come to the market last week. “If we have a few more trades that have The bonds priced with a coupon of 6.75%, SWISSCOM followed, paying around 10bp on the same positive connotation as 12.5bp tighter than initial price talk. a €500m no-grow 8.5-year, which came at Volkswagen, then I think investors will feel The investor demand showed there is still 40bp over mid-swaps. While the issuer did AûBITûMOREûCONlDENTûANDûYOULLûSEEûMOREû some liquidity available for FIG borrowers not pay up relative to more regular trades go well,” he added. despite recent market volatility, said one borrowers, a banker away deemed the banker away from the deal. premium to be high given how rarely the “The fundamentals are still very good and issuer taps the European market. Swisscom STERLING the credit outlook around banks is positive, last issued euros in September 2015, so it is not surprising to see a sub deal from according to IFR data. MOODY’S PLACES GKN ON REVIEW SG getting a solid response,” said the But, at an uncertain time, bankers on the FOR DOWNGRADE banker. two trades were still content with the But there were mixed views on what results. Moody’s has placed GKN’s Baa3 rating on should be fair value, which may have “We don’t have a crystal ball, but today review for downgrade, citing uncertainty explained the relatively minimal price you at least have a deal. We don’t know how after a majority of the British engineering progression. market conditions will be in two weeks’ company’s shareholders backed Melrose’s One European banker saw fair value at time,” a lead on Swisscom said. hostile bid at the end of March. 6.20%-6.25%, but another saw it some 20bp “Our review for downgrade stems from higher. BUILDING PIPELINE the takeover bid of Melrose, which has now At 6.75%, the bonds looked to offer some While the market has made a slow start to been accepted by the majority of GKN’s 15bp in new issue concession compared Q2, bankers still expect April to be relatively shareholders, and the related uncertainties with SG’s outstanding 8% perpetual NC10s busy compared with last year given the about GKN’s future shareholding structure, that were at a yield to the call date of chunky pipeline building. CAPITALûSTRUCTUREûANDûBUSINESSûPROlLE vûLEADû September 2025 of 6.10%, after adjusting for h)MûCONlDENTûTHATûOVERûTHEûNEXTûCOUPLEû analyst Matthias Heck said in an maturity extension, according to IFR of weeks we’ll continue to see a good- announcement. calculations. enough backdrop whereby people can get “Our review will focus on the impact of “Euro AT1s outperformed, with some of their funding done: the only down to that is Melrose as GKN’s future main shareholder, the issues up an eighth, while in the dollar for issuers to adjust their expectations,” said WHICHûWILLûDEPENDûONûTHEûlNALûACCEPTANCEû space the new SocGen deal weighed on another banker. LEVELûOFûTHEûBID ûTHEûPROPOSEDûRElNANCINGû markets and repriced parts of it with a NIP While the focus has been on how the measures of GKN’s debt by Melrose, and OFûAROUNDûTHREE EIGHTHS vûSAIDûONEû,ONDON market is widening, conditions still look '+.SûFUTUREûBUSINESSûPROlLE vû(ECKûADDED based banker. quite attractive historically. 52.4% of GKN shareholders accepted an In an investor day presentation in “Although the price is higher now, it’s £8bn offer by Melrose on March 29. The February, SG spelt out a €2.5bn-€3bn yearly only marginal on a historical basis, so maybe offer price is expected to become average target for subordinated debt that it’s not that bad that borrowers are paying unconditional by April 19. includes AT1 and Tier 2. The bank is now 10bp rather than 5bp when things are so GKN is rated BBB- by S&P and Fitch. In very near reaching that target after the TIGHTûARTIlCIALLY vûTHEûBANKERûADDED early March, both placed their ratings on latest deal, which followed a €1bn Tier 2 4HEûI"OXXûNON lNANCIALSûCORPORATEûINDEXû watch negative, though Fitch cited GKN’s trade late February. closed just inside swaps plus 54bp on plan to shed and merge its automotive Thursday, still tighter than levels seen for supply driveline division with US auto AEGON BRAVES TOUGH DAY TO most of 2017, according to Thomson Reuters supplier Dana Incorporated, which was MAKE RETURN data. GKN’s counter to Melrose’s offer. The company has £1.1bn of bonds Dutch insurance company AEGON braved a INDIGESTION? outstanding, according to Thomson Reuters volatile day in broader markets last Names added to the pipeline last week data. It last came to market in May, with a 7EDNESDAYûTOûSELLûITSûlRSTû3%# REGISTEREDû53û include EURONEXT, INFRA PARK, ACS SCE, SYNGENTA £300m 3.375% 2032 note. dollar bonds in nine years.

32 International Financing Review April 7 2018 BONDS FIG

The company’s US$800m 30-year non-call Given UBI’s limited needs, some back of AIB,” said one. “I don’t think it’s 10-year got a decent reception in the end questioned why it was doing the deal at all. ridiculously cheap - if anything, it felt despite a morning sell off in equity markets However, the bank has a combined €2.47bn relatively on the punchy side, without any after China came up with new tariffs that of wholesale bonds maturing in 2018 and kind of roadshow.” seemed to suggest a trade war between the 2019. More broadly, Italian SNP supply is country and the US. “Some of [those] maturities have already expected to be low, although others are said The deal, which was announced in BEENûlNANCEDûWITHûCOVEREDûBONDûISSUANCE û to be looking at the market closely. ,ONDONûTIME ûHADûSOMEûMOMENTUMûBEFOREû but if you have some senior debt that is UniCredit outlined a €6bn SNP target at bookbuilding began in New York, said one rolling off, it makes sense to replace that the end of 2017, but as a global systemically banker. And as equity markets seemed to rather than wait for a later date,” said the important bank it has the largest needs of recover around midday and credit spreads lead. the Italians. Intesa has ruled out any SNP showed resilience, more interest came in for Issuers must also weigh up the direction issuance in 2018. the transaction. of credit spreads, particularly given the “It is not a frequent issuer, so investors heavy supply expected in this asset class. On MIZUHO DELVES INTO NEW POOLS looked at it as a diversity play from a sector a relative basis, the SNP sector has already OF DEMAND that is perceived to be defensive,” said the widened more this year than the capital banker. space, the lead said. MIZUHO FINANCIAL GROUP prioritised price over The order book had built up to about size with a dual-tranche senior transaction, US$2.1bn before the level was tightened SMALLER POOL broadening its euro investor base after a from initial price talk of 5.75% area to 5.60% Bankers away said the deal looked like a debut trade in this sector last year. PLUSûORûMINUSûBPûATûLAUNCHû4HEûlNALû struggle but conceded its sub-investment- Mizuho has traditionally raised funding in books were slightly lower, at US$1.7bn, with grade ratings rule out a large pool of the dollar market, and a €500m seven-year THEûDEALûPRICINGûATûTHEûTIGHTûENDû)TûmIPSûTOûAû investors. 'REENûBONDûINû/CTOBERûWASûITSûlRSTûINûTHEû mOATERûWITHûAû,IBORûPLUSûBPûCOUPONûIFûNOTû AIB Group’s debut holdco senior, a €500m single currency. called after 10 years. lVE YEARû"A"" """ ûALLûPOSITIVEûOUTLOOK û The European market, however, offers an Active bookrunners were Bank of America drew over €2.25bn of demand last month, attractive source of funding as Japanese banks Merrill Lynch, Deutsche Bank, JP Morgan, Morgan but it is closer to IG index eligibility, a key build their stacks of loss-absorbing securities, Stanley and Wells Fargo. Proceeds will be used part of its appeal. That bond was 10bp prompting the bank’s return last Wednesday. TOûRElNANCEûOUTSTANDINGûDEBT tighter than reoffer last Thursday, at mid- 4HEûTWOûTRANCHES ûAûlVE YEARû&2.ûANDûAû swaps plus 105bp.  YEARûlXEDû!! ûBYû-OODYS30 ûPRICEDû SNP bonds issued by UniCredit, well inside IPTs and offered the bank a EUROS CaixaBank, BBVA and Santander - the main double-digit saving versus a theoretical comparables offered - trade in the high 20s dollar outing. UBI LIMITS SIZE IN NOD TO FUTURE over their preferred debt. UBI’s €750m 0.75% )04SûFORûTHEûlVE YEARûWEREûTRIMMEDûFROMû SNP SUPPLY October 2022s were bid around 62bp over, three-month Euribor plus 60bp-65bp to 78bp inside where its SNP priced. 50bp-55bp, and on the 10-year from mid- UBI BANCA sized its debut senior non- But UBI’s SNP felt quite tight compared to swaps plus 75bp-80bp to 65bp-70bp. preferred bond at €500m, ruling out a larger its subordinated trading levels, the bankers Both launched at the tight end of those deal to underpin performance ahead of said. ranges and in the expected €500m sizes more supply in the asset class. Its Tier 2 trades very wide compared to mAGGEDûATûTHEûOUTSETû4HEYûWEREûBIDûBPûANDû The Italian lender has not published its UniCredit and Intesa: UBI’s €500m 4.45% 4bp tighter last week, respectively. estimated Minimum Requirement for own 2027 NC2022 Tier 2 was at swaps plus 310bp The dual-tranche approach was seen as FUNDSûANDû%LIGIBLEû,IABILITIESû-2%, û last Thursday, for example, while UniCredit’s the best way to achieve a €1bn minimum towards which this bond will count. It does, €750m 4.375% 2027 NC2022 was at 190bp. trade, particularly in a tetchy market, and however, intend to return in the coming h4HEûlNALûLEVELûISûABOUTûûOFûWHEREûTHEû gave investors a chance to buy the name in a years as it builds up that buffer. Tier 2 trades, which is okay, and it’s 35bp mOATING RATEûANDûLONGER DATEDûFORMAT /RDERSûFORûTHEûlVE YEARû"A"" """  """, ûREACHEDûõBNûFROMûûACCOUNTS ûHALFû ALL FINANCIAL INSTITUTION BONDS IN EUROS ALL SUBORDINATED FINANCIAL INSTITUTION coming from Italy, via joint bookrunners BOOKRUNNERS: 1/1/2018–31/3/2018 BONDS (ALL CURRENCIES) Banca IMI, Barclays, Credit Agricole, HSBC, Managing No of Total Share BOOKRUNNERS: 1/1/2018–31/3/2018 Natixis and Santander. bank or group issues €(m) (%) Managing No of Total Share A lead spotted the bond at 138.5bp last 1 BNP Paribas 25 6,384.60 9.3 bank or group issues US$(m) (%) Friday, just inside its swaps plus 140bp reoffer. 2 Deutsche Bank 21 6,339.63 9.2 1 BNP Paribas 10 2,534.99 9.4 It priced 5bp inside the 145bp area IPTs. 3 SG 16 5,700.19 8.3 2 SG 4 2,219.88 8.3 UBI’s demand paled in comparison to the 4 UBS 15 5,428.34 7.9 3 BAML 8 1,669.00 6.2 lRSTû)TALIANû3.0 ûAûõBNûlVE YEARû"AA 5 Natixis 7 4,591.85 6.7 4 Barclays 8 1,641.25 6.1 BBB-/BBB) from UniCredit in January. 6 Credit Agricole 7 3,710.32 5.4 5 UBS 7 1,474.61 5.5 That deal drew more than €4.25bn in 7 HSBC 19 2,916.22 4.2 6 Credit Agricole 3 1,429.96 5.3 orders at swaps plus 70bp but has since 8 Barclays 13 2,673.32 3.9 7 Lloyds Bank 3 1,377.19 5.1 widened to 83bp over, in line with a drift in 9 Lloyds Bank 4 2,486.61 3.6 8 HSBC 6 1,336.77 5.0 spreads in the asset class. 10 NatWest Markets 9 2,418.28 3.5 9 Goldman Sachs 6 1,336.23 5.0 “In the context of recent senior deals, it Total 93 68,640.78 10 JP Morgan 6 1,275.97 4.8 was a decent outcome,” said a lead. “UBI Including banks, insurance companies and finance companies. Excluding Total 32 26,830.28 equity-related and covered bonds. Excluding publicly owned institutions. doesn’t have the same name recognition as Intesa and UniCredit.” Source: Thomson Reuters SDC code: N11 Source: Thomson Reuters SDC code: J3a

International Financing Review April 7 2018 33 4HEûlNALûBOOKûJUSTûABOUTûTWICEûCOVEREDû PBB TO OFFER RARE GERMAN AT1 “It’s legacy Depfa and all of that, but it’s THEûDEAL ûTHEû&2.ûlNDINGûPARTICULARLYûSTRONGû WITH ONE-OFF TRADE been completely restructured and the good interest from central banks and sovereign bank is what was privatised,” said the wealth funds, at 33%. DEUTSCHE PFANDBRIEFBANK is the second banker. “German corporate real estate is 4HEûMODESTûDEALûSIZEûREmECTSû-IZUHOSû European bank to mandate a sub- DElNITELYûBETTERûTHANûSOMEûOTHERûASSETû limited needs - according to the issuer’s benchmark one-off Additional Tier 1 bond classes; it’s a recovery story, from a CALCULATIONS ûITSûû4,!#ûRATIOûALREADYû in recent weeks, bringing some rare restructured entity.” exceeds its 2019 minimum requirement of German supply to an asset class little PBB reported a fully phased-in CET1 ratio 16%. utilised by the country’s banks. of 17.6% at the end of 2017. The bond will be 4HEûlNALûLEVELSûWEREûTHEûMOSTûAGGRESSIVEû The issuer has mandated banks for the written down on a temporary basis if that the issuer could have hoped for, a lead said, õMûNO GROWûPERPETUALûNON CALLûlVEû ratio drops below 7%. adding that there was no real desire to (expected BB- by S&P) and is due to meet upsize. investors from Monday this week. UBS is The differential between opco and holdco structuring adviser, and also a joint bookrunner NON-CORE CURRENCIES Japanese paper is smaller than that for alongside Goldman Sachs and JP Morgan. European names, as is the case with US banks. Deutsche Bank is the only German lender AUSSIE PAIR TARGET SHORT-END “I wouldn’t necessarily expect them to to issue AT1 debt in volume so far, though it FLOATERS issue any longer-dated [issuance] in opco has not done so since 2014. A handful of format anyway - your pricing differentials smaller banks such as Aareal have also sold AMP BANK, rated A2/A (Moody’s/S&P), raised are pretty minimal,” the lead added. AT1, though larger players such as A$300m (US$230m) from last Wednesday’s He put the new-issue premium at 8bp for Commerzbank have not. sale of two-year senior unsecured THEû&2.ûANDûBPûFORûTHEûlXEDû#ONCESSIONSû PBB’s transaction will strengthen its mOATING RATEûNOTES ûPRICEDûINSIDEûBPûAREAû have crept up as volatility weighs on leverage ratio and further optimise its guidance at three-month BBSW plus 70bp. investor appetite and order sizes, with US capital structure, comfortably exceeding ANZ, NAB and Westpac were joint lead banks paying 20bp or more for euro seniors 1.5% of its €14.5bn risk-weighted assets. managers on the trade. in March, for example. It echoes a similar small one-and-done ,ASTû3EPTEMBER û!-0û"ANKûISSUEDûAû “It went very well: we’re in a market that issue from Spain’s Ibercaja last month. The !MûTHREE YEARûmOATER ûPRICEDûBPûWIDEû is seeing a decent amount of volatility,” the €350m 7% PNC5 (B-/B by S&P/Fitch) came on of three-month BBSW. lead said. “The market still feels a bit a €850m-plus book and was bid nearly a MEMBERS EQUITY BANK, rated Baa1/BBB technically undersupplied in terms of point above par last Friday. (Moody’s/S&P), raised A$250m from last Japanese paper.” “Their pricing ambition is probably a bit 4HURSDAYSûPRINTûOFûTHREE YEARûmOATING RATEû The deal was led by Mizuho’s own tighter than Ibercaja,” said a banker away. notes. syndicate desk, Bank of America Merrill Lynch, “But because there is a bit more yield on ANZ, NAB and Westpac were joint lead BNP Paribas, Natixis and UBS. offer [than in senior] you’ll get more of the managers on the issue, sold inside the 130bp bigger real-money guys involved, regardless area price guidance at three-month BBSW ALL SAMURAI BONDS of the fact that it’s not €500m-plus.” plus 127bp. BOOKRUNNERS: 1/1/2018–31/3/2018 $EUTSCHEû0FANDBRIEFBANKûISSUEDûITSûlRSTû On November 1 last year, ME Bank, which Managing No of Total Share public Tier 2 deal last June, a €300m 2.875% is owned by 29 Australian industry super bank or group issues ¥(m) (%) 10NC5. That bond was bid around 40bp FUNDS ûSOLDûAû!MûTHREE YEARûmOATERûATû 1 Mizuho 9 39,345.00 18.7 inside its swaps plus 275bp reoffer level at 125bp wide of three-month BBSW. =1 Mitsubishi UFJ 9 39,345.00 18.7 the end of last year, but has since widened 3 Daiwa Securities 7 38,220.00 18.1 to 251bp as markets weakened. 4 Sumitomo Mitsui Finl 4 31,125.00 14.8 The bank was formed in 2009, the result 5 Nomura 6 23,220.00 11.0 of a merger between Hypo Real Estate Bank =5 Natixis 6 23,220.00 11.0 and Depfa Deutsche Pfandbriefbank. It COVERED BONDS 7 BNP Paribas 3 16,125.00 7.7 SPECIALISESûINûREALûESTATEûlNANCINGûANDû Total 10 210,600.00 PUBLICûINVESTMENTûlNANCE ûANDûISûONEûOFûTHEû Excluding equity-related debt. largest Pfandbrief issuers. EUROS Source: Thomson Reuters SDC code: K11 ALL COVERED BONDS (ALL CURRENCIES) CAFFIL TO DEBUT SOCIAL COVERED BOND ALL GLOBAL AND EUROMARKET YEN BONDS BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 Managing No of Total Share CAISSE FRANCAISE DE FINANCEMENT LOCALû#AFlL ûISû Managing No of Total Share bank or group issues US$(m) (%) SETûTOûBECOMEûTHEûlRSTû&RENCHûISSUERûTOû bank or group issues ¥(m) (%) 1 UniCredit 25 4,897.68 6.8 launch a Social covered bond, as part of a 1 Nomura 8 46,566.67 28.2 2 LBBW 22 4,355.58 6.1 pledge to become a regular issuer of Social 2 Mizuho 7 38,466.69 23.3 3 Natixis 17 4,318.60 6.0 and Green bonds. 3 Sumitomo Mitsui Finl 4 31,816.69 19.3 4 HSBC 21 4,076.39 5.7 The Social bond will be launched this year 4 Daiwa Securities 6 18,316.67 11.1 5 Deutsche Bank 18 4,017.67 5.6 ANDûWILLûFOCUSûONûlNANCINGûTHEûPUBLICû 5 Barclays 4 11,650.00 7.1 6 Credit Suisse 15 3,857.83 5.4 healthcare sector, said Ralf Berninger, head 6 Chugoku Bank 2 6,666.67 4.0 7 Barclays 17 3,561.86 5.0 OFûINVESTORûRELATIONSûATû#AFlLSûPARENTû =6 Morgan Stanley 2 6,666.67 4.0 8 Commerzbank 19 3,476.66 4.8 COMPANYû3OCIETEûDEû&INANCEMENTû,OCALû3&),  8 Dev Bank of Japan 1 5,000.00 3.0 9 SG 15 3,310.01 4.6 “When we provide loans to local public Total 10 165,150.05 10 Credit Agricole 19 3,241.84 4.5 SECTORûENTITIES ûWEûAREûlNANCINGûNEWû Excluding equity-related debt. Including preferreds. Total 92 71,853.46 SCHOOLS ûHOSPITALS ûENERGY EFlCIENTû Source: Thomson Reuters SDC code: K10 Source: Thomson Reuters SDC code: J15a buildings, waste management and local

34 International Financing Review April 7 2018 BONDS COVERED BONDS

ALL INTERNATIONAL YEN BONDS BOOKRUNNERS: 1/1/2018–31/3/2018 Managing No of Total Share High-yield braced for uncertain Q2 bank or group issues ¥(m) (%) 1 Mizuho 16 77,811.69 20.7 „ EUROPE Total returns turn negative for first time since Q3 2015 2 Nomura 14 69,786.67 18.6 3 Sumitomo Mitsui Finl 8 62,941.69 16.8 The euro high-yield market left behind a lacklustre GROUP’s buyout by KKR after the loans were 4 Daiwa Securities 13 56,536.67 15.0 quarter, with issuance volumes down and returns launched in early March. 5 Mitsubishi UFJ MS 11 46,011.67 12.2 negative for the first time since late 2015. A tough The refinancing of the bridge loans backing 6 Natixis 6 23,220.00 6.2 Q2 awaits, though there is some optimism for TDC’s buyout will include bonds, while the buyout 7 BNP Paribas 3 16,125.00 4.3 those deals that come at the right level. of AKZO NOBEL’s speciality chemicals business is 8 Barclays 4 11,650.00 3.1 Volumes for the quarter fell 23% compared expected to include about €1.5bn-equivalent of 9 Chugoku Bank 2 6,666.67 1.8 with Q1 2017, according to IFR data, with issuers subordinated issuance. 10 Dev Bank of Japan 1 5,000.00 1.3 raising €15.5bn as opposed to €20bn last year, Bankers are also working on a financing of up Total 20 375,750.05 which bankers say is explained in part by the to €2.8bn for the sale of TECHEM, which could Including all Euro, foreign and global issues. Excluding equity-related large scale of refinancings completed in 2017. include high-yield bonds. debt. Total high-yield returns on the iBoxx euro liquid “It’s very difficult to say how the M&A deals Source: Thomson Reuters SDC code: K12 high-yield index fell by 0.6%, the first negative will fare. The market is extremely volatile at the quarter since Q3 2015, according Thomson moment, as we’ve also seen with equities,” said public transport,” said Sami Gotrane, Reuters data, with Double Bs underperforming. Fisch Asset Management’s Kloc. lNANCIALûMARKETSûMANAGERûATû3&), “While some of those are decent companies, While covered bond issuers have tended ACTIVE INVESTING it will really depend on pricing. If they price to focus on the green format, Both the buy and sellside emphasise that reasonably, I think they can do okay, but the Kommunalkredit Austria debuted in the conditions in the market have become challenging question is if they will be priced reasonably.” social format in July last year. and investors expect the market to continue Investors remain worried that banks and It priced a €300m no-grow four-year Social repricing throughout the rest of the year. law firms will continue pushing aggressive covered bond. The 0.375% July 2021 was bid The iBoxx index closed the quarter at 3.28%, documentation and pricing in the near future, last Friday at mid-swaps plus 36bp, 2bp compared with 2.71% at the start of the year. taking time to adjust to a new market reality. tighter than reoffer, according to Tradeweb. But David Newman, head of global high-yield However, Chris Lovgren, global head of high- #AFlLûSAIDûITûWILLûTHENûLOOKûATû'REENûBONDû at Allianz Global Investors, said investors could yield and corporate distribution and trading at issuance as a second step, although there are still outperform the market by staying active in Natixis, said he expected the changed tone in the no plans to issue this year. sector and security selection. market to be reflected in the outcomes for the “We want to contribute to the “While the high-yield index could widen, if you large trades in the pipeline. development of the Green and Social bond avoid the landmines, you should still be able to The scale of outflows, which persisted for every market in the long run,” said Berninger. get positive excess returns,” he told IFR. week in Q1, will also be a key factor in determining Sparebank 1 Boligkreditt is the only issuer In Europe, sectors that saw the most trading outcomes, a syndicate head said. Some €4.9bn left so far this year to sell a Green covered bond, activity in Q1 were telecoms and clothing high-yield funds tracked by JP Morgan in Q1. drawing a strong response for a €1bn seven- retailers, according to MarketAxess data. But year in January with over €1.7bn of demand. market participants do not expect a scare around PUSH-BACK The January 2025 priced at the tight end of specific sectors, with no defaults in sight in While a flurry of recent deals have seen push- guidance at minus 6bp, and was trading at Europe. back on terms, investors remain worried about minus 3bp last Friday. “I’m not sure if demand is sector-specific; I weak documentation and do not expect banks German issuers dominated the format in think it’s more risk-specific,” said Kyle Kloc, senior and law firms to refrain from pushing aggressive 2017, with both Berlin Hyp and Deutsche portfolio manager at Fisch Asset Management. structures in the near future. Hypothekenbank pricing €500m six-year “The demand for higher risk credit in Europe In Q1, push-back came with a growing Green covered bonds at minus 14bp. They remains relatively low, so, as you go down the realisation among investors that covenant risk are quoted 2.5bp tighter and 0.5bp wider, credit quality scale, the premium really has to should be assessed contextually, depending respectively. get large.” on the circumstances of the credit in question. Geophysical equipment manufacturer CCG will This meant that some investors were willing to provide a key test as to how these challenging tolerate aggressive structures for quality credits. deals will fare as the first euro high-yield deal One credit analyst said the market was announced for Q2. The company, currently yet to see a good credit make substantial HIGH-YIELD implementing a restructuring plan, set IPTs documentation changes to get over the line, but at high eights to 9% on the euro portion of a further spread widening could boost cautious US$600m-equivalent cross-currency trade, a investors’ cases. EUROPE/MIDDLE EAST/ very high level even for a B2/B trade. In one of the last trades of the quarter, AFRICA German real estate asset manager CORESTATE M&A SUPPLY had to amend its documentation in order to get FLURRY OF SAVE-THE-DATE Still, a number of M&A-driven deals in the its trade over the line, despite a BB+ rating. ANNOUNCEMENTS pipeline are a key source of optimism for supply, Natixis’s Lovgren said he expected investors to syndicate bankers say, but it remains to be seen take advantage of widening market conditions to Three high-yield save-the-date how these will fare. enhance their push-back on documentation and announcements hit the screens on Friday. The market is still awaiting €1.05bn of senior leverage multiples, which have crept up. JP Morgan sent two announcements for unsecured notes to part-finance FLORA FOOD Yoruk Bahceli new high-yield issues out of the industrial

International Financing Review April 7 2018 35 and chemicals sectors. Both issuers will hold The deal is a repeat of a February 2017 Ireland in 2009. The last Celtic RMBS was a THEIRûlRSTûMEETINGSûONû-ONDAYû!PRILûûINû trade which sold a €1bn senior tranche with retained deal in 2010. ,ONDON AûSHORTERû YEARû7!,ûATûBPûOVERû The First Active brand has since been BNP Paribas also sent a save-the-date Euribor. discontinued; setting up the new Ardmore announcement for another industrial sector programme rather than reviving Celtic issuer, which will also hold a meeting on ULSTER BANK READIES PRIME REmECTSûTHATûTHISûISûANû5LSTERû"ANKû)RELANDû Monday, in Paris. IRISH RMBS issuance, a spokesperson at the bank said. Ulster Bank Ireland will form part of RBS’s ULSTER BANK IRELANDûHASûANNOUNCEDûITSûlRSTû ring-fenced bank sub-group after it prime Irish RMBS off a new programme, restructures its operations to comply with Ardmore Securities. UK government ring-fencing requirements. STRUCTURED FINANCE ARDMORE SECURITIES NO.1 will offer only Triple A notes, with a theoretical maximum IPTs FOR BLACKSTONE’S FINNISH size of around €1bn, although no tranche CMBS DUE THIS WEEK EMEA MBS size was indicated in Friday’s deal announcement. A two-day site visit for BLACKSTONE’s Finnish CREDIT AGRICOLE’S REPEAT FRENCH The notes have a 3.76-year weighted CMBS FROSN-2018 took place last week and RMBS ADDS TO EURO SUPPLY average life and come with a pre-set coupon IPTs are expected this week, after initial of 35bp over three-month Euribor. They are expectations of pricing last week proved too !ûmURRYûOFûANNOUNCEMENTSûAFTERûTHEû%ASTERû expected to price above par. The rest of the ambitious. break will give euro investors a welcome structure will be retained. The deal securitises a loan from Citigroup opportunity to pick up prime RMBS paper The bonds are backed by a portfolio of and Morgan Stanley to Blackstone, used to from three different jurisdictions. prime, owner-occupied mortgages totalling lNANCEûPARTûOFûTHEûPRIVATEûEQUITYûlRMSû As well as an Irish deal from Ulster Bank €1.3bn. The average balance is €156,548, acquisition of Finnish real estate company )RELANDûANDûANû!USTRALIANû2-"3ûFROMû,IBERTYû seasoning is 30 months and the remaining SPONDA. Financial, which is selling euros as well as term is 24 years. The weighted average Citigroup and Morgan Stanley are the leads. Australian dollars, CREDIT AGRICOLE said it was ORIGINALû,46ûRATIOûISûûANDûTHEûAVERAGEû Blackstone is buying a 55% stake in bringing a French RMBS last week. interest rate is 3.5%. Thomson Reuters’ Financial and Risk unit, The deal, FCT CREDIT AGRICOLE HABITAT 2018, NatWest Markets is arranger and joint lead which includes IFR. will be its second placed securitisation of with Bank of America Merrill Lynch and Morgan French home loans after a similar deal in Stanley. A European roadshow will run from ALL US$ DENOMINATED HIGH-YIELD BONDS 2017. It is offering a €1bn Triple A tranche Tuesday to Friday, with pricing expected BOOKRUNNERS – 1/1/2018–31/3/2018 WITHûAûlVE YEARûWEIGHTEDûAVERAGEûLIFE next week. Managing No of Total Share The notes have a predetermined margin Ulster Bank Ireland, which operates in the bank or group issues US$(m) (%) of 50bp over three-month Euribor and are 2EPUBLICûOFû)RELAND ûANDû5LSTERû"ANKû,TD û 1 JP Morgan 47 6,983.08 10.7 expected to price above par. The €150m which operates in Northern Ireland, are 2 Credit Suisse 39 5,261.73 8.1 Class Bs are unrated and are retained. both owned by RBS and form the Ulster 3 BAML 43 4,373.96 6.7 Credit Agricole is sole bookrunner and is Bank Group. Ardmore No.1 will be the 4 Barclays 32 4,366.81 6.7 joint lead with Rabobank. A roadshow started GROUPSûlRSTûPLACEDû2-"3ûSINCEûTHEûlNANCIALû 5 Deutsche Bank 34 4,209.73 6.5 on Friday and is due to end on Thursday, crisis. 6 Wells Fargo 31 4,174.66 6.4 with pricing expected next week. Ulster Bank Ireland already runs an 7 Citigroup 38 4,060.71 6.2 The portfolio totals €1.9bn and holds existing Irish RMBS shelf, Celtic 8 Goldman Sachs 35 4,041.48 6.2 14,985 loans with an average size of Residential Mortgage Securitisation, 9 Morgan Stanley 29 3,404.39 5.2 €128,192. The weighted average interest which has issued a total of 16 deals. The 10 RBC 21 2,225.06 3.4 rate is 2.19%, seasoning is 45 months and Celtic programme was set up in 1998 by Total 116 65,254.07 the average remaining term is 210 months. First Active Bank, which was bought by RBS Including US domestics, Euro, foreign, globals. Excluding equity-related debt. All are owner-occupied and amortising. in 2004 and merged with Ulster Bank Source: Thomson Reuters SDC code: B5

ALL ASIAN HIGH-YIELD ISSUERS ALL EUROPEAN HIGH-YIELD ISSUERS ALL NON-DOLLAR DENOMINATED HIGH-YIELD BONDS 1/1/2018–31/3/2018 1/1/2018–31/3/2018 1/1/2018–31/3/2018 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 €(m) (%) 1 Bank of China 7 720.15 6.8 1 Credit Suisse 14 1,792.20 6.7 1 BNP Paribas 14 1,360.36 7.3 2 Citic 8 695.18 6.6 2 JP Morgan 17 1,767.79 6.7 2 JP Morgan 15 1,299.24 6.9 3 Credit Suisse 8 595.01 5.6 3 BNP Paribas 15 1,696.38 6.4 3 Credit Suisse 12 1,227.12 6.6 4 Haitong Securities Co 11 435.19 4.1 4 Deutsche Bank 14 1,522.79 5.7 4 Deutsche Bank 13 1,186.81 6.3 5 Citigroup 5 423.92 4.0 5 Goldman Sachs 13 1,522.25 5.7 5 Goldman Sachs 12 1,085.91 5.8 6 Morgan Stanley 6 392.20 3.7 6 Morgan Stanley 7 1,379.52 5.2 6 Morgan Stanley 7 1,070.70 5.7 7 BAML 5 377.50 3.6 7 ING 10 1,331.43 5.0 7 HSBC 11 961.09 5.1 8 Guotai Junan Securities 10 360.54 3.4 8 HSBC 10 1,089.27 4.1 8 ING 7 724.80 3.9 9 Deutsche Bank 5 332.33 3.2 9 BAML 7 1,032.12 3.9 9 Natixis 7 722.39 3.9 10 VTB Capital 4 324.99 3.1 10 Natixis 9 1,006.06 3.8 10 UniCredit 7 703.79 3.8 Total 27 10,548.43 Total 45 26,580.62 Total 41 18,729.70

Excluding equity-related debt. Excluding equity-related debt. Excluding equity-related debt. Source: Thomson Reuters SDC code: B06d Source: Thomson Reuters SDC code: B06c Source: Thomson Reuters SDC code: B6

36 International Financing Review April 7 2018 STRUCTURED FINANCE

NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 6/4/2018 Issuer Amount (m) WAL Coupon (%) Bookrunner(s) Rating Asset type Romark WM-R US$5 - 1mUSL+62bp Citi NR/AAA/NR CLO Romark WM-R US$281 - 3mUSL+103bp Citi NR/AAA/AAA CLO Romark WM-R US$30.5 - 1mUSL+130bp Citi NR/NR/AAA CLO Romark WM-R US$38 - 1mUSL+155bp Citi NR/AA/NR CLO Romark WM-R US$23 - 4.270 Citi NR/AA/NR CLO Romark WM-R US$29.2 - 1mUSL+195bp Citi NR/A/NR CLO Romark WM-R US$29.5 - 1mUSL+302bp Citi NR/BBB-/NR CLO Romark WM-R US$19.5 - 1mUSL+526bp Citi NR/BB-/NR CLO Romark WM-R US$7.5 - 1mUSL+810bp Citi NR/B-/NR CLO Romark WM-R US$42.75 - NA Citi NR/NR/NR CLO Shackleton 2013-IV CLO Ltd US$255 - 1mUSL+100bp Citi Aaa/NR/AAA CLO Shackleton 2013-IV CLO Ltd US$15.7 - 3.760 Citi Aaa/NR/AAA CLO Shackleton 2013-IV CLO Ltd US$32 - 3mUSL+160bp Citi Aa2/NR/NR CLO Shackleton 2013-IV CLO Ltd US$14.75 - 4.340 Citi Aa2/NR/NR CLO Shackleton 2013-IV CLO Ltd US$21 - 3mUSL+190bp Citi A2/NR/NR CLO Shackleton 2013-IV CLO Ltd US$27.75 - 3mUSL+287bp Citi Baa3/NR/NR CLO Shackleton 2013-IV CLO Ltd US$18.3 - 3mUSL+585bp Citi Ba3/NR/NR CLO Shackleton 2013-IV CLO Ltd US$8.4 - 3mUSL+840bp Citi B3/NR/NR CLO Shackleton 2013-IV CLO Ltd US$33 - NA Citi NR/NR/NR CLO GLG EURO CLO I €3 1.4 3mE +40bp MS Aaa/NR/AAA CLO GLG EURO CLO I €219 5.4 3mE +74bp MS Aaa/NR/AAA CLO GLG EURO CLO I €15 5.4 1.55 MS Aaa/NR/AAA CLO GLG EURO CLO I €42 7 3mE +115bp MS Aa2/NR/AA CLO GLG EURO CLO I €13 7 2.05 MS Aa2/NR/AA CLO GLG EURO CLO I €26 7.7 3mE +160bp MS A2/NR/A CLO GLG EURO CLO I €22 8.3 3mE +245bp MS Baa2/NR/BBB CLO GLG EURO CLO I €22.2 9 3mE +485bp MS Ba2/NR/BB CLO GLG EURO CLO I €12 9.6 3mE +645bp MS B2/NR/B- CLO GLG EURO CLO I €38 - NA MS NR/NR/NR CLO

BPûCOUPONû4HEYûHAVEûAû7!,ûOFûû to individuals and small business companies EMEA ABS years. in France. The discounted outstanding There are also €22.8m Class Bs being balance is just under €761m. RCI BANQUE TO PLACE RETAINED marketed at one-month Euribor plus 70bp The used car ratio within the portfolio is FRENCH AUTO ABS IN SECONDARY COUPONû4HEû#LASSû"S ûWHICHûHAVEûAû7!,ûOFû capped at 60%. The single borrower ratio is 4.58 years, are rated AA (high)/Aa3. Both A capped at 0.05% and the commercial RCI BANQUE, the Renault Nissan Alliance auto and B notes are expected to price above par. borrowers’ ratio is capped at 6%. The lNANCEûCAPTIVEûCOMPANY ûANNOUNCEDûTHEû The transaction is a repeat of Cars weighted average seasoning is above six secondary placement of the Class A and !LLIANCEû!UTOû,OANSû&RANCEû6û  ûWHICHû months. Class B Notes of CARS ALLIANCE AUTO LOANS closed in October 2014. The roadshow began on Friday and will FRANCE V 2018-1 that had been fully subscribed 4HEûPORTFOLIOûISûAûPOOLûOFûlXEDûRATEûAUTOû run through to Wednesday. Pricing is by RCI Banque in March 2018. loans (amortising and balloon loans) granted expected on Thursday or Friday. The largest tranche comprises Triple A rated €700m Class A notes, which are AUSTRALIAN DOMESTIC BONDS ALL INTL AUSTRALIAN DOLLAR BONDS being offered at one-month Euribor plus BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 Managing No of Total Share Managing No of Total Share EUROPEAN CLOs bank or group issues A$(m) (%) bank or group issues A$(m) (%) BOOKRUNNERS: 1/1/2018–31/3/2018 1 National Australia Bank 23 7,568.01 20.0 1 TD Securities 29 2,061.35 14.8 Managing No of Total Share 2 CBA 15 6,364.24 16.8 2 RBC 22 1,604.75 11.5 bank or group issues €(m) (%) 3 ANZ Banking Group 15 5,695.99 15.1 3 Nomura 17 1,385.33 10.0 1 Citigroup 5 2,121.87 34 4 Westpac Banking 16 4,797.02 12.7 4 Deutsche Bank 17 1,349.85 9.7 2 Barclays 3 1,361.60 22 5 UBS 9 4,273.43 11.3 5 JP Morgan 8 1,160.29 8.3 3 BAML 2 776.00 12 6 Deutsche Bank 4 3,002.86 7.9 6 ANZ 7 1,057.71 7.6 4 Credit Suisse 2 717.55 12 7 Citigroup 4 2,737.84 7.2 7 Daiwa Securities 12 1,006.56 7.2 5 BNP Paribas 1 414.37 7 8 JP Morgan 3 621.65 1.6 8 Mizuho 6 943.49 6.8 6 Goldman Sachs 1 413.70 7 9 TD Securities 3 574.21 1.5 9 NAB 4 514.35 3.7 7 Morgan Stanley 1 411.00 7 10 BAML 2 496.97 1.3 10 CBA 5 485.07 3.5 Total 15 6,216.09 Total 42 37,813.40 Total 92 13,904.68

Including Leveraged Loans CLOs Including preferreds. Excluding equity-related debt. Source: Thomson Reuters Source: Thomson Reuters SDC code: AJ02 Source: Thomson Reuters SDC code: K1

International Financing Review April 7 2018 37 The arrangers are BNP Paribas and HSBC. ,ARGESTûTRANCHEû#LASSû! û53M û They are joined as lead managers by Societe US MBS rated Triple A (Fitch). Generale. US MBS DEAL PRICINGS US ABS EMEA CLO CMBS PRICED MORE ABS DEALS ON TAP EVEN AS GLG EURO CLO I REISSUE PRICED CREDIT SUISSE COMMERCIAL MORTGAGE SPREADS SEE PRESSURE VIA MORGAN STANLEY A US$857.581m SEC-registered (public/ private) conduit CMBS called CSAIL 2018-CX11 US CONSUMERS STILL HEALTHY GLG PARTNERS has priced a reissue of its priced via joint bookrunners Credit Suisse, Investors will have plenty of choices next %UROPEANûLEVERAGEDûLOANû#,/ûGLG EURO CLO I. Natixis, and Barclays. week in the asset-backed and mortgage Morgan Stanley was bookrunner. Collateral: 56 loans secured by 118 bond markets as fresh supply ramps up in The deal’s Class X Triple As printed at commercial properties. the second quarter. 40bp over Euribor, while the 5.4-year Triple ,ARGESTûTRANCHEû#LASSû! û53M û CONSUMER PORTFOLIO SERVICES, GM FINANCIAL, As came at plus 74bp for the €219m FRN WITHûAû YEARû7!, ûRATEDû4RIPLEû!ûPRICEDû HYUNDAI and SANTANDER CONSUMER USA have #LASSû!ûANDûûFORûTHEûõMûlXEDûRATEû ATû)3 BP programmatic auto ABS deals in the line-up. Class A2. In student loans, SOCIAL FINANCE and a 4HEû$OUBLEû!SûINûmOATINGûANDûlXEDûCAMEû RMBS PRICED partnership between EDUCATIONAL SERVICES OF at plus 115bp and 2.05% respectively. The AMERICA and SOUTHEAST BANK have deals in the Single As were plus 160bp and the Triple Bs AOMT 2018-1 works. plus 245bp. The Double Bs and B2/B- A private US$328.78m residential MBS And on the renewables front, SOLAR MOSAIC tranches were priced below par to give transaction called ANGEL OAK MORTGAGE TRUST I has its second-ever residential loan discount margins of plus 535bp and plus LLC 2018-1 priced. Pricing details will not be securitisation in the pipeline. 735bp. disclosed. The line-up of more than a dozen ABS and The deal has a two-year non-call period Collateral: 905 loans secured mainly by non- MBS deals comes after a slow start in April. and a four-year reinvestment period. QUALIlEDûMORTGAGESûASûDElNEDûBYûTHEû!42ûRULE Spreads have given up ground in the few deals that have come and yields have GLOBAL SECURITISATIONS IN STERLING SECURITISATIONS – ALL EUROPEAN RMBS slightly increased. BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 WORLD OMNI this week priced a roughly Managing No of Total Share Managing No of Total Share US$800m prime auto loan deal at yields of bank or group issues £(m) (%) bank or group issues €(m) (%) 2.25%-3.201% versus 1.75%-2.91% on its 1 MUFG 1 1,006.20 17.8 1 Cooperatieve Rabobank 1 1,074.57 12.8 January deal, according to IFR data. 2 Lloyds Bank 8 817.76 14.5 =1 SG 1 1,074.57 12.8 “January was probably the tights,” one 3 BAML 6 682.05 12.1 3 BAML 6 1,057.08 12.6 portfolio manager told IFR. 4 Citigroup 4 668.78 11.8 4 Citigroup 4 917.77 10.9 Early talk on many deals on tap is also 5 BNP Paribas 5 581.55 10.3 5 Lloyds Bank 5 772.04 9.2 slightly wider of the recent tights, he said. 6 Natixis 3 413.30 7.3 6 BNP Paribas 3 672.44 8.0 7 HSBC 3 374.33 6.6 7 Natixis 3 469.56 5.6 MORE JOBS, AND DEBT 8 RBC 3 227.10 4.0 8 Barclays 2 445.28 5.3 Volatility in other parts of the credit 9 Barclays 2 197.50 3.5 9 HSBC 2 434.75 5.2 markets has led to a more cautious tone 10 JP Morgan 1 175.00 3.1 10 Deutsche Bank 1 383.50 4.6 spilling over into ABS. But the overall Total 15 5,648.68 Total 13 8,418.93 picture of US consumers still appears solid, Including Euro, foreign, global and domestics, excluding CDOs. Including Euro, foreign, global and domestics, excluding CDOs. even as borrowers take on more debt. Total household debt reached a new peak Source: Thomson Reuters SDC code: B16i Source: Thomson Reuters SDC code: B10a in the fourth quarter of 2017, rising

ALL EUROPEAN ISSUERS GLOBAL STRUCTURED FINANCE IN EUROS ALL INTL ISSUERS (EXCLUDING SELF-FUNDED) BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 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 SG 4 3,030.38 12.6 1 SG 4 2,476.26 21.4 1 JP Morgan 32 8,133.77 10.3 2 BAML 7 2,248.81 9.3 2 Cooperatieve Rabobank 1 1,074.57 9.3 2 Wells Fargo 25 7,461.88 9.5 3 Lloyds Bank 8 1,658.33 6.9 3 Credit Agricole 3 966.80 8.4 3 BAML 26 7,280.48 9.2 4 BNP Paribas 7 1,432.50 6.0 4 UniCredit 4 839.89 7.3 4 Citigroup 27 5,344.50 6.8 5 MUFG 1 1,398.52 5.8 5 Commerzbank 1 769.35 6.7 5 Credit Suisse 18 4,552.77 5.8 6 Cooperatieve Rabobank 1 1,309.36 5.4 =5 BAML 1 769.35 6.7 6 Goldman Sachs 11 4,221.06 5.4 7 Credit Agricole 3 1,196.56 5.0 7 Standard Chartered 1 675.22 5.8 7 SG 8 4,213.22 5.4 8 Citigroup 4 1,122.43 4.7 8 Banca IMI 2 487.28 4.2 8 Barclays 16 3,952.77 5.0 9 UniCredit 4 1,036.61 4.3 9 ING 2 477.84 4.1 9 Deutsche Bank 19 3,818.58 4.9 10 Commerzbank 1 946.60 3.9 10 RBC 1 428.56 3.7 10 RBC 13 3,014.83 3.8 Total 31 24,069.20 Total 15 11,564.81 Total 119 78,728.48

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

Source: Thomson Reuters SDC code: B16n Source: Thomson Reuters SDC code: B16g Source: Thomson Reuters SDC code: J10d

38 International Financing Review April 7 2018 STRUCTURED FINANCE

US$193bn to U$13.15trn, according to the Collateral: Consumer loans. TRICON AMERICAN HOMES Federal Reserve Bank of New York. ,ARGESTûTRANCHEû#LASSû!û53M û TRICON AMERICAN HOMES announced a US$314m One issue to watch, however, will be their WITHû YEARû7!, ûRATEDû! ûPRICEDûATû%$3&û lXED RATEûSINGLE FAMILYûRENTALû!"3ûCALLEDûTAH paycheques. plus 72bp versus guidance of EDSF plus 75bp 2018-SFR1. Deutsche Bank sole structuring lead “Coming out of the crisis, we’ve area. and sole bookrunner. Bank of America Merrill obviously added a lot of jobs to the Direct comp: UPST 2017-2 (15/11/17) Class Lynch joint-lead manager. economy,” said Charlie Ripley, senior !û53M ûWITHû YEARû7!, ûRATEDû Collateral: Single family rentals (2,509 investment strategist for Allianz Investment A-; priced at EDSF plus 90bp. properties). Management, in Minneapolis. “One thing ,ARGESTûTRANCHEû#LASSû!û53M û we haven’t seen is wages moving up quickly. WORLD OMNI WITHû YEARû7!, ûRATEDû4RIPLEû! I think that’s impacting the consumer to WORLD OMNI FINANCIAL CORP priced a Direct comp: TAH 2017-SFR2 (11/12/17) some extent.” US$802.840m prime auto loan deal, #LASSû!û53M ûWITHû YEARû7!, û World Omni Auto Receivables Trust rated Triple A; priced at interpolated swaps AUTOS HOLDING UP WOART 2018-B. Barclays structurer and joint plus 75bp. Investors eyeing the auto ABS sector for bookrunner with Mizuho, SunTrust, and signs of pain may have a while to wait. Kroll Wells Fargo. showed improvements on both its prime Collateral: Prime retail auto loan ASIA-PACIFIC MBS and non-prime auto loan ABS indices for receivables. March. One of the largest tranches: Class PEOPLE’S PREPARES FOR RMBS Two important metrics - losses and ! û53M ûWITHû YEARû7!, û delinquencies - both dipped. Prime collateral rated Triple A; priced at interpolated PEOPLE’S CHOICE CREDIT UNION has released initial clawed back 13bp and 7bp, respectively, on swaps plus 23bp versus guidance in price guidance for an indicative A$500m a month-on-month basis, and non-prime the interpolated swaps plus 20bp ISSUEûOFû2-"3 û,IGHTû4RUSTû  51bp and 61bp, respectively. area. ANZ, NAB and Westpac are joint lead managers “My view is that collateral fundamentals Direct comp: WOART 2018-A (30/1/18) on the trade, which may be launched as soon as in ABS remain solid,” said Kroll’s Brian Ford #LASSû! û53M ûWITHû YEARû7!, û April 9. Price talk for the A$460m Class A1 notes, in an interview. rated Triple A; priced at interpolated with a 3.0-year weighted-average life, is one- For non-prime auto loan ABS, peak swaps plus 12bp. month BBSW plus 115bp area. annualised losses jumped to 9.63% this year from 6.97% in 2012, according to Kroll’s GLOBAL CDOs ALL EUROMARKET CDOs data. BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 But the trade-off for investors has been Managing No of Total Share Managing No of Total Share bigger credit cushions on bonds to help bank or group issues US$(m) (%) bank or group issues US$(m) (%) absorb higher losses. 1 Citigroup 20 11,222.20 58.3 1 Citigroup 5 2,847.16 29.8 “You have seen credit enhancement rise 2 Credit Suisse 3 1,370.24 7.1 2 Credit Suisse 3 1,370.24 14.3 year-over-year,” Ford told IFR. “I would 3 Deutsche Bank 2 1,088.69 5.7 3 BNP Paribas 2 909.95 9.5 argue that investors are just as well 4 BNP Paribas 2 909.95 4.7 4 Deutsche Bank 1 632.95 6.6 protected today as they were in 2012.” 5 BAML 2 536.76 2.8 5 BAML 2 536.76 5.6 6 Goldman Sachs 1 504.24 2.6 6 Goldman Sachs 1 504.24 5.3 US ABS DEAL PRICINGS 7 Natixis 1 460.05 2.4 7 Natixis 1 460.05 4.8 8 Morgan Stanley 1 458.54 2.4 8 Morgan Stanley 1 458.54 4.8 UPSTART 9 Daiwa Securities 1 245.16 1.3 9 Jefferies 1 18.30 0.2 UPSTART priced a US$277.211m prime and 10 Jefferies 1 18.30 0.1 Total 20 9,549.67 near prime unsecured consumer loan ABS Total 38 19,256.86 Excludes global and domestic. deal called UPST 2018-1. Goldman Sachs Including Euro, foreign, global, US domestics. structuring agent and sole-bookrunner. Source: Thomson Reuters SDC code: B12 Source: Thomson Reuters SDC code: J11

US ASSET-BACKED SECURITIES GLOBAL STRUCTURED FINANCE IN US$ STRUCTURED FINANCE – ALL INTL ISSUERS BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 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 Citigroup 41 16,773.14 20.9 1 Citigroup 71 26,962.83 14.5 1 JP Morgan 32 8,133.77 9.5 2 BAML 27 7,531.56 9.4 2 JP Morgan 67 22,287.19 12.0 2 BAML 28 7,814.41 9.1 3 JP Morgan 30 7,328.31 9.1 3 Wells Fargo 58 21,344.95 11.5 3 Wells Fargo 26 7,643.94 8.9 4 RBC 21 5,820.13 7.3 4 BAML 54 18,559.87 10.0 4 Citigroup 28 5,645.34 6.6 5 Deutsche Bank 22 4,815.23 6.0 5 Credit Suisse 36 14,613.26 7.9 5 Barclays 18 4,811.12 5.6 6 Barclays 20 4,704.39 5.9 6 Goldman Sachs 32 10,738.94 5.8 6 Credit Suisse 18 4,552.77 5.3 7 Wells Fargo 22 4,544.56 5.7 7 Morgan Stanley 26 10,239.97 5.5 7 SG 9 4,460.78 5.2 8 Mizuho 13 4,290.70 5.4 8 Barclays 30 8,234.03 4.4 8 Deutsche Bank 20 4,443.84 5.2 9 Goldman Sachs 13 3,610.73 4.5 9 Deutsche Bank 31 7,908.70 4.3 9 Goldman Sachs 11 4,221.06 4.9 10 MUFG 12 3,351.49 4.2 10 RBC 26 7,814.01 4.2 10 RBC 14 3,764.82 4.4 Total 121 80,193.31 Total 303 185,320.12 Total 129 85,523.21

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: Thomson Reuters SDC code: F14 Source: Thomson Reuters SDC code: B16b Source: Thomson Reuters SDC code: J10c

International Financing Review April 7 2018 39 Initial guidance for the respective A$262m) A1c and A$280.8m A2 tranches A$10.5m Class A2s, A$16, Class ABs, A$8m priced at spreads of 75bp, 135bp and ASIA-PACIFIC ABS Class Bs, A$4.5m Class Cs and A$1m Class 210bp over one-month BBSW, while the A1c $S ûALLûWITHû YEARû7!,S ûISûONE MONTHû piece priced at three-month Euribor plus SMOOTH DRIVE FOR VOLKSWAGEN ABS BBSW plus 135bp–140bp area, 165bp–170bp 50bp. area, low 200s area, 300bp area and high VOLKSWAGEN FINANCIAL SERVICES smoothly 500s area. RESIMAC HIRES FOR RMBS executed its A$699m Driver Australia Five People’s Choice raised A$500m from last Trust Auto ABS issue last Friday. The !PRILSûISSUEûOFûTHEû,IGHTû4RUSTû û Non-bank lender RESIMAC has mandated NAB ISSUANCEûCONlRMSûTHATûTHEû'ERMANûVEHICLEû Australian RMBS. and Westpac to engage investors for a MAKERûSûûEMISSIONSûSCANDALûISûlRMLYû potential issue through the Resimac Premier behind it, as far as the Australian LIBERTY READIES DUAL-CURRENCY RMBS RMBS programme. securitisation market is concerned. Resimac previously visited the local The A$661.5m of Class A notes, rated LIBERTY FINANCIAL has hired Bank of America market last December to sell A$1bn AAA/AAA (S&P/Fitch), with a 1.78-year Merrill Lynch, CBA, Deutsche Bank, NAB and prime RMBS via Resimac Premier Series weighted-average life and 13% credit Westpac to arrange meetings with domestic 2017-3. support, were priced inside 95bp area and offshore investors, starting on Monday, The A$880m Class A notes, with a 2.7-year guidance at one-month BBSW plus 93bp. for a potential issue of Australian dollar and weighted-average life, priced at one-month 4HEû!MûOFû#LASSû"ûNOTES ûRATEDû!  euro RMBS. BBSW plus 112bp. The A$66m Class AB, !!n ûWITHûAû7!,ûOFûûYEARSûANDûûCREDITû 4HEûSPECIALITYûlNANCEûGROUPûISSUEDûANû A$28m Class B and A$11m Class C notes, all support, matched one-month BBSW plus enlarged A$1.2bn-equivalent dual-currency WITHû YEARû7!,S ûPRICEDûBP ûBPû 150bp area price talk. RMBS in Aussie dollars and euros on July 14 and 315bp wide of one-month BBSW, ANZ was arranger, and joint lead manager last year. respectively. The A$10.5m Class D notes, with Bank of America Merrill Lynch. The respective A$120m Class A1a, WITHûAû YEARû7!, ûPRICEDûBPûOVERûONE The new Class As were priced 2bp tighter A$416m A1b, €165m (US$202m, month BBSW. than the 95bp margin for last May’s A$466m

GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 6/4/2018 Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

SSAR US DOLLARS Apr 5 2018 BNG US$500m Mar 11 2022 3mL+7 100 3mL+7 - Apr 5 2018 NWB US$350m incr Aug 9 2019 3mL+2 100.007 3mL+1 - (US$1.85bn) Apr 6 2018 Rentenbank US$300m incr Aug 18 2020 1.625 97.864 MS-7 / T+26.95 2.556 (US$2.5bn) EUROS Apr 3 2018 Hamburg €250m incr Feb 12 2021 0 100 - 0 (€500m) Apr 4 2018 Lower Saxony €500m incr Feb 15 2028 0.75 0.75 MS-15 / B+30 0.78 (€1bn) Apr 4 2018 EIB €300m incr Sep 15 2036 1.125 98.896 MS-19 / B+40.4 - (€1.8bn) STERLING Apr 4 2018 EIB £500m Mar 7 2025 1.375 99.302 G+33 1.477

Apr 4 2018 KfW £100m incr Feb 1 2021 1.375 100.689 G+24 1.121 (£1.45bn) Apr 4 2018 FMS WM £50m incr May 14 2021 0.875 99.262 G+25 0.866 (£1.15bn) SWISS FRANCS Apr 5 2018 Canton Ticino SFr100m May 8 2028 0.25 100.376 MS-18.8 / Eidg+21 0.212

NON CORE Apr 3 2018 NWB A$15m incr Jul 17 2028 3.45 102.104 ASW+53 / 3.208 (A$605m) ACGB+62.75 Apr 3 2018 Quebec C$500m Sep 1 2028 2.75 99.389 GOC+65.5 2.818 Apr 3 2018 NIB NKr500m Apr 10 2024 1.875 - - - Apr 4 2018 Ontario C$750m Jun 2 2028 2.9 99.928 GOC+73.5 2.908 Apr 5 2018 Ontario A$50m Oct 12 2028 3.2 99.206 ASW+52 3.29 Apr 5 2018 Quebec C$500m incr Sep 1 2028 2.75 98.802 GOC+67 2.884 (C$1bn) Apr 5 2018 Manitoba C$300m incr Jun 2 2027 2.6 97.217 GOC+76 2.949 (C$1.5bn) Apr 6 2018 NWB A$25m incr Jul 17 2028 3.45 101.555 ASW+53 / 3.27 (A$645m) ACGB+60.5 Apr 6 2018 EIB TL100m Apr 20 2026 11 95.516 TGB-142 11.899

40 International Financing Review April 7 2018 BONDS SUMMARY DETAILS

Driver Australia Four Trust Auto ABS and France, the Netherlands and Spain, as well CICC is lead underwriter and bookrunner inside the current 95bp–100bp BBSW spread as in North America under a different name. on the offering with Ping An Securities as joint required for a new major bank RMBS with a lead underwriter.  YEARû7!, ûACCORDINGûTOûLOCALûSYNDICATIONû PING AN TAPS AUTO LOAN ABS desks. HAIER READIES LEASING ABS The Class Bs were priced 15bp inside the PING AN BANK has printed Rmb1.94bn 165bp margin for the Driver Australia Four (US$307.7m) of auto loan-backed securities HAIER FINANCIAL SERVICES (CHINA) is preparing to B notes. in China’s interbank bond market. raise Rmb993.6m from an offering of asset- In contrast, Driver Australia Three, issued The issuer priced a Rmb1.762bn Class A backed securities, with China Development in March 2016, was forced to pay a hefty piece at par to yield 5.05% and a Rmb42m Bank as sole lead. premium because of VW’s emissions Class B at par to yield 5.50%. The two The trade comprises a Rmb160m Class A1 scandal, which had come to light less than tranches were 3.90 times and 4.85 times tranche, a Rmb784m Class A2 tranche and a six months earlier. covered, respectively. Rmb49.6m unrated subordinated tranche. The Driver Three Class As and Class Bs The originator retained an unrated Both Class A1 and A2 notes have AAA were priced 170bp and 265bp over one- subordinated Rmb134.45m tranche. RATINGSûFROMû#HINAû,IANHEû#REDITû2ATING month BBSW, respectively, with the The two senior tranches have expected Books will open on April 9 in China’s former representing a 30bp pick-up over maturities of February 26 2019 and March interbank bond market. the major bank RMBS clearing rate at that 26 2019, respectively. The Class As have AAA The securities are backed by 49 leasing time. ratings from both China Chengxin and contracts with a total balance of Distribution statistics were not available China Bond, while they see the Class Bs Rmb1.123bn. at the time of publication, but Driver Five NOTESûASû!!  4HEûlNANCIALûLEASINGûARMûOFûWHITE was understood to have drawn strong The underlying assets are 23,546 auto goods maker Haier Group intends to use offshore demand from investors familiar loans with a total balance of Rmb1.94bn. the proceeds to replenish capital. China with VW’s other driver programmes in The weighted-average interest rate on the Bond Insurance is the guarantor on the China, Japan, Brazil, Germany, the UK, loans is 10.72%, according to the prospectus. issue.

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

3mL+7 area - - Aaa/AAA/AA+ BAML/GS - 3mL+1 area(I), - - Aaa/AAA BMO/Nomura - 3mL+1 area(G) - - - Aaa/AAA/AAA RBC/TD -

- - - -/-/AAA Deka -

MS-15 area 1 >€525m -/-/AAA BLB/DZ/JPM/Nord/LB/Uni -

- - - Aaa/AAA/AAA BNPP/MS/NatWest -

G+33 area (I), 0 >£500m Aaa/AAA/AAA Barc/DB/HSBC UK 67%, Eur 27%, Asia 6%. Bks/PB G+33 area (G) 68%, FM 19%, Ins/PF/Other 7%, CB/ OI 6%. G+24 area - >£100m Aaa/AAA/Scope Barc/RBC - AAA - - - Aaa/AAA RBC -

MS-18.8 - - Aa2 KBBL/UBS Switz 100%. Tsy 60.6%, PB 20.2%, AM 19.2%.

- - - Aaa/AAA Daiwa -

- - - Aa2/AA-/AA-/AH NBF/RBC/TD - - - - Aaa/AAA Nordea - - - - Aa2/A+/-/AAL RBC/BMO/CIBC - ASW+52 area - - Aa2/A+ TD - - - - Aa2/AA-/AA-/AH NBF -

- - - Aa2/A+/-/AH Scotia -

- - - Aaa/AAA Miz -

- - - Aaa/AAA RBC -

International Financing Review April 7 2018 41 GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 6/4/2018 (CONTINUED) Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%) CORPORATES US DOLLARS Apr 3 2018 Charter Communications US$800m Apr 1 2038 5.375 98.85 T+245 5.471

Apr 3 2018 Charter Communications US$1.7bn Apr 1 2048 5.75 99.71 T+275 5.771

Apr 3 2018 General Mills US$600m Apr 16 2021 3.2 99.99 T+80 3.205

Apr 3 2018 General Mills US$850m Apr 16 2021 3mL+54 100 3mL+54 3mL+54

Apr 3 2018 General Mills US$850m Oct 17 2023 3.7 99.78 T+115 3.744

Apr 3 2018 General Mills US$400m Oct 17 2023 3mL+101 100 3mL+101 3mL+101

Apr 3 2018 General Mills US$800m Apr 17 2025 4 99.9 T+130 4.016

Apr 3 2018 General Mills US$1.4bn Apr 17 2028 4.2 99.8 T+145 0.042

Apr 3 2018 General Mills US$500m Apr 17 2038 4.55 99.84 T+155 4.562

Apr 3 2018 General Mills US$650m Apr 17 2048 4.7 99.81 T+170 4.712

Apr 3 2018 Marriott International US$450m Apr 15 2028 4 99.28 T+130 4.088

Apr 3 2018 Union Electric Co US$425m Apr 1 2048 4 99.57 T+100 4.025

Apr 3 2018 Welltower US$550m Apr 15 2028 4.25 99.96 T+148 4.255

Apr 5 2018 BMW US Capital US$1bn Apr 12 2021 3.1 99.94 T+68 3.121

Apr 5 2018 BMW US Capital US$750m Apr 12 2021 3mL+41 100 3mL+41 3mL+41

Apr 5 2018 BMW US Capital US$1bn Apr 12 2023 3.45 99.93 T+83 3.466

Apr 5 2018 BMW US Capital US$750m Apr 12 2028 3.75 99.92 T+93 3.76

Apr 5 2018 Dollar Tree US$750m 2NC1 3mL+70 100 3mL+70 3mL+70

Apr 5 2018 Dollar Tree US$1bn May 15 2023 3.7 99.81 T+110 3.74

Apr 5 2018 Dollar Tree US$1bn May 15 2025 4 99.9 T+125 4.016

Apr 5 2018 Dollar Tree US$1.25bn May 15 2028 4.2 99.74 T+140 4.232

Apr 5 2018 General Motors Financial US$1bn Apr 9 2021 3.55 99.96 T+112 3.564 Company Apr 5 2018 General Motors Financial US$500m Apr 9 2021 3mL+85 100 3mL+85 3mL+85 Company Apr 5 2018 General Motors Financial US$1bn Apr 9 2025 4.35 99.95 T+160 4.359 Company Apr 5 2018 salesforce.com US$1bn Apr 11 2023 3.25 99.94 T+62.5 3.263

Apr 5 2018 salesforce.com US$1.5bn Apr 11 2028 3.7 99.98 T+87.5 3.703

EUROS Apr 3 2018 CapGemini €500m Oct 18 2024 1 99.377 MS+52 / B+101.2 1.1

Apr 3 2018 CapGemini €500m Apr 18 2028 1.75 99.755 MS+82 / B+127.3 1.777

Apr 4 2018 Swisscom €500m Oct 12 2026 1.125 99.351 MS+40 / B+95.5 1.206 Apr 4 2018 PerkinElmer €300m Apr 9 2021 0.6 99.95 MS+60 / B+98.3 0.617 Apr 4 2018 Daimler €500m Apr 9 2020 3mE+50 100.71 3mE+15 - Apr 5 2018 Volkswagen €1bn Oct 11 2019 3mE+35 100.228 3mE+20 -

42 International Financing Review April 7 2018 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

T+270 area, 2 US$2.5bn Ba1/BBB-/BBB- Citi/DB - T+250/255 T+290 area, 7 US$4.3bn Ba1/BBB-/BBB- Citi/DB - T+275/280 T+120 area, 0 US$5.8bn Baa2/BBB BAML/Citi/DB/GS(a)Barc/MS(p) - T+85 (+/-5) L equiv, FRN US$2.6bn Baa2/BBB BAML/Citi/DB/GS(a)Barc/MS(p) - L equiv T+140 area, 0 US$6.7bn Baa2/BBB BAML/Citi/DB/GS(a)Barc/MS(p) - T+120 (+/-5) L equiv, FRN US$2bn Baa2/BBB BAML/Citi/DB/GS(a)Barc/MS(p) - L equiv T+155 area, 0 US$3.9bn Baa2/BBB Barc/Citi/GS/MS(a)BAML/DB(p) - T+135 (+/-5) T+170 area, 0 US$8.6bn Baa2/BBB Barc/Citi/GS/MS(a)BAML/DB(p) - T+150 (+/-5) T+180 area, 2 US$4.6bn Baa2/BBB Barc/DB/GS/MS(a)BAML/Citi(p) - T+160 (+/-5) T+195 area, 2 US$5.4bn Baa2/BBB Barc/DB/GS/MS(a)BAML/Citi(p) - T+175 (+/-5) T+145/150, 10 US$1.3bn Baa2/BBB BAML/DB/WFS - T+135 (+/-5) T+115/120, 6 US$1.1bn A2/A Barc/MUFG/RBC/TD - T+105 (+/-5) T+170 area, 8 US$1.5bn Baa1/BBB+ BAML/DB/MUFG - T+150 (+/-2) T+95 area, 4 US$3bn A1/A+ Barc/CA-CIB/Citi/TD/WFS - T+70 (+/-2) 3mL equiv, FRN US$2bn A1/A+ Barc/CA-CIB/Citi/TD/WFS - 3mL equiv T+100 area, 11 US$3bn A1/A+ Barc/CA-CIB/Citi/TD/WFS - T+85 (+/-2) T+110 area, 9 US$2bn A1/A+ Barc/CA-CIB/Citi/TD/WFS - T+95 (+/-2) 3mL+85 area, FRN US$2.2bn Baa3/BBB- BAML/JPM/WFS - 3mL+75 (+/-5) T+130 area, 5 US$4.7bn Baa3/BBB- BAML/JPM/WFS - T+115 (+/-5) T+145 area, 5 US$3bn Baa3/BBB- BAML/JPM/WFS - T+130 (+/-5) T+160 area, 5 US$3.7bn Baa3/BBB- BAML/JPM/WFS - T+145 (+/-5) T+130 area, 7 US$4bn Baa3/BBB/BBB BAML/CA-CIB/JPM/GS/RBC/SG - T+112 (the #) L equiv, FRN US$1.5bn Baa3/BBB/BBB BAML/CA-CIB/JPM/GS/RBC/SG - 3mL+85 (the #) T+175 area, 7 US$3.1bn Baa3/BBB/BBB BAML/CA-CIB/JPM/GS/RBC/SG - T+160 (the #) T+80 area, debut US$9bn A3/A- BAML/JPM(a)/Barc/Citi/DB/WFS(p) - T+65 (+/-2.5) T+105 area, debut US$9bn A3/A- BAML/JPM(a)/Barc/Citi/DB/WFS(p) - T+90 (+/-2.5)

MS+65/70, 22 >€3.6bn combined -/BBB Barc/BNPP/CA-CIB/Citi/HSBC/MS/ Ger/Aus 28%, Fr 22%, Benelux 17%, MS+55 (+/-3) Natx/SG UK 15%, S.Eur 7%, Switz 5%, N.Eur 5%, Other 1%. AM 74%, OI 10%, Ins/PF 8%, Bks/PB 8%. MS+95/100, 22 >€3.6bn combined -/BBB Barc/BNPP/CA-CIB/Citi/HSBC/MS/ Fr 36%, UK 23%, Ger 22%, S.Eur 8%, MS+85 (+/-3) Natx/SG Switz 5%, Benelux 4%, N.Eur 1%, Other 1%. AM 66%, Ins/PF 18%, OI 9%, Bks/PB 5%, Other 2%. MS+50/55 10 >€1.1bn A2/A DB/ING/Uni - MS+70 area - - Baa3/BBB/BBB JPM - 3mE+15 area 2 >€550m A2/A/A- GS - 3mE+35 area, FV+20 €1.15bn A3/BBB+ CA-CIB/GS/MUFG/SG - 3mE+20/25

International Financing Review April 7 2018 43 GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 6/4/2018 (CONTINUED) Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Apr 5 2018 Volkswagen €500m Apr 12 2021 0.375 99.926 MS+37 / B+83.6 0.4

Apr 5 2018 Volkswagen €750m Apr 21 2023 0.875 99.505 MS+60 / B+105 0.977

Apr 5 2018 Scentre €500m Apr 11 2028 1.75 99.809 MS+80 / B+124.6 1.771

NON CORE Apr 3 2018 Swedavia SKr500m Apr 12 2021 0.363 - - - Apr 3 2018 Fabege SKr300m Apr 9 2020 0.385 100 - 0.385 Apr 3 2018 Fabege SKr200m Apr 9 2020 3mSt+75 100.405 3mSt+55 - Apr 4 2018 Oresundsbro Konsortiet SKr1.1bn Apr 30 2025 0.88 - - - Apr 5 2018 Fabege SKr200m Apr 12 2024 3mSt+137 - - - FINANCIALS US DOLLARS Apr 2 2018 Securian Financial Group US$500m Apr 15 2048 4.8 99.68 T+185 4.82

Apr 4 2018 Aegon US$800m Apr 11 2048 (Apr 2028) 5.5 100 - 5.5

Apr 4 2018 Soc Gen AT1 US$1.25bn Perpetual (Apr 2028) 6.75 100 - 6.75

EUROS Apr 4 2018 Mizuho €500m Apr 10 2023 3mE+50 100 3mE+50 -

Apr 4 2018 Mizuho €500m Apr 10 2028 1.598 100 MS+65 / B+111 1.598

Apr 5 2018 UBI Banca (SNP) €500m Apr 12 2023 1.75 99.877 MS+140 / B+185.2 1.776

NON CORE Apr 4 2018 AMP Bank A$300m Apr 9 2020 3mBBSW+70 100 3mBBSW+70 - Apr 4 2018 SBAB Bank SKr300m incr Jul 5 2021 0.453 - - - (SKr800m) Apr 5 2018 ME Bank A$250m Apr 16 2021 3mBBSW+127 100 3mBBSW+127 - COVERED BONDS EUROS Apr 3 2018 CFF €1.5bn Apr 11 2023 0.25 99.817 MS-8 / B+38.2 0.287

Apr 4 2018 ABN AMRO €1.25bn Apr 12 2038 1.45 99.261 MS+8 / B+60.6 1.493

Apr 5 2018 ING Bank €1.75bn Apr 11 2028 0.875 99.43 MS-3 / B+42 0.935

STERLING Apr 5 2018 Nationwide BS £1bn Apr 12 2023 3mL+26 100 3mL+26 -

Apr 6 2018 Santander UK £1bn Apr 13 2021 3mL+22 100 3mL+22 - SWISS FRANCS Apr 4 2018 PSHypo SFr143m incr May 16 2023 0 100.913 MS-10 / Eidg+33.1 -0.179 (SFr383m) Apr 4 2018 PSHypo SFr260m incr Jan 18 2027 0.25 99.971 MS-4 / Eidg+34.7 0.253 (SFr835m) HIGH YIELD US DOLLARS Apr 4 2018 McDermott Escrow 1 US$1.3bn May 1 2024 (May 2021) 10.625 94.75 T+918 11.865 Apr 4 2018 Freedom Mortgage Corp US$700m Apr 15 2025 (Apr 2021) 8.25 100 T+554 8.25 Apr 5 2018 Resolute Energy Corporation US$75m incr May 1 2020 8.5 99.51 T+641 8.76 (US$200m) Apr 5 2018 Targa Resources US$1bn Apr 15 2026 (Apr 2021) 5.875 100 - 5.875 Apr 5 2018 Compass Diversified US$400m May 1 2026 (May 2020) 8 100 T+519 8 Holdings Apr 5 2018 American Greetings Corp US$282.5m Apr 15 2025 (Apr 2021) 8.75 87 T+873 11.499

44 International Financing Review April 7 2018 BONDS SUMMARY DETAILS

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

MS+50/55, FV+25 €1.65bn A3/BBB+ CA-CIB/GS/MUFG/SG - MS+40 (+/-3) MS+75/80, FV+50 €2.1bn A3/BBB+ CA-CIB/GS/MUFG/SG - MS+60/65 MS+90 area - >€1.1bn A/A BNPP/CS/DB(B&D)/RBC(a) + MUFG/ Fr 54%, Ger 16%, UK 16%, Neth 7%, SMBCNikko(p) RoEur 7%. AM 68%, Ins/PF 26%, Bks 4%, OI 2%.

- - - - Swed - - - - Baa3 HCM - - - - Baa3 HCM - - - - -/AAA Swed - - - - Baa3 HCM -

T+200 area, - US$1.4bn A3/A GS/KBW - T+190 (+/-5) 5.75% area, - - Baa1/BBB/BBB- BAML/DB/JPM/MS/WFS - 5.6% (+/-10), 5.5% 6.875% area, - - Ba2/BB+ SG/Citi/CS/JPM/MS - 6.75%

3mE+60/65, 8 €1.1bn A1/A- Miz/BAML/BNPP/Natx/UBS Eur 98.6%, Asia 1.4%. AM 55.3%, CB/ 3mE+50/55 SWF 33%, Bks 7.3%, Ins 2.5%, Other 1.8%. MS+75/80, 10 >€800m A1/A- Miz/BAML/BNPP/Natx/UBS Eur 95.7%, Asia 4.3%. Ins 55.4%, AM MS+65/70 34.2%, CB/SWF 3.1%, Other 7.3%. MS+145 area 30 ~€1bn, ~130 acs Ba3/BB+/BBB-/ IMI/Barc/CA-CIB/HSBC/Natx/Santan It 50%, Fr 21%, Ger/Aus 10%, UK 7%, Sp BBBL 7%, Switz 4%, Other 1%. FM/PB 62%, Bks 26%, Ins/PF 12%.

3mBBSW+75 area - - A2/A ANZ/NAB/WBC - - - - A1/A Danske -

3mBBSW+130 area - - Baa1/BBB ANZ/NAB/WBC -

MS-5 area, 7 €2.2bn, >80 acs Aaa/AAA/AAA Caixa/CMZ/ING/Natx/NordLB/SG Fr 34%, Ger/Aus 23%, UK/Ire 11%, MS-7 (+/-1) Nordics 11%, Benelux 10%, Asia 4%, S.Eur 3%, Other 4%. CB/OI 42%, AM 28%, Bks 25%, Ins/PF 5%. MS+10 area 5 ~€1.45bn Aaa/-/AAA ABN/HSBC/Natx/UBS/Uni Ger 49%, Neth 29%, Fr 8%, Switz 4%, UK 4%, Nordics 2%, Other 4%. Ins/PF 33%, FM 32%, CB/OI 29%, Bks/PB 6%. MS flat area 7 >€2.3bn, 70 acs Aaa/-/AAA CS/Danske/DZ/ING/LBBW/Natx Ger/Aus 45%, Benelux 30%, UK/Ire 10%, Fr 5%, Asia 5%, Nordics 3%, Other 2%. AM 31%, Bks 31%, CB/OI 24%, Ins/ PF 14%.

3mL+high 20s 1 £1.15bn Aaa/AAA/AAA CS/NatWest/Nomura/RBC UK/Ire 91%, Eur 9%. Bks 71%, AM 20%, OI 8%, Other 1%. 3mL+25 area - >£1.5bn Aaa/AAA/AAA RBC/Santan/TD -

MS-10 area - - Aaa CS/Raiff/UBS -

MS-4 area - - Aaa CS/Raiff/UBS -

10.50% area - - B2/B-/ Barc/CA-CIB/GS/ABN - 8.25% area - - B2/B-/ JPM/Barc/Key/UBS/GS/MS - 99.51 - - Caa1/B-/B+ GS -

5.75-6.00% - - Ba3/BB-/ BAML/Barc/Citi/DB/RBC/WFS - - - - B3/B-/ BAML/FITB/STRH/TD/USB -

- - - B2/B/ DB/Barc/Citizens/ING/BAML/HSBC/ - SMBC/Key/CIBC

International Financing Review April 7 2018 45 © Thomson Reuters 2016. All rights reserved. 2016. Thomson Reuters © NEW: IFR CAPITAL MARKETS WEEK AHEAD

Start the week with IFR’s Capital Markets Week Ahead email: a brief, global, cross-asset class look at the key capital markets deals and events expected in the coming week, with links to relevant IFR stories for context. ƒ Key deals coming up in the week ahead, with statistics and background context. ƒ A graphic, chart or table that captures a trend or milestone in the markets. ƒ ‘Last week in numbers’: newsworthy statistics from the previous week’s deals. Visit IFRe.com to sign up today. EMERGING MARKETS

China 48 India 49 Malaysia 49 Philippines 50 Singapore 50 South Korea 51 Kazakhstan 52 Montenegro 52 Sudan 53 Turkey 53 Ukraine 53 Oman 54 UAE 54 Argentina 54 Ecuador 56

„ FRONT STORY AFRICA Egypt takes up African euro gauntlet Cairo lines up debut euro offering Attention will focus on cost versus dollars

EGYPT has hired banks for a debut euro- emerging markets issuers over the past few The deal, for which books peaked at denominated bond, highlighting how the years, most buyers of these deals are US$12.5bn, priced about 25bp back of fair single currency is becoming a viable funding traditional EM accounts making off-index value - deemed appropriate given the volatile option for African sovereigns. trades as they are attracted by the huge backdrop. Egypt is hoping to follow in the footsteps pick-up over equivalent US dollar debt. of North African neighbours Morocco and Ivory Coast, for example, paid about 200bp Tunisia by issuing in euros. Egypt lacks the over its US dollar curve for the 2030s after “Egypt is a country that we historical connection of the other two taking the cross-currency swap into account, have liked for some time and countries with continental Europe, but the and about 250bp on the longer tranche. are comfortable with the region is one of its biggest trading partners. Senegal, too, priced its euro notes cheap There was about €30bn of trade between compared to its dollar curve, with one fundamentals” Egypt and the EU in 2016, according to EU banker away from the deal estimating they data, equivalent to roughly 10% of Egypt’s GDP. priced equivalent to a US dollar yield of Investors are becoming more bullish on Egypt (B3/B-/B) plans to issue benchmark about 7.45% after adjusting for the swap. Egypt thanks to a revival of economic growth eight-year and/or 12-year notes after “Countries should really only [issue in after the government agreed to reforms completing a roadshow, which begins on euros over US dollars] if there is a natural under a US$12bn three-year IMF loan package Wednesday and runs for the rest of the week. need for euros and if it is cheaper than in late 2016, though some policies, such as There will likely be plenty of debate RAISINGûlNANCEûINûDOLLARS vûSAIDû3AILESHû,AD û currency devaluation and withdrawal of price around where fair value lies given the lack of senior EM portfolio manager at AXA subsidies, have hurt locals. Poverty has a curve. Two other African sovereigns have Investment Managers. increased and unemployment is a concern. issued in euros in recent weeks, namely “The euro EM market is far smaller and far Still, some key macro indicators are Ivory Coast and Senegal. less liquid than the US dollar EM market, as heading in the right direction. After peaking Ivory Coast (Ba3/-/B+) raised €1.7bn is the investor base, but as we have seen ATûANûANNUALûRATEûOFûûINû!UGUST ûINmATIONû through a dual-tranche offering of 12 and 30- lately more countries have become more has fallen sharply with February headline YEARûNOTESû ûTHEûLATTERûWASûTHEûlRSTûATûTHATû COMFORTABLEûANDûBEENûABLEûTOûISSUEûINûEUROSv CPI at 14.4%. It was 17.1% in January. That tenor by an African issuer in euros. The 12- Egypt had a successful outing in US dollars allowed the central bank to reduce its key year was sold at a yield of 5.25%. in February when it raised US$4bn through interest rate by 100bp last month for the Senegal (Ba3/B+/-) raised €1bn through a lVE ûûANDû YEARûNOTES second meeting in a row. 10-year at 4.75% (it was sold in conjunction It priced a US$1.25bn February 2023 note The bank cut its overnight deposit rate to with a US$1bn 30-year). at 303bp over Treasuries to yield 5.577%, a 16.75% from 17.75%. It also slashed its However, both Senegal and Ivory Coast are US$1.25bn February 2028 at plus 373bp to overnight lending rate to 17.75% from 18.75%. much better rated than Egypt, so may not yield 6.588%, and a US$1.5bn February 2048 “Egypt is a country that we have liked for provide the best reference points. Moreover, at plus 478bp to yield 7.903%. some time and are comfortable with the both countries have a more natural need for FUNDAMENTALS vûSAIDû,AD ûADDINGûTHATû!XAûISû the single currency than Egypt given they HOLDING TIGHT overweight the credit in its benchmark are members of the West African Economic EGYPT’S US DOLLAR 6.588% FEBRUARY 2028s portfolio. and Monetary Union whose currency, the (Z-SPREAD BP) Egyptian President Abdel Fattah al-Sisi, CFA franc, is pegged to the euro. who led the military’s overthrow of Egypt’s 395 A better comparable from a ratings lRSTûDEMOCRATICALLYûELECTEDûPRESIDENTûINû perspective may be Argentina (B2/B+/B), 390 2013, has just easily won re-election for a although it has established a following in 385 second term with 97% of votes. Europe through regular issuance. 380 “The election result should have come as The Latin American sovereign has €1.25bn 375 no surprise to the market with the lack of January 2027s bid at a yield of 5.41%, 370 credible opposition and the number of invalid according to Tradeweb prices, and €1bn 365 ballots should not be ignored as a sign of a

January 2028s at 5.61%. 360 PROTESTûVOTEûAGAINSTûAL 3ISI vûSAIDû,AD

355 Banca IMI, BNP Paribas, Deutsche Bank and LOOKING FOR PICK-UP Standard Chartered are joint bookrunners on 1/3/18

8/3/18 the forthcoming deal. Meetings will take place 15/3/18 15/2/18 22/3/18 29/3/18 22/2/18 While the euro market has become more in London, Frankfurt, Munich, Milan and Paris. welcoming to sub-investment-grade Source: Thomson Reuters Sudip Roy

International Financing Review April 7 2018 47 ASIA-PACIFIC Libor rise scuppers carry trade „ ASIA-PACIFIC Higher borrowing costs sap appeal of leveraged bond investments CHINA Many Asian bond investors are licking their are giving investors little incentive to borrow US BOC GOES MULTI-CURRENCY AGAIN wounds as a jump in short-term US dollar dollars to buy credit. borrowing costs has eroded the attractiveness of “In the US dollar space, with higher funding BANK OF CHINA, rated A1/A/A, has hired banks leveraged trades. costs, expected returns have to be higher and, for a proposed offering of multi-currency Three-month US dollar Libor soared to therefore, valuations have to adjust,” said Siow. bonds as part of activities to support the 2.325% on April 4, its highest since the height “Existing leveraged structures in the space are country’s Belt and Road initiative. of the global financial crisis in November 2008, likely being unwound, and there’s a lack of creation The bank, listed in Hong Kong and Shanghai, according to Thomson Reuters data, having risen of new structures. US dollar Libor funding rates may HELDûCONFERENCEûCALLSûWITHûlXEDûINCOMEû steadily from 1.32% at the end of August. well moderate from here, but we are now in a world INVESTORSûINû!SIA 0ACIlCûANDû%UROPEûFROMû!PRILû The jump, which accelerated as the Federal of rising rates and the market is adjusting to that.” 4HEûISSUERSûOFûTHEûPROPOSEDûSENIORûlXEDû Reserve stepped up the pace of its interest rate ANDORûmOATING RATEûNOTES ûWITHûSHORTûTOû rises last year, has dealt a blow to investors that REVERSING TREND intermediate maturities, will be various had taken advantage of cheap credit to borrow The leveraged trade helped fuel a bull run branches and subsidiaries of Bank of China. US dollars and buy Asian offshore bonds. A large in Chinese offshore credit in recent years, as The Reg S notes, denominated in US number of Chinese investors and Asian private offshore securities firms and private bank clients dollars, euros, sterling, and/or Australian bank clients have borrowed to maximise returns leveraged up multiple times to lock in higher dollars, have expected ratings of A1/A/A. The on bond investments, bankers say. returns. Borrowing allowed them to amplify paper in New Zealand dollars has expected Yields on Chinese US dollar high-yield returns on the cash part of their investments. ratings of A1/A (Moody’s/S&P). property bonds and bank capital have surged The trade was particularly profitable when BOC, Singapore branch, has named BOC, as investors began to unwind those trades in the Chinese renminbi was weak against the US Citigroup, DBS Bank, OCBC Bank, Standard response to the rise in Libor. dollar, giving investors an added spread from Chartered and Mizuho Securities as joint global With supply pressures from China and global currency arbitrage. Now, the trend has reversed coordinators, joint bookrunners and joint volatility weighing on sentiment, the loss of as increased US government spending plans lead managers on a proposed offering of US this investor segment has dampened demand weigh on the dollar. dollar benchmark notes. for Asian credit and worsened mark-to-market Bankers are concerned that rising rates could The Luxembourg branch has mandated losses for leveraged investors. end one of the most profitable trades in recent BOC, Citigroup, Commerzbank, Credit Agricole “The Asian investment engine seems to have years for private banking clients. In a leveraged and ING for similar roles on an issue of euro stalled for now,” said Alan Siow, a portfolio carry trade, where the investor borrows from benchmark notes. manager at BlueBay Asset Management in banks to buy bonds, a rise in Libor increases the Its London branch has hired BOC, London. “While we have not yet seen large- cost of borrowing, reducing returns for investors Citigroup, Barclays and HSBC for the roles on scale redemptions or outflows, new inflows have in fixed-rate bonds. an offering of sterling benchmark notes. probably slowed because the opportunity cost “In the 10 years that I’ve been here, I’ve never The Sydney branch has named BOC, of waiting is lower, with short-term US dollar seen the private bank bid drop so low,” said a Citigroup, ANZ, UBS and Westpac for the roles deposits earning higher returns.” DCM banker. “Asian credit markets are really not on an issue of Australian dollar benchmark The current weak trading environment and doing well right now.” notes. lack of factors susceptible to turn things around Frances Yoon BOC’s New Zealand subsidiary has mandated BOC, ANZ Bank New Zealand and Westpac for an issue of Kiwi dollar In June 2015 and April 2017, BOC sold under its global medium-term notes benchmark notes. multi-tranche, multi-currency notes via programme. various branches, to support projects linked BOC International, Citigroup, DBS Bank, HSBC, ALL INTL EMERGING MARKETS BONDS to the Belt and Road infrastructure initiative JP Morgan, Wells Fargo Securities, MUFG and BOOKRUNNERS: 1/1/2018–31/3/2018 along the historic Silk Road route. Westpac are joint lead managers and joint Asia-Pacific In the June 2015 trade, it issued bookrunners. Managing No of Total Share US$3.55bn-equivalent of notes in US dollars, The aircraft-leasing company started to bank or group issues US$(m) (%) euros, Singapore dollars and offshore meet investors in Asia, Europe and the US 1 HSBC 61 6,451.11 7.7 renminbi. For its April 2017 print of from last Friday. 2 Bank of China 44 4,590.62 5.5 US$3.05bn-equivalent, it sold bonds in US The notes also have expected A– ratings 3 Standard Chartered 43 4,546.13 5.4 dollars, euros, Aussie dollars and offshore from both agencies. 4 Citigroup 33 4,203.08 5.0 renminbi. 5 BNP Paribas 30 3,449.71 4.1 A banker on the latest issue said BOC YUEXIU LOOKS TO MTN OFFERING 6 Credit Suisse 21 2,977.07 3.5 aimed to launch it this week at a size more 7 Citic 26 2,953.33 3.5 or less similar to previous prints. YUEXIU PROPERTY has hired banks for a 8 BAML 19 2,660.10 3.2 proposed offering of senior unsecured Reg S 9 UBS 23 2,465.98 2.9 BOCA PROPOSES DOLLAR TAKE-OFF notes in US dollars and/or offshore renminbi 10 Morgan Stanley 20 2,385.62 2.8 off a newly established medium-term notes Total 178 84,155.91 BOC AVIATION, rated A–/A– (S&P/Fitch), has programme of US$3bn. Excluding equity-related debt. hired banks for a proposed 144A/Reg S Bank of China (Hong Kong), Chong Hing Bank, Source: Thomson Reuters SDC code: L4 offering of US dollar senior unsecured bonds CMBC Capital, DBS Bank, Deutsche Bank, Guotai

48 International Financing Review April 7 2018 EMERGING MARKETS ASIA-PACIFIC

Junan International, HSBC, Morgan Stanley, Peking University owns 70% of Founder However, the court did not rule on a stay Nomura and Yue Xiu Securities have been Group and Beijing Zhaorun Investments granted by the National Company Law named joint global coordinators, joint lead Management, a holding company of the Tribunal in favour of minority investors managers and joint bookrunners. group’s employees, controls the remaining holding a 4.26% stake in subsidiary Reliance The Hong Kong-listed Chinese property 30%. Founder Group is involved in Infratel, which blocks RCom from selling developer will meet investors in Hong Kong, information technology, healthcare and TOWERûANDûlBREûASSETSû4HEû3UPREMEû#OURTû Singapore and London, starting Monday. PHARMACEUTICALS ûlNANCEûANDûSECURITIES ûBULKû SAIDû2#OMûSHOULDûlLEûANûAPPEALûBEFOREûTHEû Indirect wholly owned subsidiary Westwood commodities trading, education and training. NCLAT. The disputed claim by Reliance Group Holdings will be the issuer of the notes In January, Founder Group issued Infratel shareholders totals only Rs2bn– and Yuexiu Property will be the guarantor. US$600m of dual-tranche US dollar senior Rs3bn (US$30,800–$46,200), said RCom. Yuexiu Property has ratings of Baa3 unsecured notes, split into US$200m of RCom said that following the latest (negative) from Moody’s and BBB– (stable) from 4.70% three-year notes and US$400m of DEVELOPMENTS ûITûWASûCONlDENTûOFûACHIEVINGû Fitch and the notes have expected Baa3 and ûlVE YEARûNOTES an overall debt reduction of around Rs250bn BBB–, respectively, in line with the guarantor. hWITHINûTHEûNEXTûFEWûWEEKSv ûASûPERûTHEûlRSTû phase of its asset monetisation plans. It had FOUNDER HIRES FOR DOLLAR SENIOR INDIA originally planned to close the sale by the end of March. PEKING UNIVERSITY FOUNDER GROUP has hired four SUPREME COURT LIFTS RCOM STAY In March, holders of RCom’s US$300m banks for a proposed offering of US dollar 6.5% senior secured bonds approved the Reg S senior unsecured bonds. RELIANCE COMMUNICATIONS has cleared a hurdle substitution of collateral backing the notes, Bank of China, Barclays, DBS Bank and towards completing planned asset sales as freeing the assets to be sold. Restructuring Founder Securities (Hong Kong) are joint global part of a debt restructuring, after the Indian talks are under way, and part of the coordinators, joint lead managers and joint Supreme Court lifted a stay that had been consideration for bondholders includes a bookrunners. granted to trade creditor Ericsson India. cash payment following the asset sales. The state-owned conglomerate will meet Ericsson had in March won a stay investors in Hong Kong and Singapore, preventing RCom from selling spectrum, starting Monday. media convergence nodes and real estate MALAYSIA The issuer of the proposed unrated notes until it was repaid. RCom had responded in will be Kunzhi, while Founder Information AûSTOCKûEXCHANGEûlLINGûTHATûUNSECUREDû NAM CHEONG GETS EXTENSION (Hong Kong) will be guarantor. Both creditors should not have a higher priority companies are subsidiaries of Founder Group. of claims than secured lenders. NAM CHEONG has received approval from the 4HEûBONDSûWILLûALSOûHAVEûTHEûBENElTûOFûAû On Thursday, the Supreme Court lifted Singapore High Court for an extension to keepwell deed and a deed of equity interest the stay, allowing RCom to sell the assets to August 6 of a moratorium that stays any purchase undertaking from Founder Group. Reliance Jio Infocomm as planned. legal proceedings against it. Asian G3 volume shrinks on volatility

„ ASIA-PACIFIC Issuance slows down from record pace after yields surge

Asian G3 bond volumes decelerated in the first part due to higher expectations of US inflation Bank of China was the highest-ranked quarter from last year’s record pace, as surging after corporate tax cuts. Chinese bank, coming in fifth with US$4.3bn US interest rates sparked volatility. of volume. That was an improvement from its Deal volume in Asia ex-Japan for the quarter CHANGING EXPECTATIONS eighth place position in Q1 last year, when it fell by 14% to US$99.2bn from US$115.7bn a “The region’s G3 bond market saw greater booked US$4.1bn. year earlier, according to Thomson Reuters data. volatility in the first quarter, as participants BNP Paribas jumped to seventh place, The period saw 162 trades, down from 170 in the adjusted to changing macro and rate recording US$4.0bn of league table credit for a same quarter of 2017. expectations,” said Alexi Chan, global co-head of 4.0% market share, up 38% from US$2.9bn in “Considering what we dealt with – a spike in DCM at HSBC. the same period last year. volatility and 10-year Treasuries pushing through “Yet, with Asia’s strong underlying fundamentals, The Asian high-yield bond market shrank by 2.9% – the markets have been pretty resilient,” some excellent funding and capital-raising 15% to US$12.9bn, as the rise in US Treasury said James Arnold, head of Asia-Pacific debt opportunities were available for issuers, albeit yields began to bite. JP Morgan took the top capital markets syndicate at Citigroup. requiring more careful navigation of the markets.” spot with US$727m of deal volume and a 5.6% “The market is going through a period of The top 10 bookrunners took a smaller market market share. Bank of China and Deutsche transition, but we are positive. The markets share in the first quarter compared with the Bank were second and third, with US$720m and will rebound and there will be more same period in 2017. They made up 46.4% of US$707m, respectively. opportunities.” G3 deal volume for Asia ex-Japan, versus 51.2% “High-yield is going to be challenging,” In 2017, G3 bond issuance from Asia ex-Japan last year. said Citigroup’s Arnold. “Investors are looking totalled US$415.6bn, as benign rate conditions HSBC led the Asia ex-Japan league table, more closely at covenant packages, and and ample liquidity combined to support new booking US$7.5bn from 56 issues for a 7.5% they will gravitate towards transactions issuance and secondary trading. That began to market share. Citigroup came in second with that are well structured and reasonably change towards the end of the year, and 2018 US$5.7bn for a 5.8% share, with Morgan Stanley priced.” started with a sharp rise in Treasury yields, in third on US$4.8bn and a 4.8% share. Daniel Stanton

International Financing Review April 7 2018 49 The Malaysian offshore marine services and 4.30%, respectively, according to choice in voting on the primary company, which was put under a scheme of Tradeweb. RESTRUCTURING vûSAIDû3INGAPOREû%XCHANGEû arrangement in early November, had asked Last September, peer Ayala raised Regulation in a statement. “How a for more time to meet conditions precedent 53MûFROMûûUNRATEDûlXED FOR LIFEû shareholder votes on the primary to its completing a restructuring scheme. PERPûNON CALLûlVESûATûPARû4HEûPERPûWASû restructuring should not have a bearing on Nam Cheong obtained overwhelming quoted at a cash price of 97 to yield 5.30%. whether he/she would be entitled to receive bondholder approval on January 24 for its In January, Philippine port operator ICTSI shares in the new company under the proposals. Of the 97.047% of bondholders SOLDûAûûUNRATEDûlXED FOR LIFEûPERPû ALTERNATIVEûRESTRUCTURINGv present and voting, 94.42% opted to convert callable in May 2022 at par. The perp was “SGX RegCo will not hesitate to register their bonds into a term loan, while 5.58% quoted on Tuesday at 98.50 to yield 6%. its concerns about the alternative chose the cash-out option. The company has JP Morgan was sole bookrunner on the restructuring – in its current form – with the unsecured debt of around US$343m, Megaworld trade. relevant administrator to be appointed including S$90m (US$68.5m) of 2018 notes, should Noble Group be placed in S$75m of 2018s and S$200m of 2019s. ADMINISTRATIONv Nam Cheong will need SGX approval to SINGAPORE SGX RegCo urged senior creditors to issue and allot shares and term loans to reconsider the restructuring proposal. bondholders, and to resume trading in its SGX REGCO SLAMS NOBLE PLAN Shareholder Goldilocks, which holds shares. It will also need to obtain court around a 8.2% stake in Noble, said the RSA approval for the restructuring scheme The regulatory arm of the Singapore WASûhFATALLYûmAWEDvûANDûhDOOMEDûTOûFAILvû within the moratorium period. Exchange has criticised NOBLE GROUP’s unless it was reworked. proposed restructuring plan, questioning “Goldilocks has been emphasising since the method for allocating shares under a .OBLEûlRSTûANNOUNCEDûITSûINITIALû PHILIPPINES back-up restructuring plan and urging restructuring proposal on 29 January 2018 creditors to reconsider the proposal. that its restructuring proposal must not be a MEGAWORLD SELLS FIXED-FOR-LIFE A restructuring support agreement signed plan that is formulated in an opaque process by holders of around half of Noble’s senior with one particular class of stakeholders, at MEGAWORLD priced on Wednesday a US$200m debt states that current shareholders would the expense and to the direct detriment of OFFERINGûOFûPERPETUALûlXED FOR LIFEûNOTES û receive a 10% stake in the new company .OBLESûSTAKEHOLDERSûGENERALLY vûSAIDûTHEû despite the recent hikes in Treasury yields and after the workout. Abu Dhabi-based investment fund. expectations of further rate increases this year. However, if the primary restructuring Goldilocks also urged Noble to publish its 4HEûPERPETUALûNON CALLûlVEûSENIORû plan fails and the company enters lRST QUARTERûlNANCIALûRESULTS ûANDû unsecured notes were sold at par to yield administration, Noble’s RSA states that, questioned why it had this week appointed 5.375%, well inside initial price guidance of under an alternative proposal, current three UK-based directors, which Goldilocks 6.000% area. The size of the unrated Reg S shareholders would only be allocated shares said appeared to have been done to help issue was capped at US$200m, and was in the new company if they had voted in implement Noble’s proposed move to the HEARDûTOûHAVEûBENElTEDûFROMûTHEûSTRONGû favour of the original restructuring plan. UK. support of private-bank investors. It would ultimately be up to a court- 7HENûlNALûGUIDANCEûWASûANNOUNCED ûTHEû appointed administrator to decide how to INVESTORS SEEK MIDAS REDEMPTION order book was over US$400m. A note to proceed if Noble entered administration in the investors said it included large anchor UK, as proposed, but Noble said in an earlier Two holders of MIDAS HOLDINGS’ US$30m 7% orders, “one of which may constitute a proposal that it expected an administrator to bonds have asked for the notes to be MAJORITYûOFûTHEûSECURITIESv favour the alternative restructuring proposal, redeemed with unpaid interest. Real estate company Megaworld has given the high level of support from creditors. The notes, sold in 2016 to CRRC Hong bonds due on April 15 2018 and April 17 “SGX RegCo is of the view that Kong and CRRC Hongkong Capital 2023, quoted on Tuesday at yields of 3.50% shareholders should have the freedom of Management, were due on November 23

GLOBAL EMERGING MARKETS BOND DETAILS: WEEK ENDING 6/4/2018 Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)

Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%) Apr 4 2018 GS Caltex SFr100m Jan 31 2024 0.633 100 MS+65 / 0.633 Eidg+105.3 Apr 4 2018 DBS (T2) €600m Apr 11 2028 (Apr 2023) 1.5 99.718 MS+120 / B+166.2 1.559

Apr 4 2018 Megaworld Corporation US$200m Perpetual (Apr 2023) 5.375 100 - 5.375

Apr 4 2018 Metinvest US$825m Apr 23 2023 7.75 99.014 T+539.2 8

Apr 4 2018 Metinvest US$525m Apr 23 2026 8.5 98.583 T+601.9 8.75

Apr 5 2018 Turkcell US$500m Apr 11 2028 5.875 5.88 MS+324.3 / 6.1 T+327.7

Apr 5 2018 Buenos Aires, Province Ps30bn Apr-25 Badlar+375 100 Badlar+375 -

50 International Financing Review April 7 2018 EMERGING MARKETS ASIA-PACIFIC

2017, but the maturity was extended to CROSS-BORDER OKAY FOR EZRA In late February, KAL sold US$300m of 2018. The pair, holding equal amounts of three-year senior unsecured US dollar bonds the bond, made the respective redemption EZRA HOLDINGS has obtained approval from at a yield of 6%, or Treasuries plus 362.1bp. requests on April 3 and April 4 with the US Bankruptcy Court in the US Chapter 4HATûWASû+!,SûlRSTûSTANDALONEûOFFSHOREû payments to be made within seven calendar 11 proceedings on its application for a cross- senior bond and its second overall days. border protocol between courts in standalone trade, following a US$300m perp In a statement last Thursday to the Singapore and the US in relation to its NON CALLûlVEûISSUEûLASTû*UNE Singapore Exchange, the Singaporean restructuring efforts. Prior to that, it had sold US dollar bonds manufacturer of aluminium alloy extruded The US court approval was granted on on the back of a guarantee from the Export- products and polyethylene pipes said its March 26, after the Singapore High Court gave Import Bank of Korea. board of directors would talk to the its clearance for the protocol on March 13. noteholders for a further extension. 4HEûAPPROVALSûWILLûALLOWûTHEûlNANCIALLYû HANWHA LIFE SET FOR MEETINGS The two investors had agreed in strapped company to coordinate more November to extend the maturity with full EFlCIENTLYûTHEûBANKRUPTCYûPROCEEDINGSûINûTHEû53û HANWHA LIFE INSURANCE, rated A1/A+ (Moody’s/ redemption to be made on March 22 2018, with the restructuring process in Singapore. Fitch), will start investor meetings in Asia, based on a number of undertakings, Matters will now shift to setting up a framework Europe and the US on Monday, ahead of a including pledges of the entire equity of general principles to address issues that may proposed issue of US dollar subordinated interest in wholly owned subsidiary Dalian arise from the cross-border proceedings. capital securities. Huicheng Aluminum and a 32.5% stake in In applying for approval for a cross-border JP Morgan is sole global coordinator and joint venture CRRC Nanjing Puzhen. insolvency protocol, Ezra had also asked for joint bookrunner with Bank of America Merrill The former executive chairman and clearances for a number of issues that could Lynch, Nomura and UBS. guarantor Chen Weiping also entered into a arise from the process, including allowing A benchmark 144A/Reg S offering is charge over 100m shares he owned in Midas the company to adopt US Bankruptcy Court- expected to follow, subject to market as security against his obligations in his SETûDEADLINESûFORûCREDITORSûTOûlLEûTHEIRûPROOFSû conditions. The hybrid capital securities are guarantee on the bonds, while Midas’ of claim. expected to be rated A3/A– (Moody’s/Fitch). subsidiaries committed to a Rmb40m A hearing on the issues, referred to as +YOBOû,IFEûISSUEDû3OUTHû+OREASûlRSTû (US$6.44m) performance deposit to the prayers 2 to 5 of SUM 1195, will be held at offshore hybrid capital securities, rated A3/A– investors. the Singapore High Court on June 27. (Moody’s/Fitch), from the insurance industry -IDASûFACESûAûHOSTûOFûlNANCIALûANDû %ZRAûlLEDûFORû#HAPTERûûBANKRUPTCYûINû with last year’s US$500m print. The 3.95% CORPORATEûISSUESû4HEûCOMPANYûlLEDûAûREPORTû mid-March last year and defaulted on coupon securities with a rolling 30-year maturity and in late March with Singapore’s Commercial payments due last year on S$150m (US$113m) call in 2022 were bid at a cash price of 98.9 on Affairs Department in relation to possible 4.875% bonds, maturing on April 24 this year. Wednesday, implying a yield of 4.2%, breaches of securities laws and other according to Thomson Reuters data. offences related to irregularities in China. Midas had reported that subsidiary Dalian SOUTH KOREA GS CALTEX HAS LITTLE NIP IN Huicheng Aluminium had given SWISS DEBUT unauthorised guarantees to third parties, KAL SEEKS BIDS ON DOLLAR PERP while several litigations, enforcement /ILûRElNERûGIANTûGS CALTEX debuted in the orders and court documents against a KOREAN AIR LINES is asking banks to submit Swiss franc market on Wednesday, having number of units were discovered. proposals for a potential offering of US previously issued only in US dollars and At the same time, subsidiaries Jilin Midas dollar perpetual notes, according to a DCM South Korean Won. Aluminium Industries and Jilin Midas Light banker who received the invitation. It brought a SFr100m (US$104m) January Alloy had not met Midas instructions to “Issuing perpetual notes has the advantage 2024 deal at par with a 0.633% coupon and TRANSFERûFUNDSûTOûTHEû3INGAPOREûOFlCEûTOû of equity treatment in accounting terms, yield, equating to mid-swaps plus 65bp, or redeem the 2017s. WHICHûTHEûCARRIERûISûLOOKINGûFOR vûHEûSAID Swiss governments plus 105.3bp.

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution

Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution MS+65 area 15 SFr100m, 45 acs Baa1/BBB+ BNPP/CS Switz 100%. AM 60%, PF 15%, Bks 10%, Retail/PB 10%, Ins 5%. MS+120/125 17 >€720m, 62 acs A3/-/A+ DBS/DB/ING/Lloyds/SG UK 26%, Benelux 26%, Fr 18%, Asia 12%, Ger 8%, Switz 7%, RoEur 2%, Other 1%. FM 75%, Ins/PF 20%, Other 5%. 6% area, - US$400m Unrated JPM - 5.375% 8% area, 25 >US$1.5bn combined -/B-/B DB/ING/Natx/Uni UK/Ire 48%, US 41%, Eur 9%, Other 2%. 7.875%/8%, FM 90%, Bks/PB 7%, HF/Other 3%. 8% Mid/high 8%s, 25 >US$1.5bn combined -/B-/B DB/ING/Natx/Uni UK/Ire 59%, Eur 20%, US 15%, ME 2%, 8.625%/8.75%, Other 4%. Bks/PB 6%, FM 88%, HF/ 8.75% Other 6%. 6.25% area, 35 ~US$1bn, 142 acs -/BBB-/BBB- BNPP/HSBC/JPM USA 34%, UK 28%, Switz 11%, Ger 9%, 6.125%/6.25%, Neth 7%, RoEur 5%, ME 4%, Other 2%. 6.1% FM 74%, Bks/PB 12%, Ins/PF 6%, Other 8%. Badlar+high 300s - Ps34.139bn B2/B+ Galicia/Provincia/Citi/HSBC/Itau -

International Financing Review April 7 2018 51 DBS sets benchmark for euro T2

„ SINGAPORE Issuer diversifies investor base with bank capital trade

DBS GROUP HOLDINGS has become the first bank such, Singaporean banks’ T2 bonds are among to be able to enter the market between the from Singapore to sell Tier 2 euro-denominated the highest rated globally. Scandinavian and Australian curves,” said Yeoh notes, achieving a sizable print despite the Nordic banks were seen as the main pricing Hong Nam, head of wholesale funding at DBS recent indigestion in that market. comparison. DNB Bank’s 10-year non-call five Bank. “This transaction was a logical extension The group on Wednesday sold €600m of notes, printed last month and rated A– (S&P), of the groundwork laid by our covered bonds, 10-year non-call five subordinated bonds at mid- were quoted at mid-swaps plus 90bp, while and we look forward to developing the investor swaps plus 120bp, the tight end of initial price Svenska Handelsbanken also had 10-year non- base further.” range of 120bp–125bp, exceeding the target size call five notes, rated A3/A–/AA–, trading at plus The issue was another step in broadening the of €500m. 90bp. DBS investor base, with its two Triple A rated The order book was heard to be around Investors sought a 10bp premium to those euro covered bond issues last year reaching a €800m, with high-quality investors names, plus a new issue concession of around slightly different pool of buyers. participating. Many were said to be new to the 20bp. DBS has outstanding T2 notes in yen, credit, fulfilling the issuer’s goal of diversifying In Asia, the Australian trio of National Singapore dollars, Australian dollars and Hong its investor base. Australia Bank, Westpac and Commonwealth Kong dollars, but none in US dollars. “The positive response from the European Bank of Australia, as well as China’s Bank of DBS was sole global coordinator and Societe investor base is a tremendous vote of Communications, sold euro T2 notes before Generale was sole structuring adviser. They were confidence,” said Chng Sok Hui, CFO of DBS, in DBS. The new trade was thought to have come also joint bookrunners with Deutsche Bank, as a statement. “The strategic importance of such a inside where Australian banks would issue today, were late additions to the syndicate ING and large pool of new investors is significant, and we with one market source estimating they would Lloyds. value the trust they have placed in us.” need to print at mid-swaps plus 130bp–135bp. The bonds tightened 2bp during European The T2 notes are expected to be rated A3/ “We view the euro investor base as trading hours on Wednesday. A+ (Moody’s/Fitch), versus issuer’s Aa2/AA–. As strategically important and were pleased Daniel Stanton

Its longest liquid dollar paper, US$400m 4.875% 2025s, and US$2bn 5.75% 2043s. At still unresolved uncertainties around 3% June 2022, was bid at swaps plus 92bp, the same time, it is seeking consent to +ASHAGANû;OILûlELD= ûANDûQUITEûCOMPLEXûANDû equating to Swiss franc swaps plus 44bp. redeem early each of the notes. TIME CONSUMINGûSUPPORTûPROCEDURES vû30û That put the new bonds around 15bp wide The bonds subject to the tender have analysts said at the time. of the extrapolated dollar curve at a nominal proven problematic for KMG, as the company S&P added that the Kazakh government is 5bp per annum, adjusting for currency basis. has failed to get their terms aligned with its planning to privatise a minority stake in The company had been upgraded in the most recently issued notes - 2022s, 2027s and KMG in the coming years. previous two months, to Baa1 from Baa2 at 2047s, which were sold in April 2017. Investors that agree to tender the bonds Moody’s, and BBB+ from BBB at S&P. Last July, KMG was forced to abort a and to the consent offer by the early deadline BNP Paribas (Suisse) and Credit Suisse were controversial consent offer on 10 of its will receive a total consideration of 108.95 on leads. bonds, including those notes that it is now the 2020s, 109.35 on the 2021s, 105.55 on the GS Caltex is 50% owned by GS Energy and seeking to buy back and redeem, after 2025s and 108.80 on the 2043s. 50% by Chevron. investors failed to accept the proposal that The early deadline is April 16, with May 1 involved stripping covenants and amending ASûTHEûlNALûDEADLINE the change of control clause. The new issue includes the right to The offer was controversial because it also priority allocation for those investors that included the three notes it had issued in agree to the tender and consent proposal by EUROPE/AFRICA April. The fees on the consent offer were not the early deadline. seen as attractive enough by investors. Citigroup, Halyk Finance, JP Morgan, MUFG KMG tried with a new proposal in October and UBS are the dealer managers and KAZAKHSTAN but achieved only mixed success with the solicitation agents, as well as bookrunners resolution to amend terms on bonds on the new issue. The notes are expected to KMG EYES NEW ISSUE AND TENDER maturing in 2023 and 2044 passing but be rated Baa3 by Moody’s and BBB- by Fitch. failing for the 2020s, the 2021s, the 2025s KAZMUNAYGAS has hired banks for a potential and the 2043s. triple-tranche offering in what will be its The company was then downgraded in MONTENEGRO lRSTûDEALûSINCEûBEINGûDOWNGRADEDûBYû30ûINû November by S&P, cutting its rating to BB- November. from BB having revised down its assumption SEVEN-YEAR BECKONS FOR The Kazakh company is eyeing a benchmark of the likelihood of extraordinary SOVEREIGN US dollar transaction that will comprise government support. possible seven, 12 and 30-year tranches. “We believe that the Kazakh MONTENEGRO has launched a tender offer and In addition, KMG has announced a tender government’s willingness to provide said it intends to raise new seven-year debt offer on its outstanding US$1.5bn 7.000% support has weakened, as illustrated by its as it seeks to proactively manage its debt 2020s, US$1.25bn 6.375% 2021s, US$500m tolerance to relatively high leverage at KMG, REDEMPTIONSûANDûEXTENDûITSûMATURITYûPROlLE

52 International Financing Review April 7 2018 EMERGING MARKETS EUROPE/AFRICA

The sovereign is offering to buy back up 3INCEûTHEN ûOFlCIALSûHAVEûBEENûTRYINGûTOû wrote. “Turkcell is largely a pure play on to €400m of its €280m 5.375% 2019s, €500m lure investors to its economy, which has Turkey and it is subject to risks related to 3.875% 2020s and €300m 5.75% 2021s. The been struggling since the south seceded in INmATIONûANDûAûWEAKENINGû4URKISHûLIRAû tender expires on April 11. 2011, taking with it three-quarters of the ;VERSUSûTHEû53ûDOLLAR=v Finance minister Darko Radunovic has country’s oil output, its main source of Guidance was 6.125%-6.25% for a capped said that proceeds from the issue will be foreign currency and government income. US$500m size, books rising from around USEDûTOûlNANCEûMATURINGûDEBTûANDû “The Sudanese government will issue US$750m then to over US$1bn. repurchase shares in power utility EPCG SUKUKû;OF=ûNEARLYû53BNûFORûTHEûlRSTûTIMEû The lead said demand was driven in part from Italian regional utility A2A. THISûYEAR vûlNANCEûMINISTERû-OHAMEDû by the strength of Turkcell as a credit. A2A, which holds a 41.7% stake in EPCG, Othman Rukabi told Reuters on the “There is a scarcity of Turkish corporates, said last June it aimed to sell the entire stake sidelines of a conference in Tunis. a scarcity of investment-grade emerging in the utility. Montenegro owns the majority h)TûWILLûBEûLATEûTHISûYEARûTOûlNANCEûTHEû markets corporates, and a low level of stake. ûBUDGET vûHEûSAID ûWITHOUTûGIVINGû SUPPLYûINûRECENTûWEEKS vûHEûSAID -ONTENEGROûRAISEDûõMûOFûlVE YEARû details. “In Sudan we started already with Turkcell is rated Ba1/BBB-/BBB-, with the debt in 2016 at 6% to pay for upcoming debt LOCALûSUKUKûBUTûITûWILLûBEûTHEûlRSTûTIMEûTHATû bonds BBB-/BBB-. redemptions, but the amount raised was we will issue sukuk in the international The notes traded up on the break, moving well short of what the sovereign was hoping MARKETv from reoffer of 97.779 to 98.68, according to for. It had been seeking to raise up to In December, parliament passed its 2018 Tradeweb prices. €480m. BUDGETûANDûPROJECTEDûAûBUDGETûDElCITûOFûû The bookrunners were BNP Paribas, HSBC The 2021s are bid at 109.838 to yield of GDP. and JP Morgan. 2.23%, according to Tradeweb. The budget projects economic growth of “The ratings on Montenegro remain 4% in 2018, the cabinet said after approving constrained by the country’s high net the bill. The IMF expects growth for 2017 to UKRAINE general government debt burden, which we come in at 3.25%. EXPECTûWILLûPEAKûATûûOFû'$0ûINû vû30û The government is targeting a sharp fall METINVEST SLICES THROUGH DEBT PILE analysts wrote in March. INûINmATION ûTOûREACHûûBYûTHEûENDûOFû “This is accentuated by Montenegro’s 2018 from 34.1% at the of end of 2017, a METINVEST raised US$1.35bn through a dual- unilateral adoption of the euro, which cabinet spokesman told reporters on tranche offering on Wednesday, as it leaves almost no room for monetary policy 4UESDAYû)NmATIONûROSEûTOûAûRECORDûHIGHûTHISû RElNANCEDûAûSIGNIlCANTûCHUNKûOFûAû53BNû mEXIBILITYv year on the back of a weakening currency. debt pile that emerged following a The IMF urged Sudan to let the pound restructuring last year. mOATûFREELYûANDûTOûCUTûENERGYûANDûWHEATû The Ukrainian metals and mining group’s SUDAN subsidies to spur growth and investment. It bond came alongside a new loan in order to said Khartoum had a chance to improve the RElNANCEûTHEûRESTRUCTUREDûDEBT FINANCE MINISTER DROPS economy after the US ended 20 years of A lead said the main reason for the swift SUKUK HINTS sanctions. MOVEûFROMûRESTRUCTURINGûTOûRElNANCINGûWASû The government has implemented some to bring Metinvest’s commercial and SUDAN wants to sell international Islamic reforms, doubling the price of bread from contractual terms in line with market bonds of nearly US$1bn this year to help January, which sparked two weeks of standards, while also providing the lNANCEûTHEûBUDGET ûITSûlNANCEûMINISTERûSAIDû PROTESTSû4HEûPOUNDûHASûNOTûBEENûmOATEDû COMPANYûWITHûOPERATIONALûANDûlNANCIALû on Thursday. though. mEXIBILITY Sudan has been largely cut off from It will also give the company more room INTERNATIONALûlNANCINGûINûTHEûPASTûDECADESû for capex and dividends. due to US sanctions, which were lifted in TURKEY The restructured debt comprised a pre- October. EXPORTûlNANCINGûOFûAROUNDû53BNûTHATû TIGHT FINISH FOR TURKCELL matures in June 2021 and US$1.2bn 9.373% senior secured notes due December 2021. ALL INTL EMERGING MARKETS BONDS Mobile operator TURKCELL sold a US$500m 10- Metinvest conducted a tender offer for the BOOKRUNNERS: 1/1/2018–31/3/2018 year at 6.10% on Thursday, tightening talk December 2021 bond, and the early deadline Europe/Africa by 15bp from a cautious starting point to passed with a huge take-up in excess of 89%. Managing No of Total Share PRINTûJUSTûINSIDEûTHEûOFlCIALûGUIDANCEûRANGE Valid tenders of more than US$1bn were bank or group issues US$(m) (%) The notes were initially marketed at IPTs submitted. Investors that tendered by the 1 Citigroup 17 6,214.61 17.6 of 6.25% area. early deadline were offered a price of 105.25. 2 VTB Capital 7 4,675.39 13.2 CreditSights analysts reckoned that was “The bonds weren’t widely held, so there 3 HSBC 7 2,368.65 6.7 about 35bp back of fair value and said the WEREûQUITEûAûFEWûSIGNIlCANTûHOLDERS vûSAIDûAû 4 Deutsche Bank 7 2,342.86 6.6 bond looked priced to sell given it was lead. “Partly they came in because of the 5 Standard Chartered 5 2,306.24 6.5 offering a premium over Turkish sovereign price on offer, but also to get priority 6 JP Morgan 9 2,243.28 6.3 paper. ALLOCATIONûINûTHEûNEWûISSUEv 7 SG 10 2,068.54 5.9 Turkcell 2025s trade inside the The Ukrainian corporate began marketing 8 BNP Paribas 7 1,824.19 5.2 sovereign’s 2025s by around 5bp. THEûNEWûlVE YEARûATûTHEûûAREAûANDûEIGHT 9 UniCredit 7 1,050.70 3.0 “We have been cautious on the Turkish year at mid-high 8%. 10 First Abu Dhabi Bank 2 907.87 2.6 sovereign bonds and, in turn, recognise that “The tender went well … so in theory Total 30 35,353.51 for investors looking to take exposure to the plenty of money should roll into the new Excluding equity-related debt. new issue, a spread pick-up versus the BOND vûSAIDûAûBANKERûAWAYûWHENûTHEû)04Sû Source: Thomson Reuters SDC code: L2 SOVEREIGNûISûDElNITELYûMERITED vûTHEûANALYSTSû were released. “They look a little cheap, but

International Financing Review April 7 2018 53 given the state of the markets I guess that is ALL INTL EMERGING MARKETS BONDS NOTûTOOûSURPRISINGv BOOKRUNNERS: 1/1/2018–31/3/2018 4HEûBANKERûSAWûTHEûlVE YEARûSTARTINGû MIDDLE EAST Middle East about 110bp–120bp back of the sovereign, Managing No of Total Share and the eight-year 120bp–150bp back. bank or group issues US$(m) (%) “I would think they would like to target a OMAN 1 Citigroup 10 3,887.54 13.9 SUB BPûPREMIUMûFORûTHEûlVE YEARûATû 2 Standard Chartered 17 3,847.15 13.8 LEAST vûHEûSAID OMANTEL LOOKS AT DOUBLE BOND 3 HSBC 14 3,397.63 12.2 But the issuer was only able to print the HELPING 4 JP Morgan 6 2,277.34 8.1 legs at the wide end of guidance, at 8% and 5 Sumitomo Mitsui Finl 2 1,440.74 5.2 8.75%, respectively. The lead saw both OMAN TELECOMMUNICATIONS is looking to take a 6 Credit Suisse 4 1,254.49 4.5 tranches as pricing around 100bp back of shot at the US dollar bond market with a 7 BAML 4 1,178.00 4.2 the sovereign. potential dual-tranche offering. 8 BNP Paribas 6 1,115.80 4.0 “They wanted to get size and the yield 4HEûCOMPANYûHASûSETûITSûSIGHTSûONûlVEûANDû 9 Deutsche Bank 5 1,007.39 3.6 NUMBERûWASûTHEûRIGHTûCLEARINGûLEVEL vûHEû 10-year bonds. It has mandated Citigroup and 10 Barclays 3 897.13 3.2 said. “There was a lot more to this than just Credit Suisse as global coordinators, alongside Total 37 27,943.92 THEûlNALûINTERESTûRATEû4HEYûEXTENDEDûANDû Bank ABC, Bank Muscat, HSBC and Standard Excluding equity-related debt. SPREADûOUTûTHEûMATURITYûPROlLE ûMOVEDûTOûAû Chartered as joint lead managers. Source: Thomson Reuters SDC code: L5 market standard covenant package and got Omantel is rated Baa3 by Moody’s and away from an unconventional PIKE bond BBB- by Fitch. Citigroup, Deutsche Bank and Standard STRUCTUREûTHATûWASûINCREDIBLYûCOMPLICATEDv “The net proceeds of the offering will be Chartered are global coordinators, along with 4HEûõMûlVE YEARûBONDûTRADEDûINûLINEû used to repay a US$1.45bn bridge loan facility Dubai Islamic Bank, Emirates NBD Capital, Noor with reoffer on the break, while the €525m raised as part of Omantel’s acquisition of an Bank, Sharjah Islamic Bank and Warba Bank as eight-year traded up from pricing of 98.583 equity stake in Kuwait-based mobile network joint lead managers and bookrunners. to 98.91. operator Zain, whose operations span the Noor Bank is rated A- by Fitch, with a The combined books at the price guidance -IDDLEû%ASTûANDû3UDAN vûSAIDû$OUGLASû stable outlook. update were over US$1.5bn. There was a Rowlings, an analyst at Moody’s. skew of interest towards the shorter bond, Omantel has outlined a roadshow that DAMAC NAMES SUKUK LEADS and Metinvest responded by placing will run from April 8-11, with meetings in 53MûTHROUGHûTHEûlVE YEARûANDû Dubai, London, New York and Boston. DAMAC REAL ESTATE DEVELOPMENT, the second- US$525m at the eight-year point. In 2016, it cancelled US$130m-equivalent largest listed real estate developer in Dubai, Fund managers were the major players in dual-tranche sukuk two weeks after the deal HASûNAMEDûBANKSûFORûAûlVEûORûSEVEN YEARû the allocations, taking 88% of the bond. By priced. The company’s chief executive later unsecured US dollar sukuk offering. geography, investors from the UK and said the offering was shelved because of the The company, a BB credit to S&P, began Ireland took 48% and the US took 41%. The HIGHûPROlTûRATE meeting investors in Asia on Thursday and remainder was split between the rest of the roadshow runs through to Monday. Europe and others. Damac is a business partner of US UAE President Donald Trump and operates the FRESH MONEY only Trump-branded golf club in the Middle “More than 50% of demand was guys from BANK DUO EYE ISLAMIC OFFERINGS East, Trump International Golf Club, Dubai. the old bond, but we had some big new A second golf project planned by Damac, players, which was one of the objectives of A pair of banks from the United Arab Trump World Golf Club, Dubai, is expected THEûEXERCISE vûSAIDûTHEûLEAD Emirates have announced mandates for US to open by the end of 2018. Metinvest is rated Caa1/B–/B. Fitch dollar sukuk offerings. Early last year, the issuer sold US$500m upgraded its outlook to positive from stable SHARJAH ISLAMIC BANK is laying the lVE YEARûSUKUKû4HEûNOTESûAREûBIDûATûû on March 19, in anticipation of liquidity GROUNDWORKûFORûAûlVE YEARû53ûDOLLARûSENIORû to yield 6.01%, according to Tradeweb. HEADROOMûANDûAûMODERATIONûOFûRElNANCINGû unsecured. It has named HSBC and Standard Barclays and HSBC are global coordinators, as risks from the successful completion of the Chartered as joint global coordinators and well as joint bookrunners with Dubai Islamic deal. Bank ABC, Dubai Islamic Bank, Emirates NBD Bank, Emirates NBD Capital and Kamco Investment. 4HEûCOMPANYûHASûBENElTEDûFROMûAûRISEûINû Capital, First Abu Dhabi Bank, HSBC, Noor Bank iron ore prices over the past six months and and Standard Chartered as joint lead ITSûûlNANCIALûRESULTSûPUBLISHEDûONû managers and bookrunners. March 19 reported a 44% increase in revenue SIB is rated A3 by Moody’s, BBB+ by S&P year-on-year to US$8.9bn. and BBB+ by Fitch, all with stable outlooks. AMERICAS 4HEûIMPROVEDûlNANCIALûPERFORMANCEû It has US$500m in outstanding sukuk, came despite the loss of some production in issued in 2013 that mature in April. It has early 2017 after steel and coal assets in sold two additional international sukuk of ARGENTINA separatist eastern regions were seized by US$500m each in 2015 and 2016, both with pro-Russian rebels. Metinvest said lVE YEARûMATURITIES PBA BRINGS RARE BOND FOR Yenakiieve Iron and Steel Works was among NOOR BANK, the bank with the highest FOREIGNERS the seized assets. percentage of Dubai sovereign ownership, is Deutsche Bank and ING were joint global ALSOûLOOKINGûTOûPLACEûAûNEWûlVE YEARûLINE The PROVINCE OF BUENOS AIRES prioritised pesos coordinators and joint bookrunners, It began meetings investors on Friday in a over dollars last week when it came with the and Natixis and UniCredit were joint roadshow that will visit Singapore, Dubai, lRSTû!RGENTINEûNON SOVEREIGNûBONDûTOûBEû bookrunners. Frankfurt and London. targeted at foreigners in months.

54 International Financing Review April 7 2018 EMERGING MARKETS AMERICAS

The borrower raised Ps30bn, or US$1.5bn- Argentine corporates have tapped cross- Foreigners could place orders in pesos or equivalent, through a seven-year 144A/Reg S border bonds this year. dollars, but may have been reluctant to buy bond that priced at par to yield the local “The sovereign and other issuers hit the PESOûBONDSûLONGERûTHANûlVEûYEARS ûGIVENûTHATû&8û deposit rate plus 375bp, in line with MARKETûPRETTYûHARDû;INûRECENTûYEARS= vûSAIDû hedges only go out to one year, said the trader. whispers of high 300s. one banker. "UTûBETTERûCONlDENCEûINûCENTRALûBANKû !FTERûAûmOODûOFû!RGENTINEûDOLLARûISSUANCEû h4HATûWASûlNEûEARLIER ûBUTûTHEûMOODûHASû EFFORTSûTOûTACKLEûINmATIONû ûASûWELLûASûITSû over the last few years, the country’s shifted and Argentine debt [has] backed up intervention in the FX markets - could borrowers have stayed clear of cross-border ;CONSIDERABLY=v ultimately buoy interest in the new security. bonds of late amid a jump in global The sovereign’s 2028s, which priced in “As one of the longest duration liquid volatility. January at 6%, spiked to a high of 7.04% in Badlar bonds in the market, [the PBA bond] PBA had been expected to reopen the early February and have since settled down could become one of the best plays on a market for the provinces with a US dollar at around 6.67%, according to Thomson RENEWEDû!RGENTINEûDISINmATIONûCYCLEûTHATû trade last month. Reuters data. COULDûKICKûINûASûEARLYûASû!UGUST 3EPTEMBER vû "UTûINSTEADûITûOPTEDûTOûlRSTûTAPûTHEûLOCALû Last week’s issue goes a long way to cover wrote analysts at Balanz Capital. market, where the sovereign has been an the US$2bn-$3bn that the province is Citigroup, HSBC and Itau acted as leads on active issuer after vowing to stay clear of expected to raise this year. But it remains the international portion of the trade, while dollar deals this year. unclear whether it will return to the dollar Banco de Galicia and Banco Provincia came in as Aside from the federal government, market in 2018. local placement agents. which raised US$9bn in January, only three “There’s some motivation behind the The bond carries a local rating of AA and DECISIONûTOûGOûLOCALûPESOûlRST vû'ORKYû global rating of B+ from S&P. EXOTIC DEBT PRICES: 5/4/2018 Urquieta, managing director at Neuberger Bid Offer Berman, told Reuters last week. Americas “They don’t want to validate the levels BRAZIL Cuba (€) 19.00 20.00 where the bonds are trading in external Cuba (¥) 18.00 20.00 MARKETSv RIO PREVIDENCIA READIES BOND RETURN Guyana/PD–trade 80.00 90.00 Honduras trade 30.00 40.00 AVOIDING DOLLARS RIO PREVIDENCIA, the public pension fund of Nicaragua/Loans 16.00 19.00 "ANKERSûSAYûOFlCIALSûFROMûTHEûPROVINCEû the State of Rio de Janeiro, has mandated BB Suriname trade 10.00 12.00 indicated during recent roadshows that they Securities and BNP Paribas for a proposed Africa intend to replicate the sovereign’s policy of US$600m 10-year bond. Angola 99.00 100.00 staying clear of US dollar bonds this year. The 144A/Reg S offering, which is Benin 10.00 15.00 h4HEYûIMPLIEDûTHATûDURINGûMEETINGS vûSAIDû expected to have a weighted-average life of Burkina-Faso 8.00 10.00 a syndicate banker. “But if worst comes to 7.4 years, will be issued through a special Cameroon trade 22.00 32.00 worst, they might end up coming back [to purpose issuer called RIO OIL FINANCE TRUST. Cape Verde trade 75.00 85.00 THEûDOLLARûMARKET=v As in prior deals, the notes will be secured Central African Rep trade 0.50 1.50 The province has not been in the dollar by the right to receive present and future oil Congo/trade 25.00 30.00 market since February 2017 and was last in and gas revenues consisting of royalties and Congo (Dem Rep) 3.75 6.75 the hard-currency market in July, when it special participations allocable to the State Cote d’Ivoire 101.50 103.50 SOLDûITSûlRSTûEUROûBONDûINûMOREûTHANûûYEARS of Rio de Janeiro. Equatorial Guinea trade 85.00 90.00 In May 2017, it also issued a 144A/Reg S A roadshow began last week and will Ethiopia 2.00 4.00 lVE YEARûPESOûBONDûWITHûAûSIMILARûSTRUCTUREû continue on April 9 in London, April 10 in Gabon PD-Trade 70.00 78.00 to Thursday’s deal. Boston and April 11 in New York. Ghana 88.00 92.00 On that occasion, it raised about Expected ratings are BB-/BB-. Guinea-Bissau trade 7.00 10.00 US$951m-equivalent with a bond that priced Guinea 8.00 13.00 ATûBPûOVERû"ADLARûANDûHADûAûCOUPONûmOORû DEMAND ON BANCO DO BRASIL TENDER Kenya trade 45.00 55.00 OFûûFORûTHEûlRSTûTWOûPAYMENTS EXCEEDS CAPS Liberia PD trade 9.00 12.00 This deal offered a minimum coupon of Madagascar (trade) 27.00 34.00 ûFORûTHEûlRSTûTWOûPAYMENTSûANDû BANCO DO BRASIL said last week it had received Mali PD trade 2.00 6.00 THEREAFTERûWILLûmOATûATûBPûOVERûTHEûLOCALû SUFlCIENTûDEMANDûONûAûDEBTûTENDERûTOûBUYû Mozambique (trade) 6.00 12.00 deposit rate Badlar, which has been back US$700m of perpetuals as it looks to Senegal 24.00 26.00 hovering around 21%. lower borrowing costs. Sierra Leone PD-trade 1.00 5.00 That was a decent enough pick-up to the The bank had been targeting up to Tanzania 12.00 16.00 province’s 2022s, which are trading in the US$600m of its 8.50% perps and up to Uganda trade 16.00 18.00 low 300s, and to the City of Buenos Aires’s US$100m of its 9.25% perps. Zambia PD-trade 15.00 22.00 curve, which is being quoted at 290bp- By the early bird date, it had received Asia 320bp, said a local trader. valid tenders from holders of US$771.1bn of Bangladesh 70.00 80.00 h)TûLOOKSûATTRACTIVELYûPRICED vûSAIDû the 8.50% issue and another US$550.44m Cambodia trade 6.00 12.00 Urquieta. “It’s a big enough issue, so from holders of the 9.25%. Mongolia 27.00 38.00 liquidity should not be much of a The bank had offered an early bird Myanmar trade 27.00 32.00 consideration. I suspect the participation buyback price of 111.00 on the 8.50% perps Nepal trade 13.00 16.00 SHOULDûBEûPRETTYûROBUSTv and 109.50 on the 9.25% notes. North Korea/Loans 0.03 1.50 Even so, international orders only made The tender offer expires on April 16; the Papua New Guinea 85.00 95.00 up Ps9bn of the over Ps34bn book, according early bird date expired on April 3. Vietnam 102.00 103.00 to a source close to the deal, despite BB Securities, Citigroup, HSBC and JP Morgan Source: Wesbruin Capital relatively attractive pricing. are dealer managers.

International Financing Review April 7 2018 55 ALL INTL EMERGING MARKETS BONDS ALL INTL EMERGING MARKETS BONDS Ecuador has been the worst performing BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 credit in a composite of 16 Latin American Managing No of Total Share Latin America countries tracked by ICE BAML, and its bank or group issues US$(m) (%) Managing No of Total Share sovereign bond spreads have widened 98bp 1 Citigroup 77 19,107.44 10.6 bank or group issues US$(m) (%) year-to-date. 2 HSBC 87 13,600.97 7.6 1 JP Morgan 15 5,192.84 16.7 Bonds were pressured lower in March 3 JP Morgan 43 11,760.12 6.5 2 Citigroup 16 4,842.92 15.6 when Moreno appointed Maria Elsa Viteri as 4 Standard Chartered 66 10,605.89 5.9 3 BAML 13 3,728.85 12.0 lNANCEûMINISTERû6ITERIûHELDûTHEûSAMEû 5 BNP Paribas 48 8,475.76 4.7 4 BNP Paribas 5 2,086.05 6.7 position in 2008 when the country 6 BAML 37 7,616.95 4.2 5 Barclays 6 1,387.43 4.5 selectively defaulted on its bond debt. 7 Deutsche Bank 31 6,382.75 3.5 6 HSBC 4 1,382.12 4.4 The government has vowed not to take 8 Credit Suisse 32 5,753.43 3.2 7 Credit Suisse 5 1,375.44 4.4 hUNILATERALûACTIONvûASûITûDIDûTHEN ûTHOUGHû 9 VTB Capital 13 5,034.64 2.8 8 BBVA 2 1,308.69 4.2 Exotix does not discount a liability 10 Barclays 27 4,861.29 2.7 9 Deutsche Bank 2 1,205.97 3.9 management operation to reduce near-term Total 285 179,991.96 10 Santander Global 6 1,202.77 3.9 bond maturities. Excluding equity-related debt. Total 35 31,132.90 “It is a different situation; Ecuador needs Excluding equity-related debt. the market, and the administration realises Source: Thomson Reuters SDC code: L1 Source: Thomson Reuters SDC code: L3 THAT vûSAIDû!TANASOVûh4HEYûWANTûGRADUALû lSCALûADJUSTMENT ûSOûTHEYûNEEDûTOûHAVEû debt from its multilateral and bilateral ACCESSûTOûTHEûMARKETûATûREASONABLEûCOSTSv ECUADOR creditors. This year, Ecuador has depleted its This is assumed to mean China, which hard-currency reserves at a rate of about INVESTORS TAKE WAIT-AND-SEE according to Exotix Capital is Ecuador’s US$1bn a month. At that pace, the country APPROACH TO SOVEREIGN largest bilateral creditor and represents will soon need to return to the market after some US$7.6bn of external debt. issuing a US$3bn bond in January, its largest Investors are taking a wait-and-see approach Much of that debt, which includes ever. towards ECUADOR after the government last commercial loans from China Development week released its plan to attend to its Bank, will come due over the next couple of GROWINGûlSCALûDElCIT years, said Exotix in a recent report. MEXICO The plan is seen as a comprise by The oil-exporting nation has leaned President Lenin Moreno, who is walking a heavily on China and capital markets in SOVEREIGN BEGINS SOUNDING OUT lNEûLINEûBETWEENûPLEASINGûLOCALûCONSTITUENTSû recent years to tackle falling revenues after INVESTORS FOR SAMURAI and the foreign investors needed to top up the decline in crude prices in 2014. cash reserves. Since 2016, Ecuador has raised more than MEXICO has started sounding out investors for “Everyone in the market would have US$11bn in international bond markets a Samurai issue, two people close to the preferred to have seen a more decisive move alone. situation told IFR. INûTERMSûOFûlSCALûMEASURES ûBUTûTHEIRû That the government is seeking creditor Expectations had already been rising that PREFERENCEûISûGRADUAL vûSAIDû0ETARû!TANASOV û talks with China rather than bondholders is the sovereign might be considering a return co-head of sovereign research at hedge fund seen as a good development. TOûTHEûYENûMARKETûAFTERû-EXICANûOFlCIALSû Gramercy. “That is one of the positive things, to the met Japanese investors in March. “It is not ideal, but we knew Moreno had extent they can get better terms and a little IFR reported last month that the non-deal political impairments and the market had BITûOFûLIQUIDITYûRELIEF vûSAIDû!TANASOV roadshow was organised through Mizuho, LOWûEXPECTATIONSv Nevertheless, the government’s plan to Nomura and SMBC Nikko to update the The country’s newest bond - the 7.875% CUTûTHEûlSCALûDElCITûTOûûOFû'$0ûINûû buyside ahead of presidential elections in 2028 - skipped a touch higher to 95.73 on from 5.64% is seen as ambitious - and for July. Tuesday following the announcement, but now investors are withholding judgment. The people said that expected maturities has since dropped to 94.89 along with a h4HATûISûREALLYûGOINGûTOûBEûDIFlCULTûFORû WILLûBEûBETWEENûTHREEûANDûûYEARSû/FlCIALû broader sell-off on increasing fears of a US- THEM vûSAIDû#LAUDIAû2IBEIROûDEû#ASTRO û marketing will likely start this week. China trade war. DIRECTORûOFûlXEDûINCOMEûRESEARCHûATû Mexico was last in the Samurai market in As part of efforts to put the country’s Oppenheimer Funds. June 2016, when it raised ¥135bn lSCALûHOUSEûINûORDER ûTHEûPRESIDENTûSAIDû h)TûISûAûSIGNIlCANTûADJUSTMENTûTOûGOûTOûAû 53BN ûBYûSELLINGûTHREE ûlVE ûûANDû Ecuador would seek improved terms on ûlSCALûDElCITûITûWONTûBEûEASYv year bonds. IFR MARKETS

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56 International Financing Review April 7 2018 LOANS

Australia 58 China 59 India 59 Indonesia 61 Japan 61 Czech Republic 61 France 61 Turkey 62 UAE 63 United States 63 Panama 65 Leveraged Loans 65 Restructuring 70

„ FRONT STORY EUROPEAN MARKETS Volume down 25% but pipeline builds Drop reflects fall in M&A and refinancing Pipeline for the second quarter looks strong

First-quarter syndicated lending in Europe, lRSTûQUARTER ûTAKINGûADVANTAGEûOFûAûRELATIVELYû DENOMINATEDûTERMûLOANû"ûSINCEûTHEûlNANCIALû the Middle East and Africa fell 25% year-on- clear market and competitive conditions to crisis. YEARûTOû53BNûFROMû53BN ûREmECTINGû agree loans on improved terms. It allocated in March after attracting AûFALLûINû-!ûACTIVITYûANDûRElNANCINGû 4ELEFONICAûCLOSEDûAûõBNûRElNANCINGûINû around 80 major investors into the jumbo compared with the beginning of last year. March, while Telecom Italia completed a cross-border deal. Increased scrutiny of large cross-border €5bn loan in January. “Flora was interesting in that it was not an acquisitions and convoluted bidding Loan volume in Central and Eastern easy credit and it was aggressively structured processes has meant many M&A loans have Europe, the Middle East and Africa reached and despite that it was fully placed. It should been underwritten but have yet to syndicate, US$30.33bn, up from US$26.14bn in the give encouragement that the market has resulting in the lower volume numbers for same three-month period last year. However CAPACITYûTOûABSORBûSCALE vûTHEûlRSTûSYNDICATEû the region. one jumbo deal - the US$16bn syndicated head said. However, those deals are expected to LOANûRElNANCINGûFORûTHEûKINGDOM OF SAUDI launch soon and will increase second-quarter ARABIA - accounted for over half the total. volume. Borrowing conditions remain “There is significant new favourable for companies, with funding NEW ISSUES deal activity going on with available at highly competitive prices, while Leveraged loan volume of US$58.4bn in the a decent number of deals of all the capital markets remain open for lRSTûQUARTERûOFûûISûûDOWNûONûTHEû business. same period last year after a sharp decline in significant size” “The market is in good shape,” a senior RElNANCINGûACTIVITY loan banker said. “There is a lot of activity 2ElNANCINGûANDûREPRICINGûACTIVITYû across the spectrum, with sizeable bids like accounted for US$48.18bn of volume in the The new issue pipeline for the second Melrose for GKN, and Comcast for Sky, lRSTûTHREEûMONTHSûOFûTHEûYEAR ûALMOSTûAûTHIRDû quarter looks healthy, with a mix of jumbo helping drive activity. But there are also a lot LOWERûTHANûTHEû53BNûINûTHEûlRSTûTHREEû cross-border deals and sizeable European more US$1bn or US$2bn bridges to bonds, months of 2017. deals to come, including €5bn-equivalent of PROVIDINGûGOODûCORPORATEûmOWû7EûAREû However an increase in leveraged buyout senior leveraged loans backing the buyout of actually expecting more activity this year.” activity saw a 16% jump in new money deals AKZO NOBEL’s chemicals business, as well as an M&A loan volume dipped 45% to year-on-year, with volume of US$10.2bn in US$8bn-equivalent term loan backing 53BNûINûTHEûlRSTûQUARTER ûINûSTARKû 1Q18, compared with US$8.8bn last year. Blackstone Group’s acquisition of a 55% CONTRASTûTOûTHEû53BNûRAISEDûINûTHEûlRSTû “First-quarter last year there wasn’t real stake in THOMSON REUTERS’ Financial and Risk quarter of 2017 when volumes were buoyed volume or activity; it was just repricings and unit, which includes IFR. Both loans form by the syndication of several large-scale M&A RElNANCINGS vûAûSYNDICATEûHEADûSAIDûh4HEû PARTûOFûWIDERûDEBTûlNANCINGS deals. volume last year was a storm in a tea cup /THERûSIGNIlCANTûDEALSûTOûCOMEûINCLUDEûAû 4HEûlRSTûQUARTERûOFûûSAWûSOMEûLARGE while this year’s volume is a real £1.75bn-equivalent leveraged loan backing scale bridge loans, including a €6.1bn bridge groundswell of activity.” MOTOR FUEL GROUP’s £1.2bn acquisition of loan for France-based commercial real estate $ESPITEûAûSTEEPûDROPûONûLASTûYEARSûINmATEDû MRH, the UK’s largest petrol station and company UNIBAIL-RODAMCO. The loan is the lRST QUARTERûVOLUME ûSOMEû53BNûOFû convenience store operator. LARGESTû-!ûlNANCINGûSINCEûTHEûBEGINNINGû ACTIVITYûINûTHEûlRSTûQUARTERûSTILLûPRODUCEDûTHEû The second quarter looks set to continue of the year and backs the acquisition of SECOND HIGHESTûlRST QUARTERûLEVERAGEDûLOANû INûMUCHûTHEûSAMEûWAYûASûTHEûlRST ûASûBANKERSû !USTRALIANûSHOPPINGûMALLûOWNERû7ESTlELD VOLUMEûSINCEûTHEûlNANCIALûCRISIS and investors focus on new issuance as Meanwhile, French aerospace and defence h2ElNANCINGSûAREûDOWNûMASSIVELYûANDû opposed to rejigging existing portfolio group THALES closed a €4bn bridge loan that’s distorting the numbers but M&A is up credits. backing its acquisition of Dutch and we always want new money deals so it h4HEREûISûSIGNIlCANTûNEWûDEALûACTIVITYû CYBERSECURITYûlRMû'EMALTO HASûBEENûQUITEûAûPOSITIVEûlRSTûQUARTER vûAû going on with a decent number of deals of 2ElNANCING ûTHEûTRADITIONALûDRIVERûOFû second syndicate head said. SIGNIlCANTûSIZE vûTHEûlRSTûSYNDICATEûHEADû ACTIVITYûINû%-%! ûWASûûDOWNûINûTHEûlRSTû 4HEûLARGESTûDEALûOFûTHEûlRSTûQUARTERûWASûAû said. quarter at US$129.9bn ahead of the start of õBN EQUIVALENTûLEVERAGEDûLOANûlNANCINGû “The new volume activity will put a cap on the next cycle expected towards the end of backing KKR’s buyout of UNILEVER’s spreads REPRICINGSûANDûRElNANCINGSûBECAUSEûALLûTHEû the year. business FLORA FOOD GROUP. The company managers will be absorbing the new issue Spanish and Italian telecom giants managed to raise €2.8bn-equivalent from pipeline and won’t have time to rearrange TELEFONICA and TELECOM ITALIA returned to the European investors, including a €2bn their deckchairs.” MARKETûFORûTHEûLARGESTûRElNANCINGSûOFûTHEû tranche, the largest single-tranche euro- Alasdair Reilly, Claire Ruckin

International Financing Review April 7 2018 57 The Kestrel mine in the Bowen Basin ANDûTHATûONûTHEûlVE YEARûISûBPûOVERû""39û region produces high-quality coking coal The borrower is SDP FINCO. ASIA-PACIFIC and was Rio Tinto’s last remaining coal mine The plant has been undergoing repairs, in Australia. to be completed later this year, after The acquisition was subject to regulatory SIGNIlCANTûSTORMûDAMAGEûINû$ECEMBERûû AUSTRALIA approval and expected to be completed in As the storm triggered a force majeure the second half of this year. clause, the plant’s contractual water-supply PAIR RAISE DEBT TO BUY MINE OBLIGATIONSûTOûSTATEûUTILITYû3YDNEYû7ATERû NINE COMMIT TO NINJA LOAN have been put on hold until reconstruction Indonesia’s ADARO ENERGY and Australian is completed. PRIVATE EQUITYûlRMûEMR CAPITAL are raising An 11-year Ninja loan tranche of A$500m The plant has not delivered any water debt of US$1.7bn for their proposed 53M ûTOûRElNANCEûTHEû3YDNEYû since Hastings Funds Management and acquisition of a majority stake in a coal desalination plant has attracted Ontario Teachers’ Pension Plan bought it in mine from global miner Rio Tinto. commitments from nine lenders. MUFG has 2012, due to high water levels in Sydney. A special-purpose vehicle, under the underwritten the loan. 4HEûSPONSORSûPAIDûTHEû.EWû3OUTHû7ALESû CONTROLûOFûTHEûDUO ûWILLûRAISEûDEBTûTOûlNANCEû Three Japanese insurers – Dai-ichi Life government A$2.3bn for a 50-year lease. the purchase of Rio Tinto’s 80% stake in the Insurance, Daido Life Insurance and Meiji Yasuda Kestrel coal mine in Queensland for Life Insurance – came into the loan, which INVESTEC DOUBLES BULLET SIZE A$2.25bn (US$1.74bn). WASûPARTûOFûAûLARGERû!BNûRElNANCING The US$1.7bn debt is fully underwritten Daido Life, a relatively new entrant to INVESTEC BANK has doubled the size of its and split into a US$400m 12-month bridge offshore infrastructure lending, committed three-year bullet term loan to A$150m from loan to high-yield bond issue from MUFG US$31m to the US dollar portion of the an original target of A$75m. and Standard Chartered ûAû53BNûlVE Ninja loan. Other lenders included Chiba ANZ and BNP Paribas were original year amortising term loan from seven banks Bank, Iyo Bank, Norinchukin Bank and Sumitomo mandated lead arrangers and bookrunners, and a US$250m revolving credit facility Mitsui Trust Bank. while Bank of China, HSBC, State Bank of India from four of the seven lenders on the term 4HEûRElNANCINGûREACHEDûlNANCIALûCLOSEû and UOB joined for the same title. loan. on March 29 with MUFG putting up the Mandated lead arrangers are Agricultural ANZ, CIMB Bank, DBS Bank, MUFG, OCBC Ninja loan tranche in Australian dollars. It Bank of China, CTBC Bank, First Commercial Bank, StanChart and SMBC are the was then converted into a combined US Bank, Korea Development Bank and Taiwan underwriters of the US$1.05bn term loan, dollar and Australian dollar facility after Business Bank. Lead arrangers are Chugoku while ANZ and three others are providing lNANCIALûCLOSE ûWITHûTHEû!USTRALIAN CURRENCYû Bank, Hua Nan Commercial Bank, Land Bank of the revolver, split further into a US$150m portion being the larger of the pieces in the Taiwan, Mega International Commercial Bank, working capital facility and a US$100m two currencies. Shin Kong Commercial Bank, Sunny Bank and bond line. The Ninja loan paid all-ins of 175bp for Taishin International Bank. The interest margin on the term loan is Australian dollars and 130bp for US dollars, The facility, offering all-in pricing of north of 300bp over Libor. The banks are calculated on margins of 170bp over BBSY 140bp over BBSY, will be used partly to preparing to launch the loan into and 125bp over Libor. RElNANCEûAû!MûTHREE YEARûTERMûLOANû syndication. 4HEûRESTûOFûTHEûRElNANCINGûWASûSTRUCTUREDû closed in July 2016. That loan paid an all-in The acquisition marks Adaro’s biggest ASûTRANCHESûOFûTHREEûANDûlVEûYEARS ûWHICHû of 145bp, based on a margin of 110bp over overseas investment, as well as EMR’s existing lenders mostly funded. The interest BBSY and a 105bp upfront fee, for tickets of biggest outlay in the mining sector. margin for the three-year is 90bp over BBSY A$10m or more.

TOTAL NUMBER AND VOLUME OF SIGNED SYNDICATED CREDITS BY COUNTRY 1/1/2018–31/3/2018 Volume No of Volume No of Volume No of Country US$(m) issues Country US$(m) issues Country US$(m) issues

Saudi Arabia 18,600.0 3.0 New Zealand 376.8 3 Belgium 6,030.7 8 Qatar 3,500.0 1 Cambodia 100.0 1 Turkey 3,799.3 4 Ghana 1,500.0 1 Vietnam 100.0 1 Portugal 2,943.1 2 UAE 1,000.0 1 Asia-Pacific 160,017.30 858 Switzerland 2,086.9 5 Israel 491.4 1 United States 559,950.7 855 Sweden 1,698.1 4 Oman 300.0 1 Canada 47,425.5 73 Austria 1,618.6 6 South Africa 127.6 2 Brazil 5,550.0 3 Norway 1,434.8 3 Africa/Middle East 25,519.00 10 Mexico 4,248.0 10 Luxembourg 1,365.7 2 Japan 71,363.3 639 Argentina 1,250.0 2 Russian Federation 1,295.0 2 Hong Kong 24,612.1 43 Chile 430.0 1 Finland 1,211.8 4 China 17,119.9 44 Panama 163.0 1 Denmark 282.0 1 Australia 11,095.2 23 Americas 619,017.20 945 Kazakhstan 225.0 1 Singapore 11,692.3 18 United Kingdom 43,537.6 42 Poland 145.5 1 Malaysia 8,740.0 3 France 37,714.6 43 Ukraine 100.0 1 Taiwan 6,289.9 29 Spain 23,874.2 27 Ireland 60.9 1 India 6,233.8 43 Italy 18,465.8 14 Europe 175,608.08 210 Indonesia 1,556.3 9 Netherlands 14,305.8 8 Total 980,037.3 2,023 Thailand 612.7 2 Germany 13,413.4 31 Source: Thomson Reuters

58 International Financing Review April 7 2018 LOANS ASIA-PACIFIC

GLOBAL LOANS BOOKRUNNERS – FULLY GLOBAL LOANS BOOKRUNNERS – FULLY ASIA-PACIFIC LOANS BOOKRUNNERS – FULLY SYNDICATED VOLUME SYNDICATED VOLUME (EX US) SYNDICATED VOLUME (INCLUDING JAPAN) BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 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 BAML 288 91,334.46 10.4 1 Mizuho 133 25,155.72 7.6 1 Mizuho 121 20,877.47 18.7 2 JP Morgan 241 75,375.35 8.5 2 Sumitomo Mitsui Finl 157 19,311.27 5.9 2 Sumitomo Mitsui Finl 141 14,025.41 12.5 3 Citigroup 139 50,369.48 5.7 3 MUFG 190 17,452.11 5.3 3 MUFG 179 13,199.98 11.8 4 Wells Fargo 193 44,986.95 5.1 4 Bank of China 46 15,269.82 4.6 4 Bank of China 40 12,351.73 11.0 5 MUFG 235 43,464.53 4.9 5 HSBC 52 14,501.28 4.4 5 Citic 3 4,300.52 3.8 6 Mizuho 172 37,553.45 4.3 6 SG 35 13,402.88 4.1 6 ANZ 14 4,297.65 3.8 7 Deutsche Bank 107 31,841.53 3.6 7 Citigroup 31 12,859.79 3.9 7 Standard Chartered 10 4,230.09 3.8 8 Goldman Sachs 94 29,930.70 3.4 8 Credit Agricole 52 12,777.31 3.9 8 HSBC 12 4,010.16 3.6 9 Barclays 109 29,768.99 3.4 9 Deutsche Bank 30 12,510.82 3.8 9 United Overseas Bank 6 3,549.14 3.2 10 Morgan Stanley 71 28,688.81 3.3 10 BAML 24 11,775.10 3.6 10 Indl & Comm Bank China 5 1,815.87 1.6 Total 1,653 882,132.63 Total 843 329,502.67 Total 610 111,835.41

Proportional credit Proportional credit Proportional credit Source: Thomson Reuters SDC code: R1 Source: Thomson Reuters SDC code: R4 Source: Thomson Reuters SDC code: S3a

WALKER TO LAUNCH EXTENSION and a US$100m Tranche B, paying an interest margin of 105bp over Libor. HONG KONG Property developer WALKER CORP will launch The borrower will pay any excess interest THISûWEEKûAû!BNû53BN ûlVE YEARû rate beyond a 40bp difference between SIPG MAKES MAIDEN TRIP term loan to extend a A$1.05bn facility TAIFX and Libor. completed in 2016. Banks can join as MLAs with US$18m or SHANGHAI INTERNATIONAL PORT (GROUP) is seeking Mandated lead arrangers and more for an upfront fee of 14bp, as joint a HK$8.8bn (US$1.12bn) 13-month bookrunners ANZ and Commonwealth Bank of arrangers with US$12m–$17m for a 9bp fee, borrowing on its debut in the syndicated Australia will invite existing and new lenders or as participants with US$6m–$11m for a loan markets. to participate in the deal. 4bp fee. Sole bookrunner Deutsche Bank ûWHICHûlRSTû 4HEûûLOANûWASûSECUREDûBYû7ALKERSû Proceeds are for a factory expansion provided the loan last September, has mAGSHIPû#OLLINSû3QUAREûDEVELOPMENTûINû project in central China’s Chongqing city brought in DBS Bank and is selling down the Melbourne’s Docklands. The new facility ANDûALSOûFORûRElNANCINGûAû53MûlVE YEARû borrowing further to other lenders. increases the overall deal size to term loan from December 2013. BoT also led The bullet loan, due on October 24, pays accommodate an additional tower expected the 2013 loan, which offered a margin of all-in pricing of about 100bp over Hibor. to be completed in June, the sources said. 125bp over three-month or six-month Libor. 0ROCEEDSûRElNANCEDûBRIDGEûLOANSûTHEûPORTû The facility will pay an interest margin of The borrower would pay any excess interest operator obtained from BOC International, 170bp over BBSY with all-in pricing of about rate beyond a 35bp difference between HSBC and JP Morgan in 2016 to invest in the 180bp, slightly below the top-level all-in of TAIFX and Libor. IPO of Postal Savings Bank of China last 190bp on the existing facility. September. Existing lenders will be paid a 30bp GOLDWIND ALLOCATES BULLET LOAN As a cornerstone investor in PSBC’s extension fee to roll over their HK$59.1bn IPO, SIPG put up HK$15.9bn for commitments. An establishment fee of 7IND TURBINEûMAKERû8INJIANGû'OLDWINDû 3.35bn shares at HK$4.76 each. about 10bp per year will also be paid to Science & Technology has allocated its SIPG monetised half its stake last July existing lenders for additional US$300m three-year bullet loan. through US$1bn of zero-coupon commitments and to new participants. Final Standard Chartered was the original exchangeable bonds, split equally into four- ticket levels were not disclosed ahead of the mandated lead arranger and bookrunner on YEARûPUTûTWOûANDûlVE YEARûPUTûTHREEû launch. the loan, while China Construction Bank (Asia) tranches. The notes are exchangeable for Collins Square is an A-grade development and Hang Seng Bank are MLABs. the H-shares of PSBC, China’s biggest bank and Australia’s largest central business Mandated lead arrangers are Bank of China in terms of branch numbers. district commercial precinct. The new tower Paris branch, ABN AMRO, Hitachi Capital (Hong The borrower could sell another EB issue is backed by 10-year leases with several blue- Kong) and Industrial & Commercial Bank of China to monetise its remaining stake in PSBC. chip tenants. Singapore branch. Lead arrangers are Industrial & Commercial Bank of China (Asia) and Dah Sing Bank, while Taiwan Cooperative Bank Hong Kong INDIA CHINA branch is arranger. Lenders were offered top-level all-in BIRLA CARBON SEEKS LARGER LOAN COMPEQ CHONGQING SEEKS US$150m pricing of 165bp, via an interest margin of 145bp over Libor and a 60bp upfront fee. BIRLA CARBON, a unit of Indian conglomerate COMPEQ MANUFACTURING (CHONGQING) has The borrower is GOLDWIND INTERNATIONAL Aditya Birla Group, is seeking a US$1.2bn loan LAUNCHEDûAû53MûlVE YEARûONSHOREûTERMû HOLDINGS (HK), a unit of Xinjiang Goldwind after scrapping plans to issue US dollar bonds. loan, with Bank of Taiwan as mandated lead Science. The parent will provide a keepwell The borrower has added two more banks arranger and bookrunner. deed and a deed of equity-interest purchase to the arranger group as JP Morgan and SG The unsecured loan, with Taiwan-listed undertaking. Asia are underwriting US$50m apiece. parent Compeq Manufacturing as Funds are for general corporate Nine other banks, mandated earlier, are guarantor, comprises a US$50m Tranche A purposes. underwriting about US$122m each. They

International Financing Review April 7 2018 59 Bond rush adds to APAC lending woes

„ ASIA-PACIFIC Volumes fall to their lowest since 2012, exacerbating pricing compression

Syndicated lending in Asia-Pacific, excluding Japan, months of 2018, down 55% from US$9.79bn a Indian state-owned power producer NTPC fell to its lowest quarterly tally in nearly six years to year earlier. is wrapping up a US$350m-equivalent yen- US$80.48bn in the first three months of 2018, as A major factor in the slowdown was the denominated 10-year Samurai loan, and hurried bond issuance from Asian borrowers trying effect of measures in the past 18 months from Australia’s Sydney desalination plant funded to beat interest rate rises and a steep drop in M&A Chinese regulators to control capital outflows. a refinancing that included a A$500m 11-year lending suppressed loan volumes. China, Asia’s biggest event-driven financing Ninja loan that was syndicated to Japanese The first three months saw 176 deals market, produced only one M&A loan for a mere regional and cooperative banks and life insurers. completed, the lowest quarterly volume since US$100m in the first quarter, in stark contrast to “The benefit to borrowers is you are attracting the third quarter of 2012, when US$77.91bn was US$4.81bn in Q1 2017. a different investor base to other capital raised from 253 loans. It was also 17% lower in However, several M&A loans are expected markets,” said Drew Riethmuller, head of volume terms than the US$96.86bn transacted to boost second-quarter numbers, including a corporate and institutional banking, Oceania, at in Q1 2017, when bond issuance was also strong. US$3.38bn loan to fund the equity contributions MUFG in Sydney. “We believe this will continue Several high-profile Asian credits took of the members of a consortium that acquired to evolve given the wide pool of investors in advantage of bond investors’ hunger for yield, Global Logistic Properties, a US$1.6bn facility Japan.” and locked in long maturities as the curtain falls backing Philippine conglomerate San Miguel’s on the era of low interest rates. loans totalling US$4.06bn-equivalent in Taiwan PRICING FALLS “Volume from the loan market has been for Advanced Semiconductor Engineering and Lower deal flow exacerbated the pricing channelled to the bond market, as issuers footwear maker Pou Chen, among others. compression for high-grade borrowers and rushed to raise money ahead of the US Federal Malaysian oil and gas giant Petroliam continues to characterise lending in Asia-Pacific Reserve hike cycle of 2018,” said Aditya Agarwal, Nasional wrapped up a US$8bn loan for as banks remain eager to lend to blue-chip head of loan syndicate and sales at Maybank. its Refinery and Petrochemical Integrated firms, despite ever lower pricing. Some Asian companies raised smaller loans Development (RAPID) project, almost two years “The lack of loan deal flow has also meant than planned after success with sizeable bond after the financing first emerged. The loan, Asia’s that banks have been struggling to meet asset offerings. In January, Tata Steel reduced a proposed largest in the first quarter, boosted volumes to growth targets, leading to further compression US$2.16bn six-year loan to US$1.7bn after raising US$8.74bn, the highest for the country since the in spreads and more relationship-structured club US$1.3bn from a dual-tranche bond issue. turn of the century. deals in the region,” said Maybank’s Agarwal. China National Chemical Corp (ChemChina) The US$8bn club loan for Petronas, with a also opted for a loan-bond combination, raising JAPANESE APPEAL 364-day tenor and an extension option of six US$10.35bn in March, including a US$5.5bn loan. Lending to Japanese companies also fell by months, attracted 19 banks despite paying a 18.4% in the first quarter to US$69.68bn from tight interest margin of about 40bp over M&A SLUMP US$85.36bn a year earlier, although its banks Libor for the first 12 months before it steps up M&A financings from Asia (ex-Japan) and insurance companies provided good liquidity to 55bp. plummeted to US$4.42bn in the first three to foreign borrowers eyeing long-term loans. Prakash Chakravarti

are ANZ, Axis Bank, BNP Paribas, Credit Agricole, MUFG, Mizuho Bank and SMBC were purposes. Mizuho provided that three-year Citigroup, DBS Bank, ICICI Bank, Mizuho Bank mandated lead arrangers and bookrunners facility. and Standard Chartered. on the Samurai loan, offering top-level all-in The borrowing is split into a US$1.05bn pricing of 105bp, based on an interest PFC DRAWS FOUR TO BORROWING 30-month term loan and a US$150m 30- margin of 95bp over Tibor and a weighted- month revolving credit. average remaining life of 10 years. State-owned POWER FINANCE CORP has closed its The overall loan is expected to be Lead arrangers are Chugoku Bank, Bank of 53MûlVE YEARûLOANûASûFOURûBANKSûJOINEDû launched into syndication sometime this Yokohama, San-in Godo Bank, Aozora Bank and in general syndication. month. Shinsei Bank. Arranger is Joyo Bank and lead Mandated lead arrangers and Birla Carbon had previously eyed a managers are Gunma Bank and Hyakujushi bookrunners MUFG, Mizuho Bank and State US$600m dual-tranche loan and US dollar Bank. Bank of India managed to sell down only bonds of a similar size. However, bond The leads had prefunded the loan in US$32m in general syndication – not market conditions have not been conducive September and launched it into general surprising due to the tight pricing. for high-yield borrowers in recent weeks syndication in December. Arrangers are Mega International given the rise in US Treasury yields. &UNDSûWILLûBEûUSEDûPARTLYûTOûlNANCEû Commercial Bank and Hachijuni Bank. Lead capital expenditure for NTPC’s ongoing and managers are Gunma Bank and Shinhan Bank, EIGHT JOIN NTPC 10-YEAR SAMURAI new projects, as well as for renovation and Japan. modernisation of its power stations. The loan paid a top-level all-in pricing of India’s largest power utility NTPC has In January 2016, NTPC cancelled 100bp, based on an interest margin of 70bp SUCCESSFULLYûCLOSEDûTHEûCOUNTRYSûlRSTû plans to raise a seven-year loan of up to and a 4.5-year remaining life. unsecured 10-year offshore borrowing US$500m after failing to get regulatory The tepid response does not bode well for with a ¥39.42bn (US$370m) loan, approval. THEûSYNDICATIONûOFûANOTHERû53MûlVE which attracted eight banks in general NTPC last raised a US$100m bilateral loan year loan for which PFC has mandated syndication. INûTHEûSECONDûHALFûOFûûFORûRElNANCINGû MUFG, Mizuho and SBI.

60 International Financing Review April 7 2018 LOANS EMEA

#4û#ORP ûWHICHûHASûINTERESTSûINûlNANCIALû The loan can be repaid seven years after INDONESIA services, media, retail, lifestyle, drawdown on April 27. The interest margin entertainment, property and agriculture, on the loan will step up by 100bp after seven INDO EXIM CLOSE TO HIRING SEVEN was known as Para Group before changing years. The initial margin and lender list its name in 2011. were not disclosed. INDONESIA EXIMBANK is close to hiring ANZ, First Japan Credit Rating Agency and Rating & Abu Dhabi Bank, Mizuho Bank, MUFG, OCBC CSUL LIFTS NEW-MONEY LOAN Investment Information have assigned Bank, Standard Chartered and UOB Bank for a respective BBB+ and BBB ratings to the loan, multi-tranche loan of US$950m. CHANDRA SAKTI UTAMA LEASING has increased a which both treat as 50% equity. The loan comes with maturities of one, three-year loan to US$126.5m from US$75m, The borrower made its debut in the hybrid THREEûANDûlVEûYEARSûINûAûSPLITûTHATûISûBEINGû following commitments from eight lenders market on March 6 with two bond issues – a lNALISEDû4HEûLAUNCHûINTOûGENERALû in general syndication. ¥30bn 40-year and a ¥20bn 42-year at respective syndication is imminent. ANZ, Emirates NBD, Standard Chartered and yields of 103bp and 113bp over mid-swaps. 4HEûPROCEEDSûWILLûRElNANCEûAû53Mû SMBC were mandated lead arrangers and three-year tranche of a US$1bn loan signed BOOKRUNNERSûONûTHEûlNANCING ûWHICHûHADûAû in May 2015. That piece comes due in May. BASEûSIZEûOFû53MûANDûANûUNSPECIlEDû The US$1bn loan, which also had a greenshoe option. 53MûlVE YEARûPORTION ûDREWûûLENDERS û Lead arrangers are Bank KEB Hana EUROPE/MIDDLE including seven mandated lead arrangers Indonesia, CIMB Bank, Singapore branch, EAST/AFRICA and bookrunners. Eastspring Investments (Singapore), Rabobank The May 2015 loan paid respective top- International Indonesia and Taiwan Cooperative level all-ins of 146.3bp and 174bp, based on Bank, Manila offshore banking branch. Arrangers CZECH REPUBLIC interest margins of 118bp and 150bp over are Bank SBI Indonesia, Korea Development Bank, Libor. Singapore branch and Tokyo Star Bank. PPF LOAN HITS SENIOR Indo Exim’s most recent market visit was The loan paid a top-level all-ins of 301.9bp last June for a US$350m one-year club loan, (offshore) and 336.9bp (onshore), based on Financial investment group PPF has with BNP Paribas, StanChart, SMBC and interest margins of 265bp (offshore) and launched senior syndication of a €3.025bn UOB as leads. The loan was said to have paid 300bp (onshore) over Libor, and a remaining loan to a group of relationship banks. an all-in of around 70bp. average life of 1.625 years. The loan, which represents the largest A previous US$725m dual-tranche 4HEûBORROWERûISûTHEûlNANCINGûARMûOFû loan syndication in the Central and Eastern syndicated loan from August 2016 offered privately owned Tiara Marga Trakindo. The European region since 2011, backs PPF’s top-level all-ins of 132.27bp and 161bp for parent is an authorised dealer in Indonesia of €2.8bn acquisition of the Central and TENORSûOFûTHREEûANDûlVEûYEARS ûBASEDûONû heavy-equipment vehicles, including Eastern European assets of Norwegian margins of 105bp and 145bp over Libor and Caterpillar, Iveco, Mercedes-Benz and Michelin. telecommunications business Telenor. remaining lives of 2.75 and 4.75 years, General syndication is set to follow in a respectively. few weeks. JAPAN The loan has been underwritten by BNP TRANSMEDIA SIGNS US$300m REFI Paribas Fortis, Credit Agricole, Erste Bank-Ceska JOGMEC RETURNS FOR JUMBO Sporitelna, HSBC, Societe Generale and UniCredit TRANSMEDIA, a subsidiary of conglomerate CT as global coordinators, mandated lead #ORP ûANDûANOTHERûAFlLIATEûHAVEûSIGNEDûAû JAPAN OIL GAS & METALS NATIONAL CORP (Jogmec) is arrangers and bookrunners. 53M EQUIVALENTûLOANûFORûRElNANCING seeking a one-year bullet term loan of Societe Generale and Komercni Banka are BNP Paribas, Deutsche Bank, Maybank, CIMB ¥393.53bn (US$3.7bn), just two months after acting as facility agent and security agent, Bank and Standard Chartered were mandated signing a similar borrowing. respectively. lead arrangers and bookrunners on the loan, The interest rate on the government- PPF is acquiring Telenor’s mobile split into US$265m and €30m (US$35m) guaranteed loan will be determined through operators in Hungary, Bulgaria, Serbia and tranches. conventional auctions, with pricing bids due Montenegro. PPF said previously that it aims Deutsche Bank took the €30m piece. by April 11. Mizuho Bank is the agent. to complete the transaction in June, adding Lenders were only invited to commit to the Drawdown is slated for April 27. Proceeds that the acquired units will continue to use US dollar portion at top-level all-in pricing of will be for operating funds. the Telenor brand until mid-2021. 357.03bp, via an interest margin of 325bp Typically, Jogmec raises a large loan in PPF Group - which owns assets of almost over Libor and a participation fee of 105bp. April during frequent visits to the €35bn - invests across sectors including Arrangers are First Commercial Bank, Chang syndicated loan market. Last April, it raised BANKINGûANDûlNANCIALûSERVICES û Hwa Commercial Bank, CTBC Bank, Hua Nan a ¥335.22bn one-year term loan with a telecommunications, biotechnology, Commercial Bank, Land Bank of Taiwan, Shinhan similar structure and a zero interest rate. insurance, real estate, and agriculture, in Asia, Bank Shinhan Indonesia and EnTie In February, the borrower obtained a Europe, Russia, the US and across Asia. Commercial Bank. ¥36.818bn one-year term loan at zero Transmedia and TELEVISI TRANSFORMASI interest after heavy oversubscription from INDONESIA are the joint borrowers. Chairul lenders, such as regional banks. FRANCE Tajung, founder and chairman of CT Corp, has provided a personal guarantee, while NREH SIGNS ¥55bn HYBRID LOAN SANOFI DETAILS ABLYNX LOAN Trans Rekan Media and Agranet Multicitra Siberkom are guarantors. NOMURA REAL ESTATE HOLDINGS has completed a French healthcare group SANOFI has agreed a "ESIDESûRElNANCING ûFUNDSûWILLûBEûUSEDûFORû ¥55bn 37-year hybrid loan, according to €4.2bn loan backing its acquisition of Belgian working capital needs. releases from Japanese rating agencies. biopharmaceuticals company Ablynx.

International Financing Review April 7 2018 61 3ANOlûLAUNCHEDûAûTENDERûOFFERûFORûTHEû The interest margins for the term loan The shopping centre is jointly owned by SHARESûOFû!BLYNXûONû7EDNESDAY and revolver are 97bp and 102bp over Libor, UK shopping centre operator INTU PROPERTIES The term loan, which is provided by BNP respectively. and CANADA PENSION PLAN INVESTMENT BOARD. Paribas Fortis, provided certainty of funds for Citigroup LEDûTHEûlNANCINGûASûGLOBALû Margins on the loan have been reduced by the acquisition and was not expected to be coordinator with ANZ Banking Group, Apple 120bp, now paying 130bp over three-month further syndicated. Bank, Bank of China, Cathy United Bank, Euribor, while the maturity has been 4HEûlNANCINGûHASûANûAVAILABILITYûOFûNINEû Maybank, Oversea-Chinese Banking Corp and extended to 2025 from 2019. months and a termination date of six Westpac also acting as mandated lead The amendment was arranged by Banco MONTHSûAFTERûlRSTûUTILISATIONûWITHûTHEûOPTIONû arrangers and bookrunners. Santander and ING. to extend by a further six months. 4HEûlNANCINGûCLOSEDûWITHûAûHIGHûLEVELûOFû The joint venture was completed in June 2 The loan pays a margin ranging from oversubscription from the bank market. 2015 after Intu had acquired the shopping 17.5bp to 65bp over Euribor. It pays 17.5bp General syndication, which was launched centre in January 2015 for €451m. OVERûFORûTHEûlRSTûlVEûMONTHS ûTHENûBPûTOû to a limited set of investors is ongoing. The €225m loan was originally arranged month eight, 35bp to month 11, 45bp to The borrower is SMBC Aviation Capital in April 2015 via Banco Santander, BBVA, month 14, 55bp to month 17 and 65bp over Netherlands BV, while Ireland-headquartered Commercial Real Estate Loans, HSBC, ING thereafter. SMBC Aviation Capital is the guarantor. and Kronborg. Ticking fees started at 10% of the applicable margin up to two months after signing, rising to 20% after two months, and SOUTH AFRICA TURKEY to 30% after three months. 3ANOlûPRICEDûõBNûOFûBONDSûINûMID -ARCHû SIBANYE-STILLWATER NETS US$600m TIRYAKI AGRO GETS US$295m to be used for general corporate purposes INCLUDINGûlNANCINGûTHEûACQUISITIONSûOFû Gold mining company SIBANYE-STILLWATER has Agricultural commodities business TIRYAKI Ablynx for around €4bn and US haemophilia COMPLETEDûTHEûRElNANCINGûANDûINCREASEûOFû AGRO has agreed US$295m of loans to help it specialist Bioverativ for US$11.6bn. its existing US$350m revolving credit increase output and expand in export 3ANOlûISûRATEDû!!ûBYû30ûANDû!ûBYû facility for a total of US$600m. markets. Moody’s. The loan is for three years with two one- The loans include a US$230m three-year year extension options and pays a margin of multicurrency secured term loan from a ATALIAN LINES UP BRIDGE between 185bp and 200bp over Libor, syndicate of 10 banks coordinated by ABN depending on gearing. AMRO. ATALIAN is lining up a bridge loan to back its 3IBANYEûMAYûINCREASEûTHEûlNANCINGûBYûAû 4HEûLOAN ûWHICHûWILLûBEûUSEDûTOûRElNANCEû £550m acquisition of UK-focused Servest. further US$150m through the inclusion of Tiryaki’s existing facility and for working &ACILITIESûMANAGEMENTûlRMû!TALIANû additional lenders. capital purposes, was launched at US$175m, EXPECTSûTOûREPLACEûORûRElNANCEûTHEûBRIDGEû 4HEûRElNANCING ûWHICHûLAUNCHEDûINû closed oversubscribed and was increased. loan with long-term debt. February, was led by Bank of America Merrill ABN AMRO and Dutch development bank The consideration for the acquisition Lynch and HSBC. FMO were bookrunners and mandated lead includes Servest’s enterprise value of £457m The previous RCF was due to mature in arrangers, while the European Bank for and Servest’s 28.8% stake in workplace August 2018 and paid 200bp over Libor with Reconstruction and Development and HSBC were TECHNOLOGYûlRMû'ETRONICSû3ERVICESû5+ û utilisation fees starting at 15bp for drawings mandated lead arrangers. which is valued at £83m. of up to a third, rising to 30bp for drawings Societe Generale and Rabobank were lead As part of the acquisition the of up to two thirds and to 50bp for drawings arrangers, while Amsterdam Trade Bank, management of Servest will invest a of over two thirds. British Arab Commercial Bank, Credit Suisse and combined €37m in La Financiere Atalian. Sibanye completed the acquisition of US- Gazprombank were arrangers. Atalian’s leverage is expected to increase based Stillwater Mining in May 2017, ABN AMRO was also documentation, to between 5.0 and 5.5 times because of the backing the purchase with a US$2.65bn facility, security and collateral management acquisition. The company plans to reduce bridge loan underwritten by Citigroup and agent on the loan. FMO committed US$44m. leverage to 4.5 times in the short to medium HSBC. term. 4HEûCOMPANYûCOMPLETEDûTHEûRElNANCINGû EMEA LOANS BOOKRUNNERS – FULLY Servest provides facility management of the bridge loan in 2017 through a US$1bn SYNDICATED VOLUME services, including cleaning, contract rights issue, a US$1.05bn Eurobond and a BOOKRUNNERS: 1/1/2018–31/3/2018 catering and technical services. US$450m convertible bond. Managing No of Total Share Sibanye-Stillwater is also in the process of bank or group issues US$(m) (%) acquiring Lonmin. That acquisition, which 1 SG 35 13,402.88 8.3 NETHERLANDS is expected to close in the second half of 2 Deutsche Bank 27 11,870.82 7.3 2018, will not add debt to the balance sheet. 3 BAML 20 10,987.10 6.8 SMBC AVIATION CLOSES US$600m LOAN 4 Credit Agricole 43 9,769.14 6.0 5 BNP Paribas 45 8,836.75 5.5 Aircraft leasing company SMBC AVIATION SPAIN 6 Citigroup 21 8,754.66 5.4 CAPITALûHASûCLOSEDûAû53MûlVE YEARû 7 Goldman Sachs 15 8,128.34 5.0 syndicated loan with a consortium of PUERTO VENECIA JV AMENDS 8 ING 29 7,865.05 4.9 primarily Asian banks. 9 HSBC 29 7,611.00 4.7 4HEûlNANCING ûWHICHûCOMPRISESûAû A joint venture has agreed an amendment 10 JP Morgan 16 6,625.84 4.1 US$200m term loan and a US$400m and extension of a €225m term loan secured Total 147 161,590.85 revolving credit facility, will be used for on the PUERTO VENECIA shopping centre in Proportional credit general corporate purposes. Zaragoza, Spain. Source: Thomson Reuters SDC code: R17

62 International Financing Review April 7 2018 LOANS NORTH AMERICA

There is also a US$65m long-term loan expected to be funded with new debt, MONDELEZ AGREES US$2bn LOAN being arranged by FMO, which committed commercial paper and cash on the balance US$30m, with the EBRD and Proparco sheet. Snack maker MONDELEZ INTERNATIONAL has committing US$20m and US$15m, JM Smucker said it also plans to explore agreed a US$2bn 364-day revolving credit respectively. options for its US baking business, including facility to fund an up to US$1bn bond Tiryaki Agro will use the facilities to a potential sale. buyback. increase its output of pulses, grains, nuts, Ainsworth produces, distributes and The unsecured facility can also be used for oilseeds and feedstuffs, and expand in markets premium pet foods and snacks, general corporate purposes and working export markets such as North America and mainly within the US. Rachel Ray’s Nutrish capital. Europe, especially for organically grown brand represents about two-thirds of Citigroup and Barclays are joint lead crops. Ainsworth’s sales. arrangers and joint bookrunners on the

UAE

ICD RAISES US$1.2bn LOAN Banks get Q1 boost from

INVESTMENT CORPORATION OF DUBAI, the US lending government’s main investment arm, has RAISEDûAû53BNûLOANûTOûRElNANCEûDEBT „ US Earnings rise thanks to new-money and sponsor-led deals The loan was led by Citigroup, Dubai Islamic Bank, Emirates NBD, HSBC, ICBC and Standard Bank earnings got a first-quarter boost from CIGNA CORP in late March had lined up a Chartered. arranging US syndicated loans, and should US$23.7bn 364-day bridge loan, a US$3bn The Dubai sovereign wealth fund, whose benefit more significantly in coming months as three-year term loan and a US$3.25bn five-year portfolio includes stakes in companies such financings begin to close on large mergers and revolving credit for the health insurer’s roughly as Emirates Airline and Emirates NBD, had takeovers announced earlier this year. US$52bn acquisition of pharmacy benefit assets totalling Dh786.8bn (US$214.21bn) as An ongoing push by companies to refinance manager EXPRESS SCRIPTS. of June last year, according to its most and cut costs on existing debt, along with a “Even though announced deal activity is at the RECENTûlNANCIALûRESULTS dealmaking wave stoked by US tax reform that cut highest level that is has been since the middle of The debt facility was syndicated to a the corporate rate to 21% from 35%, should keep 2016, a lot of the deals haven’t closed yet and a larger group of banks and the fundraising lending active through the year and bolster related lot of the fees really haven’t been recognised yet,” has recently been completed. bank fee income, strategists and bankers said. Nassof said. “We are seeing the bridge loan fees, )TûPARTLYûRElNANCESûAû53BNûlVE YEARû Fees from underwriting leveraged loans but the fees for the bonds that will ultimately take loan that ICD raised in 2013. That loan, to highly indebted companies rose 13% to out the initial bridges can be significantly higher.” which included an Islamic tranche, saw the US$2.57bn in the first quarter from the year- participation of a group of banks including earlier period, the highest level for the first three BROADCOM BLOCKED Abu Dhabi Commercial Bank, Abu Dhabi months of the year in records dating back 20 The dealflow was sufficient to overshadow the Islamic Bank, Citigroup, Commercial Bank years, according to Freeman Consulting Services. lost earnings potential from the largest loan of Dubai, Emirates NBD, HSBC and Standard Although leveraged lending volume was down commitment ever: a US$100bn financing to Chartered. 33% in the first quarter from the same quarter back BROADCOM’s planned US$117bn takeover last year, Freeman said there was a shift towards of Qualcomm that fell away when US President more new-money issuance and more sponsor- Donald Trump blocked the deal in mid-March led deals that are higher-margin transactions over national security concerns. versus corporate-led deals. Freeman estimated at the time that the 12 NORTH AMERICA For extending loans to high quality bridge loan lending banks stood to split a total pool companies, banks earned US$512m in the first of US$20m-$40m in fees once the acquisition was quarter, also the highest first-quarter income in scrapped, having had an opportunity to earn up UNITED STATES records dating back two decades. to 10 times that amount including fees from long- “There’s a big pipeline that suggests the rest term debt financing if the deal had gone through. BAML BACKS JM SMUCKER of the year can be as strong as the beginning of While income from putting together the year,” said Jeff Nassof, a director at Freeman, syndicated loans got off to a solid start this JM SMUCKER has agreed a US$1.9bn 364-day which estimates fees based on Thomson Reuters year, it was insufficient to increase the total US senior unsecured bridge term loan data. investment banking fee pool. with Bank of America Merrill Lynch to On the leveraged side, the announced When adding bank earnings from equity and back its acquisition of Ainsworth Pet US$13.5bn loan and bond financing supporting bond underwriting, as well as M&A advisory Nutrition. Blackstone Group’s purchase of a 55% stake in and syndicated loan arrangement, the total US The all-cash acquisition, valued at THOMSON REUTERS’ Financial and Risk unit, which investment banking fee pool dropped 9% in the 53BNûBEFOREûANûEXPECTEDûTAXûBENElT û includes IFR, has yet to launch or be counted first quarter to US$11.1bn from US$12.2bn in the aims to strengthen the company’s in fee totals. The buyout for the F&R unit is the year-earlier period. competitiveness in the premium pet food largest since the financial crisis. “M&A doesn’t look exceptional in the first market. The situation is similar for lending to investment- quarter but there’s a lot of recent activity that hasn’t 4HEûCOMPANYûSAIDûITûEXPECTSûTOûRElNANCE û grade companies, with temporary financing lined been recognised in terms of fees yet,” said Nassof. “I at closing, all Ainsworth’s outstanding debt up that has yet to be replaced by the permanent think this year will end up fairly good for M&A.” and certain of its units. The cash bond debt that magnifies fee intake. Lynn Adler CONSIDERATION ûASûWELLûASûTHISûRElNANCING ûISû

International Financing Review April 7 2018 63 Leveraged lending sags, high-grade rises n US In Q1, two-thirds of leveraged loans were refinancings

US syndicated lending in the first quarter was In 2017, when a late-year burst of mergers Three-month Libor, at 2.31%, has jumped the lowest of any since the third quarter of 2016, and the torrid pace of refinancing drove US from about 1.70% at the start of the year and is following a record year for annual issuance in syndicated lending to an all-time high of the highest since the financial crisis. One-month 2017. US$2.5trn, the same two-thirds share of highly Libor is up at 1.88% from 1.56%. US$517.6bn of loans were arranged in the first indebted borrowers repriced deals to lock in “Libor moved up so fast that despite the quarter, down from US$604.4bn year-on-year, more favourable terms before rates increased. spread compression, the average coupon is with leveraged loans sagging and loans for top- Among highly rated companies, syndicated still higher than three or six months ago,” quality companies rising. lending of US$197.8bn in the first quarter from Nechamkin said. Some of the bigger leveraged deals, including 89 deals was up 38% from the US$143.3bn in 88 While average leveraged loan spreads of 3.3% the US$13.5bn loan and bond financing backing deals a year earlier. in the first quarter were the lowest since the Blackstone Group’s purchase of a majority stake “Tax reform has been a real shot in the arm third quarter of 2007, average yields jumped to in THOMSON REUTERS’ Financial and Risk unit - the for many companies in terms of lowering their 5.42% in the first quarter from 5.02% at the end largest buyout financing since the financial crisis costs of doing business, and making it more of last year. - have yet to launch or be tallied in these volume compelling to consider doing acquisitions,” one “For the last six months loans have figures. The F&R unit includes IFR. senior banker said. outperformed high-yield bonds consistently, Bankers are hopeful that this year’s newly Bankers are eager to put capital to use, month after month, for the first time in well over lowered corporate tax rate of 21%, down from especially after the biggest committed loan ten years,” said John Fraser, head of Investcorp 35%, will help to free up companies for more financing ever - a US$100bn bridge loan arranged Credit Management US. “Loans have also acquisitions and related financing. by a dozen banks to back BROADCOM’s US$117bn dramatically outperformed investment-grade The prospect of more US Federal Reserve takeover of Qualcomm - fell away after US bonds.” interest rate hikes this year and next will also President Donald Trump blocked the chipmaker CLO funds, the biggest buyers of leveraged keep borrowers refinancing existing debt before deal in March over national security concerns. loans, could intensify their purchases, with more rates rise further, boosting loan volume. capital freed up now that they are exempt from “Our pipeline is probably four to five times BUY, BUY “skin in the game” requirements to hold 5% of busier than in mid-January,” said Brendan Dillon, While leveraged loan volume slid, investor their funds’ risk. global co-head of leveraged finance and capital demand did not, allowing borrowers to keep Retail investors, meantime, have pumped in a markets at UBS. “This bodes well for a robust pricing deals aggressively. net US$3.5bn into loan funds this year to March second quarter and lively third quarter.” Investors continued to clamour for floating-rate 21, while yanking out almost US$19bn from In the first quarter, US$269.3bn of leveraged assets, which are pegged to a rising Libor benchmark. high-yield bond funds, according to Lipper. loans were arranged in 718 deals, a drop of That demand has dragged down yield spreads. “Loans do benefit from rising interest rates,” about 33% from US$404.8bn in the same period “The first quarter was all about one thing: said Fraser. “Increases in Libor year to date last year from 618 issues. loan spread compression - lower and tighter have more than offset spread compression, so Around two-thirds of the leveraged loans spreads,” said Michael Nechamkin, senior investors are realising an improvement in yield made in the first quarter were for refinancing portfolio manager and co-chief investment and market prices have held up.” purposes. officer at Octagon. Lynn Adler

financing. Citigroup is administrative agent CHURCH & DWIGHT NETS US$1bn RCF The borrower is rated Baa1 by Moody’s and Barclays is syndication agent. and BBB+ by S&P. Pricing is in line with a US$1.5bn 364-day CHURCH & DWIGHT, maker of Arm & Hammer Proceeds will be used for general RCF arranged in February and is tied to a toothpaste, has agreed a five-year US$1bn corporate purposes. ratings-based grid. unsecured revolving credit facility, with the For A/A2 the margin is 83.5bp over Libor option to increase the loan by up to US$600m. BEST BUY GETS US$1.25bn REFI with a 4bp facility fee; for A-/A3 it is 94bp The revolver replaces an existing US$1bn and 6bp; for BBB+/Baa1 it is 104.5bp and facility dated December 2015 and will be Electronics retailer BEST BUY has agreed a 8bp; for BBB/Baa2 it is 115bp and 10bp; and due March 29 2023 unless extended. refinancing of its US$1.25bn five-year senior for lower than BBB/Baa2 it is 125bp and Bank of America Merrill Lynch is lead unsecured revolving credit facility. 12.5bp. administrative agent and Wells Fargo is co- JP Morgan led the revolver, which February’s US$1.5bn RCF was put in administrative agent. BAML, SunTrust and refreshes the tenor on a US$1.25bn five-year place via JP Morgan, Citigroup, Credit Wells Fargo are joint lead arrangers and senior unsecured revolving facility slated to Suisse, HSBC, and Bank of America Merrill joint bookrunners. expire in 2021. Lynch as joint lead arrangers and joint Pricing is linked to ratings. For A/A2 the The company is paying upfronts of 4bp on bookrunners. JP Morgan was administrative margin is 87.5bp over Libor with a 7bp old money and 12.5bp on new money. agent. commitment fee; for A-/A3 it is 100bp and The loan pays 11bp undrawn and 112.5bp Mondelez brands include Oreo, Cadbury, 9bp; for BBB+/Baa1 it is 112.5bp and 10bp; over Libor drawn. Wheat Thins and Dentyne. The company is for BBB/Baa2 it is 125bp and 12.5bp; and for Pricing is linked to ratings. For A/A2 it is rated BBB by S&P and Baa1 by Moody’s. BBB-/Baa3 it is 150bp and 17.5bp. 7.5bp undrawn and 87.5bp drawn; for A-/A3

64 International Financing Review April 7 2018

8 Loans 2228 p57-70.indd 64 06/04/2018 19:23:30 LOANS LEVERAGED LOANS

US AND CANADA LOANS BOOKRUNNERS – AMERICAS LOANS BOOKRUNNERS – FULLY FULLY SYNDICATED VOLUME SYNDICATED VOLUME BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 LEVERAGED LOANS Managing No of Total Share Managing No of Total Share bank or group issues US$(m) (%) bank or group issues US$(m) (%) 1 BAML 272 80,347.36 13.5 1 BAML 272 80,347.36 13.2 UNITED STATES 2 JP Morgan 224 68,495.17 11.5 2 JP Morgan 226 68,749.50 11.3 3 Wells Fargo 192 44,808.44 7.5 3 Wells Fargo 192 44,808.44 7.4 INTL TEXTILE OUT FOR ACQN FUNDS 4 Citigroup 112 38,169.39 6.4 4 Citigroup 117 40,225.65 6.6 5 Morgan Stanley 69 27,622.14 4.6 5 Morgan Stanley 69 27,622.14 4.5 Industrial and technical textiles maker 6 Barclays 96 26,109.77 4.4 6 MUFG 46 26,352.43 4.3 INTERNATIONAL TEXTILE GROUP has circulated 7 MUFG 45 26,012.43 4.4 7 Barclays 96 26,109.77 4.3 price talk on its first and second-lien loan 8 RBC 92 23,487.66 3.9 8 RBC 92 23,487.66 3.9 facility, which partly backs an acquisition. 9 Credit Suisse 88 23,426.10 3.9 9 Credit Suisse 88 23,426.10 3.8 Bank of America Merrill Lynch leads with 10 Goldman Sachs 84 21,802.36 3.7 10 Goldman Sachs 84 21,802.36 3.6 Deutsche Bank, Goldman Sachs, Jefferies and Total 887 597,065.41 Total 904 608,706.37 HSBC. Proportional credit Proportional credit The covenant-lite financing comprises a Source: Thomson Reuters SDC code: R9 Source: Thomson Reuters SDC code: R7 US$575m seven-year first-lien term loan and a US$135m eight-year second-lien term loan. Guidance on the first-lien tranche is it is 9bp and 100bp; for BBB+/Baa1 it is 11bp leverage. For under 1.0 time the margin 450bp-475bp over Libor with a 0% floor. It is and 112.5bp; for BBB/Baa2 it is 15bp and is 125bp over Libor and the commitment offered at 99.5 with six months of soft call 125bp; and for BBB-/Baa3 it is 20bp and fee is 17.5bp; for 1.0-1.5 times it is 150bp protection at 101. 150bp. and 20bp; for 1.5-2.5 times it is 175bp and Guidance on the second-lien tranche is 25bp; for 2.5-3.5 times it is 200bp and 25bp; 850bp-875bp over Libor with a 0% floor. It is HP EXTENDS US$4bn RCF and for 3.25 times or over it is 225bp and offered at 98.5 with a 103/102/101 hard call 30bp. schedule. Computer manufacturer HP has amended The financing was led byPNC Bank as joint Proceeds will be used to fund the and restated a senior unsecured revolving lead arranger, sole bookrunner and acquisition of American & Efird and credit facility with total commitments of administrative agent. SunTrust is joint lead refinance existing debt. US$4bn, to be used for general corporate arranger and syndication agent. Ratings are B1/B corporate and first-lien purposes. Fifth Third Bank and Regions Bank are and B3/B- second-lien. Citigroup is administrative agent and JP documentation agents. Other participants VERITAS CAPITAL has received committed Morgan is co-administrative agent for the are BMO, KeyBank, Morgan Stanley and Synovus financing from a trio of investment banks five-year facility that is now available until Bank. and a non-bank lender to back its March 30 2023. acquisition of General Electric Healthcare’s The revolver can be extended by up to Value-Based Care division. two one-year periods. Veritas is buying the unit, which includes Margins range from 87.5bp to 162.5bp GE Healthcare’s enterprise financial over Libor, and commitment fees range LATIN AMERICA management, ambulatory care from 7bp to 25bp, depending on long-term management and workforce management debt ratings. software assets, for US$1.05bn. HP is rated Baa2 by Moody’s and BBB by PANAMA The financing for the carveout will S&P. include first and second-lien term loans. GLOBAL BANK UPPED TO US$163m Goldman Sachs will lead the first-lien SUN HYDRAULICS AGREES tranche with Barclays and Deutsche Bank on US$500m LOAN GLOBAL BANK CORP has increased its three-year the right. senior unsecured term loan to US$163m Canadian pension fund manager Public SUN HYDRAULICS has agreed a US$500m senior from the US$135.5m target. Sector Pension Investment Board is fully secured credit facility as it completed its Citigroup, JP Morgan and Mizuho Bank were underwriting the second-lien tranche. It is €430m acquisition of Italian hydraulic the joint lead arrangers and bookrunners of also participating in the revolving credit coupling firm Faster. the facility, which offered an interest facility. The financing, which replaces the margin of 175bp over Libor. PSP in 2015 launched a private debt company’s existing US$300m revolving Lenders were offered a top-level upfront platform, PSP Investments Holding USA LLC, credit facility, comprises a US$400m RCF fee of 70bp. which focuses on private placements and and a new US$100m term loan, both Lead arranger is Bank of China, Panama direct loans for leveraged finance maturing in April 2023. branch, while participants are Export-Import transactions, including US medical Sun Hydraulics can increase the financing Bank of the Republic of China, Gunma Bank, KDB helicopter operator Air Medical Group through a US$200m accordion facility. The Asia, NEC Financial Services, Bancaribe Curacao Holdings’ purchase of ambulance services previous facility included a US$100m Bank, Taishin International Bank and Atlantic provider American Medical Response. accordion. Forfaitierungs. Semiconductor maker MICRON TECHNOLOGY The company drew US$258m under the Funds will be used to refinance debt. detailed pricing guidance for a US$736.875m RCF and the US$100m term loan to help The borrower, rated BBB– (S&P/Fitch), senior secured term loan B, proceeds of finance the acquisition. provides corporate and retail banking which will be used to reprice existing debt The financing pays a margin based on services in Panama and globally. due 2022.

International Financing Review April 7 2018 65

8 Loans 2228 p57-70.indd 65 06/04/2018 19:23:30 Secondary prices wobble amid tariff threats n US Stock market volatility is reflected in the SMi100

The high-stakes trade confrontation between early March before the tariffs took place. The leveraged loan market is less exposed the US and China is increasing the secondary “For steel, there’s a direct positive impact than the broader equity markets or the loan prices of steel manufacturers and metals on domestic producers. Within the leveraged investment-grade loan and bond market, both companies, but components manufacturers are finance market, the impact on that sector has of which have a more global perspective, said potentially vulnerable to Chinese retaliation. been directly meaningful so far,” said Steven Rank. President Donald Trump’s proposed tariffs on Oh, global head of credit and fixed income at “As the counter-tariffs from China on US Chinese goods are fuelling talk of a trade war PineBridge Investments. products account for a tiny portion of the goods that could crush global growth, and increasing shipped between the countries each year and political uncertainty is roiling the financial COUNTERPUNCH the loan universe doesn’t have much exposure markets. China’s retaliatory duties on key US imports from to the tariffs, it hasn’t really affected the credit Rising volatility in the global stock markets is the agriculture, aerospace and auto sectors on space aside from general market weakness starting to be reflected in the SMi100, an index products including soybeans, planes, cars and caused by the policy uncertainty,” said John that tracks the 100 most widely held US loans, chemicals are largely yet to feed through to the Lloyd, co-head of credit research and portfolio as overall secondary loan prices weaken. US-centric leveraged finance markets. manager at Janus Henderson Investors. The SMi100 fell to 98.51 on Thursday from However, companies directly targeted by Aerospace component manufacturers with 98.61 on March 8 and is now 43bp lower than the tariffs - component manufacturers and significant exposure to US firms such as Boeing the 98.94 recorded on February 7, the highest aerospace and automobile suppliers - are could see a negative impact, rather than point in 2018 to date. potentially vulnerable. European companies, such as Airbus, which will Trump directed US trade officials to identify WP CPP HOLDINGS, an aerospace component be excluded from China’s levy, according to Oh. tariffs on another US$100bn of Chinese imports maker, was among the biggest losers in the Furthermore, the leveraged finance market on Thursday, after China retaliated against secondary market on Wednesday. Its US$118m could be caught in a sell-off of all risk markets an initial US$50bn of tariffs on steel and term loan fell to 99.25-100.25 on Wednesday if this is just the beginning of further retaliatory aluminium. from 99.75-100.5 on Tuesday, sources said. measures, Oh said. Domestic US metals producers’ loans climbed “Nearly all aerospace component suppliers “What you are seeing right now and what in response. CANAM STEEL’s US$320m term would potentially be exposed to the tariffs,” you will see initially is a negative impact on the loan due 2024 was quoted at 100.5-101.5 on said Josh Rank, portfolio manager for Principal equity markets, and that will filter through into Wednesday, up from 99.75-100.75 on March 6 Global Investors Fixed Income. “However, due leveraged finance markets because leveraged before the tariffs were announced on March 8. to large backlogs, it is likely that costs would finance credit is closely correlated to equity,” he BIG RIVER STEEL’s US$400 term loan was be passed through, leaving credit largely said. quoted at 102-102.75, above 100.75-101.5 in unimpacted.” Yun Li

Morgan Stanley leads the loan, due April 26 The financing also includes a US$135m repricing of its US$397m term loan B due in 2022, which is expected to price at 175bp revolving line of credit. June 2024. over Libor with a 0% floor at par. Jefferies leads with KKR Capital Markets, TD Goldman Sachs leads the deal, which is guided There will be 101 soft call protection for Securities, BMO Capital Markets and Macquarie at 175bp over Libor with a 0% floor, versus six months. Capital. current pricing of 200bp with a 0% floor. The loan will amortise at 1% per year and KKR is acquiring a majority interest in the It is offered at par with a six month 101 will be covenant-lite, the same as the company from Ontario Teachers’ Pension soft call refresher. existing loan. Plan and other existing shareholders. Existing ratings are Ba2/BB+ corporate Last October, the company priced a Barclays and Credit Suisse are providing and Baa3/BBB- facility. US$740.625m facility due April 26 2022 at committed financing for building materials 200bp over Libor with a 0% floor at par. company GMS’ acquisition of Canadian LEGALSHIELD MARKETS US$750m DEAL Corporate ratings are Ba2/BB and facility gypsum dealer WSB Titan. ratings were Baa2/BBB-. Publicly traded GMS is purchasing WSB Legal services provider LEGALSHIELD is in the for roughly US$627m, or eight times last market with a US$750m senior covenant-lite HEARTLAND DENTAL SEEKS LBO DEAL 12-months’ adjusted Ebitda of credit facility that funds the company’s sale approximately US$78m, including around to Stone Point Capital from MidOcean HEARTLAND DENTAL is in the market with a US$10m of anticipated cost synergies. Partners. US$1.15bn first-lien term loan to back its GMS, also known as Gypsum Management The deal comprises a US$50m revolver, a buyout by KKR. & Supply, was acquired by private equity firm US$550m first-lien term loan and a The company is offering lenders price AEA Investors in 2014. The company US$150m second-lien term loan. guidance of 350bp-375bp over Libor with a completed an IPO in June 2016, raising RBC Capital Markets leads the financing 0% floor. It includes a 99.5 OID. roughly US$157m of proceeds that were used with SunTrust, KKR Capital Markets, Capital One The term loan comes with a US$150m to pay down its then-outstanding second lien and BMO Capital Markets. delayed-draw piece that has a ticking fee term loan. Credit Suisse and Barclays were The seven-year first-lien tranche is guided that kicks in between 31-60 days at 50% of among the underwriters of the IPO. at 350bp over Libor, with a 25bp stepdown the spread. On the 61st day and beyond, it Environmental, energy and industrial when leverage falls to 0.5 time inside closing will be 100% of the spread. services company CLEAN HARBORS launched a first-lien net leverage, and a 0% floor.

66 International Financing Review April 7 2018

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It is offered at 99.5 with six months of 101 Ratings are B3 on the corporate level, B2 Call protection of 101 for 12 months, and soft call protection. for the term loan B and Caa2 for the second- amortisation of 1% annually, are expected. The eight-year second-lien tranche is guided lien loan. A US$30m revolving credit rounds out the at 750bp over Libor with a 0% floor. It is offered Health club operator LA FITNESS facility. at 99 with a 102/101 hard call schedule. INTERNATIONAL set price talk on a covenant-lite Channelview is a natural gas-fired Ratings are B2/B corporate, B1/B first-lien US$700m term loan B backing a refinancing. combined cycle cogeneration plant in Texas. and Caa1/B- second-lien. Bank of America Merrill Lynch leads with MidOcean, which purchased LegalShield MUFG, Bank of the West and Fifth Third Bank. AUTHENTIC BRANDS SEEKS ADD-ON in 2011, will retain a minority stake in the The seven-year term loan is guided at 325bp business. over Libor with a 0% floor and 99.5 discount. Consumer products company AUTHENTIC QUINCY MEDIA is repricing its US$213.4m Lenders will receive six months of soft call BRANDS has set price talk on US$410m of term loan B due in November 2022. protection at 101. incremental loans backing its acquisition of Wells Fargo leads the deal, which is guided Proceeds from the term loan, along with apparel brand Nautica. at 275bp over Libor with a 1% floor, those from new pro rata facilities, will be used Bank of America Merrill Lynch leads with compared with previous pricing of 325bp to refinance the company’s existing credit Barclays and KeyBank. over with a 1% floor. facilities and redeem up to US$337m of the The financing comprises a US$340m Lenders will receive six months of soft call outstanding 6% preferred equity held by Seidler first-lien term loan add-on that comes protection at 101. Institutional and Madison Dearborn Partners. with a US$90m delayed-draw tranche The loan contains a total net leverage and a US$70m second-lien term loan covenant. DUO BACKS TRANSCONTINENTAL add-on that carries a US$20m delayed-draw Expected ratings are B2/B+ corporate and tranche. facility. CIBC and Scotiabank are providing committed The first-lien incremental will be fungible Quincy is a privately owned media financing for Montreal-based with the existing US$723m first-lien term company that owns several television TRANSCONTINENTAL INC’s acquisition of loan due in September 2024 at 350bp over stations. packaging products maker Coveris Libor with a 1% floor. TOWNSQUARE MEDIA has postponed the Americas. The entire first-lien term loan will receive repricing of its US$282.3m first-lien term Publicly traded Transcontinental is buying six months of 101 soft call protection. loan due in April 2022 after a large lender the business from Sun Capital Partners- The second-lien incremental will be opted out, a banking source said. backed Coveris Holdings for US$1.32bn. fungible with the existing US$270m second- RBC Capital Markets led the covenant-lite The financing will include new term loans lien term loan due in September 2025 at deal, which was guided at 275bp over Libor and cash on hand. 775bp over Libor with a 1% floor. It will with a 1% floor, compared with current Coveris Americas generated US$128m of include a 102/101 hard call schedule. pricing of 300bp over with a 1% floor. adjusted Ebitda in 2017, implying Both tranches are offered at 99.5. It was offered at par with a six-month 101 Transcontinental is paying a 10.3 times The delayed-draw tranches are structured soft call refresher. multiple of that amount. with a ticking fee that kicks in 46 days after Transcontinental’s pro forma net leverage is allocation at 50% of the margin and steps up PELICAN PRODUCTS SEEKS US$530m expected to be 3.2 times at closing, declining to 100% of the margin 76 days after to close to 2.0 time by the end of 2020. allocation until funding. Protective case and lighting equipment WCA WASTE CORP is in the market with a Proceeds will be used to fund the maker PELICAN PRODUCTS is marketing a repricing of its roughly US$300m term loan acquisition of Nautica from VF Corp, as well US$530m loan. B due in August 2023 and fungible US$100m as other upcoming acquisitions, to pay The financing, which comprises a add-on. SunTrust leads. transaction fees and expenses, and to fund US$380m first-lien term loan, a US$120m Guidance on the entire loan is 250bp over cash to the balance sheet. second-lien term loan and a US$30m asset- Libor with a 0% floor. The existing tranche Expected ratings are B2/B corporate, B1/ based revolving credit, will be used to pays 275bp with a 1% floor. The existing B+ first-lien and Caa1/CCC+ second-lien. refinance debt. tranche is offered at par, while the The SEMINOLE TRIBE OF FLORIDA is repricing its Morgan Stanley and Jefferies lead. incremental is offered at a 99.75 discount. US$1.194bn Term Loan B due in July 2024. The US$30m five-year revolver is expected As part of the amendment, the company BAML leads with Fifth Third Bank. Guidance to price at 150bp over Libor, based on a grid, is asking permission to extend the maturity is 175bp over Libor with a 0% floor, with a 0% Libor floor. of the revolving credit facility to February compared with current pricing of 200bp The US$380m seven-year term loan B is 2023 from August 2021. with a 0% floor. Lenders will receive six expected to price at 375bp over Libor, with a Proceeds from the add-on will be used to months of soft call protection at 101. 25bp step-down at 3.2 times first-lien net pay down roughly US$50m of borrowings The loan will continue to be governed by leverage. There will be a 0% floor and 99.5 OID. under the revolving credit facility and to a 2.5 times net leverage covenant and a 3.0 The US$120m eight-year second-lien loan fund cash to the balance sheet for future times interest coverage covenant. is guided at 775bp over Libor with a 0% Libor M&A transactions. The Seminole Tribe owns six gaming floor and 99 discount. Ratings are B2/B+ corporate and facility. facilities in Florida. Call protection is 101 soft call for six EIF CHANNELVIEW COGENERATION launched a Ratings are Baa2/BBB corporate and months on the first-lien loan and 102/101 US$275m senior secured term loan via sole facility. hard call for the second-lien loan. bookrunner Morgan Stanley, acting as joint Electricity generator ATLANTIC POWER CORP is The first-lien loan will amortise at 1% per lead arranger along with Investec Bank. repricing its US$510m first-lien term loan year. Proceeds will be used to refinance debt. due in April 2023. For the revolver, there is a springing The seven-year term loan B is expected to Goldman Sachs is leading. Commitments leverage covenant, while the term loans are price at 450bp-475bp over Libor with a 1% were due by Friday for existing lenders and covenant-lite. Libor floor and 99 OID. by April 13 for new lenders.

International Financing Review April 7 2018 67

8 Loans 2228 p57-70.indd 67 06/04/2018 19:23:30 The loan is guided at 300bp over Libor Ratings are B3/B- corporate, B2/B- first-lien Libor at the current B3 corporate rating, with a 1% floor, compared with existing and Caa2/CCC second-lien. with a step-down to 300bp at a B2 corporate pricing of 350bp with a 1% floor. Casino operator MOHEGAN TRIBAL GAMING rating, and a 0% floor. Opening guidance was It is offered at par with a six-month 101 AUTHORITY revised terms for the add-on to its in the 275bp-300bp over Libor range with a soft call refresher. US$757.3m term loan B due in October 0% floor. Ratings are Ba3/B+ corporate and Ba2/BB– 2023. The loan sold at a 99.5 discount with six facility. Citizens Bank was leading the deal, for months of 101 soft call protection, HILTON WORLDWIDE is repricing its covenant- which commitments were due on Friday - unchanged from launch. lite US$3.919bn Term Loan B due in October extended from March 28 originally. Lenders receive a ticking fee that kicks in 2023. The company has downsized the at 31 days after allocation at half of the Deutsche Bank leads. Price talk is 175bp incremental by US$5m to US$120m. spread and steps up to the full spread 91 over Libor with a 0% floor, compared with Pricing is now 400bp over Libor with a days after allocation until funding. existing pricing of 200bp over Libor with a 37.5bp step-up when leverage exceeds 5.5 The financing includes a US$300m 0% floor. times and a 1% floor. The step-up will also apply revolving credit facility. The loan is offered at par with a six-month to the existing tranche, which previously paid Ceridian HCM on March 26 filed for an 101 soft call refresher. 400bp over Libor with a 1% floor. IPO of up to US$200m. The company plans Ratings are Ba2/BB+ corporate and Ba1/ The add-on remained offered at a 99.75 to use proceeds to repay a portion of its debt BBB– secured. OID. and for general corporate purposes. The 101 soft call protection was extended Ratings are expected at B2/B in VYAIRE REVISES TL TERMS to 12 months from six months originally. conjunction with the pricing of the The transaction includes an incremental company’s IPO. Medical device company VYAIRE MEDICAL to the US$170m revolving credit facility due revised terms for its US$360m term loan in October 2021 that has been upsized by SHAPE WRAPS US$300m REFI backing private equity firm Apax Partners’ US$5m to US$80m from US$75m at launch. acquisition of the existing minority It remained guided in line with the existing SHAPE TECHNOLOGIES finalised terms on a shareholder’s stake in the company. facility at 375bp over Libor with a 0% floor. US$300m first-lien term loan being raised to Bank of America Merrill Lynch led with RBC, The consent fee offered to lenders was refinance debt. ING, Natixis and Mizuho. Commitments were increased to 50bp from 12.5bp at launch. Credit Suisse led with Barclays and Deutsche due on Friday. Proceeds will be used to fund the Bank. Pricing on the covenant-lite seven-year purchase of KCC Corporation’s share of The seven-year loan covenant-lite loan loan was flexed to 475bp over Libor with a Project Inspire, a US$1.6bn resort casino priced at 300bp over Libor with a 25bp step- 1% floor, compared with opening guidance development in South Korea. down if corporate ratings are upgraded to of 425bp-450bp with a 1% floor. The company will also invest an B1/B+. Pricing was guided at 325bp-350bp. The offering price was cut to the 96-97 additional US$100m into the project, for a Corporate and facility ratings are B2/B. range, versus 99.5 previously. total equity investment of US$300m, There is a 0% floor and a 99.5 discount, as The 101 soft call protection was extended Moody’s noted. guided. The deal includes 101 soft call to 12 months from six months originally. The Mohegan Tribal Gaming Authority protection for six months. The financing includes a US$90m second- owns and operates Mohegan Sun in Shape manufactures waterjet systems. lien term loan due in 2026 that is not being Connecticut and Mohegan Sun Pocono in IT provider CONVERGEONE increased the size syndicated. Pennsylvania. of its covenant-lite term loan being used to The new capital structure will also Workforce management and human refinance existing debt by US$20m to contain a US$125m revolving credit facility resources information software company US$670m and finalised terms. due in 2023, according to Moody’s. CERIDIAN HCM revised terms for its US$680m Credit Suisse led the seven-year term loan, In addition to the minority stake term loan B backing a refinancing. which priced at 375bp over Libor with a 1% purchase, proceeds from the term loans will Deutsche Bank led the covenant-lite seven- Libor floor and 99.5 issue discount, as be used to finance potential acquisitions. year term loan, which priced at 325bp over guided.

US LEVERAGED LOANS EUROPEAN LEVERAGED LOANS EMEA SPONSORED LOAN BOOKRUNNERS BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 Managing No of Total Share Managing No of Total Share Europe, Middle East, Africa bank or group issues US$(m) (%) bank or group issues US$(m) (%) Managing No of Total Share 1 BAML 155 35,086.76 12.6 1 Deutsche Bank 18 4,248.65 7.3 bank or group issues US$(m) (%) 2 JP Morgan 128 29,174.43 10.5 2 BNP Paribas 18 4,074.56 7.0 1 SG 10 2,066.75 8.6 3 Credit Suisse 82 21,240.57 7.6 3 Goldman Sachs 13 3,887.73 6.7 2 Deutsche Bank 9 1,850.24 7.7 4 Wells Fargo 98 17,248.27 6.2 4 SG 15 3,477.21 6.0 3 Natixis 10 1,840.89 7.7 5 Barclays 75 16,459.02 5.9 5 Credit Agricole 14 3,428.70 5.9 4 Goldman Sachs 9 1,830.15 7.6 6 Citigroup 62 16,409.34 5.9 6 ING 14 3,312.84 5.7 5 ING 8 1,827.27 7.6 7 Goldman Sachs 74 16,067.00 5.8 7 Citigroup 10 3,146.17 5.4 6 HSBC 8 1,808.54 7.5 8 Deutsche Bank 74 14,614.05 5.2 8 HSBC 13 3,042.00 5.2 7 BNP Paribas 9 1,746.35 7.3 9 Morgan Stanley 59 11,416.28 4.1 9 Natixis 12 2,488.44 4.3 8 Citigroup 4 1,206.01 5.0 10 RBC 51 9,869.45 3.5 10 UniCredit 9 2,343.89 4.0 9 Credit Agricole 8 1,160.99 4.8 Total 501 278,636.07 Total 48 58,249.31 10 RBC 4 1,009.34 4.2

Excluding Project Finance. Excluding project finance. Western Europe only included. Total 28 24,004.66

Excluding project finance. Source: Thomson Reuters SDC code: P2 Source: Thomson Reuters SDC code: P10 Source: Thomson Reuters SDC code: P13

68 International Financing Review April 7 2018

8 Loans 2228 p57-70.indd 68 06/04/2018 19:23:30 LOANS LEVERAGED LOANS

There will be 101 soft call protection for floor. Pricing on the existing tranche was The first-lien tranche, which will mature six months. 425bp over Libor with a 1% floor. in November 2022, cleared at 450bp over Corporate and facility ratings are B2/B. The existing tranche was offered at par, Libor with a 1.25% floor, from opening COMPASS GROUP DIVERSIFIED HOLDINGS finalised while the add-on was offered at 99.75. guidance at 400bp with a 0% floor. terms for its US$500m term loan B backing a Lenders will receive a six-month 101 soft call It was issued at 97, compared with initial refinancing. refresher. The existing first-lien term loan OID guidance of 99.5. Bank of America Merrill Lynch led with was issued in October 2017 to back the Lenders will receive six months of soft call SunTrust, TD Securities and US Bank. company’s leveraged buyout by TPG Capital. protection at 101. Pricing on the seven-year loan firmed at Proceeds from the incremental will pay The second-lien tranche, which will 250bp over Libor with a step-down to 225bp down US$25m of the US$110m second-lien mature in May 2023, cleared at 900bp over over Libor when net leverage falls to 2.75 term loan due in 2025, which was part of the Libor with a 1.25% floor, from opening times, and a 0% floor. Opening guidance was buyout financing. The tranche pays 875bp guidance at 800bp with a 0% floor. 225bp-250bp with a 0% floor. over Libor with a 1% floor. Ratings are B3/B– It was issued at 96, versus 99 launch OID The offering price was increased to 99.75 corporate and B2/B– first-lien. guidance. from 99.5. The six-month, 101 soft call Coal company PEABODY was expected to It contains a 103/102/101 hard call protection is unchanged. close on Friday a repricing of its US$446m schedule, compared with a 12-month 101 The loan will contain secured net leverage Term Loan B due in 2022, which the hard call premium at launch. and total net leverage covenants. company was also seeking to extend. Original proceeds will be used to refinance Proceeds, along with those from a new Goldman Sachs was leading the deal, guided at the company’s existing US$397m first-lien US$400m bond, will be used to refinance the 250bp–275bp over Libor with a 0% floor, term loan due in 2019, US$200m second-lien company’s existing US$560m term loan B versus previous pricing of 350bp over Libor term loan due in 2020 and borrowings under due in 2021 and outstanding revolver with a 1% floor. The loan was offered at par its asset-based loan revolving credit facility. borrowings. with a six-month 101 soft call refresher. Cosmetics retailer SALLY BEAUTY has Ratings are B1/B+ corporate, Ba3/BB As part of the amendment, the company is repriced its US$548.6m floating-rate term secured and B3/B- unsecured. seeking to push out the maturity of the loan loan B due in July 2024. Compass Group owns and operates a by three years to March 2025 and remove the JP Morgan led the loan, which cleared at variety of brands including motorcycle parts capital expenditures covenant. Lenders will 225bp over Libor with a 0% floor, in line with maker Fox Racing, food warming products receive a 12.5bp amendment fee. price talk. company Sterno, and baby-wearing products Existing ratings are Ba3/BB– corporate and It was issued at 99.875, at the midpoint of maker ERGObaby. Ba3/BB. 99.75-100 guidance. Chemical company POLYONE was due to Lenders will receive six months of soft call JDA SOFTWARE NEARS REPRICING close on Friday a repricing of its US$637.5m protection at 101. Term Loan B due in November 2022. Existing ratings are Ba2/BB+ corporate Supply chain management software SunTrust was leading the deal, guided at and Ba1/BBB- facility. company JDA SOFTWARE was scheduled to 175bp over Libor with a 0% floor, compared Fast food company YUM! BRANDS completed close on Friday a repricing of its US$1.238bn with previous pricing of 200bp with a 0% syndication of its US$1.97bn term loan B Term Loan B due in October 2023. floor. It was offered at par with six months that will be used to refinance its existing JP Morgan was leading the transaction, of soft call protection at 101. Ratings are term loan B due in 2023. guided at 250bp–275bp over Libor with 1% Ba2/BB corporate and Ba1/BB+ facility. JP Morgan led the seven-year loan, which floor. The loan was offered at par with six allocated in line with guidance at 175bp months of soft call protection at 101. FLEETPRIDE COMPLETES REFI over Libor with a 0% floor. It was issued at The loan was repriced in October 2017 to par, the tight end of 99.875-par guidance. 300bp over Libor with a 1% floor. It was Aftermarket truck and trailer parts It is structured with six months of 101 soft originally placed in September 2016 to refinance distributor FLEETPRIDE has wrapped up call protection. debt in conjunction with a US$570m equity syndication of its covenant-lite first and Ratings are Ba3/BB corporate and Ba1/BBB- investment in the company by private equity second-lien term loans, after making facility. firms Blackstone and New Mountain Capital. structural and pricing concessions. Miner ARCH COAL repriced its US$297m JDA is rated B2/B. The loan is rated B1/B. Bank of America Merrill Lynch led the deal term loan B to 275bp over Libor with a 1% Logistics provider TRANSPLACE asked for with KKR Capital Markets on the right of the floor versus guidance of 250bp-275bp. commitments by Friday for the repricing of second-lien tranche. The Credit Suisse-led covenant-lite loan is its US$400m first-lien term loan due in 2024 The final structure comprises a US$482m due in March 2024. and a US$25m fungible add-on. Goldman first-lien tranche, upsized by US$35m at Lenders receive a six-month 101 soft call Sachs was sole arranger. launch, and a US$175m second-lien tranche, refresher. The existing tranche and the incremental downsized by US$25m, representing a net Corporate ratings of Ba3/BB- and facility were guided at 350bp over Libor with a 1% US$10m increase. ratings of Ba3/BB are expected. Make the most of your success stories

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International Financing Review April 7 2018 69

8 Loans 2228 p57-70.indd 69 06/04/2018 19:23:30 EUROPE/MIDDLE EAST/ AFRICA Banks pitch aggressive terms CLARION EVENTS SEEKS ADD-ON on refinancings UK-based events organiser CLARION EVENTS is in the market with a US$230m add-on to its n EUROPE Bankers fear strong conditions cannot prevail for long term loan B due in October 2024 to finance an acquisition. Bankers are pitching recapitalisation and refinancings of issues on the horizon and at some point they HSBC is leading the incremental loan, to sponsors in a bid to maximise leverage, lower will have an impact.” which is guided in line with the existing pricing and attain aggressive documentation for Ongoing hurdles include Brexit, US President tranche at 500bp over Libor with a 1% floor. portfolio companies while a window of opportunity Donald Trump and his stance on trade, issues It is offered at a 99 OID. remains as longer-term visibility in Europe’s leveraged over the Italian government and a rising interest The company in February placed a loan market starts to dwindle. rate environment. US$190m TLB add-on backing its merger Europe’s leveraged loan market has been on Yet some bankers are more positive and see with Asian peer Global Sources, and a fire since last year, with a host of refinancings the loan market’s ability to shrug off volatility as distribution to shareholders. and recapitalisations in the first half of 2017 a given. The transaction amended Clarion’s £50m before new buyouts started to dominate activity, “It tends to be the case that technicals trump revolving credit facility due in October 2023 gifting cash-rich investors much needed supply. Trump. They outweigh geopolitical events in the and £315m term loan B due in October 2024 The new issue trend continued in the first loan market and arguably they should as it is to allow the acquisition. quarter of 2018 with the likes of a €4.7bn- senior secured debt, not equity, so it would need Blackstone acquired Clarion in 2017 from equivalent leveraged loan financing backing an extreme set of circumstances to undermine buyout firm Providence Equity Partners. KKR’s buyout of UNILEVER’s spreads business confidence because that is what senior secured Blackstone is buying a 55% stake in Flora Food Group that comprised a €2bn tranche debt is paid to do - you get 3%-4%, not equity Thomson Reuters’ Financial and Risk unit, - the largest single-tranche euro-denominated returns,” a syndicate head said. which includes IFR. term loan B since the financial crisis. Many bankers and investors would welcome a There is now a window of opportunity for correction in Europe’s leveraged loan market, which sponsors to launch opportunistic financings has gradually imported all the borrower-friendly terms before another flurry of jumbo cross-border of the US leveraged loan market without the flex buyout financings hit the market between May protection afforded to the US banks in US markets. RESTRUCTURING and summer, including a €7.3bn-equivalent debt This has led European banks and investors to financing to back the buyout ofAKZO NOBEL’s accept increasingly aggressive terms on flexibility chemicals business and a US$13.5bn-equivalent around restricted payments with limited deleveraging UNITED STATES loan and bond financing backing US private from the outset, increasing flexibility around accordion equity firm Blackstone Group’s acquisition of a features and permissible indebtedness. NINE WEST NEARS BANKRUPTCY 55% stake in THOMSON REUTERS’ Financial and Leverage has rocketed on a number of jumbo Risk (F&R) unit, which includes IFR. deals and some bankers are offering opening- Fashion footwear company NINE WEST “If you’re going to go, then go now; that is day leverage in excess of 7.5-8.0 times on HOLDINGS intends to file for bankruptcy with the message we are telling sponsors,” a senior potential sales of French drug maker SANOFI’s a plan to sell the intellectual property of its leveraged banker said. European generic drugs business ZENTIVA and flagship brand toAUTHENTIC BRANDS. German metering group TECHEM. The proceeds from the sale will pay down HOT FOR HOW LONG? Borrowers now have the ability to add up to some of Nine West’s approximately No-one has much certainty on what the markets two turns of leverage onto a company as soon as US$1.5bn in debt, increasing the chances will be like during the remainder of the year. a loan closes, without prior deleveraging. that the company will emerge from a While the loan market has been quite resilient Pricing has also compressed at the same time planned bankruptcy. in the face of major geo-political uncertainty so with 300bp being offered on Single B term loans. Nine West missed a debt interest payment far, there is a fear among bankers that such hot One bank is offering a second-lien on Zentiva at in March, setting off a 30-day period in conditions can’t prevail for much longer. 675bp, a record low since the financial crisis. which the accessories seller must either “We’ve been at the top of the market for a “We are at the peak of aggressiveness in make the payment or face bankruptcy. while but are we now at the peak? The market Europe’s loan market and we need something to The company’s creditors plan to take can’t shrug off the inevitable for much longer,” prompt a correction,” an investor said. ownership stakes in Nine West’s remaining the senior banker said. “There have been a load Claire Ruckin business, including its denim line sold in mass merchandisers such as Walmart and Sears Holdings in exchange for forgiving some of their debt. Brand licensing firm Authentic Brands online. Nine West competitor Aerosoles Some creditors of Nine West plan to pursue recently announced it would buy the sporty Group filed for bankruptcy last year. claims against Sycamore for the sale of Kurt Nautica brand from VF Corp and plans to SycamorePartners acquired the Jones Geiger and Stuart Weitzman. The creditors team up with a partner on the Nine West Group, then the parent of Nine West, in a will claim that the divestitures of the shoe acquisition. deal valued at US$2.2bn in 2014. Sycamore companies made Nine West insolvent. US retailers are going through a period of then sold high-end shoe wear lines Stuart Authentic Brands has done business with upheaval, with more than 15 filing for Weitzman and Kurt Geiger, part of the Jones Sycamore before. It bought the Jones New bankruptcy last year as more shoppers buy Group. York label from Sycamore in 2015.

70 International Financing Review April 7 2018

8 Loans 2228 p57-70.indd 70 06/04/2018 19:23:31 EQUITIES China 72 India 73 Japan 73 Belgium 75 Germany 75 Russia 76 South Africa 76 UK 77 United States 78 Brazil 82 Structured Equity 83

n FRONT STORY INDONESIA Trio skirt poll uncertainty IPOs target combined proceeds of US$524m in second quarter

Three Indonesian companies are planning companies will be on track to put on Workers Social Security Agency, had both IPOs totalling up to US$524m in the second sustained annual earnings growth in the announced higher allocations to equities for quarter to avoid the uncertainty that is mid-teens if the current economic trend this year, improving the prospects of more likely to plague the market well ahead of continues,” said one Jakarta-based analyst. local inflows. next year’s general elections. This is good news for the three IPO The pipeline of IPOs is building. Paint- State-owned lender BANK BRISYARIAH, a hopefuls, which are beneficiaries of the maker AVIA AVIAN plans to launch its IPO of subsidiary of Bank Rakyat Indonesia, has opened country’s consumption boom. up to US$250m in the second half, with books for a Rp1.32trn–Rp1.70trn (US$96m– As a result, the deals are unlikely to go cheap. Citigroup, Credit Suisse and UBS as leads. $124m) IPO at a price range of Rp505–Rp650. Maternity hospital operator Hermina is Ride-hailing and online payment Meanwhile, healthcare provider MEDIKALOKA seeking an EV/Ebitda valuation in the 20s, company GO-JEK INDONESIA is also HERMINA and sanitary wares distributor SURYA while regional peers Raffles Hospital and considering an IPO, but has yet to provide PERTIWI are pre-marketing respective IPOs of up IHH Healthcare trade at a range of 18 to 19. details. E-commerce company BHINNEKA to US$250m and US$150m. “Hermina is a direct beneficiary of MENTARI DIMENSI also plans an IPO of The robust activity in April is in contrast Indonesia’s young population,” said a US$30m later this year. to the first quarter, when Indonesia’s equity banker working on the IPO. The company Among the current listing hopefuls, the capital markets deals trailed Singapore, owns 14 maternity facilities in the country. joint global coordinators are Ciptadana, CLSA Malaysia, the Philippines, Thailand and Still, some market participants caution that and Credit Suisse for Surya Pertiwi. Vietnam. According to Thomson Reuters selling the issues will not be easy because the The bookrunners on the Hermina float data, ECM volume fell to US$14.9m in the trade war between the US and China and volatile are Citigroup, Credit Suisse, DBS and Mandiri. first quarter from US$41.4m a year earlier. global equities have made investors wary. For BRISyariah, the bookrunners are “Issuers want to catch the market before the “The companies have taken the plunge Bahana, CLSA, Danareksa and Indo Premier. The implications of the elections cloud the current because they are optimistic that local demand bank, which provides sharia-compliant optimism,” said a banker on one of the IPOs. for equities will help the offerings sail through,” banking services, is selling around 27% of its Indonesia will hold general elections in said a banker working on the BRISyariah IPO. expanded share capital, in the IPO. April next year. In a recent research report, Morgan Books opened last Thursday and close on For now, there is optimism as strong Stanley said Indonesia’s Taspen, which April 20. The shares will be listed on the economic growth has helped companies manages the retirement funds of civil Indonesia Stock Exchange on May 9. show positive earnings. “Indonesian servants, and BPJS Ketenagakerjaan, the S Anuradha

valuation discount to peer Marriott Hilton stake next up from HNA International. Bankers said Hilton management would also US Chinese conglomerate shifts sights to 26% stake in hotelier be eager to see HNA check out of its holding. Hilton has a shareholder agreement with Struggling Chinese investment group HNA from seller Blackstone. Those losses were HNA, struck in 2016 at the time of its confirmed months of speculation by estimated at US$90m and split between three purchase, that restricts HNA from selling revealing on Thursday that its multi-billion- banks, though the figure was never confirmed. shares for two years unless approved by dollar asset sale programme would extend to Blackstone’s sale of a one-quarter share of Hilton’s board. its 26.1% stake in hotelier HILTON WORLDWIDE. Hilton to HNA for US$6.5bn in October 2016 Hilton could assist HNA’s sell-down by HNA disclosed in a SEC filing that it had meant Blackstone would not need to bring repurchasing shares as part of any offering. determined to pursue the sale of some or all more mega-blocks (though it retains a 5.4% HNA has already this year sold its stakes in of the US$6.5bn Hilton holding of 82.5m stake in Hilton) and came just ahead of Hilton spin-offs Hilton Grand Vacations shares through one or more registered Hilton’s three-way corporate split. (US$1.1bn) and Park Hotels & Resorts public offerings. But the Blackstone sale to HNA simply (US$1.4bn), undertaking marketed stock The disclosure came just a week and a half shifted the overhang, especially since the sales in both cases. after HNA scrapped the US$1.2bn IPO of its latter’s struggles to reduce its debt mountain Because Hilton is better followed by Swiss airline catering business Gategroup. have come to light. analysts, an overnight block sale of Hilton HNA could bring a large block sale of Hilton Hilton shares rallied 1.3% to US$79.04 on stock may make more sense. stock as early as this month, reviving the news on Thursday, an indication that Blackstone is buying a 55% stake in memories of 2015’s US$2.7bn Hilton block, investors would view positively the removal Thomson Reuters’ Financial and Risk unit, dubbed the “Mother’s Day massacre” for hefty of the overhang. Some analysts believe the which includes IFR. losses carried by banks who bought the stock overhang is responsible for a current Anthony Hughes

International Financing Review April 7 2018 71

9 Equities and SE 2228 p71-84.indd 71 06/04/2018 19:32:50 WEEK IN NUMBERS The Jiangsu-based developer aims to raise around US$400m from the listing, according ASIA-PACIFIC to people close to the plans. 1929 Redsun posted a 2017 profit of Rmb1.20bn n THE US EQUITY MARKET HAD ITS WORST (US$191m) on revenue of Rmb6.14bn, START TO THE SECOND QUARTER SINCE CHINA according to a company filing. THE WALL STREET CRASH OF 1929. THE CCB International, Huatai Financial and ABC S&P 500 FELL 2.23% ON MONDAY, WHILE MAOYAN WEYING USES DUO FOR IPO International are joint sponsors of the float. Q2 1929 BEGAN WITH A 2.55% DROP. BY WEDNESDAY’S CLOSE THE INDEX HAD MAOYAN WEYING, China’s biggest online seller APPROVALS FOR SHANGHAI FLOATS JUST MOVED INTO POSITIVE TERRITORY of film tickets, has started working with FOR THE QUARTER Bank of America Merrill Lynch and Morgan CHINA SECURITIES, also known as CSC Financial, Stanley on a Hong Kong IPO this year, has cleared a China Securities Regulatory according to people close to the deal. Commission hearing for a proposed -10.2% The company plans to raise about US$1bn Shanghai listing of up to 400m A-shares, or n SPOTIFY TECHNOLOGY FELL 10.2% ON from the float. about 5.2% of its enlarged capital. ITS FIRST DAY OF TRADING FOLLOWING Maoyan was valued at Rmb20bn (US$3.17bn) Based on the April 3 close of HK$6.71, ITS DIRECT LISTING ON THE NYSE. SHARES last November, when internet giant Tencent equivalent to Rmb5.37, the brokerage may FELL ANOTHER 3.2% ON WEDNESDAY. Holdings made a Rmb1bn investment in the raise over Rmb2bn (US$318m) from the listing. THE MUSIC STREAMING SERVICE AVOIDED company, according to a Reuters report. UBS Securities and China Galaxy Securities are AN IPO IN PART TO AVOID THE POP IN The investment came after Maoyan and joint sponsors on the IPO, proceeds of which SHARES ON DEBUT Tencent-backed Beijing Weiying will be used to increase the firm’s capital. Technology struck a merger deal in The IPO still needs written CSRC approval. September to create a film ticketing giant. GAN & LEE PHARMACEUTICALS has also cleared a US$ 175 Maoyan Weying’s other backers include CSRC hearing for a proposed Shanghai IPO Shenzhen-listed film producer Beijing of about Rmb2.52bn. 170 Enlight Media and Meituan Dianping, The company plans to sell not more than 165 China’s largest provider of on-demand 40.2m shares, or about 10% of its enlarged 160 services. capital. Proceeds will be used for insulin 155 China is the world’s second-largest production, research and development, and

150 cinema market and nearly 80% of film-goers replenishment of working capital. buy tickets online, Reuters has reported, Citic Securities is the sponsor on the IPO and 145 citing Big Data Research. joint bookrunner with Citi Orient Securities. 140 The float is still awaiting written CSRC 135 LIEPIN OPERATOR FILES FOR IPO approval. 03/04/2018 04/04/2018

WISE TALENT INFORMATION TECHNOLOGY, operator XIANHE SETS IPO PRICE of internet-based recruitment services provider Liepin.com, has applied for a Hong Paper products maker XIANHE CORP intends to 1.75m Kong IPO. raise up to Rmb843m (US$134m) from a n SONY SOLD 1.75m SHARES IN SPOTIFY JP Morgan and Morgan Stanley are joint Shanghai IPO of 62m shares, having set the TECHNOLOGY ON TUESDAY’S DEBUT. sponsors on the proposed float. price at Rmb13.59 each. PRIOR TO THE LISTING SONY HELD 10.2m IFR reported in January that Liepin could The price represents a 41% discount to the SHARES, REPRESENTING 5.7% OF THE raise US$600m–$800m from the IPO. average valuation of listed peers in the COMPANY The company posted a 2017 net profit of paper and paper products industry. In Rmb7.6m (US$1.2m) a turnaround from a pricing consultations, the institutional book 2016 loss of Rmb128m. was about 502 times covered. Rmb13bn According to the filing, it had 38.9 million The book will close on April 9. n CONTEMPORARY AMPEREX registered individual users as of December Citi Orient Securities is the sponsor. TECHNOLOGY HAS SECURED CSRC 31 2017. Proceeds will be used mainly for paper APPROVAL FOR ITS CHINEXT IPO OF Liepin was valued at about US$1bn in production and a thermal power project. ABOUT Rmb13bn (US$2bn), WHICH WOULD June 2016, when it raised US$100m from a MAKE IT THE FIRST Rmb10bn-PLUS IPO ON China Mobile Innovation Industry Fund-led CHINA KEEPS ECM BUSINESS HUMMING THE NASDAQ-STYLE BOARD private financing round. China Mobile and State Development & Investment Corp Activity soared in Asia-Pacific equity established the fund. capital markets in the first quarter, as a 96.18 Warburg Pincus and Matrix Partners flurry of Chinese follow-on offerings and n THE BID FOR CARREFOUR’S ZERO China also invested US$70m in Liepin equity-linked deals drove issuance COUPON SIX-YEAR CONVERTIBLE BONDS during a 2014 fundraising round. volumes. MOVED ABOVE 96 FOR THE FIRST TIME Equity and equity-linked issues in Asia ON THURSDAY, UP FROM 95.2 THE REDSUN PROPERTIES FILES FOR IPO Pacific, excluding Japan, jumped 50.6% in PREVIOUS DAY. THE US$500m BOND the first quarter to US$73.6bn from ISSUE WAS PRICED AT 96.75 ON MARCH REDSUN PROPERTIES GROUP has applied to the US$48.9bn a year earlier. 22 THOUGH NOT ALL THE BONDS WERE Stock Exchange of Hong Kong for a Bankers are generally expecting ECM SOLD proposed IPO. activity to increase at a slower rate in the

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an IPO of US$300m–$400m targeted for the second half of this year. SK Lubricants oils KRX pipeline Primary shares for Rs8bn (US$123m) and 10.2m secondary shares will be sold. Argan n SOUTH KOREA Hyundai Oilbank and Doosan Machine Tools plan to list later this year Mauritius and TA FVCI are among the vendors of the secondary shares. Argan SK LUBRICANTS, a unit of South Korea’s energy more than W2trn (US$1.89bn) at the time of currently owns 57.05% of the company and and chemicals company SK Innovation, started listing, according to people close to the deal. TA holds 37.71%. Founder Chinnaswamy pre-marketing a KRX IPO of up to W1.56trn The targeted valuation is almost double the Sunder Raju and some individual (US$1.48bn) last week, testing the waters for price MBK Partners paid in April 2016 to acquire shareholders own the remaining interest. several other domestic listing applicants in Doosan Machine Tools from Doosan Infracore. Atria says it is India’s third largest volatile market conditions. South Korean media reported at the time that broadband internet service provider with a The proposed deal is SK Lubricants’ third the transaction was worth about W1.1trn. 6.9% market share. attempt to secure a listing after earlier plans for Doosan Machine Tools is a manufacturer of ACT earned a net profit of Rs1.71bn for IPOs of up to US$1.5bn in 2013 and 2015 failed turning centres, machining centres and other the financial year to March 31 2017 versus to materialise. precision machine tools. Rs1bn for FY2016. SK Innovation plans to sell 10.2m shares of its Citigroup, HDFC Bank, ICICI Securities and JP lubricant oil subsidiary in the IPO. SK Lubricants SMALLER DEALS EXPECTED Morgan are bookrunners on the IPO. itself will issue about 2.6m new shares at an Given the current weakness of the South Korean indicative price range of W101,000 to W122,000. stock market, it may take a while for IPO activity RAIL VIKAS FILES IPO DRAFT The recent global market turmoil provides a to become more broad-based. “We are expecting challenging backdrop for the transaction. As of smaller IPOs in the US$500m and below range,” State-owned RAIL VIKAS NIGAM has filed to the last Thursday, South Korea’s KOSPI stock index a Seoul-based banker said. Securities and Exchange Board of India a had fallen 3.2% in the past two weeks. New issues are expected to be led by the draft prospectus for its IPO of Rs6bn “Market conditions are challenging but a rally technology, biotechnology and gaming sectors, (US$92m). in oil prices over the past year should help SK according to the banker. The Indian government will sell a 25% Lubricants’ IPO. Investors are also familiar with SK Lubricants will sell 60% of its IPO shares stake in the IPO, through bookrunners Elara the parent company and feel comfortable to look to institutional investors, 20% to retail investors Capital, IDBI Capital and Yes Securities. at the spin-off,” said a banker on the deal. and 20% to the employee stock ownership Rail Vikas develops high-speed-rail Rising oil prices have improved the outlook association. networks. for the sector, also leading HYUNDAI OILBANK, the Books are scheduled to open on April 16 and refining arm of Hyundai Heavy Industries Group, to pricing will be on April 27. Listing will be around CRYSTAL CROP SOWS IPO SEEDS plan a US$1bn–$2bn KRX IPO in the second half mid-May. of 2018. SK Innovation will retain a 70% stake after the CRYSTAL CROP PROTECTION has filed a draft Beside oil companies, DOOSAN MACHINE TOOLS, listing. prospectus for its IPO of Rs10bn (US$154m), owned by private equity firm MBK Partners, is Korea Investment & Securities and Samsung targeted for launch in the second half of this also set to bring another sizeable IPO to the Securities are the domestic leads for the IPO year. Korea Exchange this year. while Citigroup and Credit Suisse are the The agro-chemical company will sell It has mandated Bank of America Merrill Lynch, international leads. Mirae Asset Daewoo is also a primary shares for Rs5.45bn and secondary Credit Suisse and NH Investment & Securities to joint bookrunner. shares for Rs4.55bn in the IPO. lead its float, which is targeting a valuation of S Anuradha, Fiona Lau Members of the Agarwal family, majority owners of Crystal Crop, and Everstone Capital will sell shares in the IPO. Currently, second quarter given the recent global stock ”For several years, institutional investors the Agarwals own 91.2% of the company, market turmoil. shied away from Hong Kong IPOs due to Everstone holds 3.5% and employees However, in the second half, volume is poor aftermarket performance and lack of controls 5.3%. expected to pick up significantly given Hong liquidity in many names. However, the The shares will be listed on BSE and the Kong has proposed changes to its listing success of a number of deals at the end of National Stock Exchange. rules to woo Chinese technology listings and 2017 has signalled a shift in investor Axis, HSBC, ICICI Securities and Nomura are early-stage biotechnology companies, while sentiment. The IPO pipeline is the strongest the IPO bookrunners. China plans to introduce Chinese Depositary it has been in many years and the Receipts to allow overseas-listed tech giants underlying stories of these growth to list in the A-share markets. companies are attractive to investors.” JAPAN The Hong Kong IPO of Chinese In the A-share market, Chinese smartphone maker XIAOMI TECHNOLOGY, which e-commerce giants ALIBABA GROUP HOLDING and RENESAS SELL-DOWN FOR ¥288.3bn may include a CDR tranche, is expected to JD.COM both are planning CDR issuances as hit the market around summer. China’s early as this summer. Three shareholders plan to sell down their largest provider of on-demand online stakes in chipmaker RENESAS ELECTRONICS for a services, MEITUAN-DIANPING, is also mulling a combined ¥238bn (US$2.2bn). Hong Kong IPO of several billions of US INDIA Innovation Network Corp of Japan, Japan dollars this year. Trustee Services Bank and Hitachi Corp plan “We are seeing the return of institutional ATRIA TARGETS SECOND-HALF IPO to sell 234.7m shares at base size, with a investors to Hong Kong’s IPO market,” said greenshoe of 35.2m shares. David Binnion, head of ECM Distribution Internet service provider ATRIA CONVERGENCE About 80% of the shares will be sold to and Risk in Asia ex-Japan at Goldman Sachs. TECHNOLOGIES has filed a draft prospectus for international investors and 20% to domestic

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9 Equities and SE 2228 p71-84.indd 73 06/04/2018 19:32:51 buyers. The shares will be offered at a CIMB and Credit Suisse are joint global discount of 3%–5% to the market price. SINGAPORE coordinators on the IPO and bookrunners Based on the company’s close of ¥1,068 with CGS-CIMB, Daiwa and DBS. on Tuesday morning, the sell-down could QUALITAS EYES S$133m FROM IPO Before delisting in 2011, the raise up to ¥288.3bn. On announcing the healthcare services provider was listed sell-down, shares of the company fell more QUALITAS MEDICAL is targeting S$100m–$133m on Singapore’s Catalist exchange for than 10% on Tuesday afternoon. (US$77m–$102m) from its Singapore small companies. There are lock-up periods of 90 days on Exchange IPO, having set a price range of Renesas and 180 days on the selling S$0.57–$0.76. MGCCT RAISING ACQUISITION shareholders. According to a term-sheet, Qualitas will FUNDS Domestic and international roadshows sell up to 175.4m shares in the IPO, with a run from April 4 to April 16. Books will greenshoe option of 35m shares. Institutions MAPLETREE GREATER CHINA COMMERCIAL TRUST open on April 12 and close on April 17 at will be sold up to 166.6m shares and retail has said it aims to sell shares of the earliest. Pricing will be as early as April 8.8m. S$323.1m (US$246.7m) to finance the 18. Books closed on April 6 and the shares planned acquisition of seven Bank of America Merrill Lynch, Daiwa, JP will be listed on April 19. commercial properties in Japan for Morgan and Morgan Stanley are joint global If the greenshoe option is exercised, S$770.5m. coordinators, as well as joint bookrunners majority shareholder Southern Capital The trust is likely to sell 296.4m new units with Mizuho on the international tranche. Group’s stake will fall to 52.7% from 77.7%. at an illustrative price of S$1.09 to raise the On the Japanese tranche, Daiwa and Southern Capital postponed a similar- S$323.1m. Banks have yet to be hired for the Mitsubishi UFJ Morgan Stanley are joint sized Bursa Malaysia IPO in March 2015 on a sale. bookrunners for both institutional and retail tepid investor response. The IPO was pulled MGCCT will be renamed Mapletree North portions. BAML and JPM are joint at the pre-marketing stage. Asia Commercial Trust on the completion of bookrunners on the institutional portion Besides operations in Malaysia, Qualitas the acquisition. only, while Mizuho and Nomura have similar also runs healthcare services in Australia, MGCCT shares closed flat at S$1.16 last roles on the retail portion only. India and Singapore. Tuesday on the Singapore Exchange.

ASIA-PACIFIC SECONDARY OFFERINGS ASIA-PACIFIC IPOs (EXCLUDING JAPAN) ASIA-PACIFIC SECONDARY OFFERINGS BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 (EXCLUDING JAPAN) Managing No of Total Share Managing No of Total Share BOOKRUNNERS: 1/1/2018–31/3/2018 bank or group issues US$(m) (%) bank or group issues US$(m) (%) Managing No of Total Share 1 Morgan Stanley 20 7,418.69 14.9 1 Citic 6 1,137.05 7.5 bank or group issues US$(m) (%) 2 Citigroup 20 6,565.75 13.2 2 BAML 4 1,048.81 6.9 1 Morgan Stanley 15 7,066.54 16.0 3 UBS 19 4,152.70 8.4 3 Huatai Securities Co 6 967.65 6.4 2 Citigroup 17 6,248.45 14.2 4 BAML 5 3,767.52 7.6 4 Goldman Sachs 4 962.69 6.3 3 UBS 17 3,912.00 8.9 5 Goldman Sachs 12 3,373.97 6.8 5 Credit Suisse 4 879.45 5.8 4 BAML 4 3,745.67 8.5 6 Mizuho 11 1,203.91 2.4 6 China Merchants 5 582.03 3.8 5 Goldman Sachs 11 3,321.40 7.5 7 Nomura 22 1,200.95 2.4 7 Axis Bank 4 521.06 3.4 6 Huatai Securities Co 3 1,107.79 2.5 8 Huatai Securities Co 3 1,107.79 2.2 8 China Securities Co 3 494.59 3.2 7 Daishin Securities 1 860.18 1.9 9 Sumitomo Mitsui Finl 16 1,073.24 2.2 9 Haitong Securities Co 6 480.54 3.2 8 Axis Bank 5 793.30 1.8 10 Daishin Securities 1 860.18 1.7 10 Zheshang Securities Co 1 377.57 2.5 9 Guotai Junan Securities 7 731.07 1.7 Total 400 49,653.75 Total 217 15,218.36 10 Kotak Mahindra Bank 3 706.09 1.6

Including all domestic and international deals and rights issues Including all domestic and international deals Total 359 44,131.77 Proportional credit Proportional credit Including all domestic and international deals and rights issues Proportional credit

Source: Thomson Reuters SDC code: C04a6 Source: Thomson Reuters SDC code: C04a4 Source: Thomson Reuters SDC code: C04a5r

ASIA-PACIFIC EQUITIES ASIA-PACIFIC EQUITIES (EX-JAPAN) ASIA-PACIFIC IPOs BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 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 Morgan Stanley 25 7,871.66 11.9 1 Morgan Stanley 19 7,400.44 12.5 1 Citic 6 1,137.05 6.9 2 Citigroup 23 6,735.58 10.2 2 Citigroup 20 6,418.28 10.8 2 BAML 4 1,048.81 6.4 3 BAML 9 4,816.33 7.3 3 BAML 8 4,794.48 8.1 3 Huatai Securities Co 6 967.65 5.9 4 Goldman Sachs 16 4,336.66 6.6 4 Goldman Sachs 15 4,284.09 7.2 4 Goldman Sachs 4 962.69 5.9 5 UBS 21 4,260.07 6.4 5 UBS 19 4,019.37 6.8 5 Credit Suisse 4 879.45 5.4 6 Huatai Securities Co 9 2,075.44 3.1 6 Huatai Securities Co 9 2,075.44 3.5 6 China Merchants 5 582.03 3.5 7 Citic 11 1,728.58 2.6 7 Citic 11 1,728.58 2.9 7 Axis Bank 4 521.06 3.2 8 Sumitomo Mitsui Finl 23 1,485.76 2.2 8 Credit Suisse 12 1,335.85 2.3 8 China Securities Co 3 494.59 3.0 9 Nomura 29 1,450.10 2.2 9 Axis Bank 9 1,314.35 2.2 9 Haitong Securities Co 6 480.54 2.9 10 Mizuho 17 1,387.18 2.1 10 China Securities Co 9 1,147.41 1.9 10 Morgan Stanley 5 452.98 2.8 Total 638 66,058.00 Total 576 59,350.13 Total 238 16,404.26

Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues Including all domestic and international deals Proportional credit

Source: Thomson Reuters SDC code: C4a1 Source: Thomson Reuters SDC code: C4a2 Source: Thomson Reuters SDC code: C04a6

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restructuring and part nationalisation of ING, KBC Securities and Kempen for a potential Dexia that led to the creation of Belfius. capital increase to finance future growth. EUROPE/MIDDLE Deputy Prime Minister Kris Peeters of the The rights issue is expected to total EAST/AFRICA Christian Democratic and Flemish (CD&V) around €100m-€125m. party has refused to support the IPO until Retail Estates has a market capitalisation of the Arco issue is resolved. €688m. BELGIUM “As part of the agreement last summer, my party, the N-VA, Open Vld and MR, have BELFIUS LISTING BOGGED DOWN BY clearly agreed that the Arco file needed to be GERMANY POLITICS resolved in a sustainable and structured way, before the launch of the Belfius IPO,” he said. GODEWIND DISAPPOINTS ON DEBUT The Belgian government has pushed back CEO Raisiere said he understood the plans to list banking and insurance group government’s position, but failure to give the GODEWIND IMMOBILIEN shares debuted at €3.60 BELFIUS until after the summer according to green light for the initial public offering in early on Thursday, from a fixed price of €4.00 on reports in the local press. March meant a listing in June was not feasible. its downsized €375m Frankfurt float. CEO Marc Raisiere told l’Echo that he and “Whether it’s June or September-October, The real estate business cut sizing on a the management committee think there is that changes nothing,” he said. €450m all-primary float, with an upsizing not enough time to prepare for a public Bank of America Merrill Lynch, Citigroup, JP option to €550m, but maintained the fixed offering before summer. An IPO for 25%–35% Morgan, and UBS are reported to have the price of €4 per share. of the share capital was expected for June. mandate for the listing, with Nomura Shares dropped immediately on debut to The government is seeking European advising. €3.40, then began the long process of walking Commission approval for a plan to provide back up. By midday, the shares had risen to €600m in compensation to cooperative RETAIL ESTATES HIRES FOR POTENTIAL €3.85. This was done under its own steam as members affected by the bankruptcy of RIGHTS ISSUE there is no greenshoe, but the shares Arco, the financial arm of the Flemish ultimately closed at €3.75, down 6.25%. Christian Workers’ Movement. Arco RETAIL ESTATES, which focuses on out-of-town The stock was trading just below €3.77 on suffered substantial losses as a result of the retail properties, has appointed Belfius Bank, Friday afternoon. Citigroup and JP Morgan were joint global TOTAL NUMBER AND VOLUME OF EQUITY AND EQUITY-RELATED ISSUES BY COUNTRY coordinators and joint bookrunners with 1/1/2018–31/3/2018 Berenberg and Societe Generale. Volume No of Volume No of Country US$(m) issues Country US$(m) issues MOROCCO South Africa 2,099.7 10 Argentina 979.5 2 Israel 1,033.6 7 Chile 361.1 3 CASABLANCA SET FOR FIRST IPO OF 2018 Egypt 892.0 2 Colombia 0.5 1 Nigeria 646.3 4 Americas 70,240.7 374 Real estate company IMMORENTE is set to raise United Arab Emirates 287.3 2 Germany 12,812.3 26 Dh400m (US$43.4m) from a share issue and Saudi Arabia 113.8 1 United Kingdom 8,318.9 84 listing on the Casablanca stock exchange, Oman 71.8 1 France 5,380.1 20 the first Moroccan listing this year. Africa/Middle East 5,144.5 27 Spain 2,451.2 10 The company will issue 4m new shares at China 43,872.4 132 Norway 1,681.0 12 Dh100 per share, with subscriptions from India 8,731.4 95 Switzerland 1,667.8 8 April 23 to April 26. The shares will make a Japan 8,021.0 68 Netherlands 1,460.5 6 trading debut on May 11. Australia 6,008.2 170 Italy 1,455.9 5 The proceeds will be used for investments. South Korea 5,533.8 36 Belgium 1,447.8 4 CFG Bank and Upline are global coordinators. Hong Kong 3,988.2 72 Sweden 1,402.7 12 Thailand 1,252.7 9 Finland 947.8 6 GLOBAL BLOCK TRADES AND Taiwan 947.2 36 Turkey 836.4 3 ACCELERATED BOOKBUILDS Singapore 909.0 14 Luxembourg 746.9 4 BOOKRUNNERS: 1/1/2018–31/3/2018 Malaysia 830.4 33 Austria 739.0 1 Managing No of Total Share Philippines 706.8 5 Jersey 522.1 5 bank or group issues US$(m) (%) Vietnam 198.5 1 Denmark 418.7 2 1 Morgan Stanley 31 10,369.80 18.1 Macau 102.4 2 Ireland 410.8 4 2 Goldman Sachs 31 8,451.23 14.8 Indonesia 67.9 5 Cyprus 386.0 4 3 Citigroup 25 8,431.53 14.7 Bangladesh 40.9 5 Guernsey 355.1 7 4 JP Morgan 23 4,990.33 8.7 Mongolia 16.8 1 Greece 98.9 2 5 BAML 11 4,501.36 7.9 Myanmar (Burma) 12.3 2 Poland 87.4 3 6 UBS 17 3,452.35 6.0 Pakistan 6.9 1 Russian Federation 72.3 1 7 Barclays 12 2,302.28 4.0 Asia-Pacific 81,246.8 687 Lithuania 27.3 1 8 Credit Suisse 11 2,057.88 3.6 United States 57,064.1 225 Europe 43,726.9 230 9 Deutsche Bank 15 1,869.03 3.3 Canada 5,648.9 133 Total 200,739.1 1,320 10 SG 5 1,229.58 2.2 Mexico 2,393.6 3 Source: Thomson Reuters Total 194 57,189.42

Cayman Islands 2,304.1 2 Global, including all domestic and international deals Bermuda 1,488.9 5 Source: Thomson Reuters SDC code: C2a

International Financing Review April 7 2018 75

9 Equities and SE 2228 p71-84.indd 75 06/04/2018 19:32:51 over that time, and supplying 80% of pork IBS reported revenues of Rbs21.4bn in the RUSSIA production to the company’s meat year ended March 31 2017 from Rbs14.7bn in processing, compared with 40% of pork the year to March 31 2015, representing a RE-IPO FOR CHERKIZOVO production in 2014. CAGR of 21%. In the nine months to December Leads will be hoping for a less dramatic 31 2017, revenues totalled Rbs19.7bn, up 10% Pre-marketing began on Tuesday for a ride compared with the 2006 listing, when on the same period in 2016. US$300m-plus re-IPO of vertically integrated Morgan Stanley left the syndicate by mutual IBS was previously part of the IBS Group, meat producer CHERKIZOVO as it consolidates consent after pre-marketing when it could which was listed in Frankfurt between 2007 its Moscow line. not agree on valuation. Troika saw an and 2014 and which floated software Cherkizovo will raise approximately opportunity to shift up to bookrunner level, developer subsidiary Luxoft on the NYSE for US$150m from a primary offering, with but when it was refused Morgan Stanley’s US$80m in 2013. proceeds to be used for general corporate empty slot it also walked. The float priced purposes, including repayment of debt and off the bottom of the range for proceeds of HEADHUNTER FILES FOR NASDAQ LISTING potential acquisitions. The primary raising US$251.4m. Renaissance Capital was sole is to be completed through Treasury shares bookrunner, with Gazprombank and Online recruitment firmHEADHUNTER GROUP and, in the structure required of Russian URALSIB Capital as co-leads. has filed with the SEC for a US$250m companies, through the sale of secondary It is all change this time with Goldman Nasdaq listing. shares by a major shareholder - the Sachs, JP Morgan and Sberbank as joint Morgan Stanley, Goldman Sachs, Credit Suisse, founding family in this case - to be bookrunners. VTB Capital, Bank of America Merrill Lynch and replenished through a directed issue later. Sberbank CIB are attached. The Treasury share portion involves 2.9m IBS IT SERVICES TARGETS Rbs7bn Headhunter’s platform averaged 16.3 shares, or 6.63% of existing share capital. MOSCOW IPO million, 16.7 million and 17.8 million Secondary selling comes from MB Capital, unique visitors per month for the years owned by the founding Mikhailov/Babaev Pre-marketing began last Wednesday for a ended December 31 2015, 2016 and 2017 family, and is expected to be larger than the Moscow Exchange listing of IT business IBS IT respectively, according to Russian portal primary tranche, with the total offering SERVICES. Citigroup and Renaissance Capital are LiveInternet. taking the free-float to around 30%. joint global coordinators and joint Revenues were Rbs3.74bn (US$65m) for Following the cancellation of the London bookrunners with SOVA Capital (formerly the pro forma year ended December 21 2016 GDR line in February, the current free-float Otkritie Capital), with Alfa-Bank as retail and Rbs4.73bn for 2017. has dropped to around 2%-3%. MB Capital manager. Headhunter was sold by Russia’s Mail.ru will also provide stock for a greenshoe. The deal size is expected to be up to in February 2016 to an investor consortium A two-plus-two approach is anticipated, Rbs7bn (US$121m), with a mix of primary led by Elbrus Capital. putting the launch of bookbuilding around and secondary shares. The latter will come Monday April 16 and completion around from one of the founders Anatoly April 27. Karachinskiy, who has a 75% pre-money SOUTH AFRICA There is a dividend policy of at least 50% stake. Primary is likely to account for more of net income for the immediately than half of the deal and proceeds will fund CONSOL PACKAGES R2.7bn-PLUS preceding fiscal year, subject to Cherkizovo internal growth and potential acquisitions. JSE FLOAT maintaining a 2.5 times net debt/adjusted The free-float will be approximately 30%- Ebitda ratio. 35% and the schedule follows a typical CONSOL, a glass packaging manufacturer in CEO Sergei Mikhailov said that since the two-plus-two format, with bookbuilding to sub-Saharan Africa for drinks and food, is 2006 float, revenues have increased five-fold begin in the week beginning April 16. The attempting to raise at least R2.7bn and Ebitda by seven times. deal is marketed on a Reg S basis. (US$226m) in a Johannesburg float. Consol, The company has taken recent measures Founded in 1992, IBS has a client base of which was listed on the JSE until 2007 when to become more self-sufficient, tripling more than 2,000 Russian companies and it was taken private, will use proceeds to grain production between 2014 and 2017, Russian divisions of international deleverage and may raise more to repay a increasing egg sourcing to 95% from 65% companies and government institutions. portion of the group’s shareholder loans.

EMEA EQUITIES EMEA IPOs EMEA RIGHTS ISSUE UNDERWRITING BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 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 Goldman Sachs 19 4,757.94 10.8 1 Citigroup 7 1,478.18 10.6 1 Barclays 3 993.41 16.3 2 JP Morgan 14 3,361.93 7.6 2 Deutsche Bank 6 1,208.35 8.7 2 HSBC 2 921.81 15.1 3 Deutsche Bank 17 2,840.84 6.4 3 JP Morgan 4 1,092.78 7.8 3 EFG Hermes 1 865.58 14.2 4 Citigroup 15 2,609.53 5.9 4 BNP Paribas 3 1,003.35 7.2 4 Investec 1 773.37 12.7 5 UBS 7 2,248.26 5.1 5 Goldman Sachs 3 945.84 6.8 5 Emirates NBD PJSC 2 287.28 4.7 6 Credit Suisse 9 1,858.44 4.2 6 UBS 2 907.02 6.5 6 Chapel Hill Advisory Pt 2 270.00 4.4 7 Morgan Stanley 16 1,790.73 4.1 7 BAML 3 879.13 6.3 7 Santander 3 234.91 3.9 8 Investec 9 1,594.28 3.6 8 Morgan Stanley 7 874.79 6.3 8 Standard Chartered 1 215.71 3.5 9 Barclays 9 1,584.56 3.6 9 Berenberg Bank 3 614.05 4.4 9 Morgan Stanley 1 160.29 2.6 10 SG 9 1,583.34 3.6 10 Credit Suisse 3 432.63 3.1 10 Oddo BHF 1 139.82 2.3 Total 243 44,136.04 Total 37 13,964.57 Total 26 6,097.19

Including all domestic and international deals and rights issues Including all domestic and international deals Source: Thomson Reuters SDC code: C4cr Source: Thomson Reuters SDC code: C7c Source: Thomson Reuters SDC code: C8fr

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Secondary selling is restricted to a 15% with R3.4bn and R896m in 2016. For the greenshoe and the balance of the shareholder financial year ended June 30 2017, revenues TURKEY loans will be converted to equity on admission. and adjusted Ebitda were R6.18bn and R1.6bn, As a result, R2.7bn is the minimum proceeds respectively. ASELSAN CONSIDERS CAPITAL INCREASE target and any upsize is neutral to shareholders. Bank of America Merrill Lynch, Goldman Sachs, Bookbuilding is likely to be slightly RMB and Standard Bank are joint bookrunners. The board of directors of defence contractor accelerated, suggesting the beginning of ASELSAN has given the go-ahead for a capital roadshows around April 19 and wrapping up increase of 210m shares. around April 27. The free-float will be in SWEDEN The board decision was revealed in a filing excess of 20%. and follows news that Aselsan has signed a deal The nearest peer is locally listed Nampak, SAGAX TO PAY DOWN DEBT WITH with the Turkish defence ministry regarding which is in the process of selling its glass RIGHTS ISSUE the modernisation of its some of its frigates. business, but is smaller than Consol with a At last Tuesday night’s TL30.22 close, an market cap of R10.6bn, and a banker Commercial real estate group SAGAX is targeting offering of 210m shares without a discount involved said Consol is considered to be of SKr656m (US$78m) from a rights issue to pay would total TL6.34bn (US$1.57bn). Aselsan’s much higher quality. down debt. Proceeds will enable the company market cap is TL30.34bn. Consol has operations in South Africa, to lower its net debt below 7.5 times Ebitda and Kenya and Nigeria and is constructing a the loan ratio to drop below 50%. facility in Ethiopia, which is expected to be The offering comprises 23.86m shares on a UK commissioned during the fourth quarter. 1-for-10 basis at SKr27.50 each. Subscription runs Headquartered in South Africa, where it has from May 15 to May 29. The record date is May 11. SEQUOIA INFRASTRUCTURE FUND four glass manufacturing facilities, 11 glass Board members and senior executives have BACK FOR MORE furnaces and 29 production lines, Consol also committed to subscribe pro rata for an aggregate has glass manufacturing facilities in Kenya 31% of the capital increase, or about SKr205m. SEQUOIA ECONOMIC INFRASTRUCTURE INCOME FUND is and Nigeria. Major customers include AB The rights issue requires shareholder approval considering an equity fundraising having InBev, Diageo, Heineken and Tiger Brands. at a May 7 EGM, although shareholders deployed the £160m raised in May 2017. For the six months ended December 31 representing 38% of the votes in the company Sequoia anticipates using the proceeds to 2017, revenues and adjusted Ebitda were have already said they will vote in favour. repay outstanding debt, with any additional R3.7bn and R936m, respectively, compared A result is due on June 1. capital going towards the acquisition pipeline.

ALL NORDIC EQUITIES ALL SPANISH EQUITIES ALL UK EQUITIES BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 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 Citigroup 2 821.39 18.5 1 Morgan Stanley 2 297.14 19.3 1 Investec 6 1,253.07 15.7 2 Carnegie 10 562.73 12.6 2 Deutsche Bank 2 287.91 18.7 2 Barclays 4 1,222.39 15.3 3 Nordea 4 524.59 11.8 3 JP Morgan 3 250.89 16.3 3 HSBC 2 973.12 12.2 4 Danske Bank 5 359.30 8.1 4 Goldman Sachs 2 184.34 12.0 4 Stifel/KBW 6 927.08 11.6 5 Sundal Collier 7 316.40 7.1 5 Santander 2 163.32 10.6 5 Numis 9 491.86 6.2 6 SEB 3 231.43 5.2 6 SG 1 136.84 8.9 6 N+1 Singer 5 453.17 5.7 7 UBS 1 193.05 4.3 7 Citigroup 2 99.83 6.5 7 Goldman Sachs 2 374.15 4.7 8 Morgan Stanley 1 190.93 4.3 8 BNP Paribas 1 52.33 3.4 8 Peel Hunt 5 357.25 4.5 9 Deutsche Bank 2 189.68 4.3 =8 Credit Suisse 1 52.33 3.4 9 Canaccord Genuity 4 181.53 2.3 10 Swedbank 3 130.65 2.9 10 Renta-4 1 6.10 0.4 10 Citigroup 2 179.22 2.2 Total 32 4,450.10 Total 8 1,535.99 Total 83 7,988.87

Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues Source: Thomson Reuters SDC code: C4c7r Source: Thomson Reuters SDC code: C4c4r Source: Thomson Reuters SDC code: C4c1r

ALL FRENCH EQUITIES ALL GERMAN EQUITIES ALL ITALIAN EQUITIES BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 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 Goldman Sachs 3 1,302.43 32.3 1 Goldman Sachs 4 2,036.25 15.9 1 Mediobanca 3 253.34 17.4 2 SG 5 1,106.70 27.4 2 Credit Suisse 3 1,354.67 10.6 2 Equita SIM 2 248.52 17.1 3 Credit Agricole 2 590.56 14.6 3 JP Morgan 4 1,335.73 10.4 3 BNP Paribas 1 183.84 12.6 4 JP Morgan 1 544.55 13.5 4 Citigroup 6 1,274.11 9.9 4 Banca Akros 1 86.13 5.9 5 Oddo BHF 3 214.81 5.3 5 UBS 4 1,191.35 9.3 =4 Citigroup 1 86.13 5.9 6 BNP Paribas 1 45.22 1.1 6 Deutsche Bank 4 1,079.94 8.4 =4 Commerzbank 1 86.13 5.9 7 Midcap Partners 1 40.39 1.0 7 BNP Paribas 3 1,003.35 7.8 =4 Credit Suisse 1 86.13 5.9 8 Barclays 1 39.70 1.0 8 Berenberg Bank 7 992.01 7.7 =4 Santander 1 86.13 5.9 =8 Deutsche Bank 1 39.70 1.0 9 BAML 1 738.24 5.8 =4 SG 1 86.13 5.9 =8 Morgan Stanley 1 39.70 1.0 10 Morgan Stanley 5 593.34 4.6 =4 Stifel/KBW 1 86.13 5.9 Total 17 4,035.46 Total 25 12,812.27 Total 5 1,455.94

Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues Source: Thomson Reuters SDC code: C4c2r Source: Thomson Reuters SDC code: C4c3r Source: Thomson Reuters SDC code: C4c5r

International Financing Review April 7 2018 77

9 Equities and SE 2228 p71-84.indd 77 06/04/2018 19:32:51 The fund said that it has drawn a further The float priced at the bottom of €3.60– The shares opened higher at 160p on US$55m under its £100m multi-currency €4.60 per share guidance but the shares Thursday, but closed at 159p and were at leverage facility with RBS. have struggled to achieve this level, closing that same level on Friday afternoon. The fundraising is expected to take place only once at or above issue. Zeus Capital was sole broker for the IPO. once the existing placing programme Bank Degroof Petercam was stabilisation expires at the beginning of May and is agent, and joint bookrunner of the IPO covered by existing approvals that mean the alongside RBC, armed with a 10% greenshoe fund does not need to give shareholders pre- that was used from the debut on March 5 emption rights. until it was exhausted on March 29 with the AMERICAS Stifel Nicolaus Europe will manage the shares closing that day on €3.40. equity issue as with previous fundraisings. The shares struggled last week, falling to a close of €3.07 on Thursday but the UNITED STATES PACIFIC INDUSTRIAL SCALES BACK Cambridge-based pharmaceutical’s shares FUNDRAISING were bouncing back on Friday, reaching VOLATILITY, EARNINGS HINDER ECM €3.2955 at 2pm local time on Euronext RECOVERY PACIFIC INDUSTRIAL & LOGISTICS REIT has said that, Brussels. owing to market conditions, it has scaled Volatile markets and blackouts around the back ambitions for a £50m placing and will SIMPLYBIZ DOWN 7% ON DEBUT end of the first quarter limited the scope for now be targeting £20m to fund a portion of US ECM issuance in the past week, but the its UK urban logistics pipeline. SIMPLYBIZ GROUP closed down 7% on debut US IPO calendar has restocked and a more The deal was due to close on Thursday last Wednesday, finishing at 158p versus constructive week beckons. March 29 and was extended to Friday, April pricing at 170p per share for its £64.6m After a holiday-induced hiatus, four 6. Canaccord Genuity is sole bookrunner. AIM IPO. IPOs launched, two of which (software SimplyBiz, which provides regulatory and company ZUORA and biotech ALZHEON) are ACACIA’S GREENSHOE USED UP business support to financial advisers, raised scheduled to price in the coming week £30m alongside £34.6m of secondary shares, and both on April 11. The other two, The entire greenshoe on ACACIA PHARMA’s IPO representing a market capitalisation of GRAFTECH INTERNATIONAL and VRIO, price on was used in support of the flagging share £130m. Proceeds will be used to pay down April 18. price following its €40m fundraising. debt. The free-float is 50.1%. There are a string of mainly technology and biotech IPOs that have recently filed and US EQUITIES US IPOs could be ready to launch next week, among BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 them Pivotal Software, Smartsheet and Managing No of Total Share Managing No of Total Share Ceridian HCM (technology) and MorphoSys, bank or group issues US$(m) (%) bank or group issues US$(m) (%) Mereo BioPharma and Surface Oncology 1 Morgan Stanley 43 8,624.74 16.8 1 BAML 15 1,616.26 13.3 (biotech). 2 JP Morgan 47 6,037.47 11.8 2 Goldman Sachs 12 1,307.52 10.8 However, whipsawing markets amid the 3 Goldman Sachs 40 5,594.81 10.9 3 Morgan Stanley 11 1,264.98 10.4 escalating trade tiff between China and the 4 Barclays 27 5,241.01 10.2 4 Credit Suisse 8 970.67 8.0 U.S. is making it difficult for issuers to be 5 Citigroup 32 4,224.65 8.2 5 JP Morgan 9 966.54 8.0 confident their roadshows will not be 6 BAML 35 3,451.39 6.7 6 Citigroup 10 915.57 7.5 disrupted by a market decline. 7 Deutsche Bank 18 2,560.10 5.0 7 Deutsche Bank 6 845.89 7.0 In one of the largest upcoming IPOs, AXA 8 Credit Suisse 23 2,304.51 4.5 8 RBC 6 784.02 6.5 Equitable is also poised to bring its IPO in 9 RBC 19 2,098.07 4.1 9 Barclays 8 711.92 5.9 the current quarter. 10 UBS 14 1,393.03 2.7 10 UBS 5 401.51 3.3 On the follow-on front, China investment Total 203 51,213.07 Total 36 12,133.43 conglomerate HNA is unlikely to wait long Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues after signalling on Thursday plans to sell- Source: Thomson Reuters SDC code: C3r Source: Thomson Reuters SDC code: C6 down its 26% stake in hotelier Hilton Worldwide. LATIN AMERICA EQUITY, EQUITY-RELATED US SECONDARY OFFERINGS The past week saw more than US$2bn BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 raised from US follow-on stock sales, though Managing No of Total Share Managing No of Total Share SS&C Technologies’ US$1.25bn equity bank or group issues US$(m) (%) bank or group issues US$(m) (%) financing for its DST Systems purchase was 1 Citigroup 2 387.0 10.4 1 Morgan Stanley 32 7,359.76 18.8 easily the biggest deal. 2 BBVA 2 355.4 9.5 2 JP Morgan 38 5,070.93 13.0 =2 Santander 2 355.4 9.5 3 Barclays 19 4,529.08 11.6 ZUORA OFFERS SUBS FOR SUBS 4 BTG Pactual 2 289.9 7.8 4 Goldman Sachs 28 4,287.30 11.0 5 BAML 3 284.6 7.6 5 Citigroup 22 3,309.08 8.5 ZUORA, a software company that sells 6 Goldman Sachs 2 276.4 7.4 6 BAML 20 1,835.13 4.7 subscriptions to a platform that helps 7 Morgan Stanley 2 252.9 6.8 7 Deutsche Bank 12 1,714.21 4.4 businesses adopt a subscription-based 8 Credit Suisse 1 237.0 6.4 8 Credit Suisse 15 1,333.83 3.4 business model, on Monday launched an up 9 Grupo Fin Banorte-Ixe 1 229.0 6.1 9 RBC 13 1,314.04 3.4 to US$110m IPO that is next in the queue as =9 Inversora Bursatil 1 229.0 6.1 10 Cowen & Co 21 1,101.74 2.8 the nascent US tech IPO recovery gathers Total 9 3,734.7 Total 167 39,079.64 momentum. Including all domestic and international deals and rights issues Including all domestic and international deals and rights issues Zuora plans to sell 10m Class A shares in a Source: Thomson Reuters SDC code:C1f Source: Thomson Reuters SDC code: C8ar range of US$9-$11 for pricing April 11.

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9 Equities and SE 2228 p71-84.indd 78 06/04/2018 19:32:52 EQUITIES AMERICAS

Brookfield hits jackpot with US$900m Graftech IPO

n US Asset manager could net up to US$2.9bn

Canada’s Brookfield Asset Management plans and taking Brookfield’s total collect to as much about is whether the global economy continues to to capitalise on a stark turnaround in the as US2.9bn. grow,” one banker close to the deal said. fortunes of graphite electrode maker GRAFTECH About one-third of Brookfield’s equity stake GrafTech is in the midst of an earnings surge INTERNATIONAL by selling a stake worth up to in GrafTech is held through its publicly traded amid a spike in graphite electrode prices that US$907m in the company’s NYSE IPO. vehicle, Brookfield Business Partners, whose has followed a 20% cut in industry capacity and GrafTech last Wednesday launched an IPO in stock price soared 5.7% on news of the deal resulting global shortages. which Brookfield will sell 37.8m of its shares at launch Wednesday. Better market dynamics in the market for US$21-$24 apiece for pricing post-close April 18. GrafTech management are undertaking a petroleum needle coke, the main raw material JP Morgan and Credit Suisse are active books. longer-than-normal 11-day IPO roadshow that will for graphite electrodes and lithium-ion batteries According to market models, midpoint pricing see them meet investors in the US, Canada and used in electric vehicles, is also pushing end values GrafTech at about six times 2019 EV/ Europe. product prices higher. Ebitda and represents a free cash flow yield in The roadshow included meetings in London Ahead of the IPO, GrafTech has locked in the mid-teens. and Frankfurt at the end of the past week. It prices for 60%-65% of its production with three- The deal will cut the stake held by Brookfield swings back to the East Coast of the US in the to five-year take-or-pay contracts. funds to 87.5% and attribute GrafTech a market week ahead and heads to Toronto on Friday, GrafTech’s filing implies it expects to generate cap of up to US$7.25bn. before West Coast, Chicago, Denver and Kansas first quarter Ebitda of up to US$305m for the This comes just three years after the asset City legs in the first half of the following week. period, up significantly from less than US$100m in manager bought the then-struggling business all of 2017 and a sharp reversal from losses in 2016. for just US$850m (or US$1.3bn on an enterprise PRICE SURGE “(Graphite electrodes) are a mission critical value basis). Founded in 1886, GrafTech is one of the world’s product that is going through a cost-push squeeze Assuming the IPO can navigate market leading producers of graphite electrodes used by so current prices are attractive relative to historical choppiness and shrug off any stigma associated electric arc furnace (EAF) steelmakers (so-called prices and you can layer on their revamped with an all-secondary stock sale, Brookfield is mini-mills that process scrap steel) and “the commercial strategy offering customers take-or- looking at a cash bonanza taking into account both only substantially vertically integrated operator pay contracts,” the banker said. the direct IPO proceeds plus some chunky dividends. in the industry”, according to its SEC filing. Underwriters are arguing that GrafTech’s In February, GrafTech took out a US$1.5bn The IPO comes as the US government’s vertical integration gives it a clear competitive term loan to replace US$300m of bonds import tariffs have buoyed the local steel advantage and the ability to confidently strike maturing in 2020, and fund a US$1.1bn pre-IPO industry, though GrafTech is a supplier to steel these long-term contracts. dividend to Brookfield. mills around the world from factories in the US, GrafTech achieved this through its purchase of GrafTech also expects next month after Mexico France and Spain. Seadrift Coke in November 2010, making it the the IPO to pay a US$160m cash dividend to “The company is relatively insulated in terms second largest petroleum needle coke producer Brookfield and plans to issue a US$750m of the tariffs because they supply a range of in the world after Phillips 66. promissory note to Brookfield, also as a dividend steelmakers around the world - what they care more Anthony Hughes

Goldman Sachs, Morgan Stanley, Allen & Co Zuora is tapping a market opportunity valuation though look to have been taken and Jefferies are leading the underwriting that extends from billing and revenue into account in setting the IPO terms. effort. recognition (US$9bn a year) to the broader The terms and Zuora’s growth rate With a stated mission of enabling “all ERP market (US$40bn), and capitalising on translate into a forward EV/sales multiple of companies to be successful in the the desire of many companies to develop four to five times, versus seven times-plus subscription economy”, Zuora sells a recurring and highly visible subscription- for the SaaS sector as a whole and the even platform that automates the management based revenue streams. higher multiples at which recent debutantes of subscriptions including the order-to-cash The company grew revenues 49% to Dropbox and Zscaler now trade. process. US$167.9m last year. Yet gross margins were a The IPO attributes Zuora a market cap of relatively low 52% because low margin and AT&T GOES LIVE WITH US$653m roughly US$1bn. often one-time professional services revenues LATAM PAY TV IPO At that size, the deal is unlikely to made up about a quarter of total revenues. command the hype of Dropbox’s IPO last Subscription revenues generated a much The record of cable TV/pay TV IPOs is not a month or Spotify’s direct listing in the higher gross margin of 76% but grew at the comforting one, last year’s disappointing past week. But Zuora does boast some slower pace of 33% last year. US$1.9bn IPO of Altice USA providing the pedigree. The company is also making big net losses latest example. Founder Tien Tzuo was employee number and burning cash (it has negative operating Overlay the country risk in LatAm and 11 at SaaS bellwether Salesforce before cash flow), and is running its balance sheet AT&T’s inability to previously find a buyer branching out on his own with co-founders with US$48.2m in cash and US$15m of debt. for VRIO and it is not obvious whether the up KV Rao and Cheng Zou and with funding These factors may limit the company’s to US$653m NYSE IPO of the DirectTV/Sky from Benchmark Capital Partners. ability to command a premium SaaS LatAm satellite TV arm is going to be easy.

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9 Equities and SE 2228 p71-84.indd 79 06/04/2018 19:32:52 Alzheon IPO takes aim at Alzheimer’s disease n US Castoff drug developer seeks funding for Phase III trial

Biotechs have long been fighting a losing Taking an experimental drug from the pre- benefit for a narrower population of patients. It is battle against Alzheimer’s disease, and at clinical to commercial stages is extremely only testing the drug in patients that fit a narrow great cost. expensive. Acquiring castoff drugs that have genetic profile. Rather than start from scratch – spending already been proven safe and have shown proof- The FDA awarded the drug Fast Track hundreds of millions funding another of-concept in early-stage trials is one way to designation in patients with mild Alzheimer’s experimental therapy – ALZHEON is giving a keep development costs low. and a genetic predisposition for early onset of castoff drug another turn at the bat against the In this case, Alzheon is gearing up for a Phase the disease. Alzheon has only US$6.4m of cash devastating memory-loss disease. III trial of its Alzheimer’s drug despite having left, so needs the IPO to fund the Phase III trial The company hopes to use proceeds from its raised just US$24.6m privately. later this year. up to US$75m IPO to fund a Phase III trial on a Tramiprosate, the active ingredient in ABG Capital, the company’s second-largest castoff Alzheimer’s drug it acquired for almost Alzheon’s drug ALZ-801, has already been shareholder, has some downside protection to nothing five years ago. tested in 16 clinical trials in more than 2,000 its current 17.6% pre-IPO stake. Citigroup and Piper Jaffray are marketing patients by former owner Bellus Health. As part of a US$7.6m series B round 5m shares at US$13-$15 each for pricing on Bellus abandoned development after the drug investment in December at US$10.64 a share, March 11. Alzheon’s existing shareholders are missed the primary endpoint of a Phase III trial. the firm would see its equity stake topped up if not reinvesting on the IPO, making this a true Alzheon reviewed Bellus’ data after the fact the IPO prices below US$12.50. IPO. and determined that the drug might provide a Robert Sherwood

Vrio launched plans on Thursday to sell Postpaid subscribers are proving tougher Allogene Therapeutics, which has taken 29.68m Class A shares or about 15% of the to grow but ARPU for these customers is up over Pfizer’s place in a collaboration company at US$19-$22 apiece for pricing April 18. as they shift to premium content packages. between the companies, breathed new life There is a big syndicate on hand to help The company goes into the IPO having into the project, propelling Cellectis’s shares out AT&T, which is not selling any shares posted a big improvement in free cash flow to a three-year high of US$38.85 after the and will retain control of Vrio. last year to US$520m, a key metric for deal was announced on Tuesday morning. Goldman Sachs, JP Morgan, Citigroup and management. Cellectis captured almost none of that Morgan Stanley are active bookrunners, Vrio is coming at about 5.3 times 2018 EV/ upside on a one-day marketed, US$175m trailed by no less than 10 banks in the Ebitda versus eight times for peers including equity sale launched after Tuesday’s close. passive slots and another 11 co-managers. Liberty Latin America, a banker close to the Goldman Sachs, Citigroup and Barclays placed All of the proceeds and cash on hand will deal said. 5.6m shares at US$31.00, a 6.3% discount to be used to repay US$1.2bn to AT&T via a Telefónica Brasil, a competitor cited in the the last sale and a 20.2% all-in discount. distribution. roadshow, trades at 5.5 times forward Ebitda “It is healthcare,” said one banker Vrio has 13.6m subscribers, including according to Thomson Reuters data. involved in underwriting. It is also a brutal 5.4m in Brazil, and the top one or two Vrio’s post-IPO net debt leverage stands at market with investors extracting heavy market positions in each of the markets it 4.1 times (about US$2bn of net debt), though concessions on marketed deals. operates in except Chile and Peru. the company’s long-term target is to bring it Cellectis is using US$100m of the It operates in underpenetrated pay TV down to 1.5-2 times. proceeds to build a manufacturing facility markets (38% penetration in the region versus Management is also targeting mid-single- for the new off-the-shelf CAR-T drugs it is 81% in the US) where satellite offers a cheaper digits revenue growth (versus 8.5% on a developing with Allogene. cost alternative to broadband, better suited to constant currency basis last year) and mid- Unlike typical CAR-T drugs, which harvest countries with lower GDP per capita, and less 20s Ebitda margins. a patient’s own T-cells, Cellectis’s CAR-T vulnerable to competition from new-fangled cells come from healthy donors, reducing streaming services. CELLECTIS TRADES STOCK GAINS FOR the time and offering potential for mass The growth engine is Vrio’s lower ARPU FUNDING production. prepaid business, serving those customers Allogene also brings US$300m that it who buy their own equipment, install the CELLECTIS has a new ally in its goal to develop recently raised privately. dish themselves and therefore come with a new class of mass-produced, off-the-shelf Under terms of the Cellectis agreement, low subscriber acquisition costs. CAR-T cancer drugs. Allogene is on the hook for up to US$185m

ECM DEALS: WEEK ENDING 6/4/2018 Stock Country Date Amount Price Deal type Bookrunner(s) Transcontinental Canada 02/04/2018 C$250.0m C$26.60 Block (primary) CIBC World Markets, Scotiabank Cellectis France 04/04/2018 US$175.0m US$31.00 Follow-on (primary) Goldman Sachs, Citigroup, Barclays Intercept Pharmaceuticals US 04/04/2018 US$150.0m US$64.00 Accelerated follow-on (primary) Credit Suisse, Jefferies New Media Invesment Group US 05/04/2018 US$99.0m US$16.50 Accelerated follow-on (primary) Credit Suisse, Morgan Stanley Northern Oil & Gas US 05/04/2018 US$88.1m US$1.50 Follow-on (primary) Stifel SendGrid US 05/04/2018 US$156.7m US$24.00 Follow-on (primary) Morgan Stanley, JP Morgan SS&C Technologies US 03/04/2018 US$1.25bn US$47.50 Follow-on (primary) Credit Suisse, Morgan Stanley

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in milestone payments on each CAR-T target The stock sale, slightly upsized with extra a condition of a twice-amended exchange plus royalties in the high-single digits on secondary shares from 6.25m at launch, was agreement that would see bondholders commercial sales of approved drugs. first filed confidentially on March 23 and swap US$497m of 8% 2020 bonds with priced well before IPO lock-ups were due to US$155m of stock and US$344m of new INTERCEPT BULLISH ON NASH DRUG expire on May 14. 2023 bonds. Morgan Stanley and JP Morgan acted as joint New chairman and Life Time fitness INTERCEPT PHARMACEUTICALS, a once high-flying bookrunners, the former agreeing to early centres founder Bahram Akradi, chairman liver drug developer, secured U$250m lock-up release because of the stock’s strong emeritus and ousted former CEO Michael through an overnight stock sale last post-IPO performance. Reger, billionaire Texas oilman Bob Rowling Wednesday and short-circuited its A banker close to the deal said the book and other investors are putting up US$52m detractors in the process. was four times covered with the top 10 of equity as part of a separate subscription Intercept shares jumped by 9.9% to accounts taking 50% of the shares. agreement. This would take the total equity US$70.76 on Thursday, rewarding Since it went public at US$16 in raised to US$140m. shareholders that participated, though November, SendGrid has seen its shares as Northern expects the exchange and some of that gain was on short-covering of much as double, hitting a record high of equity offering to bring down its net debt-to- profitable positions. US$32.02 on March 11. Ebitda to 3.5 times, though the stated use of Credit Suisse and Jefferies discussed the A range of insiders including Foundry the equity proceeds is acquisitions, drilling plans confidentially with investors intraday Group (2.1m shares) and Highway 12 costs and general uses other than the Wednesday before broadening the Ventures (1.81m shares) took profits and repayment of debt. marketing overnight. agreed to a fresh 90-day lock-up on their Interim president Brandon Elliott said in The public launch came with a US$92m remaining shares. February the exchange would usher in “a commitment from long-time backer Fellow VC backers Bessemer Venture new phase for Northern, one where our Genextra and biotech-focused VC Samsara Partners, which invested more money at the strengthened balance sheet will allow us to BioCapital. IPO, and Bain Capital Ventures did not sell accelerate growth and re-establish Northern The public offering was upsized to 2.34m any shares in the offering. as the natural consolidator of non-operated shares at US$64.00, taking proceeds from Certain non-selling shareholders agreed not working interests in the Williston Basin”. US$120m to US$150m, and Genextra/ to part with any shares (2.1m in all) until June 4. The company would look “to further Samsara increased their investment to SendGrid’s lock-up expirations are now improve its total debt-to-Ebitda metrics with US$100m. staggered across three dates (the original the long-term goal of getting Northern to be Genextra is Intercept’s largest IPO lock-up date and the two new ones), in a position where [it] can harvest the value shareholder with a 25.6% stake while such that SendGrid will not trade with a full of the business model and begin to return Samsara is a newer investor. On the other free-float any earlier than July 4. capital to shareholders”. side, fully 38% of its shares were sold short If SendGrid stock trades well the company at last count. could consider another offering before then NEWSPAPER OPERATOR ROLLS UP Intercept’s FDA-approved drug Ocaliva to further smooth the transition to a full ACQUISITIONS has given the bulls reason for free-float. encouragement. In late February, SendGrid said it expected NEW MEDIA INVESTMENT GROUP, a Softbank Already approved for a liver condition revenues to grow 25% to US$139m–$141m Group-managed operator of community called primary biliary cholangitis, Ocaliva’s this year and non-GAAP net income of newspapers, continues its strategy to potential against non-alcoholic US$2m–$4m. consolidate the industry, spending US$111m steatohepatitis (NASH) makes it a potential The shares recovered some ground lost on acquisitions so far this year. blockbuster. during marketing in Friday’s aftermarket, New Media funded the purchases with a NASH is a progressive disease that causes rising 4% to US$25.52 early in the session. US$99m overnight block sale on Thursday. cirrhosis and liver failure for which there is Credit Suisse and Morgan Stanley shared risk on no current treatment. NORTHERN OIL FINALLY GETS ITS MONEY their purchase of 6m shares that they offloaded Intercept will update investors about at US$16.50, the lower-half of a US$16.45-$16.65 Ocaliva’s potential as a NASH drug in Paris NORTHERN OIL & GAS, an investor in oil leases marketing range and 5.2% discount to last sale. next week at the EASL International Liver and drilling projects in the Bakken in North New Media broke re-offer early Friday to Conference. Dakota, raised US$88m from a deeply US$16.25. discounted stock sale, reprising a deal it “This is not for everyone,” said one SENDGRID UPSIZES WITH ECM RETURN failed to price last month. banker involved in the underwriting. “But Northern Oil took out a day of marketing there are some folks that know the story.” Not too many IPOs in recent times have on Thursday with sole bookrunner Stifel One hook was a high 9.1% dividend yield done well enough to contemplate a first- before selling 58.7m shares at US$1.50 that New Media covered by 1.3-times from time follow-on inside standard 180-day IPO apiece, a 21% file-to-offer discount versus its free cashflow it generated last year. lock-up arrangements. US$1.90 pre-launch close. Another is investor familiarity, as New SENDGRID, whose communication software The stock had already waned from Media is a serial issuer that last raised platform helps companies reach customers US$2.30 before launching but failing to US$145m in November 2016, also overnight via email, priced an upsized US$156.7m price a slightly bigger US$105m stock sale via Morgan Stanley as sole bookrunner, at follow-on late on Thursday just five months on March 19, and has steadily declined from US$16.79 a share. after its NYSE debut. more than US$15.00 a share in mid-2014. New Media is using proceeds to fund the The offering of 6.53m shares, including Despite last month’s failure, Northern acquisitions of Austin American-Stateman 600,000 primary shares and the rest from Oil’s equity needs never went away. and three other newspapers for a total insiders, priced at US$24.00, a relatively large An equity raising of at least US$140m – purchase price of $111m. That is on top of 10% all-in discount after two days of marketing. revised down from US$156m previously – is the US$165.1m it spent last year.

International Financing Review April 7 2018 81

9 Equities and SE 2228 p71-84.indd 81 06/04/2018 19:32:52 The Series C funding round included a US$15m investment from mutual fund Fidelity. SS&C prepares for more M&A Other backers include ARCH Venture Partners, Baillie Gifford, the Mayo Clinic and Venrock. Unity is led by Keith Leonard Jr, who co- with US$1.25bn equity raising founded and led Kythera Biopharmaceuticals before it was sold to n US Pulls in more than needed for DST buy but fresh target beckons Allergan for US$1.9bn in October 2015. Goldman Sachs, Morgan Stanley and Citigroup Financial services software provider SS&C two other offers. Fidessa later confirmed one of are leading the IPO, which could also launch TECHNOLOGIES surprised investors with a bigger- those offers came from SS&C. in April. than-expected US$1.25bn follow-on stock sale to JP Morgan analyst Sterling Auty said in a High-powered semiconductor laser maker help fund its pending US$5.4bn purchase of DST report on Thursday that Fidessa would bolster NLIGHT filed with the SEC on March 30 to SYSTEMS and give it some additional firepower in SS&C’s franchise in Europe and its product raise up to US$86.3m from a Nasdaq IPO that the hunt for more targets. mix “could offer more attractive accretion like could launch later this month. SS&C late on Tuesday sold 26.3m primary [SS&C’s previous] Advent Software deal”. Founded in 2000 and with vertically shares at US$47.50 after one day of marketing, According to UBS analyst Alex Kramm, integrated facilities in the US, Finland and raising more than twice the US$500m base Tuesday’s equity raising leaves SS&C with about China, the company booked US$138.6m of amount that SS&C management had flagged US$600m of excess cash to deploy, leaving it sales last year, up 37% from the prior year, when it announced the DST purchase in January. needing about US$1.5bn of debt if it succeeds in and adjusted Ebitda of US$18.1m. The offering price represented a 3.1% discount its chase for Fidessa. VC backers include Menlo Ventures (21.5% to last sale and a wide 8.4% file-to-offer/all-in Notably, US$1.8bn of the US$6.85bn in debt pre-IPO) and Oak Investment Partners (20%). discount, the latter possibly reflecting concerns SS&C recently raised went to the company’s nLight filed confidentially on December that the extra capital would dilute upside in the European subsidiary, Kramm wrote. 20 last year. Stifel and Raymond James are stock price. Alongside the offering, SS&C upped its listed as joint bookrunners. The offering came just days after the shares synergy target for DST to US$175m from hit a record high of US$53.99 on March 27 and US$150m, helping to solidify market support following news that the DST deal is on track to for what was already an immediately accretive BRAZIL close as early as this month, ahead of the original acquisition. third-quarter target. SS&C is buying DST in an all-cash deal that BANCO INTERMEDIUM TARGETS US$620m Credit Suisse and Morgan Stanley, who also is immediately accretive to earnings per share VALUATION advised SS&C on the M&A, led the stock sale. and expands SS&C’s presence in retirement and A banker close to the deal said investors were wealth management markets. Brazilian online bank BANCO INTERMEDIUM is somewhat distracted by Spotify’s direct listing “The company has been pleased with the way seeking to raise roughly R$800m (US$240m) - the music-streaming service debuted on the the market has reacted to the DST deal,” another from its IPO to fund growth as well as to NYSE on Tuesday - and “a lot of investors were banker said. “But the stock is relatively under- allow controlling shareholders to cash out a already filled up” with SS&C stock. followed and somewhat under the radar.” portion of their investment. Despite the price slump during marketing, the When the acquisition was announced on Bradesco, Citigroup, Morgan Stanley and BB deal drew a solid reception in the aftermarket. January 11, SS&C CEO and founder William Stone Investimentos launched marketing on The stock closed the following session told analysts the company would raise US$500m Thursday of 35.5m shares, including 6.2m nearly flat at US$48.98, well above the in equity “on a scale basis” but could seek more secondary shares, at R$18–$23 apiece, to offering price. depending on demand. As a result, investors had target a market capitalisation of about Initial concerns about dilution from the extra pencilled in a US$500m-$750m offering. US$620m at the mid-point of that talk. shares issued may prove misplaced. The stock sale was an opportunity to broaden Brazilian hedge funds Squadra Reports emerged later in the week that SS&C the company’s shareholder base. Stone himself Investments and Atmos Capital have each had lodged a rival offer for British financial (15.5%) and top institutional holder Janus put in for up to R$100m to anchor the deal. software company Fidessa. Henderson Investors (9.4%) together controlled Inter, as the bank is known, plans to use On Tuesday Fidessa postponed a shareholder a quarter of SS&C shares outstanding going into proceeds from the offering to fund growth while vote on whether to back a US$2bn takeover bid the offering. members of the controlling Menin family would from Switzerland’s Temenos, saying it might have Anthony Hughes reduce their stake to 61% on the secondary sale. Founded in 1994, Inter was the first online bank and is now one of the fastest Fortress Investment, now owned by The company, which represents 80 growing. The bank, which provides services Softbank, manages New Media and earns an insurance companies that underwrite across 4,500 Brazilian cities, had 435,000 annual fee of 1.5% of total equity. home, auto and other insurance, has clients as of January 31, including 56,900 grown organically in a network of seven that signed up in January. IPO ASPIRANTS SHOW THEIR HAND corporate sales offices and 411 franchise As of December 31, Inter had extended locations. R$2.6bn of loans, 61% of which are GOOSEHEAD INSURANCE, a personal lines Goosehead, which registered for a collateralised. insurance agency founded in 2003 and with US$100m placeholder amount, first filed The online-only business model is resulting revenue of US$42.7m last year, filed publicly confidentially on January 16. in improved economics, that saw the bank for an IPO that could launch later this UNITY BIOTECHNOLOGY, which is developing generate 2017 net earnings of R$47.7m on net month. anti-aging drugs, filed for an US$85m IPO interest income of R$220.8m. JP Morgan and Bank of America Merrill Lynch that comes just weeks after it raised Return on equity last year expanded by are slated to lead the offering. US$54.9m from its heavy-hitting backers. 530bp to 12.8%.

82 International Financing Review April 7 2018

9 Equities and SE 2228 p71-84.indd 82 06/04/2018 19:32:52 STRUCTURED EQUITY

The offering comes as the number of bonds of up to Rmb6bn (US$955m) with Pure Storage bought back US$20m of online financial transactions conducted shares of FANGDA CARBON NEW MATERIAL as the stock in conjunction with the deal and also across Brazil has exploded from 500 million underlying. spent a portion of the proceeds on a call in 2012 to 22 billion in 2016. Liaoning Fangda holds 731m Fangda spread, whereby the embedded call option is Inter is projected to grow net earnings by Carbon shares, or 40.85% of the company’s repurchased and warrants sold at US$39.66, about 70% CAGR for the foreseeable future. issued capital. a 100% premium. Because of such heady growth, the Inter IPO The issuance plan still needs regulatory The repurchased shares are temporarily is being marketed at two times book value, in approval. loaned out to arbs, allowing them to delta- line with traditional bricks and mortar banks Fangda Carbon makes graphite and hedge a portion of their long exposure, such as Itau (2.4), Banco Bradesco (1.9) and carbon products. while the call-spread requires buying of the Banco Santander (1.8) but a deep discount to underlying stock by investment banks to online financial services providers Cielo (3.9) hedge their long exposure. and PagSeguro Digital (7.3). UNITED STATES Pure Storage shares fell just 0.7% post- pricing on Thursday to US$19.69. OPPORTUNISTIC US$500m CB FOR PURE For Pure Storage, the CB is purely STORAGE opportunistic financing. The company, which went public in October 2015 but has STRUCTURED EQUITY Enterprise storage provider PURE STORAGE not sold equity since, has seen its shares run captured recent investor enthusiasm up around 25% this year as revenue growth through a US$500m, five-year convertible accelerates. CHINA bond launched overnight on Wednesday. The company expects revenue growth of The CB is one of a handful of deals this 28%–33% to US$1.31bn–$1.36bn this year, CHUANTOU ENERGY PULLS CB PLAN year to price overnight. Typically overnight more than quadruple the US$273.8m it marketing would obligate an offset to generated in the TTM ahead of the IPO. SICHUAN CHUANTOU ENERGY has withdrawn its pricing, given the inability of arbitrage More significant to CB investors is that application for a proposed issue of six-year investors to pre-hedge long exposure by Pure Storage is expected to generate convertible bonds to raise up to Rmb4bn short selling. US$43m in free cash flow this year, after (US$637m). Pure Storage did compensate investors, years of haemorrhaging cash, including The withdrawal is due to current market though economics achieved on the CB are US$195m the year it went public, on analyst conditions, regulatory policy requirements extremely attractive. consensus estimates. and the financing environment, as well as Pure Storage will pay a coupon of just the potential issuer’s actual situation, 0.125% annually, with investors eligible to GANNETT PRINTS US$175m CB according to a company filing. convert into the underlying at US$26.27, a OVERNIGHT Credit Suisse Founder Securities was sole 32.5% premium to reference. bookrunner. JP Morgan, Deutsche Bank, Morgan Stanley GANNETT, the publisher and owner of USA The electric power producer had planned and Barclays launched overnight marketing Today, is doing its best to transition away to use the proceeds to build a hydropower for a US$450m base deal size with talk of from legacy newsprint to digital plant. 0%–0.25%, up 32.5%–37.5%. subscriptions. Part of that transition “We feel good,” one equity-linked banker involves operating with a conservative FANGDA PROPOSES EB ISSUE told IFR shortly after the launch. “We should balance sheet. be able to accommodate about half of the To provide it flexibility, the company LIAONING FANGDA GROUP INDUSTRIAL has proposed delta-hedge from the buyback and call termed out floating-rate revolver a placement of three-year exchangeable spread.” borrowings with a US$175m, six-year Reach the people who matter Advertising and sponsorship opportunities in IFR

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International Financing Review April 7 2018 83

9 Equities and SE 2228 p71-84.indd 83 06/04/2018 19:32:53 convertible bond overnight on Wednesday. times cash flow, is struggling to contend The exchangeable, which is cash-settle Sole bookrunner Jefferies eliminated with declining print ads. only, matures on May 1 2023, matching the market risk by placing the CB overnight at a expiry of the underlying Voya warrants the coupon of 4.75% and conversion premium of BANK OF AMERICA LATEST TO OFFLOAD bank acquired last year from ING Group. 22.5%, versus 4.625%–4.875% and 22.5%–25% VOYA EXPOSURE On the US$1.4bn spin-off IPO of Voya in talk. 2014, former Voya parent ING Group The coupon compares with the one- BANK OF AMERICA hedged a portion of its long retained 26.05m warrants exercisable at month LIBOR plus 1% rate the media exposure in VOYA FINANCIAL through the sale US$48.75, 2.5 times the US$19.50 price of company pays on the US$350m it had drawn of a US$250m, five-year exchangeable bond. the IPO. on its revolver at year-end. Bank of America Merrill Lynch, as sole Last year, the Dutch bank sold 19m Gannett closed Tuesday ahead of pricing bookrunner, marketed the exchangeable on warrants, roughly 75% of the position, across at US$9.90, down 12.1% since a Thursday at a coupon of 0%–0.25% and a series of transactions to lock in gains. disappointing fourth-quarter earnings conversion premium of 37.5%–42.5%. The Voya closed Thursday trading at US$50.72, release on February 20. bank finalised pricing after the close at up 1.8%. The CB offset dilution to share prices 0.25%, up 37.5%, the investor-friendly ends The conversion price on the exchangeable above US$12.13. of talk, but was able to increase the base will be set off a five-day forward VWAP, The CB is provisionally callable after four deal size from US$200m at launch. allowing BAML time to hedge its long years at a 130% trigger, providing flexibility Bank of America, rated A3/A-, issued the exposure on the residual position. to cap dilution or refinance. exchangeable off its own balance sheet, BAML is the latest financial institution to Gannett, which finished the year with net providing credit enhancement to an otherwise similarly offload Voya long exposure, following debt of about US$238m or less than one- unrated/non-investment-grade CB universe. a US$350m five-year exchangeable by JP Morgan in January and a US$300m five-year GLOBAL CONVERTIBLE OFFERINGS GLOBAL CONVERTIBLE OFFERINGS – EMEA exchangeable by Deutsche Bank in March. BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 Aside from settlement mechanisms, such Managing No of Total Share Managing No of Total Share as compensation in the event that Voya bank or group issues US$(m) (%) bank or group issues US$(m) (%) were acquired, the Voya exchangeables are 1 Goldman Sachs 17 4,188.88 13.6 1 Deutsche Bank 3 922.29 19.4 all similarly structured. 2 Morgan Stanley 15 1,933.62 6.3 2 SG 5 607.79 12.8 For new investors, the exchangeable 3 JP Morgan 17 1,757.52 5.7 3 BNP Paribas 4 584.09 12.3 provides upside exposure to Voya shares in a 4 BAML 13 1,751.48 5.7 4 HSBC 3 343.25 7.2 credit-enhanced wrapper. The central 5 Citic 3 1,413.99 4.6 5 JP Morgan 3 326.58 6.9 question is whether they have had enough. 6 Deutsche Bank 6 1,366.03 4.4 6 Citigroup 2 243.58 5.1 “Normally you would think the market 7 BNP Paribas 7 1,192.85 3.9 =6 Goldman Sachs 2 243.58 5.1 would be saturated, but investors are 8 China Intl Capital Co 2 1,080.66 3.5 8 Credit Agricole 2 204.21 4.3 starved for paper,” said an equity-linked 9 CSC Financial Co 2 941.03 3.1 9 Barclays 2 203.25 4.3 banker involved in one of the underwritings. 10 Barclays 6 800.45 2.6 10 Natixis 2 181.54 3.8 “We have seen a lot more paper maturing Total 107 30,839.90 Total 15 4,758.89 than has been issued. A lot of the recent Including exchangeables. Including exchangeables. deals have been by unrated tech and Source: Thomson Reuters SDC code: C9 Source: Thomson Reuters SDC code: C09d healthcare companies.”

ALL INTERNATIONAL ASIAN CONVERTIBLES ALL INTERNATIONAL US CONVERTIBLES ALL INTERNATIONAL ASIAN CONVERTIBLES BOOKRUNNERS: 1/1/2018–31/3/2018 BOOKRUNNERS: 1/1/2018–31/3/2018 (EXCLUDING JAPAN) Managing No of Total Share Managing No of Total Share BOOKRUNNERS: 1/1/2018–31/3/2018 bank or group issues US$(m) (%) bank or group issues US$(m) (%) Managing No of Total Share 1 Goldman Sachs 3 2,289.76 37.5 1 BAML 11 1,594.62 16.8 bank or group issues US$(m) (%) 2 Daiwa Securities 3 524.29 8.6 2 Morgan Stanley 13 1,590.04 16.8 1 Goldman Sachs 2 2,136.01 44.5 3 BNP Paribas 2 475.42 7.8 3 JP Morgan 13 1,270.54 13.4 2 BNP Paribas 2 475.42 9.9 4 Sumitomo Mitsui Finl 2 401.79 6.6 4 Goldman Sachs 10 1,020.87 10.8 3 China Merchants Secs Co 1 333.33 6.9 5 Nomura 3 375.42 6.1 5 RBC 4 610.54 6.4 =3 Citic 1 333.33 6.9 6 China Merchants Secs 1 333.33 5.5 6 Barclays 4 597.20 6.3 5 Credit Suisse 2 205.48 4.3 =6 Citic 1 333.33 5.5 7 Wells Fargo 6 360.42 3.8 6 Morgan Stanley 1 200.00 4.2 8 Credit Suisse 2 205.48 3.4 8 Credit Suisse 3 341.67 3.6 7 JP Morgan 1 160.40 3.3 9 Morgan Stanley 1 200.00 3.3 9 Citigroup 4 275.00 2.9 =7 CIMB Group 1 160.40 3.3 10 JP Morgan 1 160.40 2.6 10 Jefferies 3 246.70 2.6 9 Nomura 1 142.09 3.0 Total 16 6,110.05 Total 27 9,466.07 10 Yuanta Financial Hldg Co 1 100.00 2.1

Including exchangeables. Total 10 4,796.89

Including exchangeables. Source: Thomson Reuters SDC code: M10 Source: Thomson Reuters SDC code: C9a Source: Thomson Reuters SDC code: M11

EQUITY-LINKED DEALS WEEK ENDING 6/4/2018 Issuer Country Date Amount Greenshoe Tenor Coupon (%) Premium (%) Bookrunner(s) Gannett US 03/04/2018 US$175.0m US$26.3m 6y 4.8 22.5 Jefferies Pure Storage US 04/04/2018 US$500.0m US$75.0m 5y 0.1 32.5 JP Morgan, Deutsche Bank, MS, Barclays Voya Financial US 05/04/2018 US$250.0m NA 5y 0.3 37.5 BAML

84 International Financing Review April 7 2018

9 Equities and SE 2228 p71-84.indd 84 06/04/2018 19:32:53 GLOBAL DEBT: SOVEREIGN FOREIGN CURRENCY LONG-TERM RATINGS (5/4/2018) 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– p AAA A– AAA Andorra W BBB AAA BBB p A– Lebanon B3 B1 B– B+ B– B– Angola B2 n B1 B– B– B n B Lesotho B+ BB+ Argentina B2 B1 B+ BB– B p Liechtenstein Aaa AAA AAA Armenia B1 p Ba2 B+ p BB– Lithuania A3 Aaa A– p AAA A– AAA Aruba BBB+ BBB+ BBB– Luxembourg Aaa Aaa AAA AAA AAA AAA Australia Aaa Aaa AAA n AAA AAA Macau Aa3 Aa2 AA AAA Austria Aa1 Aaa AA+ AAA AA+ AAA 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+ Bahrain B1 n Ba2 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 CCC+ n CCC+ Mexico A3 n A1 BBB+ A+ BBB+ A Belarus B3 B3 B B B– p B– Moldova B3 B2 Belgium Aa3 Aaa AA AAA AA– AAA Mongolia B3 B1 B– B B– p Belize B3 B1 B– B– Montenegro B1 Ba1 B+ AAA Bermuda A2 Aa3 A+ AA+ Montserrat BBB– BBB– Bolivia Ba3 Ba2 BB n BB BB– Morocco Ba1 p Baa2 BBB– 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 n 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+ BB– B+ Cameroon B2 Ba2 B BBB– B BB+ Nigeria B2 B1 B B B+ n B+ Canada Aaa Aaa AAA AAA AAA Norway Aaa Aaa AAA AAA AAA AAA Cape Verde B BB– B B+ Oman Baa3 n Baa2 BB BB+ BBB– n BBB Cayman Islands Aa3 Aa2 Pakistan B3 B2 B B B B Chile Aa3 n Aa1 A+ AA A AA Panama Baa2 p A3 BBB AAA BBB A China A1 Aa3 A+ A+ A+ A+ Papua New Guinea B2 n B1 B+ n BB Colombia Baa2 A3 BBB– BBB+ BBB Paraguay Ba1 Baa3 BB BB+ BB p Congo (DR) B3 n B3 CCC+ CCC+ Peru A3 A1 BBB+ A BBB+ A– Congo (Rep) Caa2 n B2 CCC+ BBB– CC B+ Philippines Baa2 A3 BBB BBB+ BBB Cook Islands B+ AAA Poland A2 Aa3 BBB+ A A– AA– Costa Rica Ba2 n Baa3 BB– n BB+ BB Portugal Ba1 p A1 BBB– AAA BBB AA Cote d’Ivoire Ba3 Baa3 B+ BBB– Qatar Aa3 n Aa3 AA– n AA AA– n AA Croatia Ba2 Baa3 BB p BBB BB 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 BB+ p AAA BB p BBB Rwanda B2 B1 B B B+ B+ Czech Rep A1 Aa2 AA– AA+ A+ p AA+ St Vincent & Gren B3 Ba3 Denmark Aaa Aaa AAA AAA AAA AAA San Marino BBB– BBB+ Dominican Rep Ba3 Ba1 BB– BB+ BB– Saudi Arabia A1 A1 A– A A+ AA Ecuador B3 B2 B– B– B Senegal Ba3 Baa1 B+ BBB– Egypt B3 B2 B– p B– B B Serbia Ba3 Ba1 BB BB+ BB BB+ El Salvador B3 B1 CCC+ p AAA B– Seychelles BB– BB Estonia A1 Aaa AA– AAA A+ p AAA Singapore 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+ AAA A– AAA Finland Aa1 Aaa AA+ AAA AA+ AAA Solomon Islands B3 B2 France Aa2 Aaa AA AAA AA AAA South Africa Baa3 n A3 BB BBB– BB+ BBB– Gabon B3 n Ba3 B BB+ South Korea Aa2 Aa1 AA AAA AA– Georgia Ba2 Baa3 BB– BB+ BB – p BB Spain Baa2 Aa2 A– AAA A– AAA Germany Aaa Aaa AAA AAA AAA AAA Sri Lanka B1 n Ba2 B+ B+ B+ B+ Ghana B3 B1 B– p B B B Suriname B2 n Ba3 B **  B+ B– Greece B3 p Ba2 B p AAA B BB– Sweden Aaa Aaa AAA AAA AAA AAA Guatemala Ba1 Baa3 BB– BB+ BB Switzerland Aaa Aaa AAA AAA AAA AAA Honduras B1 Ba2 BB– BB Tanzania B1n Ba3 B1 n Hong Kong Aa2 Aaa AA+ AAA AA+ Taiwan Aa3 Aa2 AA– AA+ AA– Hungary Baa3 Baa1 BBB– p BBB+ BBB– p A– Thailand Baa1 A2 BBB+ A BBB+ Iceland A3 A3 A A A A Trinidad & Tobago Ba1 Baa3 BBB+ A India Baa2 Baa1 BBB– BBB+ BBB– Tunisia B2 Ba2 B+ BB– Indonesia Baa3 p Baa2 BBB– BBB BBB Turkey Ba2 Baa2 BB n BBB– BB+ BBB– Iraq Caa1 B3 B– B– B– B– Turks & Caicos BBB+ p AAA Ireland A2 Aaa A+ AAA A+ AAA Uganda B2 Ba3 BBB A– B+ B+ Israel A1 Aa3 A+ p AA A+ AA Ukraine Caa2 p Caa1 B– B– B– B– Italy Baa2 n Aa2 BBB AAA BBB AA UAE Aa2 Aa2 Jamaica B3 Ba3 B B+ B B UK Aa2 Aaa AA n AAA AA n AAA Japan A1 Aaa A+ AA+ A USA Aaa Aaa AA+ AAA AAA Jordan B1 Ba1 B+ BB Uruguay Baa2 A2 BBB A– BBB– Kazakhstan Baa3 Baa2 BBB– BBB– BBB BBB+ Venezuela C Ca SD CC RD Kenya B2 Ba3 B+ BB– B+ BB– Vietnam B1 p Ba2 BB– BB– BB– p 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/  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/  Deterioration in ratings, 4 S&P Transfer and for upgrade W Rating withdrawn outlook outlook or watch status Convertibility Assessments SD Selective default

International Financing Review April 7 2018 85

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International Financing Review April 7 2018 87

11 Masthead 2228 p87.indd 87 06/04/2018 19:15:32 INTERNATIONAL FINANCING REVIEW INDEX

Abanca 21 Go-Jek Indonesia 71 Saudi Arabia 57 Acacia Pharma 78 Goldman Sachs 17 Sbanken Boligkreditt 24 Adaro Energy 58 Goldwind International Holdings (HK) 59 Scentre 32 Aegon 32 Goosehead Insurance 82 SDP Finco 58 Akzo Nobel 35, 57, 70 GrafTech International 78, 79 Seminole Tribe of Florida 67 Alzheon 78, 80 Greenhill 15 SendGrid 81 American Greetings 4 GS Caltex 51 Shanghai International Port (Group) 59 AMP Bank 34 Haier Financial Services (China) 41 Shape Technologies 68 Anbang Insurance Group 21 Hanwha Life Insurance 51 Sharjah Islamic Bank 54 Arch Coal 69 Headhunter Group 10, 76 Sibanye-Stillwater 62 Ardmore Securities No.1 36 Heartland Dental 66 SimplyBiz Group 78 Aselsan 77 Hilton Worldwide 68, 71 SMBC Aviation Capital 62 Atalian 62 HNA 71 Social Finance 38 Atlantic Power Corp 67 HP 65 Societe Generale 14, 32 Ausgrid Finance 31 HSBC 14 Solar Mosaic 38 Australian Capital Territory 28 Hyundai 38 SouthEast Bank 38 Authentic Brands 67, 70 Hyundai Oilbank 73 Spain 25 Avia Avian 71 IBS IT Services 10, 76 SpareBank 1 Boligkreditt 24 Banca Popolare di Vicenza 19 Immorente 75 Sponda 36 Banco do Brasil 55 Indonesia Eximbank 61 Spotify Technology 4 Banco Intermedium 82 Infra Park 31, 32 SS&C Technologies 82 Banco Popular 10, 19 ING Bank 24 Standard Chartered 14 Bank BRISyariah 71 Intercept Pharmaceuticals 81 Sudan 53 Bank of America 84 International Textile Group 65 Sun Hydraulics 65 Bank of America Merrill Lynch 14 Intu Properties 62 Surya Pertiwi 71 Bank of China 21, 48 Investec Bank 58 Swisscom 32 Bank of Communications 21 Investment Corporation of Dubai 63 Syngenta 29, 32 Barclays 14 Ireland 25 TDC 35 Belfius 75 Italy 25 Techem 35, 70 Best Buy 64 Japan Oil Gas & Metals National Corp 61 Telecom Italia 57 Bhinneka Mentari Dimensi 71 JDA Software 69 Telefonica 57 Big River Steel 66 JM Smucker 63 Televisi Transformasi Indonesia 61 Birla Carbon 59 JP Morgan 13, 14, 17 Thales 57 Blackstone 36 KazMunayGas 52 Thomson Reuters 57, 63, 64, 70 BMW 30 KfW 28 Tiryaki Agro 62 BNP Paribas 14, 19 Korean Air Lines 51 Townsquare Media 67 BOC Aviation 48 LA Fitness International 67 Transcontinental Inc 67 Broadcom 63, 64 LegalShield 66 Transmedia 61 Buenos Aires, Province of 54 Liberty Financial 40 Transplace 69 Caisse Francaise de Financement Local 34 Marubeni 31 Transurban Queensland 31 Canada Pension Plan Investment Board 62 McDermott International 4 Tricon American Homes 39 Canam Steel 66 Medikaloka Hermina 71 Turkcell 53 Capgemini 32 Megaworld 50 UBI Banca 33 CCG 35 Metinvest 53 Ulster Bank Ireland 36 Cellectis 80 Mexico 56 Unibail-Rodamco 57 Ceridian HCM 68 Micron Technology 65 Unilever 57, 70 Chandra Sakti Utama Leasing 61 Midas Holdings 50 United Overseas Bank 6 Cherkizovo 10, 76 Mizuho Financial Group 33 Unity Biotechnology 82 Chicago Bridge & Iron 4 Mohegan Tribal Gaming Authority 68 Upstart 39 Church & Dwight 64 Mondelez International 63 Veneto Banca 19 Cigna Corp 63 Montenegro 52 Venezuela 9 Citigroup 14 Morgan Stanley 17 Veritas Capital 65 Clarion Events 70 Mortgage Society of Finland 24 Volkswagen Financial Services 32, 40 Clarion Housing Group 31, 32 Motor Fuel Group 57 Voya Financial 84 Clayton, Dubilier & Rice 4 Mozambique 9 Vrio 78, 79 Clean Harbors 66 Nam Cheong 49 Vyaire Medical 68 Commerzbank 24 Nationwide Building Society 24 WCA Waste Corp 67 Compagnie de Financement Foncier 24 New Media Investment Group 81 Wells Fargo 14, 17 Compass Group Diversified Holdings 69 Nine West Holdings 70 World Omni 38 Compeq Manufacturing (Chongqing) 59 nLight 82 World Omni Financial Corp 39 Consol 76 Noble Group 50 WP CPP Holdings 66 Consumer Portfolio Services 38 Nomura Real Estate Holdings 61 Yuexiu Property 48 ConvergeOne 68 Noor Bank 54 Yum! Brands 69 Corestate 35 Northern Oil & Gas 81 Zentiva 70 Credit Agricole 36 NTPC 60 Zuora 78 Damac Real Estate Development 54 Oman Telecommunications 54 Agricultural Bank of China 21 Danske Bank 21 O’Shares Investments 8 Alibaba 6 DBS Group Holdings 52 Pacific Industrial & Logistics REIT 78 Alibaba Group Holding 73 Deutsche Bank 14, 19 Peabody 69 Atria Convergence Technologies 73 Deutsche Pfandbriefbank 34 Peking University Founder Group 49 China Construction Bank 21 Dollar Tree 30 Pelican Products 67 China Securities 72 Doosan Machine Tools 73 People’s Choice Credit Union 39 Contemporary Amperex Technology 6 DST Systems 82 Ping An Bank 41 Crystal Crop Protection 73 Ecuador 56 PolyOne 69 Fangda Carbon New Material 83 Educational Services of America 38 Power Finance Corp 60 Foxconn Industrial Internet 7 Egypt 47 PPF 61 Gan & Lee Pharmaceuticals 72 EIF Channelview Cogeneration 67 Puerto Venecia 62 Industrial and Commercial Bank of China 21 EMR Capital 58 Pure Storage 83 JD.com 6, 73 Euronext 31, 32 Qatar 7 Liaoning Fangda Group Industrial 83 European Financial Stability Facility 25 Qatar National Bank 21 Maoyan Weying 72 European Investment Bank 25 Quincy Media 67 Meituan-Dianping 73 Express Scripts 63 RCI Banque 37 Members Equity Bank 34 Ezra Holdings 51 Reliance Communications 49 Qualitas Medical 74 FCT Credit Agricole Habitat 2018 36 Resimac 40 Rail Vikas Nigam 73 FleetPride 69 Retail Estates 75 Redsun Properties Group 72 Flora Food Group 35, 57 Rio Oil Finance Trust 55 Renesas Electronics 73 Franklin Templeton Investments 8 Rio Previdencia 55 Sichuan Chuantou Energy 83 Gannett 83 Sagax 77 SK Lubricants 73 General Mills 8, 28 Salesforce.com 29 Walker Corp 59 General Motors 30 Sally Beauty 69 Wise Talent Information Technology 72 GKN 32 Sanofi 61, 70 WuXi AppTec 7 GLG Partners 38 Santander 10, 19 Xianhe Corp 72 Global Bank Corp 65 Santander Consumer USA 38 Xiaomi 6 GM Financial 38 Santander UK 24 Xiaomi Technology 73 Godewind Immobilien 75 Santos 11

International Financing Review April 7 2018 1

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S018758_v3.indd 1 05/03/2015 11:20 SAVE THE DATE: MAY 22 2018

GREEN FINANCING ROUNDTABLE TUESDAY MAY 22 2018 | THOMSON REUTERS BUILDING, CANARY WHARF, LONDON

Sponsored by:

Green bond issuance broke through the US$150bn mark in 2017, a 78% increase over the total recorded in 2016, and there are hopes that it will double again this year. But is it on track to reach the US$1trn mark targeted by Christina Figueres?

This timely Roundtable will bring together a panel of senior market participants to assess the current state of the market, examine the challenges and opportunities and provide an outlook for the rest of the year and beyond.

This free-to-attend event takes place in London on the morning of Tuesday May 22 2018. If you would like to be notified as soon as registration is live, please email [email protected].

IFR Green Bonds 2018.indd 1 27/03/2018 16:39:13